Broon Demolished

[oldmanxfella]

You also had stock and housing markets that bore no relation to reality because they didn't have to as the normal checks and balances were not required to be done. Its was the same "new paradigm" bullshit that we were told about the dot com companies. Price earnings ratios were old hat because ..... err well this is all so new paradigm and you don't understand it because its no longer about earnings its about growth and market share. Then 2 years later its - whoops the markets gone tits up because companies that have no earnings go bust when they can't access new capital.

 

I was reading a good article in one of the business publications recently that said that those with MBA's from certain top US business schools were currently having a tough time in the job market as employers now realise that much of what they have been taught over the last 15 years about business and economics was a load of old shite.

[Slim]

and I maintain that you are totally wrong. The government had no plan to push cheap credit - it happened because of deregulation and low interest rates (set by the BoE independent of the UK government) enabling companies to take higher risks to make the higher profits they needed.

 

I said governments and central banks. and isn't deregulation government action too? Look at the US Fed interest rates over the last ten years, you can see that they caused the banks to take advantage of cheap short term credit rates to lend out on long term mortgages. This was an action encouraged by governments as a financial stimulus post 9/11.

 

In fact Tony Blairs' complete adoption of the US government laissez fair style approach to running the economy is why we are in this mess. George Bush and Bill Clinton effectively did jack shit about anything when it came to government intervention - in regulation or the economy (or in Clinton's case anything really) and everyone else quickly copied that model. Soon unregulated and unchecked businessess found new ways to generate vast profits - sub prime being the biggest case in point where they just found mugs to lend to and mugs to buy the debt off them and made a slice in the middle.

You also had stock and housing markets that bore no relation to reality because they didn't have to as the normal checks and balances were not required to be done. Its was the same "new paradigm" bullshit that we were told about the dot com companies. Price earnings ratios were old hat because ..... err well this is all so new paradigm and you don't understand it because its no longer about earnings its about growth and market share. Then 2 years later its - whoops the markets gone tits up because companies that have no earnings go bust when they can't access new capital.

 

But that's exactly what I said. The governments removed those checks on housing inflation, they, with the central banks, provided cheap credit, they introduced ratings and risk monitoring regulation that wasn't appropriate. Government action, including deregulation or action through inaction can be put at the root of this.

[thesultanofsheight]

But that's exactly what I said.

 

I'm worried now because you have agreed with me.

[P.K.]

I would have to disagree with most of this. Historically governments have been absolutely crap at running businesses. This is because they are politicians, not a very difficult putt on the golf course i.e. an "Alan Sugar" = a nasty little five-footer.

 

The shallow bang on and on about how it's all Brown's fault, he was Chancellor etc etc. Yes he was, but ask yourself, what government "regulation" do banks and building societies actually need? The gov is responsible for passing legislation. So they can only regulate banks, building societies etc etc to ensure they are operating within the law. Those running financial institutions first and foremost have a duty to their shareholders to be sensible, prudent and profitable. It's not exactly Brown's fault that "the scum that Thatcher spawned" threw caution to the winds and in the pursuit of greed took risks with their client's money that brought the whole lot crashing down.

[Sebrof]

Nonsense. What we are actually seeing signs of now, and Obama's inertia since he has taken power is living proof of this, is the growing acceptance by the political establishment that they do not control their own economies, and that they do not even control employment in their own countries. They won't even be able to control tax rates soon as the costs of these bail outs increase.

 

I maintain that the root of the problem was government intervention, not a lack of it.

 

This is a bust that has followed a boom fuelled by the actions of the governments and central banks to provide cheap credit, discount tax policies to encourage rapid growth and the removal of any sort of inflationary controls on house pricing.

 

and I maintain that you are totally wrong. The government had no plan to push cheap credit - it happened because of deregulation and low interest rates (set by the BoE independent of the UK government) enabling companies to take higher risks to make the higher profits they needed. In fact Tony Blairs' complete adoption of the US government laissez fair style approach to running the economy is why we are in this mess. George Bush and Bill Clinton effectively did jack shit about anything when it came to government intervention - in regulation or the economy (or in Clinton's case anything really) and everyone else quickly copied that model. Soon unregulated and unchecked businessess found new ways to generate vast profits - sub prime being the biggest case in point where they just found mugs to lend to and mugs to buy the debt off them and made a slice in the middle.

 

You also had stock and housing markets that bore no relation to reality because they didn't have to as the normal checks and balances were not required to be done. Its was the same "new paradigm" bullshit that we were told about the dot com companies. Price earnings ratios were old hat because ..... err well this is all so new paradigm and you don't understand it because its no longer about earnings its about growth and market share. Then 2 years later its - whoops the markets gone tits up because companies that have no earnings go bust when they can't access new capital.

 

Just like has happened here in the IOM the UK government never had any real grip on the economy or economic drivers they just asked no questions and spent the money whilst it was being generated by everyone else. Almost all the jobs Brown has created since he came into power are in the public sector, he just took the money and spent it and has left Britain with a cost base in terms of top heavy government and local authorities that it can't possibly afford and the same is going to happen here really soon.

 

Its lack of government control that is at the root of this and this is where China and the Asian economies will come out of it much quicker than us as they are still pulling the strings behind the market.

 

Not bad, Sultan.

 

S

[Sebrof]

But that's exactly what I said. The governments removed those checks on housing inflation, they, with the central banks, provided cheap credit, they introduced ratings and risk monitoring regulation that wasn't appropriate. Government action, including deregulation or action through inaction can be put at the root of this.

 

No, this is what you said: "I maintain that the root of the problem was government intervention, not a lack of it."

 

Everytime you get caught out, you claim you said the opposite to what you actually said. It's a terrible example to set to your poor little kiddies.

 

Government should have intervened to stop the excesses of the banks, and to curb the housing bubble. They didn't.

 

S

[Slim]

Same thing. The governments did intervene, encouraging low interest rates, deregulated banking, introduced ineffective risk based licensing and removed inflation checks from housing. I've not changed what I said at all, if you disagree, show me where I contradicted myself.

 

Yes, they should have intervened sooner, but that wouldn't be the root of the problem, would it?

[Sebrof]

. I've not changed what I said at all, if you disagree, show me where I contradicted myself.

 

It's the Slim great lie again. You hope that if you repeat your lie often enough, people will think you are telling the truth.

 

Now, for the last time:

 

Slim: I maintain that the root of the problem was government intervention, not a lack of it. This is a bust that has followed a boom fuelled by the actions of the governments and central banks to provide cheap credit, ............etc, etc.

 

Sultan: and I maintain that you are totally wrong. The government had no plan to push cheap credit ..... etc, etc.

 

Slim: But that's exactly what I said.

 

You really couldn't make it up. EVERYBODY acknowledges there was a lack of intervention by government and its agencies, except dear old "House prices won't fall" Slimbo. George Soros said so only yesterday. The Economist said so on Friday; Adair Turner said it two weeks ago; even George Brown has said so.

 

But what do they know? If they'd only consulted Slimbo, there'd be no crisis. The meanest studio flat in Salford would be worth 6 million quid, and everybody would be happy.

 

Especially the pigs flying past the window.

 

One of these days, Slimbo, they're going to cart you off to the funny farm.

 

S

[Slim]

Sebrof, I'm convinced you can't read, or that you have the attention span of a goldfish. I qualified what I said, sultan and I agreed in the end, and it was sorted. If you want to edit what I said down to single quotes you're going to find ambiguity, which is why I wrote more. That aside, disagreeing with someone isn't lying. I'm not as arrogant as you, so I'm happy to take someone else's opinion on board without calling them a liar. This is a big complex issue, I'm only putting forward my take on it.

 

I've also never said house prices in the uk won't fall.

 

Now if you've got something to say on the subject, say it. Your obsession with me is getting weird. If I give you a picture to fap over, will you pipe down?

[Sebrof]

sultan and I agreed in the end, and it was sorted.

 

Again, you are distorting the facts.

 

Sultan said: "I'm worried now because you have agreed with me.".

 

That is not the same as "sultan and I agreed in the end". He never agreed with you.

 

But facts have never been you concern, have they?

 

And don't flatter yourself that I have any interest in you whatsoever except in your unfortunate ability to be an irritant. Your rudeness, stupidity, and distortions constitute a boil on the collective backside.

 

S

[Slim]

Again, you are distorting the facts.

Sultan said: "I'm worried now because you have agreed with me.".

That is not the same as "sultan and I agreed in the end". He never agreed with you.

 

But facts have never been you concern, have they?

And don't flatter yourself that I have any interest in you whatsoever except in your unfortunate ability to be an irritant. Your rudeness, stupidity, and distortions constitute a boil on the collective backside.

 

No interest in me? Three posts in a row talking about me rather than the subject, not adding anything at all to the discussion? Sorry Sebrof, I'm know I'm hot, but I'm taken, you'll have to hump someone else's leg.

 

Sultan and I agreed, he said the root causes were cheap credit which was provided by the central banks and deregulation. Obamas treasury secretary said the same thing: ""No crisis like this has a simple or single cause, but as a nation we borrowed too much and let our financial system take on irresponsible levels of risk.", there it is right from the horses mouth.

 

Sultan disagreed on the role split between central banks and governments, but I'm of the opinion that those wholesale lending rates were dropped post 9/11 as a financial stimulation dictated by governments, not central banks acting independently. The message post 9/11 was 'spend, spend spend', which was paid for by cheap borrowing.

 

Now, have you got anything to add to this discussion, or are you just going to idolise me further like some lovesick schoolgirl?

[Sebrof]

Now, have you got anything to add to this discussion, or are you just going to idolise me further like some lovesick schoolgirl?

 

There is nothing sadder than thinking people you don't know might be interested in you.

 

But I've just realised what your problem is. You're illiterate.

 

You don't know what "intervention" means, and that's why you think you were agreeing with Sultan.

 

Had you learned Latin at school, you would know that the word "intervention" comes from two Latin words meaning to come between.

 

IE: "I saw a fight starting, so I intervened to break it up".

 

You have been using the word to mean "contributed to".

 

IE: "Goverment contributed to the problem by relaxing regulation."

 

Nobody is disagreeing with that, though it is less important than the lack of INTERVENTION to reduce bad lending and curtail house price rises.

 

Remember Lewis Carroll?

 

'When I use a word,' Humpty Dumpty Slim said, in a rather scornful tone,' it means just what I choose it to mean, neither more nor less.'

 

Do us a favour and buy an English dictionary, Slimbo, then use it.

 

S

[Slim]

That's yet another post talking more about me than the subject, does my bum look big in this post?

 

I'm not illiterate, thanks, I know what I mean and I don't need you to tell me. I'm posting my opinion, you're free to disagree with it, but it doesn't make me a liar.

 

Intervention: "To involve oneself in a situation so as to alter or hinder an action or development", which is exactly what we're talking about, eh?

 

I think your brain must be addled with decades of worthers original and sherry abuse, because you seem to be struggling to follow the thread. I was talking about possible root causes. I'm not talking about what the government did following, what I'm talking about is what they did to create the problem in the first place.

 

Take the Fed reserve rate as an example: 6.5% in May 2000, 1.75% December 2001. That's a direct government backed financial stimulus post 9/11, which in my opinion was a large contributory cause of the current crisis.

 

Take a look at Wikipedias timeline of the current crisis:

http://en.wikipedia.org/wiki/Subprime_cris...eline#2001-2006

 

Governments and government action through central bank created this problem. In my opinion banks and other institutions took advantage of the environment that government created. There's been a ton of scapegoating, from hedge funds to offshore tax havens to rich bankers with their bonuses. It's all rot, it's government and the dependence of our economies on constant growth.

[pongo]

Had you learned Latin at school, you would know that the word "intervention" comes from two Latin words meaning to come between.

 

With a sentence like that you are basically saying that you are better than Slim because you went, in your opinion, to a better school. So you are being clumsily elitist. Which someone with the confidence of a good education which fitted them would never need to do.

[Sebrof]

Governments and government action through central bank created this problem. In my opinion banks and other institutions took advantage of the environment that government created. There's been a ton of scapegoating, from hedge funds to offshore tax havens to rich bankers with their bonuses. It's all rot, it's government and the dependence of our economies on constant growth.

 

Don't disagree, Slimbo.

 

But it was government inaction, not government intervention, that was the problem.

 

You just don't know the meaning of everyday words.

 

S