Malcolm Robinson

Interesting to hear Merv's address to a parliamentary committee yesterday about the bank's position regarding buying more UK plc debt. 'We stand ready to what seems appropriate.' So he isn't ruling out adding to the near 200,000million portfolio he already holds. Taking a view over his whole presentation what he really was saying was, 'No more please!' UK bond yields did drop slightly so he might have had some impact, but more worryingly is that 0.95% spread over German bunds is now 1.02%. I wouldn't care but the German economic stats are looking suspect themselves as is most of the eurozone stats as a whole! Never mind we are out of recession, aren't we????????

So Greece was supposed to provide her up to date economic statistics to Eurostat last week but missed the deadline. Hardly surprising the markets are thinking about down grading Greek debt at exactly a time when it needs international belief to get it bonds away. On top of the strikes we see it doesn't paint a picture of a country taking its problems seriously. Another area of concern is that despite all the huffing and puffing we saw by her European partners, the whispered emergency funding has not materialised. 25B became 20B but where is it? They have now said the funds will be available after the Greek government auction its bonds, to make up any shortfall, but where is the sense in that? Under ECB rules a fund of this sort is made up proportionally by population and GDP so Germany will have to pay in nearly 30% and we may have seen German public reaction to that! BTW, Italy would have to pay in about 18%, Spain and Portugal would also have to contribute, I can see that happening, not! One plan floated was to allow Greece to withdraw from the Euro for a few months then rejoin at a lower rate, effectively devaluing Greek Euros, but that would mean everyone in Greece would loose out by the percentage of the devaluation as soon as they rejoined. Not only that there would be a queue of club Med countries wanting to go down that route. Greece could threaten to withdraw from the euro of course and that could probably signal the end to this fiscal experiment certainly for the weaker economies involved. That may well be the position the Greek Prime Minister is touting in private as he jets around the continent meeting other EU leaders! This whole subject is showing the flaws in the European experiment for me. They, the Federalists, expected monetary union to lead to political integration but that is the wrong way around. We can now see the need for say German workers having to work longer, take pay cuts and economise to bale out another country whose workers have much easier terms, it can't work and realistically it shouldn't!

Merc, I can see the sense in that but we are talking about planning........... If the Lion was sold as de-licensed then it would follow it would need to be re-licensed to open up as a boozer, wouldn't that mean change of use etc....?

It was a failure to understand what was going on, and a delusion that the economy could walk on water. I think it was a failure because it gave leaders such an easy option. A sound economy needs to be sector diverse but they took their eye off that ball once financials and the service sector in general took off, and what better timing than to have a consumer boom. I remember being at a business presentation at Durham in the late 90's when a high ranking gov officer said they expected the service sector to take up the slack in the jobs market produced by the recession in manufacturing. It was as misguided then as it is now. BTW we are seeing the same sort of unimpressive thinking much closer to home, take a look at NCC's 5 year economic strategy! I dunno about the fat-cat stuff. I think good old socialist envy comes into this argument at some point. On the other hand where is real capitalism and healthy competition in all this when failure is so generously rewarded? Exatamundo GGG, there is no downside, even if gross levels of incompetence are apparent. Now that would be the case for the directors of Equitable Life etc, this lot are in a league of their own! Apparently revenue producing licences for semi-monopolistic activities are only for things like struggling community radio stations.

A chemist walks back into his shop to find a man slumped against a wall. What's wrong with him he asks his assistant? He came in for a cough bottle so I gave him those extra strong laxatives we had for years. You stupid bozo cries the chemist you can't treat a cough with laxatives. Course you can said the assistant he daren't cough now! A man cooks deer for his family but won't tell them what it is. The only clue he gives the kids is that it is what Mum calls him sometimes. The little girl cries out 'Don't eat it, it's an !*!@# !'

Here's the video....... http://www.one.org/international/blog/?p=2298&gclid=CJ7_jYyThqACFcUB4wodcXXitA

Sizsells, You been lobbying for this Robin Hood tax on banks? 0.05% tax on banking activities which have no impact onto members of the public, derivative trading etc, produces something like......£100 billion PA! Ratchet it up by a decimal point and start to pay the deficit off without impacting onto community services!

Monetary union without political integration........... http://uk.news.yahoo.com/22/20100214/tbs-uk-eurozone-germany-4210405.html

The Fed's rise in discount rate the other day might signal the tide is turning for rates worldwide. If it is then economies will be squeezed at exactly the time they shouldn't be.

Our credit rating hasn't actually been downgraded but the yields are such that it may as well have been. The next gilt auction is on Wednesday by the way, £3billion of 2019 bonds up for sale but this time the BoE won't be buying. Be interesting to see if our AAA rating is worth the paper it isn't written on? And we've relied on that - our growth has come from such markets, rising public spending, and rising personal debt. Along with the deficit, the national debt, the high level of personal debt, and the pensions demographic time bomb, one of my other main worries for the future is where our economic growth is going to come from now? Is that the economic growth which will service these debt piles? It will have to be exponential for us to stand still! Interest rates can't stay at these artificial levels for much longer so we face increasing costs, probably, year on year. Without the needed revaluation of these asset bubbles we will be paying a very large proportion of our GDP into servicing the debt associated with the delusion of our personal and national wealth instead of investing in the infrastructure the country needs to be a sustainable player in the 21st century economy. As for Sizsells take on the bankers, with a capital W, I would charge them with financial treason. They have done more to bring the country to its knees than any terrorist organisation!

OK for another 2 weeks then........ http://uk.news.yahoo.com/22/20100221/tts-uk-greece-papandreou-ca02f96.html

http://uk.news.yahoo.com/blog/editors_corner/article/59684/

What is with those daft letter jumbles???????? Got a daceheah now......... Which prat thought this up?

That's my point GGG it wasn't a normalised market, it was fraudulently built. Like even the best Ponzi schemes it had to crash it wasn't being underpinned by sound economic fundamentals. The regulators were certainly to blame because they didn't act to stamp this out and return the market to its normal operating principles. I am not really arguing to nationalise banks only that in this case it was certainly an option which I think should have been taken if we are to believe they are too important to the county to be allowed to fail. You can't argue that line then allow them to be in the hands of people without any consideration to the country as a whole. All that recapitalisation dosh sitting in bank vaults which is untouchable now could have been used to restart normal banking for the people and may well have negated the need for QE. If NR say came out with a savings rate of 5% it would attract most if not all savings which could be dished out at say 7%. Before you start on international capital etc have you seen credit card rates, the average now is 18.5%. I am not saying this is what should happen only generalising an option. There are no 'good' reasons why a nationalised institution shouldn't be run in as competent a manner as any in the private sector. I think you are correct about inflation we have overcompensated for deflation and given our effect on a global scale we can't hope to influence even raw material prices, which by and large we have put up devaluing the pound, never mind anything else. Everything seems to have been done to get us back to an unattainable position and one which caused the problems in the first place?

GGG, I don't think the market did perform the way you stated. I think the market always acts in ways to enhance its own validity, be that up or down. Left to its own devices the market will only react to strictly economic data, but that has to be as unbiased as the market's reaction. What seems to have happened is that a mature part decided to invent new income paths but they were fraudulent so therefore unsustainable. We then saw the politicos enter the frame and impose their own reasons. Had there been a President with a different political background we might well have seen Lehman's saved! I can see the sense of letting NR go but for me there were two possibilities. Either that or nationalise the whole sector. Like I said if this sector is so intrinsic to the health of the nation then it should be under state control. Banks are in the business of money supply, the private sector as a whole doesn't mind where it gets its investment only that the terms are right. It has cost us billions of pounds to end up with some half hearted halfway house which isn't working for our benefit anyway! I don't think it's fair to say Darling didn't know what was going to happen, given a certain course of action he took, I don't think anyone knew what was going to happen hours into the future never mind weeks, months or years. These are the times when a clear personal belief in a political course is needed; problem is that we now have career politicians with no real ethos. As for the BoE I think that was more of a precursor to us going into the euro and even preparing the way for the dreaded federalism than anyone taking a sensible decision and withdrawing interfering rights from transient politicians!

Yes, first individual gold in 30 years for a UK athlete in the winter games and if we perm in the gender that almost doubles!

Actually Stephen we might be higher up your list than that! If we accept 10 year gov debt bond yields in comparison to German Bunds is indicative then the UK is in a worse position than Spain or Italy. UK 10 yr bond yields are .95% above German ones with Spanish ones .81% above and even Italian ones at .84%. We have spent nearly £200,000 millions buying our own debt and we are now locked into either repaying it or defaulting on it, either option not very attractive in enticing normality back into the markets. If we add inflation, and yes the BoE have said they consider the latest figure to be a blip but really....., and also the latest public finance figures, (Jan which holds a lot of information about how much the self assessment workers are paying as tax or not as that figure fell by 11.8% compared with the previous Jan!) then we can see we are far from out of the woods and in fact probably only just entering the deepest part of them! Until we see a clear plan and direction from our leaders to stabilise the situation and get back to some sort of sustainability we are living in La La Land! As for the Obama and Tobin options you mention I would have thought the Obama one holds more water. The Tobin plan whilst appealing to nationalistic or even xenophobic tendencies probably couldn't work in the global context we now find ourselves in. The Obama one is probably the only way a capitalistic economy like the USA can resolve itself to the fact that if a section of the economy is so important it cannot be allowed to fail then it should be under state control. Keeping it in the private sector but splitting it up into much smaller units at least gives some form of governmental control.It would stop another Lahman imploding the market.

Politicians can't help themselves from grandstanding; it's in the nature of the beast. They now seem to be falling over themselves to patronise the people affected by the Corus closure. Shows just how ineffective they are when faced with economic reality!

I find it interesting that the 'father of the euro' Robert Mundell has come out and said he believes Italy is really the one to watch as the intricacies within euroland unfold. I have thought that for a long time now. Back to Greece and a couple of days ago saw the end of the Ecofin meeting where the euro zone finance leaders met and what did they come up with. Very little really, the head J-C Junker said Greece would be helped by individual governments offering bilateral loans or loan guarantees. This was probably to get around their own rule book! Greece will try to get 16 billion Euros worth of bonds away in the coming months, April & May, the markets might test that resolve! Greek 10 year bonds are now paying 3.21% more than German ones, in the same currency????? (This is the same reason I think Italy is suspect!) Might be interesting to see if Goldman Sachs is brought into the open to explain it's handling of debt issues for the Greek government. Their last government oversaw a massive 20% rise in public sector jobs and with it a 30% rise in public sector wage bill and pension provision so there must have been large salary increases as well. Coupled with a black economy which is estimated at 30% of GDP and a decline in competitiveness estimated at 30-35% not hard to see why Greece has been hit hard by the current recession. Perming in labour market restrictions only exacerbates the position. Some of the above rings bells with the way we have been going and funnily enough the Greek prime minster is in London now for talks with Brown. I wonder who is asking who for a loan?

Com'on Amy!

Merc, Not sure you can get a 'change of use' provisionally? I am pretty sure an application along these lines would precipitate quite a close examination of the knock on effects. It's a bit like the whole Tesco deal, you get an 'aggressive' national in and the local independents must catch a cold. Having said that I know there is a debate at the moment about improving the night time economy in places like Bedlington so this might fit into that thinking? I would like to agree with Mr D's thoughts and I think Weatherspoons would have made a good strategic fit for Bedders but they are in the business of servicing an existing client base not taking a punt on developing one from scratch.

Merlin, I agree but it must have to go through some sort of planning process, I would therefore assume our Town/county councillors would be aware of it??

Typical.........

Ex B, Yes the next one you get will probably not even have the stamp on so you will have to pay for the postage! Actually NCC are in a really precarious position at the moment, the administration cannot set a legal budget, they get one more try then central gov step in and impose one.

If that is right Weatherspoons have just bought a delicenced pub? I would think getting the licence back would be a real uphill struggle, arguing that the town needs another pub while most are on their uppers if not closing, would tax the persuasive powers of Aristotle!