The panic has been stabilised for the moment by the de facto nationalisation of Northern Rock and the promise to guarantee the value of deposits. It will be important to ensure that this guarantee does not become a crooks\’ charter in which any dodgy bank will be able to lure in depositors with attractive interest rates, expand rapidly using Northern Rock\’s business model and then call in the Government when it hits trouble.
Well, yes, that\’s the moral hazard part of it all, isn\’t it. By making xertain behaviours less risky you make them more likely.
The FSA also has much to answer for. It beggars belief that it failed to see any connection between Northern Rock\’s reliance on financial markets, rather than customers\’ deposits, and its frantic expansion into new mortgage lending with ridiculous multiples of incomes and loan-to-value ratios.
Well, those loans haven\’t actually gone wrong (yet!) so we\’ve no evidence that they were a bad idea. But yes, the FSA does seem to have been asleep at the wheel. They\’ve only been responsible since 2004 mind, so it might be that the system cooked up by El Gordo wasn\’t actually fit for purpose.
But the Government should not be allowed off the hook. Eddie George warned what could happen if the Bank\’s responsibility for systemic stability was separated from day-to-day banking supervision. Gordon Brown ignored him. When I asked who was responsible for the dangerous bubble in the housing market against which new mortgages are secured, I was told a tripartite committee. No one was in charge.
Quite so. This little dig is also worth savouring:
David Cameron\’s claim to have anticipated the personal debt problem didn\’t persuade even his supporters. Economic policy is not a branch of the public relations industry.
I don\’t watch any TV really, (apart from the rugby) and my Portuguese isn\’t up to scratch either.
first there was "morangos com caca" full of pathetic attempts at being radical (i.e. bad haircuts and abortions).
But is there really a Portuguese TV show called "strawberrys with shit"?
Quite excellent this. Amanda Marcotte rips off a rant:
Eric can’t understand why Susie Bright is on the left, and his reasoning seems to be that a) all he knows about Susie is she seems to know her way around a cock as do a lot of liberal chicks b) which is really unfair and nice wingnut guys like him deserve a little of the cock-touching action but all the sluts are on the left. Is it really too much to ask to have a girl and a couple of her bisexual friends tag team you before heading to the polls to vote for a ban on abortion and an end to comprehensive sex education and legal discrimination against those of them who might be leaning on the lesbian side of bisexual? Why on earth do the sex-loving ladies seem to think these things are at odds with each other?
Doubt that would excite Eric much actually.
Of course, the real world debate over women’s sexual freedom doesn’t even enter into Eric’s radar.
Well, not really his thing I agree.
He does extend his defense to prostitution and gay sex, but not gay people—he doesn’t rouse himself to defend gay marriage or fight against discrimination, leaving room for horrible laws affecting gay people while allowing straight-identified people to enjoy same sex couplings, a la Larry Craig or the imaginary bisexual free spirits who hate legal abortion.
Err, Eric is in fact a defender of gay people, although it\’s true he\’s against gay marriage.
Because the “leave people alone” philosophy, aka “libertarianism”, is a lie told to sucker stupid people into believing there’s something progressive about a neo-feudalist society. That has been Simple Answers To Stupid Questions You Should Have Asked.
What makes this all so amusing is that Eric, the one being shouted at here, is in fact gay. Possibly a Stupid Question that Should Have Been Asked?
Good, at least this idea is going to be properly looked at:
Scientists are considering a plan to combat climate change by dumping millions of tons of iron into the ocean to alter its chemical make-up.
They believe the iron could act as a “fertiliser”, promoting the growth of tons of plankton that would soak up carbon dioxide from the surrounding sea water. When the plankton died, their bodies would sink into the deepest waters and sediments, where the carbon would be locked up indefinitely.
The theory, known as “ocean fertilisation”, has long caused controversy among marine scientists, many of whom doubted that it could work. This week leading researchers will meet at the Woods Hole Oceanographic Institution in Massachusetts for a scientific conference to discuss the idea.
The last time I ran through the numbers on this I think I came up with a figure of a few cents per tonne of CO2 removed: that, of course, on the assumption that it actually works. Actually having a scientific meeting to discuss it is a great idea. For, at present, we\’ve got two highly partisan sides:
Russ George, chief executive of Planktos, said adding a single ton of iron could remove as much as 100,000 tons of dissolved CO2 from the oceans.
Russ is running a company which would dearly love to be allowed to get going, to sell the offsets and also, attract more investors.
Dr David Santillo, a senior scientist at the Greenpeace research laboratories at Exeter University, said iron fertilisation was a foolish idea.
David doesn\’t want there to be a solution to climate change that doesn\’t involve a radical change in society.
While my instinctive sympathies are with Russ (good to see a man trying to make a buck) I do think it would be a good idea to actually study the evidence and find out whether it actually works. Which is, I assume, what the meeting of scientists is all about.
The emergency services are being told not to attempt to save drowning people because of health and safety restrictions, it has emerged.
Amid a growing row over the failure of two police support officers to try to save a boy from drowning, both the police and the fire service disclosed this weekend that their frontline staff are instructed not to enter the water in case they put themselves in danger.
Are they the emergency services? Is someone drowning an emergency?
Good grief, what is anyone supposed to do? Call the RNLI out to a pond in Wigan?
Update. And an extremely interesting little note on PCSOs from Peter Risdon. Apparently so many of them are bent that there\’s no time left to investigate real corrupt coppers.
And still lending at what seem to be (at least to me) dangerous multiples of income:
Northern Rock stands accused of “reckless” lending after it emerged this weekend that the beleaguered bank is still offering mortgages of six times salary to potential borrowers.
Despite provoking the worst banking crisis for decades, the bank last week offered a reporter posing as a first-time buyer a £180,000 mortgage even though he had a salary of only £30,000.
The loan was at least £30,000 more than other leading lenders were prepared to offer. Repayments for the loan would have accounted for more than 60% of the fictional buyer’s take-home salary.
It is, of course, the taxpayer that is extending that loan. A good use of your money, don\’t you think?
Really, he is:
In the long history of Labour as a governing party, nothing – but nothing – has been as politically destructive as financial crisis. The slump of 1931, the devaluations of 1949 and 1967 and the IMF bail-out of 1976 inflicted mortal wounds that destroyed four Labour prime ministers and sent four Labour governments to their electoral graves. Collectively these events had an even more devastating effect, cumulatively undermining the plausibility of the entire 20th century Labour governmental project and barring the way to a sustained British social democratic settlement on European lines.
Whether the run on Northern Rock of 2007 has triggered another episode to rank with those past traumas it is still too early to say.
But there is a radical option too. This says that Northern Rock proves that the right sort of government regulation and intervention will support, not destroy, strong markets and good businesses.
Quite. The right sort of government intervention and regulation will indeed support strong markets and good businesses. There\’s no one (at least no one rational) who would dispute this. All we need now is to work out what is the right sort of government intervention. On the evidence that Martin himself offers, the Labour Party has failed to get the right answer to this question four times and the result at the fifth time of asking is as yet unknown.
There is a very good argument for the right type of intervention but I\’m not sure that the above is a very strong argument for Labour knowing what the right type is.
An extract from The Guardian:
Cienfuegos was lovely, but it was in Trinidad, just 50km further along the south coast, that I really fell in love with la vida loca of rural Cuba. A colonial Spanish town built on sugar and slavery and now a Unesco world heritage site. All pink, pistachio and pale blue, it appeared to have taken a civic decision to halt pretty much all conventional progression around 50 or 60 years ago.
Gosh, what was it that happened 50 or 60 years ago that might have caused that? Anyone?
Interesting precis here from The Times:
Emma Thompson will be in Trafalgar Square in London every day next week hoping to raise awareness of the sex industry
There was a time not long ago when \”actress on street corner\” was the sex industry rather than a way of raising awareness of it. Although to be fair, such advertising would indeed raise awareness.
Yet more evidence that biofuels are part of the problem, not the solution:
Rapeseed and maize biodiesels were calculated to produce up to 70 per cent and 50 per cent more greenhouse gases respectively than fossil fuels. The concerns were raised over the levels of emissions of nitrous oxide, which is 296 times more powerful as a greenhouse gas than carbon dioxide. Scientists found that the use of biofuels released twice as much as nitrous oxide as previously realised. The research team found that 3 to 5 per cent of the nitrogen in fertiliser was converted and emitted. In contrast, the figure used by the International Panel on Climate Change, which assesses the extent and impact of man-made global warming, was 2 per cent. The findings illustrated the importance, the researchers said, of ensuring that measures designed to reduce greenhouse-gas emissions are assessed thoroughly before being hailed as a solution.
Well, quite. We want indeed to have a proper cost benefit analysis of all of the things that are being proposed. Landfill, for example, has lower emissions than wormeries in dealing with food and garden waste. You\’ll note though that government action is to increase the use of wormeries and reduce landfill. You\’ll already know that the recycling of green glass into road surfacing increases emissions rather than reduces them: and that government policy is to increase the use of green glass in roads. You\’ll now know, from the above, that biofuels (except in the limited sense of driving off old chip fat) increases rather than reduces emissions. And the EU and the US are in an orgy of subsidy for this increase in emissions.
Those who insist that government actions are going to save us obviously haven\’t been paying attention.
We are privileged indeed to see what they do with our money:
Changes to GPs’ working arrangements and a generous pay rise for doctors have cost the Government £1.8 billion more than ministers bargained for, new figures have revealed.
Just to recap. Our Lords and Masters decided that there should be a renegotiation of the contract by which GPs offer their services to the NHS. Fine, entirely acceptable. Then they underestimated how much work GPs actually did already, offered to let them off some of the most onerous work (out of hourse services), offer bonuses for things they were already doing (vaccination rates etc) and, lo and behold, GPs incomes rose much more than the negotiators planned. So they ended up buying less service for more money and they were so inefficient at it that they didn\’t even manage to calculate how much it was going to cost.
Can someone remind me why it is that we let politicians run such things for us?