Monday, September 12, 2011

Asia 1 UK 0: Why the UK is a lost cause

Should I bother to renew? © fintag

News comments:
Glass Steagall, sorry, Vickers won't happen.

Trying to ring fence banks is ludicrous. Not only is it not practical it is pointless. As has been noted by others, the debt crisis was not caused by banks - it was also caused by retail outfits thinking they were investment banks (RBS, Northern Rock, AIG) but who cares? What us Brits care about is tax revenue. We need lots of it so alienating Banks who pay a lot of tax is pointless. HSBC and Barclays will soon be relocating and the UK will start moving into France territory; Bankrupt with spin.

So UK inflation is pumping hard at 4.5% and interest rates stay at nearly zero. What is the point of giving the rate setting policy to the Bank of England who won't use it? Any monkey can keep it at nearly zero. Remember the days when the rate setting committee (who spend most days in Starbucks near Mansion House) would make a song and dance about tweaking the rates 25 bips? Pathetic. Rates going up will dampen inflation and keep wage rises down. Inflation leads to job losses leads to higher benefits and lower taxes which equals anarchy (see below re Slovenia) and MORE GOVERNMENT DEBT.

Why the UK is AAA is beyond me.

Not that we are alone. Being German is very frustrating at present. Their leader is way out of her depth and should just say it as it is instead of spooking the markets with comments about Greece that can be interpreted either way. The EURO will break up and the UK who has enjoyed not being part of the Euro will end up being a weaker currency for it.

Why do I live here? Well there is more to life than wealth and safety and opportunity. Better to live in a dogs dinner with culture and beauty and history and humour than live in Norway. Or Canada. Or Singapore. Or Australia. For the moment that is.

Today's shorts:
Balloon blowing (bloomberg)

Slovenia > UK (telegraph)

Today's longs:
Groupon copy (greenshield stamps are the new black) (reuters)

UK to rename itself the Useless Kingdom.


Anonymous said...

You Brits are so obsessed with the end of the EU. Why did you ever joined it? You just don't get it do you. It is a PO-LI-TI-CAL project. It will never break up cause nobody on the continent ever wants to experience war again.

Anonymous said...


Move away for the re-recession
Return for the recovery

Stay for the re-recession
Emigrate on sighting recovery


The amount of cheap fun to be had in the re-recession

The amount of cheap fun to be had elsewhere

The price of property

The price of people droning on about property

The price of overseas property