Gordon Brown

One of the my biggest grips on this whole sorry scenario is about the Government. Its level of stupidity has no bounds. Take its whole era from 1997-2008. On day one not only did it give the Bof E independence..(a good decision) but then it split up the regulatory framework into 3 parts. This was critised then and has now been shown to be one the reasons the FSA did not spot the danger regarding Northern Rock. If the left hand does not know what the right hand does and vice versa how can oyu be effective….Then Gordon Brown announces he wants to sell the country’s gold. He picks the time gold prices are at their lowest level for 20 years to do this. Not only that he literally picks the bottom of the market. Since his decision gold prices have shot up..Selling gold at approx 250 where gold now trades at 900…and the media refer to Gordon Brown being a great Chancellor. Do me a favour.

Gordon Brown then takes credit for the great economic expansion being undertaken in the UK.He fails to mention the debt mountain the country was living on and fails to mention world economic growth was expanding rapidly at the same time as were all G7 countries (bar Japan). Indeed it would have to be an absolute terrible Chancellor to screw this mess up. In addition to all of this there existed a budget surplus at the turn of the century. Anyone who has ever studided economics would know that when an economy is growing hte budget deficit should shrink...In this country though under the gret leadership of Gordon Brown the budget deficit rose....How can it even be possible. Now that hte economy is undergoing a bust....this deficit will rise even more....Who is going to pay for all of this????

Gordon Brown says he has done away with boom and bust. If this is not a bust I dont know what is...Of course he will blame USA for all these problems..failing to take into account that Vince Cable MP warned him of all of these problems in 2005. What did Gordon Brown reply to him...Essentially he didnt know what he was talking about...Pot kettle black GB.....

And now having sunk this ship onto the rocks....the media are saying he is doing a great job....I shake my head at the stupidity of it all. People talk about "dumbing down" well the media really have dumbed down if they are portraying GB as a super hero....What next...George Bush to be nominated for the Nobel Peace Prize....and North Korea to be voted as the most democratic state in the world....The guy is a liability....and needs to leave now...the problem is who will replace him....

The World we are in

So today begins my blog. We live in strange times. A market in freefall, a global economy set to undergo a recession, a generation set to see what real hardship is about and a power hungry government intent on imprinting on us it view of the socialist world.

What does this author think of it all? Totally disgusted. Disgusted at the governments response, furious at the way the current crisis is being reported by the media and worried about the future.

While it is impossible to write down everything regarding the crisis in own post here a couple of things which the reader should take away – who is responsible for this crisis?

Is it the banks who went round lending money (sometimes 125% mortgage value) to people who where already stretching themselves in repaying the loans at low interest rates?

Is it the regulators who where in charge of over seeing the system but had little idea at how CDOs/CDS and all the other kinds of products Wall Street issued worked but refused to acknowledge until it was all too late?

Is it the credit ratings company who were being paid by Wall Street (legally) who went round giving AAA+ ratings to CDOs giving investors a fall sense of security at how secure these products are when in fact they had mispriced the risk on these products.

Is it asset managers/pension funds fault investing in products they had little idea of how they worked but where enticed by the extra yield?

Is it Greenspan’s fault for keeping nominal rates low, so real rates were negative for almost 2 years further fuelling the boom crazed years?

Is the hedge funds fault for promising positive alpha in all kinds of scenarios (boom/bust) and in doing so investing in products they themselves had no idea worked?

Is it the government’s fault who was more than happy to instigate a boom so as to fuel the happy days convinced that this time it would be different (a la Brown…”there will be no return to the days of boom and bust” ).

Is it the borrowers fault for borrowing too much money, convinced that they could make an almost instance profit on the buying and selling of their house (referred to here as “flipping”).

Is it the speculator fault who drove the prices down in markets, by making false rumours and hence instigated a global run on the banks.

Is it the fault of the reporters who kept putting a positive spin on the direction of where the stocks/ house prices would go resulting in private investors again mispricing the risk.

Is it the fault of the bonus system which results in bankers being paid for selling/buying products which blow-up several years after…long after the trader has left and collected his winning….?

Or was it the fault of capitalism, and should we return to a socialist world.

Over the next couple of posts I will try and address some of these issues and in doing so try and offer some solutions where we should go from here. One thing I will say is that the current government (both in the US but particularly in UK) has been totally useless in this crisis and has done nothing until it is too late.

The current crisis in my honest opinion can be blamed on Government, Greenspan (and several other central banks), regulators, ratings agencies, media, and finally the bonus system in investment banks. Over the next couple of posts I will try and point out why I believe the blame to lie of these guys and would welcome feedback from the reader.