Tuesday, September 16, 2008

Boooooom………Bust

This week the crash went nuclear, and Britain will feel the worst of the fallout

It was Black Monday. Banks going bust. Stock markets in turmoil. A nosedive in the share price of HBOS, Britain's biggest mortgage lender. The brainboxes who come up with complex models of how financial markets work say that these sorts of things are supposed to happen only once in a blue moon. But at the moment it is a case of another week, another crisis.

Posted by housebear @ 09:10 AM (928 views)
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12 thoughts on “Boooooom………Bust

  • Chr!st.. The Guardian has gone Uber Uber!

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  • I agree, I think the UK is – in many ways – in a far worse position than the US. Prices went far higher over here, debt is greater over here….

    Soon people will be literally ‘giving’ houses away, just to get something.

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  • last_days_of_disco says:

    “Despite the all-pervasive bleak mood yesterday, however, the financial storm cloud has three silver linings. Perhaps the least important is that it brings forward the timing of cuts in interest rates in the UK. For the past six months, the Bank of England has been unable to decide whether the credit crunch or rising inflation poses the bigger threat to the British economy; the latest, downward lurch in the financial markets (coupled with the drop in the oil price to below $100 a barrel) means that there are no longer any excuses for inaction from the Bank. While cheaper borrowing is no panacea for the problems of the British economy, and will come too late in any event to prevent recession, it will help to cushion the fall. A rate cut in October is quite possible in the light of what has happened so far this month.”

    It funny how no matter what is happening, the answer is a rate cut. Maybe he and Blanchflower are twin brothers or something.

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  • Richard Davidson says:

    A rate cut will help, to be fair. It’s quite nice if you’re not directly in the firing line to enjoy the schadenfreude of ‘I told you so’, but this will effect EVERYONE if we’re not very very careful.. the good and the bad… the long term conservative investor and the short term speculator… the chips won’t fall just on the greedy…

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  • Hang on, I heard our leaders tell us the UK is the best placed economy in the world to ride out these difficulties?
    So which is it – best, or worst?

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  • “The bottom line is that Tuesday and the rest of this week could be ugly so be prepared. The second bottom line is that this Depression like the last appears to be caused by a deliberate contraction of credit. House prices are falling because banks don’t have the money to lend to house buyers. As a result, portfolios holding mortgage backed securities are tumbling, taking banks with them. The Fed, after bailing out Fannie May and Fredie Mack, have let Lehman Brothers fail. AIG appears to be next and the dominoes will continue to fall. !

    henry

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  • “We may be on the verge of a stock market crash reminiscent of 1929.

    I was watching CNBC when the news came across that Moody’s had downgraded the Insurance giant AIG (American International Group.) This company was already on the ropes Monday when its stock crumbled to $4.75 from $11, %60 in one day. It was down from a $70 52-week-high. The company had gone to the Fed for a bailout. It was estimated it needed $40 billion.!

    henry

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  • “Because of the Moody’s downgrade, it emerges that it will need alot more money to avert bankruptcy. This is a massive company that holds the pensions of millions of employees. A money manager estimated that a trillion dollars would be lost if AIG declares bankruptcy. The whole world financial system could be taken down. He said banks in the Far East were already acting like this is inevitable, and the collapse already has been set in motion.

    As you can imagine, the CNBC commentators were frantic. One demanded to know how the Fed can allow this to happen. “We know they print money,” he said. Another wondered if the States whose pension funds were held by AIG could organize a bailout. Not enough time, he was told.”

    henry

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  • “That noted, let’s remember the words of Denis Healey,

    former British Defence Secretary and Secretary of the Exchequer:

    “World events do not occur by accident:

    They are made to happen, whether it is to do with national issues or commerce;
    and most of them are staged and managed by those who hold the purse strings.” ”

    more from henry later

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  • sneaker @3 said… Hang on, I heard our leaders tell us the UK is the best placed economy in the world to ride out these difficulties?
    So which is it – best, or worst?

    Depends which way you look at the list…

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  • malct @ 7

    “That noted, let’s remember the words of Denis Healey, former British Defence Secretary and Secretary of the Exchequer:”

    “We are all agreed on a massive extension of public ownership.”
    Speech in York (2 June, 1973).

    “By the end of next year, we really shall be on our way to that so-called economic miracle we need.”
    In an Ministerial broadcast on the Budget (6 April, 1976).

    “If we can keep our heads—and our nerve—the long-awaited economic miracle is in our grasp. Britain can achieve in the Seventies what Germany and France achieved in the Fifties and Sixties.”
    The Sunday Telegraph (4 July, 1976).

    “The alternative to getting help from the IMF would be economic policies so savage I think they would produce riots in the streets, an immediate fall in living standards and unemployment of three million.”
    On ITN’s News at Ten (29 September, 1976).

    “It is totally unproven that the increase in the money supply has a short term or medium term connection with inflation and prices.”
    Speech in the House of Commons (Hansard, 11 November, 1981, Col. 552).

    He may have had integrity but his policies on nationalisation and other aspects opened the door for 18 years of tory nonsense.

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  • Check out HBOS Share price now – down another 23% today!!! I pity poor Martin Ellis next time he gets wheeled out to put positive spin on dire numbers. Must be embarassing being the chief economist of a company thats lost nearly 80% of its value in a year!

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