Sunday, Jan 25, 2009
Some banking greatest (*)hits
Observer: Why they all owe us now
"Distressed debt is symptomatic of the leverage boom that has brought the British economy to its knees. It is inevitable that HBOS and RBS own a large slice of this worthless paper. And their problem is now our problem."
Posted by letthemfall @ 12:42 PM (412 views) Add Comment
2 Comments
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1. bellwether said...
A simple article but seems to clarify why the UK is bust. For years commentators have been talking about the demise of the USD. I suspect that won't happen any time soon but I have imminent concern about our currency.
In the 7 years to 2008, £275billion was withdrawn as debt and secured against residential propery - so called equity released (as if equity even exists until it is realised free of debt) . Without this stimulus the UK would have been in recession since 2001 ie the average of apx 2.6% growth per annum would have been negative.
This recession will blow that froth away (ie apx 17% contraction straight away) but it will be much worse than that as there is a negative feedback loop now in operation and with a global recession in effect we cannot even rely on a weakening currency for exports
Forget about houses dropping by say 30% or more over the next few years that could be the figure for GDP - which would infer up to 10 million unemployed.
2. troy said...
"Then we look for the why governments are not repealing the Act of King William and restoring unto themselves the right and duty to create and issue their nation's money....
We discover that governments, particularly of the 'Western World' are unwilling to initiate any change in the system or even discuss it."
bamr