Malcolm Robinson

Found a more contemporary comparison..... http://escfans.com/news/read/14351

In 2002 it cost Estonia its whole year's tourism budget about $26M. I think we could have had a gold plated market place for that sort of money even at today's prices! BTW, your £8B is now up to around £9.3B with £1.25B contingency!

There would seem to be a clear message coming out of the last G20 meeting. Gone are the 'Brownism's'......'unlimited fiscal stimulus will enable economic recovery' and we now see austerity and debt repayment as the latest way forward. No wonder the Polish Prime Minister immediately gave them what for, only last year he was told to expand the Polish economy as a way of avoiding recession, now he is being told to repay debts and the extra one incurred trying to follow their advice! This is either sheer hypocrisy or incompetence and no sign of humility from any of the G20 leaders! If we look at the April 2009 advice there was much back slapping concerning the $5 trillion fiscal stimulus the G20 world was embarked on which was supposed to raise economic output by 4%. Ah the heady days of our then Prime Minister saying he had saved the world! The latest G20 release, June, is all about.....'Sustainable public finances, fiscal stability, national circumstances reduce deficits in 2010 and strengthen fiscal frameworks and institutions.' This is the antithesis of their position of only a year earlier. Course it has to be pointed out that the UK has made itself broke trying to attain the previous position! Those US jobless figures had such an effect because even Obama had been caught up in promoting the line that they would be better than what they turned out to be. Maybe he is learning the necessary lessons of high office! We are now seeing a wider disparity between EU bonds with some countries obviously bearish for investors. It will only take a popular revolt in any one of them to spark a default and then the EMU crashes. About that cash held on deposit at the ECB by the other EU banks.......it's about 351B Euros and earns them 0.25% instead of the normal market rate of 0.33%, such a price comes safety! The ECB can be making a tidy profit as it 'invests' in say Geek bonds paying 8%+! Course if we then think about possible Greek debt defaults..........

Well simon liked it, or am I getting my popular culture mixed up? http://www.youtube.com/watch?v=hdPEA-DslSc&feature=related

As I mentioned gold the other day it might be worth looking a little closer into the gold market to try and find its intrinsic worth. It is a rare and scarce metal and so as demand rises up goes its price, yes.......err no not exactly. Since 2002 total demand from gold 'users', goldsmiths, dentists, jewellers etc, has come to about 22,500 tonnes. Total gold which has come onto the market over the same period is about 29,000 tonnes which leaves an oversupply of around 6500 tonnes. Shouldn't that fact precipitate a fall in the gold price? It hasn't because of the gold speculators or people who see holding gold as a hedge against the loss of confidence or value in fiat money but because there are no real underlying economic reasons for the price rises we see then we are looking at a typical pyramid scheme or Ponzi scheme where rises only come through newer and more investors willing to get onto the bus before a wheel comes off. In effect the price of gold is now a classic bubble. It would seem strange that at a time of rising gold prices central banks have been sellers but then again they had to get hold of some cash real money to buy their own sovereign bonds! The FT reported that last year central banks sold 246 tonnes of gold which is the lowest figure for years. These paragons of financial astuteness would seem intent on selling largesse into the market at times when it is becalmed and then not being able to take advantage of a rising market. I wonder if any of them understand the basics of supply and demand? Course their incompetence only costs us the respective tax payers money and again we see criminal incompetence insulated from any form of retribution! It could therefore be assumed that the heady rise in gold pricing is in direct correlation to the breakdown of the rest of the financial system. I think we might as well be picking brightly coloured pebbles off the beach and using them!

Looking at the associated costs involved with putting on this event maybe we 'win' by coming 'last'?

Could this fictional projection be on the cards? Spain, a nation with 20% unemployment and $1.1 trillion in debt, which just announced yet another austerity package to assure the markets, which is enormously unpopular. Its then that a young, aspiring politician begins to question why bother paying the debts if we're already in a depression!! Within a month or so, he's attracting very large crowds of angry citizens who agree, and their parliament notices.. as do the markets. The cost of insuring Spanish debt reaches Greek levels; Spain becomes essentially unable to borrow on the open bond markets and the EU steps in.. but asks Spain to agree to another austerity package. The Spanish people, led by our young politician, explode with anger.. violent strikes paralyze Spain. Meanwhile, large marches take place in Berlin to protest Germany's part in the upcoming bailout, burning Spanish flags along the strasse. These scenarios on TV are too much for the Spanish Prime Minister, who has arrived at the Rubicon.. and he stops answering Sarkozy and Obama's phone calls and at a news conference announces that Spain will stop paying on it's debts and would like to begin negotiations on default with banks. By morning, European stock markets are in utter turmoil as a dozen very large banks are essentially insolvent. The Crash is on, and by 1pm the European governments have halted trading on their stock, bond and currency markets despite central bank intervention. The markets open up in New York, but don't stay open for long... worried that the trillions of credit default swaps written by American banks on the European banks will crash the American banking system, and by noon the markets halt trading as the chaos is complete. It is Thursday. All trading is halted throughout the weekend. The vast majority never saw it coming, and with the banks now on E200/day withdrawal limits, they are pretty angry and fearful.. and well they should be. ATM's stop working; prices soar (fuel in particular); some businesses simply close up shop rather than risk being paid in a currency that could soon be worthless. Petrol stations ration fuel purchases. Many are sent home from work for the last time. The very basic function of modern economy.. the exchange of currency for goods.. is in doubt. Over the weekend, it becomes rather obvious that the heads of the governments and central banks cannot come up with a united front; the markets are again not allowed to open, thus ensuring that the entire system is doomed. At this moment a plan is brought up.. a plan to essentially reboot the entire system, with everyone's (people, government and companies) debt zero'd out. People own their homes, ensuring societal stability. Everyone's national debt is zero. But by the same token, anyone who owned stock and/or had money in the banks are wiped out. An international currency standard is agreed upon by major powers, based on a basket of commodities. The world is about to enter into a Depression. Overnight, unemployment in the US hits 20%, on it's way to better than 33%.. fully half of all adults are not working; taxes on those who are working are crushing. Such is the fate of nations who borrow from their children's future for a more prosperous present.

Might be interesting to ponder over this.......... Someone buys land and plants a forest. It takes years and years for the wood to grow to commercial viability all the while people are employed looking after it. Once it reaches viability workers go in and cut it down. It is then transported to a wood mill where once again people are employed to size it. Some of it goes to a pulp mill where again it is treated and eventually leaves as paper rolls. That goes to another factory where paper bags are made. Those bags are then sold to shops who then give them away free? Ok there are inbuilt charges on the shop produce to take the costings into account but essentially there are a lot of people getting paid and a lot of money invested to produce something which is seen as a free by product. Greggs have taken out a cost yet they will retain the income, in reality they have put up whatever you buy in those bags by 1p and most people will not even think about it!

Merlin, Don't know how far that is correct, as far as I know council are bending over backwards with legs akimbo to accommodate Tesco and it is only recalcitrance by Tesco holding up the deal. Tesco have already taken over the covenant on the car park, probably in order to adjust it so a 2 or 3 hour only free car park will be provided for their patrons exclusively! That leads to problems with parking for the law courts as well as VPG, not to mention anyone using that car park who works on or uses Front Street! The derelict land at the side is to be built on with shop units and offices above as part of the overall deal. Don't think there was a petrol station mentioned in the planning application? As for the Netto deal that might have more to do with Netto wanting to be out of the UK and ASDA not wanting to see anyone else getting hold of their shop units? The strangest fit for me is the Argos deal, wonder what business model Wallmart have in mind for those?

That would seem to explain a lot monsta!

I have been away for almost 2 weeks and what has happened to the markets, well very little looking at the closing positions. The footsie is down but has rebounded a little and we see the main driver almost certainly the DOW even more so than usual as the dollar is still seen as a safe haven. Those US jobless figures released at the end of this week might overhang the start of next weeks trading as they left the DOW below 10,000 and that will probably mean triggered sales. My main concern is still in the banking sector, both European and UK, and I believe we can now start and see the whole Euro bailout was more to do with saving banks rather than people's jobs! Without any worthwhile new regulation the banks are getting back into their old habits but using all that taxpayers' dosh to shore up their balance sheets. It is essentially heads you win, tails I loose because they now know if anything goes wrong they will be bailed out with tax payer's money! Applegarth, Fred the Shred, etc, they should all be in jail! I would have thought that someone who was so vocal in the pre election run up about wholesale change in UK banking and who is now in charge of delivering that would have had a plan ready and waiting to impose, yet Vince the Cable is so apparent by his silence now words have to be put into deeds! We can see the European problem by looking at Spain and the mopping up going on there in her banking sector. The smaller largely savings and lending banks are having to be taken over by larger banks as their liabilities to bad debts becomes a real issue and one that threatens to destabilise any government action on their economy. At least Spain looks to be trying to be proactive, the rest of ClubMed seem intent on letting events overtake them and then relying on ECB help. Talking about the ECB we see Trichet openly admit to a QE programme yet the devil is in the detail once again as Germany voted against it. Yet another reason to presuppose a split in the Euro might well be on the cards! Interesting plays at the moment are the LIBOR rates, sovereign ratings and associated Gov bond sales, gold price and market swings. LIBOR rates are especially interesting as it looks like the big money players are more willing to overnight the cash with the ECB than they are to lend to other banks. This sort of stuff precipitated the loss of confidence and crash last time! I don't think we are out of the wood yet by a long shot! As for gold prices I will let the Sage of Omaha give his view on gold. "Gold gets dug out of the ground in Africa, or someplace,” he said. "Then we melt it down, dig another hole, bury it again and pay people to stand around guarding it. It has no utility. Anyone watching from Mars would be scratching their head.”

Just out of interest Brian, what 'Geordie' food do you miss?

Mr Smirnoff might have taken over Andy but you have identified several points which have to be considered. If the town is to develop, in the right way (!), there has to be a cohesive resurgence of community spirit with everyone willing to play whatever part they can. As with any venture there are lots of people willing to tell why something cannot happen, not many able to come up with the ideas needed of course! One thing is for sure in this day and age any schemes HAVE to be able to wash their own face, financially, and there in lies the rub! BTW, it only looks like nothing is happening at the moment, there is a lot in the pipeline and some of it might actually work out! Climbing wall possibility already been talked about but that depends on other initiatives succeeding and the doubters seem to have sway at the moment! Keep the ideas coming or better still get along to the community forums and float the ideas there, at least everyone will get to know what some people are trying to do for the town. We can either sit back and watch the place putrefy or we can stand up and fight for what we believe we deserve.

This sort of madness happens EVERY summer as far as I can see, from mad dogs to kids being abducted. BTW, GGG, wasn't the Hungerford nutter in a gun club?

:lol:

Having just been ripped off for 1.26/litre at a BP filling station, even the other motorway ones were 1.16!!!!!!!!!!! Boil the sods in oil!

!?????!

To add further comment on my last posting in a little more detail there are several factors which seem to have impacted on the market's consciousness. First the likely impact of politicians putting in further regulations. We can see the effect that has looking at what happened after Frau Merkel banned naked short selling. We can now add in the Senate vote on the IMF EMU bailout package and at 94-0 there would seem to be a clear massage! Also their reform package aimed at banks which in the main should be welcomed at the present moment in time could easily be counterproductive. Secondly the effects of these austerity packages which have to go hand in hand with any bailout package. These will undoubtedly lead to markets reconsidering their impact onto world trade and prosperity and by implication the austerity models will mean higher unemployed and reduced GDP of 'rescued' countries. We now see more German demands for tighter fiscal policies with some pretty draconian threats implied. Movements in currencies which seem to be accelerating as investors look for safe havens. The moral as well as straight financial implications of the more prudent countries having to rescue the more imprudent and that may well leave them open to recessionary influences themselves. Last but by no way least is what is happening in the savoir of western economies, China. This was the main economic driver which was supposed to pull us all out of recession but looking at the Chinese market it seems to be more bearish than bullish. They too have a housing bubble which needs pricking but as yet no one has dared to go near it with the pin! So there are some real problems building in the system and what do we see, the political class so far out of their depth it is untrue! Their almost day to day pronouncements of this is the plan to save us all and my idea will work best is nothing more than hot air. In fact as they are forced almost hours later to either retract or vote in the complete opposite direction to what they had only just said I am beginning to wonder how they dare walk out of their house doors every morning! It may best be summed up by a quote from Albert Einstein which was mentioned in the FT, ''The definition of insanity is doing the same thing over and over again and expecting different results.'' As I have used one quote, I would like to post what an American economist has stated on a blog site we both use, the implication of which I couldn't agree more with. What's the difference between Singapore and Zimbabwe? Zimbabwe has rich natural resources and they were left a wonderful infrastructure by the Brits at the end of WWII. Singapore is a rock with no resources that was utterly destroyed in that war. Yet today Singapore contributes millions to help feed starving Zimbabweans. A nation's greatest resource is the people that inhabit it.

Looks like Wile-e-Coyote has finally realised the effects of gravity. With markets tanking all over the world they are being forced to re-examine fundamentals. The bull markets we have seen over the last year or so might eventually be seen as them just breathing a sigh of relief that the financial Armageddon we stared in the face had been averted. If there isn't anything underpinning whatever there is only one way it can go..............

Don't be too sure about Australia Dave. They look to be getting squeezed by Asian debts and an appreciating US dollar and have had to introduce special mining taxes to compensate. Might be indirect but things are iffy down there as well..........

It has just escalated some more......... Just to further complicate this already heady mix of international poker bluff the Yanks (Congress) have now voted not to allow the IMF recue package for Greece! If we believe the published figures that takes out around $320B and leaves the ECB with an empty hat! I don't believe the ECB actually thought it would have to stump up their projected share of the Trillion dollar bailout, even if it did put a SPV in place! If anyone thought this was only about a little European country called Greece then I hope by now you are seeing something different! If the Congress vote goes through, and they have said they cannot constitutionally subscribe to the IMF bailout as there is no prospect of any repayments and they are bankrupt anyway, then the IMF is about washed up. That leave the world with no fall back position, no lender of last resort, if or when countries go belly up! It is a salutary thought!

Might be worth seeing why there is such a clamor to 'save' Greek and Portuguese banks........

Well now we see Markel banning CDS's. I think serendipity has a part to play here as it would seem an overtly political move as the Germans have to ratify their part (maybe E140B) in the ECB Euro bailout. Course the markets have now been spooked and the Euro continues its downward spiral! Even the most fiscally responsible seem to act in a completely irresponsible way sometimes! The politicians want to portray hedge funds and currency speculators as bogymen whereas in reality they only operate taking positions with regard to the moves the politicians make. If this is a move to stabilise the Euro it would seem to be having the opposite effect for obvious reasons. Traders can now not insure their positions against a drop so they will get out forcing the Euro even lower. Course that would suit Germany as she is an exporter but it will make the PIGS positions even weaker. I thought the whole idea behind EMU was economic convergence, what we are seeing is divergence as the industrialised northern European members of EMU leave their fellow southern members for dead in the water. It all boils down to the major flaw in EMU, political integration, as sovereign countries will now do what suits them not what suits the wider community the belong to.

Can someone explain the word 'temporary' to Merve the Swerve, he seems unable to understand the definition! Every time he has had to write his letter to the Chancellor explaining why inflation is at least 1% over target he has used this term yet inflation seems to be persistently over target? In fact inflation has been over target in all but 6 out of the last 30 months, looks like a trend to me? If we now consider currency falls and a possible rise in VAT we will see even more upwards pressure on our inflation figures. So we seem to have a sort of relaxed attitude to inflation and we also have to consider all that QE money which added to liquidity in the system and in itself must push up inflation. The only explanation I can see is that someone somewhere wants to use inflation to reduce the debt pile we are carrying in real terms. I think the MPC has to come in for criticism in this respect as they are charged with implementing fiscal policy to combat inflation. Their projections of deflation have been proved wrong yet the measures they took at that time have been carried forward, can we ask why? It would seem the obvious case that either the MPC have been wrong and in which case incompetent or there is a hidden policy towards our inflation targets! Their faith in output gap theory is still holding even though a blind man on a 3 legged white horse could drive though it! Considering the possible mechanism to get rid of miscreant politicians being talked about maybe that should be extended towards all public bodies as well! According to the Office for National Statistics Consumer Price Inflation is now 3.7% and has risen 0.6% on a month on month basis. Ordinary RPI has risen by 1% on a month on month basis and is now 5.3%. RPI-X (our old targeted measure) has also risen by 1% on a month on month basis and is now 5.4%. Things are going from bad to worse. If we take the old RPI-X figure we see a real figure of 5.4% with a target of 2.5% so we are 2.9% over target. After a clear relaxation of targeting inflation we seethe CPI figure now being used and even that brings up an overshoot of 1.7%. If we take a moment to consider that both figures are supposed to measure the same thing then on one hand we see different tallies and on the other both are way out of whack, not good either way! There would seem to be a build up of more pressure in the system not a release. Output prices rose 5.7% year on year but input prices rose 13.1%. Our exchange rate falls will contribute to higher prices and impact onto the inflation figures. These, and the possible VAT rise which now seems certain, are inescapable and will have persistent upward pressure on our inflation figures not at Merve says be a temporary blip! GGG might yet be proved correct!

Happy Birthday...........