Sunday, Aug 02, 2009
Its not working
BBC: Darling seeks more bank lending
Part of the solution to a debt deflation spiral is increased bank lending at 0% close as. Now two years in there isn't even a slight sign of this happening, and so all reflation plans fail, and all asset prices with real economic activity continue their decline. I hope Darling is getting desperate because he should be. To think we could have carried out an orderly liquidation of the banks and avoided all this. Oh no, that would have been too easy.
Posted by stillthinking @ 01:45 PM (710 views) Add Comment
14 Comments
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1. will said...
The Banks had to be bailed out - after all who is going to fund Gordon Brown's luxury retirement? It should be illegal for former MPs to sit on the board of any listed company after leaving office, but of course the majority only become an MP in order to do so. MPs are meant to serve their people, not the other way round.
2. Clockslinger said...
If Mr darling wanted a competetive banking system in this country he had the ideal opportunity to let the incompetent ones go, refund deposits and get on with it. Wasn't it always the free market that led to a competitive system? So why am I paying to keep this one going?
Like I said, Blanchflower article posted on this site is Danny being let out as Alistairs fluffer.
3. alan_540 said...
Why didn't the Government let the banks fail? It guarantees ordinary depositors anyway up to £50k. Why did they have to be bailed out?
I don't understand. All I know is that huge amounts of taxpayers money has been given to these failed institutions. They are not lending this money but using it to pay off their debts... surely these debts could have been defaulted and we could start again from zero? Excuse my ignorance... but felt I had to ask the obvious question.
4. paul said...
The title could just as well read "Darling seeks higher house prices", because that's what this is all a pretext to. There is a very direct correlation to house prices going down and approval ratings going down, and that's what Darling wants to reverse.
There is also the small issue of most MP's multiple properties adding to their retirement pots too. Like much of the baby boomer generation, if it's a choice between affordable homes for young people and a bumper retirement pot for baby boomers, I'm afraid the young have to get it in the neck according to Labour.
5. devo said...
@2. alan_540 said... Why didn't the Government let the banks fail?
There are a number of regular visitors to this site who can answer your question authoritatively. I await their response with anticipation.
6. Stillthinking said...
Although without authority, I am a regular visitor ! So I will jump in.
The answer, IMHO, is that they are clueless retards who have no idea what they are doing, there is no secret agenda or benefit. Like asking a cr*p carpenter why he hit his thumb with the hammer, there is no reason. Or maybe they felt in a country dependent on importing 50% of something basic like food, defaulting foreign creditors might end up with an politically unpopular food shortage, if they thought at all. The UK population is a net debtor(except more so than the word implies, like dddebtor), so they haven't guaranteed anything connected with us, they guaranteed foreign creditors.
7. stillthinking said...
Although without authority, I am a regular visitor ! So I will jump in.
The answer, IMHO, is that they are clueless retards who have no idea what they are doing, there is no secret agenda or benefit. Like asking a cr*p carpenter why he hit his thumb with the hammer, there is no reason. Or maybe they felt in a country dependent on importing 50% of something basic like food, defaulting foreign creditors might end up with an politically unpopular food shortage, if they thought at all. The UK population is a net debtor(except more so than the word implies, like dddebtor), so they haven't guaranteed anything connected with us, they guaranteed foreign creditors.
8. alan_540 said...
stillthinking, did you mean "one eyed slackjawed clueless retard" by any chance?
9. devo said...
5. stillthinking said.. The answer, IMHO, is that they are clueless retards who have no idea what they are doing, there is no secret agenda or benefit.
If this were true the Conservatives and Lib Dems would be all over it. They're not.
So, in my opinion, the question remains unanswered: Why didn't the Government let the banks fail?
Will you have a go at answering, flashman?
10. icarus said...
Or - why didn't governments in general let banks in general fail? It's not just Brown and Darling.
11. c'mon correction said...
I would think the reason that any government can't let major banks fail is due to the confidence of savers. Ok, they may have insured desposits up to £30k (now £50k), but there is a LOT of rich families, business owners, pensioners etc with more; that would completely destroy any confidence in british banks. The whole sector would implode, meaning immediate major effects on the short-term economy and medium-long term the UK public and businesses would be at the mercy of foreign banks, who would be the only ones left with any trust.
The banks should be dis-banded in an orderly fashion however, although how you do that without losing savers, customers and investors too - god only knows!! It's all rather bolting the stable door after the greedy-fat-unregulated-horse has bolted.
The public shouldn't be bailed out either mind you. It's disgusting that interest rates are soo low, we need a good weeding of weak businesses, greedy BTLer's and stupid people taking out 100% mortgages 'cos they gotta get a foot on da ladder'.
12. devo said...
9. c'mon correction said... I would think the reason that any government can't let major banks fail is due to the confidence of savers....
So the government's strategy of bailout/QE (money printing) is correct then?
13. new user 2007 said...
The problem is that if banks are nationalised we take on all their liabilities. If they are not nationalised they can fail, which is also bad for tax payers. The biggest issue, however, is that we seem to have left them private enough to allow bankers to return to their old ways (where it benefits them), yet public enough to accept all the liabilities and risks through the backdoor.
As for bankers being told to still give out loans...that was the problem to begin with. If their lending activity was sustainable we would not be in this situation to begin with, yet we are following policies aimed at sustaining the unsustainable! I think those are the deeper issues...rather than sustain an asset bubble, why not focus on allowing a disorderly decline and using our resources for the subsequent "clean up" of the real economy.
14. new user 2007 said...
orderly decline