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Saturday, 24 September 2011


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My offspring said "Dad, you were right about the double dip." I had to tell her that double dip might not be the best analogy: wiggly snake all the way down the board, more like.

And one, moreover, that swallows its own tail!


Thanks for this post - how refreshing to see common sense (IMHO) published in the paper press. The only economic commentator consistently taking the Der Spiegel position in the UK is Liam Halligan of the Sunday Telegraph. Mind you even Mathew Parris in today's Times is taking his colleague (Anatole Kaletsky) to task for AK's complaint that (basically) if the Fed hadn't let Lehman's collapse we'd all be in Paradise.

One Der Spiegel point I would disagree with is the option of bank rescue over sovereign rescue. There is a third way: let the banks go bust while 1. guaranteeing the small depositors (up to, say, the euro equivalent of the £85,000 at present guaranteed in the UK) and 2. national central banks and/or the ECB provide short-term liquidity to enable an orderly winding down of the short-term interbank market as the insolvent bank constituents of that market are put out of their misery.

This is, of course, what should have happened in 2007/8 in the UK. There was no need (apart from the 3 major collapsed banks being headquartered in Labour constituencies) to "save" RBS, Lloyds/HBOS or Northern Rock. In other words the financial system not individual banks could and would have been saved and the "haircut" would have been largely restricted to shareholders. Yes I know we're "shareholders" in major financial institutions through our pension schemes but what are the shares in RBS and Lloyds worth now?

In principle, Bongers, I think you're right to suggest that the 'High St' banks should have been 'let go' but, so to speak, lowered carefully into the grave safeguarding small depositors but, alas, I lack the detailed knowledge to be absolutely how it would have been done.

Look at Schauble, all he needs are the collars with two lightning strikes on each ...


You're a very naughty boy, now go to bed!

"and that means you"

It doesn't mean me, I don't owe a penny to anyone and haven't for several years now.

And before you ask, I do NOT have a public sector pension!

My reward for this prudence is 5.5% inflation and 0.1% interest on my savings.

A plague on the lot of them.

'I feel your pain', Peter, to use a particularly soppy current expression, not least because I am in a similar boat, can't quite remember the name . . . Ritanic? . . . Bitanic? . . . no, don't tell me, it will come to me in a moment!

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