Thursday, Aug 27, 2009
An absolute liar....
Express: BROWN 'KNEW OF CRUNCH IN 2007'
''GORDON Brown faced huge embarrassment yesterday when a leading US financier said the Premier had been warned that the world’s banks were heading for a crisis. Hedge-fund chief Jim Chanos said then-Chancellor Mr Brown was told so-called toxic loans could send the global banking crisis into meltdown''
Posted by hpwatcher @ 06:34 AM (541 views) Add Comment
15 Comments
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1. bidin'matime said...
They all knew, but thought if they shut their eyes, covered their ears and went 'I can't hear you', it would all go away.
I wrote to both the BoE and the FSA early in 2007 to warn them of known cases of ridiculous and dangerous lending to individuals who were on a one way ticket to bankruptcy, but who were able to keep a clean credit rating by taking out new loans to meet their payments on existing loans, only to be told to go away and not worry my little head about it.
They are all a bunch of crooks and idiots.
2. techieman said...
I actually do think this is a bit unfair. The CDOs CDS etc started off as a good idea but themselves became a bubble with predictable consequences to any one with common sense sitting outside. However WHEN they would blow up was really anybody's guess. It could have blown up before or gone on for a few more years - such in the nature of bubbles. I have little time for GB for a variety of reasons, but in this case i think its just wrong to have a go. And anyway should we really post anything from the Express?
A lot of people far more clever than him were caught out. Present company excepted [that is deliberately ambiguous].
3. a saver said...
Anything that will make Brown more unpopular and ensure Labour are defeated in the next election is good.
4. This comment has been removed as it was found to be in breach of our Blog Policies.
5. a saver said...
At least if the Cons get in they can instigate some tough policies because they can admit the country is f*cked and blame it on Brown.
Everything Brown does is so transparently vote-catching that it's a miracle anyone wouldn't see through it.
6. bluebeach said...
Why should any of the feckless wasters want to "see through it" Gordon is king to them and has done everything in his power to rescue their stinking ways.... I think he will soon have it in the bag...another term with Gordon and Ali...
7. icarus said...
What could Brown have done in April 2007? The damage had already been done. This wasn't a normal over-lending crisis, as in Japan in the early 90s. In such cases at least you can pinpoint the location and scale of the crisis. The main cause of this credit crunch was OTC derivatives, especially CDOs, with no market pricing or pricing mechanism (apart from means that markets could easily see as arbitrary), distributed widely across the financial system. Once some of these derivatives were shown to be junk (as with BNP Paribas in August 2007) the money markets, pension funds and other investors decided thet had no way of knowing how much of the rest of the mountain was junk, so they fled. This was an Anglo-American system, with London very much the junior partner.
In any case, Greenspan/Bernanke appeared to think that you couldn't prevent bubbles (risk-models never adequate, unfactorable 'irrational exhuberance', you see), you could try to manage them, and the best way to do that was to make more money by blowing the next bubble. This required a lot of co-operation between Wall Street and Washington. Blair and Brown just went along with this.
8. bellwether said...
Gordon Brown was however complicit in the blowing of the gargtuan uk housing bubble which triggered the credit money furnishing the succesive, and to be paid for later, quarters of growth he used to crow about.
9. icarus said...
@8 - OK. My point was simply that by April 2007 it was too late for Brown to turn back the tide.
10. techieman said...
icarus - agreed - per mine @ 2. However does the fact that everybody in government ignored these "exotic" instruments because they didnt understand them, excuse all of them in the aggregate? Probably not after all the bursting was inevitable so should we not blame those that allowed the bubble to keep inflating (by not applying any real regulation) - eg SIVs were i think excepted from basel?
11. p. doff said...
Agreed bidin' @ 1. Everybody just wanted to look the other way.
I repeatedly reported dodgy brokers packaging 'liar loans' (in 2005/6) , and supplied the evidence to my line manager, Result - nil, not a sausage, bugger-all. In fact, my motives were called into question and I was virtually told not to make waves.
12. icarus said...
techie - yep, hubris and profligacy in financial matters have characterised the Blair-Brown years.
13. iguana said...
What??????!!!!!!!
Cast your minds back a little to the damning statements made by the outgoing BOE supremo 'fast' Eddie when he spoke to the Treasury Sub committee about the first ten years of the MPC/BOE 'control' of interest rates. He knew and said clearly that the economy was heading for hell in a handcart. With certainty he had shared his concerns and conclusions with the Treasury and with Blair/Brown on many occasions, yet having said that the population as a whole were being stuffed on a grand scale his staggering statements were largely ignored and it would now seem forgotten.
The writing was on the wall long before 2007.
14. Lucas said...
Yep Igunna, you are spot on.
Most trained economists including those at the BOE knew that we had a bubble in house prices and unsustaining debt/lending problem as early as 2003, I'm sure the Treasury and Brown must have known as well. He had five years to do something about it but didn't. Where did he think the money to lend/debt was coming from? Savings which were at multi-decade lows? Surely he was not that stupid?
15. The Truth said...
What and they just worked that out? Anyone with basic economic literacy has known for years that brown has been a dishonest, lying cheating manipulating of the truth and of course economicly incompetent. Only desperate for power - what a loser