February 20, 2009

Government intervention is the problem - watch vid, read link

Great video from Denninger

Explains the problems in the US. Think the UK will avoid this?
Read this Bradford & Bingley Bond ‘Madness’ May Hurt Capital

I'm a contrarian by nature. Everybody is blaming the bankers at the moment. Perhaps the fury should be aimed somewhere else.

February 20, 2009

US bailout is equivalent to 74 Marshall plans

So the bailout to rescue the US from lending too much to buy houses is now 74 times the cost of the package to rebuild Europe after World War 2. Note that this is not in "old money" as the Marshell plan figures have been adjusted for inflation.

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From the BBC's Global Downturn in Graphics.

February 19, 2009

Tech sector wage cuts

After my brief self-doubt in a furniture store - I'm coming out fighting again after a couple of days immersed the news.

Inflating our way out of the mountains of debt is surely the most tempting course for politicians.As wages rise rapidly - the debt burden for the individual is eased. Back in the real world there are waves of pay cuts

HP to cut most employees’ salaries

After reporting a 13 percent drop in first-quarter profit, the world’s largest personal-computer maker said it will reduce Hurd’s base salary by 20 percent, executives’ pay by 10 percent to 15 percent, and most employees’ salaries by 5 percent.

Will these folks be rushing to borrow more?

February 16, 2009

Anecdotal

I generally avoid anecdotal evidence. I do like a balanced view.
Anyway - as a nod to my Inflationista pal Kev I will admit that this
weekend I went to Ikea Glasgow - and it was busier than I have ever seen
it. The indoor snow ski slope had queues at the entrance. This does
not square with my worldview.

Credit crunch over? One last blast on the credit cards? House prices up in Jan and MEW brigade fired fired up again?

Comments welcome.

--
Sent from my mobile device

February 16, 2009

Deflation

Decreasing inflation is not deflation.

Just wanted to get that off my chest after today's infantilised coverage.

February 5, 2009

An infantilised electorate

Fresh out of the Treasury Select Committee on Wednesday Jeff Randal strips the issue of debt to the fundmanetals in the Telegraph today
We're in denial: afraid to face up to the real causes of recession

Finally someone trying to shift the spotlight around to those that share the blame. It is not only

bankers and subprime in the US to blame..

For if too much debt is at the heart of the crisis, what about the over-borrowers? What do they have to say?I'm not talking about unfortunate souls who have slipped behind as a result of redundancy or family crisis. I'm more interested in Smart Alecs who signed for a dozen credit cards and then spent over the limits. Or homebuyers who enjoyed a burst of creativity when it came to disclosing incomes on mortgage forms. Or heavily geared buy-to-let merchants who worked out that instead of paying for a house, they could get a house to pay for them.

I'm not sure there will be momentum in this sentiment - but it will be interesting to watch.

Debt Revulsion

February 2009