I'm not keen on how Americanised our little country has become. I didn't mind McDonalds, I've always been keen on their food if the truth be told. But those burgers and their greasy goodness has had us skidding down a slippery slope ever since.
Once we accepted McDonalds, our nippers started listening to their music, the rap and the other noise and before you know it kids from Berkshire were only half dressing themselves with baggy jeans only pulled up to just above the knee and their accents changed from Southern-middle England to South Central LA.
Our language has been bastardised, about which I understand the Queen cries herself to sleep every night, God bless you ma'am. There's been talk about having quarters in football and an appalling increase in enormous 4x4 vehicles with huge cattle grates on the front which are only used twice a day to take little Jordan and little Brittney to and from their church funded Primary Schools.
While our society deteriorates into a mess of moral goo and linguistic poop, Gordon Brown is now hell bent on dragging our financial systems down the same path. If America was going to have a melt-down with their banking system - if that's what's in vogue now on Wall Street - then we better have one too.
And if they're going to require a subsequent ball-busting bail-out which has tax-payers from coast to coast vomiting in their sleep with the sheer magnitude of the plan and the sudden realisation that their lives and the lives of their children are now basically over - then we better damn well have one too and we'll call it a bail-out too to sound cool.
From what I can understand of this whole mess - which is very little, let's be clear about that - it appears the entire global banking network has been involved in the mother of all ponzi schemes. These things usually involves a small number of people making huge profits while a large number of people end up at the soup kitchen crying into their gruel. On this occasion the large number of people is anyone needing any form of credit.
All over the world banks have been borrowing money that wasn't there in the first place, lending money to each other with other bank's money, trying to lend to themselves in some cases and ultimately it's the tax-payer that has been left to suffer the consequences while those irritating City Banker type dudes sporting pink shirts and cuff links that cost more than my whole life are making so much money out of their own reckless greed it's spewing out of their silver suitcases like porridge in the Magic Porridge Pot.
So essentially here's where the bear sits. Bank A is approached by Joe six-pack who wants a mortgage. Before they approve his application they consult their sugar daddy. In America who started this mess, those sugar daddies were Freddie Mac and Fanny Mae - Government subsidised money lenders.
So Fanny and Freddie tell Bank A they can have the loan for 0.5% interest on the loan. Bank A then tells Joe Six-pack the loan is his for 10% interest. Joe needs his mortgage cause he's sick of living in a trailer and want's something more nutritious to eat than mayonnaise sammiches so he signs up.
As Joe leaves the branch, Bank A are on the phone to Bank B and they sell his loan to them for 2% interest over the course of the loan. It's now Bank B's loan for the duration at 2% and Bank A in a matter of minutes has cashed in a 20-30 year loan. Bank B then sells it to Bank C for 3% and so on.
Meanwhile no one in the form of a regulator is paying any attention to this because he's busy cozying up to these banker dudes and having a jolly good life and also because he doesn't actually understand what's occurring. Eventually by Bank E or F they can no longer sell the thing on and they are dependent on Joe paying his loan re-payments without fail. Many times, a lot of these Joes could not finance their debts.
All of these loans are now no longer assets to Bank E. When they subtract the debt they owe to the bank they bought them from their value is noffin...so ultimately cazillions of loans which may not have even been defaulted on, essentially become bad assets because Bank E has no money to pay Bank D and so on all the way back down to Fanny and Freddy. The banks now have no money left to dish out to new customers. All they have is a bunch of loans written in red ink. Even dudes with awesome credit can't get a loan now.
The politicians are now trying to unravel this scheme and restore some sort of order to the banking system, but critics keep referring to their plans as socialisation of debts and the privatisation of profits. Laying blame on unscrupulous fat cats who eat money and shit debt. I don't know if they've really said that last part, but I like it and may use it again later - moral hazard is more diplomatic phrase.
Moral hazard is the buzzword, I think, to express the unscrupulous practices of greedy bankers. But it's an insurance term. Moral hazard means people with insurance are more careless. There's a suggestion that the Northern Rocks and Lehman brothers of the banking world took a rather reckless and blasé approach to high risk investment because they knew the Governments would bail them out with tax-payers monies if things went bandy.
This is probably not true, but even if it was, a bail-out appears to be a good idea still. If you burn your house down because you fell asleep with a cigarette in your mouth and it fell onto your puppy sleeping next you that ignited and then jumped up yelping and ran off into the other rooms setting them on fire, the Government will not buy you new stuff and a new pooch, but they will pay for a fire engine to come and douse the flames. This is because fires spread and we can't have a whole street, town, or city burning down cause you were careless.
So this bail-out while unpalatable is necessary. And while after the smoke clears everyone will be demanding more regulation - we're talking about such complicated systems and such huge amounts of monies - that the levels of regulation required are not possible, just as you can't expect a fireman to keep his eye on you 24 hours a day and so more moral hazard in the shape of careless investing is inevitable, but unavoidable.
This bail-out might even turn out to be a money making venture though. Sweden made a profit from their bail-outs. They're a funny lot though. All organised and blonde and so on. But the current plan which I doubt Gordon Brown really came up with essentially gives the Treasury license to buy up all those "toxic" assets that have bunged up the banking system at a huge discount by nationalising our banks.
Because, because because, only a small percentage of these loans which were bad assets to the banks because of the ginormous ponzi scheme are actually defaulted mortgages, i.e. toxic assets... the tax-payer ought to make a profit on this bail-out because the banks ought to perform more efficiently, driving up their share prices which Gordon Brown on our behalf can then sell at a profit.
In America Bank E for example, who have 30 billion of these loans for which they're paying 40 billion have sold them under the Paulson plan to the Federal reserve - the tax-payer really - for about a quarter of their worth so they have £30 billion of "assets" and only paid £7.5 billion for them. Awesome. The banks become solvent again and tax-payer has a great investment.
Our plan is that we just buy the banks, lower interest rates and hope people pay their mortgages, but it amounts to the same risk reward as the USA's effort. The only snag is that Gordon Brown couldn't organise a lynching at a Klan meeting and all the over-sight and regulations in place to keep track of all this money may mysteriously get confused somehow and by his sheer dilly-dallying incompetence may engineer a loss for the tax-payer, by losing track of all the money injected into the banking system and not realising any profits on this socialised investment - which he'll subsequently blame on someone else.
This is the problem we have with following America. Tony Blair stood shoulder to shoulder with George Bush during the crisis of his time - again a manufactured crisis - and sent us on a crusade to rid the free world of Saddam the tyrant who was a menace to the universe and free up the path to democracy for the Iraqi people. We royally fucked that one up and now Gordon Brown is standing shoulder to shoulder with Bush again and following his lead in dealing with this financial bushwhacking.
While I think the logic behind the bail-out is sound-ish - I have no confidence in Gordon Brown and that other dude, the fella with the comedy eyebrows - Alistair Darling - to see us through this mess. They remind me too much of General Melchett and Captain Darling in Black Adder goes Forth.
Emboldened by America joining the war and hell bent on sending Jerry to hell, instead the British Army engineered a means through their Generals to send as many of their own men to their deaths as possible, and in that they succeeded fabulously. In fact that scene at the end of Black Adder goes Forth when they all meet their inevitable deaths after going over the top is pretty much the fate I see our economy facing after we plunge into this bail-out armed only with a proverbial stick and whistle. Happy days.
Once we accepted McDonalds, our nippers started listening to their music, the rap and the other noise and before you know it kids from Berkshire were only half dressing themselves with baggy jeans only pulled up to just above the knee and their accents changed from Southern-middle England to South Central LA.
Our language has been bastardised, about which I understand the Queen cries herself to sleep every night, God bless you ma'am. There's been talk about having quarters in football and an appalling increase in enormous 4x4 vehicles with huge cattle grates on the front which are only used twice a day to take little Jordan and little Brittney to and from their church funded Primary Schools.
While our society deteriorates into a mess of moral goo and linguistic poop, Gordon Brown is now hell bent on dragging our financial systems down the same path. If America was going to have a melt-down with their banking system - if that's what's in vogue now on Wall Street - then we better have one too.
And if they're going to require a subsequent ball-busting bail-out which has tax-payers from coast to coast vomiting in their sleep with the sheer magnitude of the plan and the sudden realisation that their lives and the lives of their children are now basically over - then we better damn well have one too and we'll call it a bail-out too to sound cool.
From what I can understand of this whole mess - which is very little, let's be clear about that - it appears the entire global banking network has been involved in the mother of all ponzi schemes. These things usually involves a small number of people making huge profits while a large number of people end up at the soup kitchen crying into their gruel. On this occasion the large number of people is anyone needing any form of credit.
All over the world banks have been borrowing money that wasn't there in the first place, lending money to each other with other bank's money, trying to lend to themselves in some cases and ultimately it's the tax-payer that has been left to suffer the consequences while those irritating City Banker type dudes sporting pink shirts and cuff links that cost more than my whole life are making so much money out of their own reckless greed it's spewing out of their silver suitcases like porridge in the Magic Porridge Pot.
So essentially here's where the bear sits. Bank A is approached by Joe six-pack who wants a mortgage. Before they approve his application they consult their sugar daddy. In America who started this mess, those sugar daddies were Freddie Mac and Fanny Mae - Government subsidised money lenders.
So Fanny and Freddie tell Bank A they can have the loan for 0.5% interest on the loan. Bank A then tells Joe Six-pack the loan is his for 10% interest. Joe needs his mortgage cause he's sick of living in a trailer and want's something more nutritious to eat than mayonnaise sammiches so he signs up.
As Joe leaves the branch, Bank A are on the phone to Bank B and they sell his loan to them for 2% interest over the course of the loan. It's now Bank B's loan for the duration at 2% and Bank A in a matter of minutes has cashed in a 20-30 year loan. Bank B then sells it to Bank C for 3% and so on.
Meanwhile no one in the form of a regulator is paying any attention to this because he's busy cozying up to these banker dudes and having a jolly good life and also because he doesn't actually understand what's occurring. Eventually by Bank E or F they can no longer sell the thing on and they are dependent on Joe paying his loan re-payments without fail. Many times, a lot of these Joes could not finance their debts.
All of these loans are now no longer assets to Bank E. When they subtract the debt they owe to the bank they bought them from their value is noffin...so ultimately cazillions of loans which may not have even been defaulted on, essentially become bad assets because Bank E has no money to pay Bank D and so on all the way back down to Fanny and Freddy. The banks now have no money left to dish out to new customers. All they have is a bunch of loans written in red ink. Even dudes with awesome credit can't get a loan now.
The politicians are now trying to unravel this scheme and restore some sort of order to the banking system, but critics keep referring to their plans as socialisation of debts and the privatisation of profits. Laying blame on unscrupulous fat cats who eat money and shit debt. I don't know if they've really said that last part, but I like it and may use it again later - moral hazard is more diplomatic phrase.
Moral hazard is the buzzword, I think, to express the unscrupulous practices of greedy bankers. But it's an insurance term. Moral hazard means people with insurance are more careless. There's a suggestion that the Northern Rocks and Lehman brothers of the banking world took a rather reckless and blasé approach to high risk investment because they knew the Governments would bail them out with tax-payers monies if things went bandy.
This is probably not true, but even if it was, a bail-out appears to be a good idea still. If you burn your house down because you fell asleep with a cigarette in your mouth and it fell onto your puppy sleeping next you that ignited and then jumped up yelping and ran off into the other rooms setting them on fire, the Government will not buy you new stuff and a new pooch, but they will pay for a fire engine to come and douse the flames. This is because fires spread and we can't have a whole street, town, or city burning down cause you were careless.
So this bail-out while unpalatable is necessary. And while after the smoke clears everyone will be demanding more regulation - we're talking about such complicated systems and such huge amounts of monies - that the levels of regulation required are not possible, just as you can't expect a fireman to keep his eye on you 24 hours a day and so more moral hazard in the shape of careless investing is inevitable, but unavoidable.
This bail-out might even turn out to be a money making venture though. Sweden made a profit from their bail-outs. They're a funny lot though. All organised and blonde and so on. But the current plan which I doubt Gordon Brown really came up with essentially gives the Treasury license to buy up all those "toxic" assets that have bunged up the banking system at a huge discount by nationalising our banks.
Because, because because, only a small percentage of these loans which were bad assets to the banks because of the ginormous ponzi scheme are actually defaulted mortgages, i.e. toxic assets... the tax-payer ought to make a profit on this bail-out because the banks ought to perform more efficiently, driving up their share prices which Gordon Brown on our behalf can then sell at a profit.
In America Bank E for example, who have 30 billion of these loans for which they're paying 40 billion have sold them under the Paulson plan to the Federal reserve - the tax-payer really - for about a quarter of their worth so they have £30 billion of "assets" and only paid £7.5 billion for them. Awesome. The banks become solvent again and tax-payer has a great investment.
Our plan is that we just buy the banks, lower interest rates and hope people pay their mortgages, but it amounts to the same risk reward as the USA's effort. The only snag is that Gordon Brown couldn't organise a lynching at a Klan meeting and all the over-sight and regulations in place to keep track of all this money may mysteriously get confused somehow and by his sheer dilly-dallying incompetence may engineer a loss for the tax-payer, by losing track of all the money injected into the banking system and not realising any profits on this socialised investment - which he'll subsequently blame on someone else.
This is the problem we have with following America. Tony Blair stood shoulder to shoulder with George Bush during the crisis of his time - again a manufactured crisis - and sent us on a crusade to rid the free world of Saddam the tyrant who was a menace to the universe and free up the path to democracy for the Iraqi people. We royally fucked that one up and now Gordon Brown is standing shoulder to shoulder with Bush again and following his lead in dealing with this financial bushwhacking.
While I think the logic behind the bail-out is sound-ish - I have no confidence in Gordon Brown and that other dude, the fella with the comedy eyebrows - Alistair Darling - to see us through this mess. They remind me too much of General Melchett and Captain Darling in Black Adder goes Forth.
Emboldened by America joining the war and hell bent on sending Jerry to hell, instead the British Army engineered a means through their Generals to send as many of their own men to their deaths as possible, and in that they succeeded fabulously. In fact that scene at the end of Black Adder goes Forth when they all meet their inevitable deaths after going over the top is pretty much the fate I see our economy facing after we plunge into this bail-out armed only with a proverbial stick and whistle. Happy days.
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