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Uriah Heap

Spectator Says Uk Government Now Rated As Credit Worthy As Rbs

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http://www.spectator.co.uk/coffeehouse/327...te-of-rbs.thtml

This article is one of the most apocalyptic I have yet seen.

The short version is that UK government debt now has the same market value as RBS debt suggesting that the probability of default is judged equally high for the two institutions.

Very short version - we are now regarded as the dodgiest bunch in Europe.

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My congratulations to Ponzi Brown you truly will go down in British history your name will be taught to school children for centuries to come as the man that bankrupted a nation.

And you managed to achieve this feat in little over 10 years.

I think Lord Sutch couldn't have fooked it up as much as you and he's a raving loony.

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I think Lord Sutch couldn't have fooked it up as much as you and he was raving loony.

Fixed. Respect. Died in 1999.

Edited by deflation

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http://www.spectator.co.uk/coffeehouse/327...te-of-rbs.thtml

This article is one of the most apocalyptic I have yet seen.

The short version is that UK government debt now has the same market value as RBS debt suggesting that the probability of default is judged equally high for the two institutions.

Very short version - we are now regarded as the dodgiest bunch in Europe.

Here what said.

Britain is now as likely to go bust as RBS - this is the official verdict of the markets. At the bottom of this post is Bloomberg's Graph of the Day, which shows how Britain's dodgiest bank and Europe's dodgiest government now have the same "credit default swap" rating - the yardstick the markets use to guage whether something's about to go bust. No wonder, you may say, given that RBS is state-owned. But my point is that this has major implications for our ability to borrow - and borrowing is what both Cameron and Brown will be relying on to pay the bills. Spain lost its AAA rating yesterday, and the markets think Britain may be next. This would increase the cost of borrowing, our taxes, our mortgages - the works. I wish I could find a way of getting across, in plain, non-hyperbolic English, the sheer scale of what's going on right now, and what this means to our country's ability to finance itself. I just can't: the size of our problems defies my powers of expression. Journalistic language can't do it justice: we cried doom months ago, and we were right. Crying "double doom" now wont resonate. So I leave you with this recent, chilling analysis from Michael Saunders of Citi:

"The debt-fuelled boom in asset prices and spending in recent years was so huge that deleveraging and retrenchment will cast a shadow over the economy for many years. The combined debts of households and non-financial firms surged to 219% of GDP in Q3-2008 — the EU’s highest — from 128% of GDP at end-97 and 98% of GDP at end-87. Debts of leveraged non-bank financial firms (e.g. hedge funds, private equity, banks’ off-balance-sheet vehicles, wholesale mortgage lenders) rose even faster, to 172% of GDP in 2008-Q1 from 66% of GDP at end-97. In turn, total sterling and FX assets of UK banks surged from £188bn (240% of 1996 GDP) at end-96 to £754bn (521% of 2008 GDP) in early 2008. This debt boom relied heavily on short-term external funding. The UK’s external debts (i.e. debt owed by UK banks, non-bank companies, households and government to non-residents) ballooned from 129% of GDP in 1987, to 197% of GDP at end-1997 and 413% of GDP in 2008Q3. This is, by a long way, the G7’s highest. Moreover, roughly three-quarters of the UK’s external debts are short term, making the UK highly vulnerable when, as now, global banking flows dry up.

Credit booms and asset booms are as old as capitalism. But, this one was especially big, both in the UK and overseas. Because inflation was capped by benign effects from globalization over recent years, this credit boom was allowed to run until it collapsed under the weight of worsening credit quality, high debt service burdens, high debt rollover, and extraordinarily high house prices. As a result, the UK now faces a savage mix of shrinking bank assets, widening lending spreads and falling asset prices. Although financial market conditions are improving a little, the process of retrenchment by banks, companies and households is far from over.

And, further ahead, if and when the recession eventually ends, there are uncertainties as to whether the authorities will be able to manage the withdrawal of massive policy stimulus at an appropriate pace to avoid both a massive upsurge in inflation and a renewed dive into recession. It will be a long journey — probably many years — back to economic stability."

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Spain lost its AAA rating yesterday, and the markets think Britain may be next. This would increase the cost of borrowing, our taxes, our mortgages - the works.

This is both terrifying and a increasingly becoming a reality under the maniac Brown. Few reporters seem to be mentioning this though!

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My congratulations to Ponzi Brown you truly will go down in British history your name will be taught to school children for centuries to come as the man that bankrupted a nation.

And you managed to achieve this feat in little over 10 years.

I think Lord Sutch couldn't have fooked it up as much as you and he's a raving loony.

I actually think that due to his stupidity, our GDP will actually be considerably LOWER in 10 years than it is now. In other words, we will likely be permanently poorer as a result.

We may possibly get through the downturn/recession/depression relatively unscathed (unless of course, if hyperinflation occurs, in which case things are likely to become insanely messy), but the damage caused by the INSANE borrowing against the UK will suppress the economy for many years in the future. I think the UK will struggle to return from this, and theres a risk that it end up becoming a second world country.

Many of the people we need to keep will leave the UK, as there is just very little point staying if this happens.

Well done Gordon Brown. you were amazing... for all the wrong reasons.

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There's a great comment underneath the spectator article;

"So, basically, the banks have screwed us royally, and because we can't afford a collapse of the banking system, we have to prop them up. Which we also can't afford."

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  • 285 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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