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And the news keeps getting worse...
- Thread starter the_leander
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the_leander said:
Welcome, ladies and gentlemen, to the end of the British economy.
Because if this does fail, in 3 months, we'll have to plunk up this much again; And in so doing, leave us in a worse economic situation then Russia was when communism collapsed.
The full article of the plan is here
What is your definition of failure? This type of thing has been tried before (on a smaller scale) with success in Japan and Scandanavia. It even made the taxpayer some profit. And what makes you think we'll have to pay all this again?
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smithy said:
Because the assurances and promises that are tied to this agreement are of the same woolly insubstantial type that this government have become famous for through things like PFI, IE; worth sod all.
Now if it works, great, if it doesn't, we'll have to cough up that much again in around 3 months to restart it all from scratch and in so doing.. Bankrupt the country.
I guess it comes down to how much faith you place in both our government and our financial sector (you remember them, the ones who got us into this mess in the first place)..
the_leander said:
You're right, PFI is a disgraceful short termism that will prove to be very expensive in years to come.
First of all, we're not coughing up £500bn. In fact, as of tomorrow, the plan has cost us £50bn - and the Government has forced 4 of the banks to take this cash. Even then, we're getting preference shares in return at bargain basement prices. The taxpayer will also be collecting dividends on these shares.
The short term loans from the BoE: the banks pay interest on them.
The government debt guarentee also comes at a price to the banks - more income for the taxpayer. And the taxpayer will only pay out on this £250bn if the debt is defaulted on. And remember, we've already seen Barclays and RBS do some massive writedowns on this same debt anyway.
If the plan doesn't work (not sure what your definition of "work" is?) then it will not necessarily cost the taxpayer more money. If you mean "doesn't work" by another bank running out of cash... this is extremely unlikely now. For a start, we don't have any more unsound banks that ran themselves on a model like Northern Rock and B&B's. If you mean "doesn't work" by not easing up the credit crunch, well that's down to foreign governments doing something similar.
Secondly, the UK is in no danger of bankruptcy. The UK's GDP is about £1.2trillion, our current national debt is about 40%. This plan will boost that somewhat, but much of it is short term debt, and the money being borrowed is making money too.
Although I'm instinctively a Tory, I think the Labour government is doing a good job of managing this crisis. A rather better job than the Conservatives would have, who I believe, wouldn't have managed to reach beyond a market dogma.
Lastly, it's all very well blaming the greedy stockbrokers, but bare in mind that nobody has blamed them much in the last 5 years. Instead we were all queuing up for their tax-pounds to be spent on us. We must remember that about 40% of the UK's GDP is generated by the City. All of our wealth, hospitals, schools, community projects depend on this, the UK's major industry. It's in our interest to help it through hard times.
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US Mint isn't producing any more gold coins. Wonder why? Could it be that they can't get gold? My local bullion dealer was having difficulties getting stock.
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This just in:
Following the problems in the financial sector in the UK, uncertainty
has now hit Japan.
In the last 7 days Origami Bank has folded, Sumo Bank has gone belly up
And Bonsai Bank announced plans to cut some of its branches.
Yesterday, it was announced that Karaoke Bank is up for sale and will
likely go for a song, while today shares in Kamikaze Bank were suspended
after they nose-dived.
While Samurai Bank is soldiering on following sharp cutbacks, Ninja Bank
Is reported to have taken a hit, but they remain in the black.
Furthermore, 500 staff at Karate Bank got the chop and analysts report
That there is something fishy going on at Sushi Bank where it is feared
that staff may get a raw deal.
/gets coat
Following the problems in the financial sector in the UK, uncertainty
has now hit Japan.
In the last 7 days Origami Bank has folded, Sumo Bank has gone belly up
And Bonsai Bank announced plans to cut some of its branches.
Yesterday, it was announced that Karaoke Bank is up for sale and will
likely go for a song, while today shares in Kamikaze Bank were suspended
after they nose-dived.
While Samurai Bank is soldiering on following sharp cutbacks, Ninja Bank
Is reported to have taken a hit, but they remain in the black.
Furthermore, 500 staff at Karate Bank got the chop and analysts report
That there is something fishy going on at Sushi Bank where it is feared
that staff may get a raw deal.
/gets coat