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gruffydd

A Deluded Wall Street Threatens World Economy

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http://www.guardian.co.uk/commentisfree/20...runch.useconomy

excerpts:

The unresolved question is a humdinger. How big is the void between all the debt and the actual, slipping, value of the property that is supposed to be sustaining it? And here's another: how many banks may go bust before the situation steadies? Goldman Sachs estimate the gap at $2trn; Professor Nouriel Roubini, of the Stern School of Business at New York University and a contemporary Nostradamus, says the number is $3trn. Any which way, it is large and the only way to save the US economy from a credit-crunch-induced recession is to try to narrow the gap by steadying property prices, while the banks are thrown a lifeline.

The Europeans, and here Britain should take a lead, must redesign and reregulate their financial systems fast to close down the scope for the kind of seizure that has hit not just Bear Stearns, but British, German and French banks and threatens more. There must be a readiness to offer any troubled bank as much liquidity as it needs. This is not just an American, but global, emergency.

Edited by gruffydd

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http://www.guardian.co.uk/commentisfree/20...runch.useconomy

excerpts:

The unresolved question is a humdinger. How big is the void between all the debt and the actual, slipping, value of the property that is supposed to be sustaining it? And here's another: how many banks may go bust before the situation steadies? Goldman Sachs estimate the gap at $2trn; Professor Nouriel Roubini, of the Stern School of Business at New York University and a contemporary Nostradamus, says the number is $3trn. Any which way, it is large and the only way to save the US economy from a credit-crunch-induced recession is to try to narrow the gap by steadying property prices, while the banks are thrown a lifeline.

The Europeans, and here Britain should take a lead, must redesign and reregulate their financial systems fast to close down the scope for the kind of seizure that has hit not just Bear Stearns, but British, German and French banks and threatens more. There must be a readiness to offer any troubled bank as much liquidity as it needs. This is not just an American, but global, emergency.

The VI exposes itself right at the bottom:

The US government needs to put a floor under house prices by offering mortgage guarantees and prohibiting immediate foreclosures.

WTF? The economy is going to hell in a handbasket, but we must support bubble prices?

Bloody Hell..... :huh:

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http://www.guardian.co.uk/commentisfree/20...runch.useconomy

excerpts:

The unresolved question is a humdinger. How big is the void between all the debt and the actual, slipping, value of the property that is supposed to be sustaining it? And here's another: how many banks may go bust before the situation steadies? Goldman Sachs estimate the gap at $2trn; Professor Nouriel Roubini, of the Stern School of Business at New York University and a contemporary Nostradamus, says the number is $3trn. Any which way, it is large and the only way to save the US economy from a credit-crunch-induced recession is to try to narrow the gap by steadying property prices, while the banks are thrown a lifeline.

The Europeans, and here Britain should take a lead, must redesign and reregulate their financial systems fast to close down the scope for the kind of seizure that has hit not just Bear Stearns, but British, German and French banks and threatens more. There must be a readiness to offer any troubled bank as much liquidity as it needs. This is not just an American, but global, emergency.

Another page out of the champagne socialists book of how to manage an economy into state ownership.

Great - thank Will - you are our saviour - W*nker!

The fact that they (NuLabour) have been complice in this messy event to help 'hard working families' get into debt, prop up unsustainable house prices, erode pensions and spend tax payers money on an excess of government pen pushers to buy votes may not have past his notice - how can dipshits like him get air time.

HAL

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Ah! It's only Will Hutton. I just can't seem to take him seriously anymore. Him and Billy Bragg.....Toynbee as well........Yasmin Alibhai Brown - she's also crap.

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The readers' comments afterwards are good. There's a lot of interesting stuff in there, and almost all of the contributors agree that Hutton's talking nonsense. Most of them sound considerably more knowledgeable than him as well.

Edit: typo

Edited by Scunnered

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http://www.guardian.co.uk/commentisfree/20...runch.useconomy

...

The Europeans, and here Britain should take a lead, must redesign and reregulate their financial systems fast to close down the scope for the kind of seizure that has hit not just Bear Stearns, but British, German and French banks and threatens more. There must be a readiness to offer any troubled bank as much liquidity as it needs. This is not just an American, but global, emergency.

The guy's an idiot. The damage has already been done with too many people in too much debt. You can't regulate your way out of this crisis.

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The readers' comments afterwards are good. There's a lot of interesting stuff in there, and almost all of the contributers agree that Hutton's talking nonsense. Most of them sound considerably more knowledgeable that him as well.

Agreed. Willy gets royally pwned.

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The readers' comments afterwards are good. There's a lot of interesting stuff in there, and almost all of the contributers agree that Hutton's talking nonsense. Most of them sound considerably more knowledgeable that him as well.

I particularly liked the comment about Corporate America decoupling fromt the state ...

What it fails to comprehend is that the large American corporation has decoupled from America.

- The movement of jobs overseas in acts of labour arbitrage that have nothing to do with comparitive advantage,

- the free movement of capital out of the US dollar and into any floating currency an American corporation wishes to hold its currency in,

- the investment in R&D that only produces growth for the very wealthiest Americans, its institutions and corporations which then use it to boost the GDP in other countries

this is the real story. And this IS all to do with foreign trade and open markets. It's precisely the story and the mind boggles that Hutton doesn't grasp this.

The decoupling has simply removed all those good things that he mentions into the private sphere which is no longer contained within the nation state. International trade, labour arbitrage, giant differentials in wealth that make the R&D the birthright only of rich Americans and the grist for emerging economies lays waste to Hutton's assertion.

It is interesting that Karl Polanyi indicates in his double movement theory that capitalism cannot decouple from the economy as many societal forces move to prevent what would otherwise be the destruction of the society in which that economy lives. However completely open international trade has changed the equation a bit, because the corporation can simply shield itself and a vast percentage of a nation's wealth which it has accrued in other parts of the world. The country may indeed finally eject this sort of capitalism but it cannot control it anymore as Polanyi's analysis says it will. The result is that the nation is gravely wounded. This is where America is now and while all those rich American corporations may be forced to file their risible taxes there at some point, their wealth, the fruit of their r&d and their power to do as they wish will remain offshore.

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The United States is about to be trashed by perhaps the greediest, most arrogant, self-deluding financial class in the country's history

I guess they must have friends over here then, every one of them voting for good ole Dave!!

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funny that it happened under Labour then

please!! How many times will everybody say that!! How irrational is it to blame everything on Mother Brown and Co. "it happened under a labour government.. so it must be their fault... nah nah nah!!!"

Have you not read anything on here which would allow you to realise that our economy follows the US economy not the other way around.

All those greedy barstewards in the city are certainly no fans of Brown and co are they??

WAKE UP!

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please!! How many times will everybody say that!! How irrational is it to blame everything on Mother Brown and Co. "it happened under a labour government.. so it must be their fault... nah nah nah!!!"

Have you not read anything on here which would allow you to realise that our economy follows the US economy not the other way around.

All those greedy barstewards in the city are certainly no fans of Brown and co are they??

WAKE UP!

so the Labour government is not responsible for anything - such as consumers getting into huge amounts of debt, Government overspending and living beyond our means?

It's all society's fault.

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This seems to be the day for idiotic plans to save the world economy. Scotland on Sunday (the Sunday version of the Scotsman) has a piece by their economics expert Bill Jamieson, entitled A five point plan to avoid meltdown which explains how the Fed should be sorting things out.

His five points comprise:

  • Continuing interest rate cuts
  • Day-to-day intervention in the credit markets
  • Government mortgage guarantees to "cauterise" the rise in foreclosures
  • A large package of tax cuts and spending increases
  • Economic leadership from the White House.

Perhaps Mr. Hutton and Mr. Jamieson should get together and form a new political party. Once they've got a decent number of members the whole lot could be marooned on Rockall where they could implement their theories to generate a booming local economy.

Edit: mangled URL

Edited by Scunnered

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so the Labour government is not responsible for anything - such as consumers getting into huge amounts of debt, Government overspending and living beyond our means?

It's all society's fault.

Well done...

yes it is "our" collective fault for being so fecking greedy!! That's it!! EVERYONE WHO HAS BOUGHT A SECOND PROPERTY AS AN "INVESTMENT" IT IS YOUR FAULT!!!!

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Well done...

yes it is "our" collective fault for being so fecking greedy!! That's it!! EVERYONE WHO HAS BOUGHT A SECOND PROPERTY AS AN "INVESTMENT" IT IS YOUR FAULT!!!!

"collective" greed encouraged by this Labour Government because it provided a short term illusion of wealth to help get them elected at the expense of long term stability.

This Labour Government will end in financial disaster in the same way that all previous Labour Governments have.

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Ah! It's only Will Hutton. I just can't seem to take him seriously anymore. Him and Billy Bragg.....Toynbee as well........Yasmin Alibhai Brown - she's also crap.

LOL. My thoughts exactly. They all seem so 1997 and have lost touch with reality. I'd add David Aaronovich to the list.

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Well done...

yes it is "our" collective fault for being so fecking greedy!! That's it!! EVERYONE WHO HAS BOUGHT A SECOND PROPERTY AS AN "INVESTMENT" IT IS YOUR FAULT!!!!

I think the government overspending might be down to the government but you're righ on the rest of it. :P

"collective" greed encouraged by this Labour Government because it provided a short term illusion of wealth to help get them elected at the expense of long term stability.

The greed has been encouraged by a capitalist system which has only delivered gains to the workers in the last 35 years first by having 2 workers per household, then by having them working longer hours, then by letting them spend tomorrow's earnings today. It's all a smokescreen to make us thing we're getting our fair share.

Edited by jimmy_joe

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Wonder if Will is mortgaged to the hilt on his own BTL portfolio.

Ah, this comes up regularly. His wife is a property developer. For example, here's what the Telegraph had to say in 2004 (full article).

Will Hutton, Britain's foremost critic of capitalism and an outspoken advocate for affordable social housing, is married to a property developer who has made a fortune out of selling and renting inner-city properties, often at rates which local council housing officers describe as exorbitant.

Mr Hutton's wife heads a company called First Premise, which owns and manages dozens of commercial and residential properties in London.

The company specialises in renovating rundown properties - often with the help of public grants - and then makes a profit by selling or renting them out.

The disclosure that Mr Hutton's own family is among those capitalising on Britain's property boom will be an acute embarrassment for him.

If you search for Will Hutton on this website you'll find a number of threads discussing articles he's written over the last few years. At first he was fairly negative about the whole property boom thing, but recently he's switched to making regular calls for government measures to protect over-indebted mortgagees.

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The greed has been encouraged by a capitalist system which has only delivered gains to the workers in the last 35 years first by having 2 workers per household, then by having them working longer hours, then by letting them spend tomorrow's earnings today. It's all a smokescreen to make us thing we're getting our fair share.

I agree. The financial system has become too big and unregulated. However, this era is now over. The point unclefuddly is missing is that Labour bought into this and exploited it for short term political gain by allowing an explosion in Government and consumer spending that we could not afford most of which was funded by debt.

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How irrational is it to blame everything on Mother Brown and Co. "it happened under a labour government.. so it must be their fault... nah nah nah!!!"

I blame Brown for these things:

* Adopting a reckless symmetric inflation target in 1997.

* Adopting CPI as a sole metric for inflation in 2003 - *AGAINST* the advice of Eurostat who define the metric!

* Dressing up stripping the BoE of its regulatory role as "independence" - while policies remain anything but independent.

* Adopting a "tripartite agreement" clearly intended to undermine authority and hinder accountability.

* For assigning regulation the the FSA - an organisation that is now admitted not to be fit for purpose.

* For retrospectively taxing pensions - hence encouraging fund managers to take higher risk investments.

I blame Brown & Co for their shambolic meddling and mismanagement of the economy which exacerbate the impact of global effects on a national level.

I don't blame Brown for the short sighted policies of the Fed and US Congress.

I don't blame Brown for problems arising from union of heterogeneous nations under the Euro... but I do blame him for exposing our economy to its influences unnecessarily.

Don't get me wrong, I'm no Conservative lacky... when in power, the Conservatives dropped some big clangers too... but it is hard to separate Brown from national fiscal policy over the past 10 years. He is complicit in that, at least.

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http://www.guardian.co.uk/commentisfree/20...runch.useconomy

excerpts:

The unresolved question is a humdinger. How big is the void between all the debt and the actual, slipping, value of the property that is supposed to be sustaining it? And here's another: how many banks may go bust before the situation steadies? Goldman Sachs estimate the gap at $2trn; Professor Nouriel Roubini, of the Stern School of Business at New York University and a contemporary Nostradamus, says the number is $3trn. Any which way, it is large and the only way to save the US economy from a credit-crunch-induced recession is to try to narrow the gap by steadying property prices, while the banks are thrown a lifeline.

The Europeans, and here Britain should take a lead, must redesign and reregulate their financial systems fast to close down the scope for the kind of seizure that has hit not just Bear Stearns, but British, German and French banks and threatens more. There must be a readiness to offer any troubled bank as much liquidity as it needs. This is not just an American, but global, emergency.

Rantings of a total NuLab idiot

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The readers' comments afterwards are good. There's a lot of interesting stuff in there, and almost all of the contributers agree that Hutton's talking nonsense. Most of them sound considerably more knowledgeable than him as well.

Edit: typo

Indeed, the comments tear the article to rags! About 3/4 down in the comment column is a quite long explaination of solvency vs liquidity as cause of the problems. Forget his title but it is the longest comment. He nails it. If I had computer skills :huh: . Ide pull it out and post it here. Maybe someone else can :rolleyes: . He used a few roman numerals in his title.

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I blame Brown for these things:

* Adopting a reckless symmetric inflation target in 1997.

* Adopting CPI as a sole metric for inflation in 2003 - *AGAINST* the advice of Eurostat who define the metric!

* Dressing up stripping the BoE of its regulatory role as "independence" - while policies remain anything but independent.

* Adopting a "tripartite agreement" clearly intended to undermine authority and hinder accountability.

* For assigning regulation the the FSA - an organisation that is now admitted not to be fit for purpose.

* For retrospectively taxing pensions - hence encouraging fund managers to take higher risk investments.

I blame Brown & Co for their shambolic meddling and mismanagement of the economy which exacerbate the impact of global effects on a national level.

I don't blame Brown for the short sighted policies of the Fed and US Congress.

I don't blame Brown for problems arising from union of heterogeneous nations under the Euro... but I do blame him for exposing our economy to its influences unnecessarily.

Don't get me wrong, I'm no Conservative lacky... when in power, the Conservatives dropped some big clangers too... but it is hard to separate Brown from national fiscal policy over the past 10 years. He is complicit in that, at least.

I really wish I had the time to answer your very valid arguments point by point, but I'm not sure this thread is the place. To say that Brown has mismanaged the economy really is laughable

I quote..

Gordon Brown might be overstating his case when he ignores his Thatcherite inheritance and a benign global economic environment, and takes sole credit for Britain’s rather good economic performance during his tenure at No. 11.... Irwin Stelzer

Stelzer can hardly be called a new labour supporter can he, and if he thinks SS Britain did "rather good " under Brown, then I'd tend to believe his analysis over yours!!! Sorry!

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Stelzer can hardly be called a new labour supporter can he, and if he thinks SS Britain did "rather good " under Brown, then I'd tend to believe his analysis over yours!!! Sorry!

Stelzer is a true believer in debt fueled consumption as a path to economic success. He has nothing useful to say.

The UK's economy over the last 10 years been run on debt and its apparent wealth and "success" is an illusion.

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  • 295 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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