Tuesday, January 20, 2009

A Leak From Every Seam

Riots in Latvia, Lithuania and Bulgaria.

Putin's Russia gets more gangster-like every day. And his Chechen satrapy is even worse.

While UK banks collapse, things are looking even scarier across the water. Bank shares in the Free State dropped 48% yesterday. The Irish government took the lead in guaranteeing deposits, but the nightmare, Icelandic scenario is if the banks' liabilities are greater than the Irish treasury's purse. The UK is in the same boat, but we can always inflate (i.e. collapse) the currency.

Can anyone suggest a safe-ish currency for my savings ?

Spain's in the doo-doo. I wonder how Santander, only a few months back a safe haven for Alliance and Leicester, Abbey National and B&B, is faring, given the Spanish property slump ?

Spain also has demographic collapse plus mass immigration.

Alice Cook is a woman after my own pessimistic heart :

Today was an historic moment. The RBS and its barely comprehensible loss signaled the end of an era. The days when finance was the engine of the UK economy are definitively over. The UK banking sector has become the 21st century equivalent of coal mining; over-staffed, over-paid, and profoundly unproductive ...

So what happens next? The government will continue to prop the banking system with liquidity. Whatever Brown and Darling might say in public, they now have the minimalist objective of preventing total collapse. It is simply inconceivable that lending could return to the 2007 levels. The heady days of near limitless credit growth have gone. The government would be doing well if it simply avoids another financial sector meltdown ...

What about the real economy? This too will adjust, and it will be painful. The bulk of the adjustment will be in financial services, which has just begun to shake out all that value-reducing labour that created this appalling banking crisis. Currently, the sector employs about 6 million people. Don't be surprised if that number falls by half.


I said 2009 was going to be interesting !

7 comments:

Homophobic Horse said...

"And his Chechen satrapy is even worse."

Satrapy? That's just pure Orientalism Laban. Tut tut.

It will be interesting to see how the new American government deals with the proposed plan to create a "Missile Shield" in Eastern Europe i.e. neutralise Russia's nuclear deterrent--which would constitute the most aggressive and dangerous act in geopolitics since the Soviets placed nuclear missiles on Cuba in 1962.

If it happens on Obama's watch then it will prove that the democrats really are the evil party, lead charismatic fascist demagogue Bari Soetero.

Obama. The MSM candidate, the same MSM that sold you stupid lies about WMD in Iraq.

Anonymous said...

McCain was the MSM candidate too, as was Hilary.

McCain was never supposed to win of course, but I think they were waiting to see who would play better, Obama or Hilary.

You dont stitch up an election by backing one candidate, you do it by making sure you control all of them before the election.

Hugh Oxford said...

The 11p RBS share price is a reflection of the confidence the markets have in Gordon Brown and UK Plc as a whole, rather than RBS in particular.

I am convinced that resolving the problems that got us into this mess will not get us out of it.

I think that when the dust has settled people will look at the future of Western societies - post industrial, welfare ridden, demographically unsustainable, riven with ethnic tensions, a growing underclass, illiterate and innumerate, and ask themselves if there is anything worth investing in.

In that context, Brown, the c**t, is throwing good money after bad and further hobbling the already hobbled future. He is throwing fuel onto the fire of social tension.

But there are no votes in telling it like it is - that we would be far better off letting nature run its course, dismantling the welfare state, forcing people to become productive or die, and rebuilding; rather than this desperate white-elephant banquet.

Homophobic Horse said...

"I think that when the dust has settled people will look at the future of Western societies - post industrial, welfare ridden, demographically unsustainable, riven with ethnic tensions, a growing underclass, illiterate and innumerate, and ask themselves if there is anything worth investing in."

Yup. Hope and Change. For me this is all Obama represents. Obama, the establishment's charming maggot.

Mark said...

'Can anyone suggest a safe-ish currency for my savings ?'-No, but
this could be the year the goldbugs strike it lucky !

Evans-Pritchard over at the Telegraph also thinks we are headed for interesting times. When it comes to the Euro he makes Pte Frazer look like Pollyanna, but it could be his lucky year also, given the stresses to which his favourite paper currency is likely to be subject.

nzconservative said...

The EU has just gotten too damn big. The original concept wasn't too bad, but it now includes too many different countries and too many diverse economies.

Hopefully, this crisis will spark debate about downsizing it.

Countries like Britian which have always been lukewarm about entry are best out of it.

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