Categories: uncategorized
Date: 07 October 2008 20:36:30
It looks like the financial crisis is over. The government are going to announce their solution to the global malaise that is affecting us all. Do we really believe that this will succeed?
Things got worse today when Icesave stopped accepting deposits and allowing withdrawls. This is a division of Landbanki, when of Iceland's biggest banks. Unfortuantely this has now gone into receivership. This means that UK savers will be bailed out partly by the Icelandic and British governments. Though there is a question mark over the Icelandic government's ability to pay. If they can't then they will cause even wider problems in the financial markets.
This could be a case of not just another bank going under but an entire country. How the heck do you rescue that?
No matter what governments do now they are in danger of trying to shut the door after the (Black?) horse has bolted. Unless they make coordinated decisions then there will be too many small attempts to solve a large problem. As things stand too many governments are making decisions that do nothing to solve the problem but -help create larger ones as their actions have repurcussions elsewhere.
Yet the biggest problem is that the banks themselves are continuing to cause problems by not releasing capital amongst themselves. If they don't lend to each other then they can't lend to businesses or the general public; you see this in the quick demise of the property market.
It will also lead to good companies being destroyed as bankers call in loans and mortgages that would be considered safe but, due to panic, are deemed to be at risk. It is not just badly run conglomerates and high street names at risk but everyone.
Yet what has actually changed?
We still produce things; we still buy and sell things; our pensions and investments maybe falling in value but they will recover; we wake up and fall asleep. All that has changed is that some idiots have been foolish with their investments and lucky that they covered them up.
We are facing a modern South Sea Tulip Bubbles from the 17th & 18th century. They were also financial crisis that were related to experts conning others into investing in worthless financial investments. Many bankers knew that the "mortgage securitisations" were worthless but no one wanted to believe in it. So the problem just kept expanding.
History Today:
1571: The "Holy League" of the Papl States - an early version of the Premiership? - Spain and Venice rout the Ottoman navy at the Battle of Lepanto. Another step in halting Islamic expansion into Europe.
1879: Germany and Austro-Hungary sign the Dual Alliance, an anti-Russian defensive pact.
1919: The former Dutch airline, now owned by Air France, is founded.
1943: 96 American prisioners of war are executed by the Japanese on Wake Island for trying to make radio conatct with the US.
1944: Inmates of Auschwitz revolt, killing SS guards and managing to destroy one crematorium.
1949: The German Democratic Republic is established. It was, of course, a one party Communist dictatorship.
1959: The Soviet spacecraft Lunik III takes the first pictures of the far side of the moon.
1985: The cruise ship Achille Lauro is hijacked by members of the Palestine Liberation Front. They had little support and on October 9th agreed to surrender to Egyptian authorities. Unfortunately when an Egyptian jet landed to remove the hijackers, on 10th October, it was intercepted by US navy jets and forced to land in Sciliy. The sole casualty was an elderly Jewish-American Leon Klinghoffer, who was shot and dumped overboard.
2001: US forces launch 'Operation Enduring Freedom' against the Taliban and al-Qaeda in Afghanistan. It's a good job that the aim was to 'endure'.