Friday, August 05, 2011
The Possible Hague spanner in the financial works
Cameron and Clegg being on holiday is no crime even if there is a financial dustup.
It is not like Roy Jenkins (then Chancellor) being on holiday in a deeply rural part of France the day when France devalued the Franc and the French phone system at that time being less efficient than shouting and more expensive. It took days for him to get properly in touch with the Treasury in London to co-ordinate the UK response.
There is an UK minister at hand and in charge in London – and I am concerned by who that is. William Hague is a long term Euro-hater and the current gyrations require sensitive comments from EU countries outside the Eurozone. The situation may even require some government slapping down of jeers of triumph from Tories who want the Euro actually wrecked. Can Hague do what is necessary?
One point that does need to be made – we would be in an European currency crisis even if all the old currencies were still in place.
The crisis would be taking a different form though. There would be huge gyrations in the foreign exchange markets as hot money flowed from one currency to the other as speculators tried to arbitrage small differentials in perceived values. Germany would be in a crisis as the value of the ‘Deutchmark’ rocketed. The Irish Punt would have sunk a long time ago, throwing Northern Ireland into financial turmoil because of the intricate cross-border economy. The Drachma would be damned, the Peseta melted into a puddle and the Franc fried. Sterling would probably be doing a yo-yo with funds flowing in and out unpredictably.
The existence of the Euro provides important stability for the UK economy even though we are not part of the Eurozone. Whoever sets the tone for UK responses to today’s financial dances needs to believe in that truth and make it very clear to everyone that we live in respect to that truth. Can Hague do it?
Labels: euro, Financial markets, Hague
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Wednesday, October 27, 2010
New bubbles for old
Robert Reich comments on the latest round of 'Stimulation' in the USA and sounds a warning.
He says:
Might be worth keeping an eye on any similar tendencies in UK markets?
This is on Reich's blog linked to Guernica online magazine
He says:
The latest jobs bill coming out of Washington isn’t really a bill at all, it’s the Fed’s attempt to keep long-term interest rates low by pumping even more money into the economy (“quantitative easing” in Fed-speak).......
Problem is, it won’t work....
So where will the easy money go? Into another stock-market bubble.
It’s already started. Stocks are up even though the rest of the economy is still down because money is already so cheap. Bondholders (who can’t get much of any return from their loans) are shifting their portfolios into stocks. Companies are buying back more shares of their own stock. And Wall Street is making more bets in the stock market with money it can borrow at almost zero percent interest.
When our elected representatives can’t and won’t come up with a real jobs program, the Fed feels pressed to come up with a fake one that blows another financial bubble. And we know what happens when financial bubbles get too big.
Might be worth keeping an eye on any similar tendencies in UK markets?
This is on Reich's blog linked to Guernica online magazine
Labels: financial bubbles, Financial markets, stimulation
Comments:
I agree completely with Reich on this. I also don't have any answers. I know what has to be done(LOTS more 'manual' half/decently-paying jobs NOT funded by the State). I just don't know how to get from here to there. That's unfortunate.
Evidently however, no-one anywhere, know how to do that little thingy, That's not just unfortunate --- that's disastrous in the long-term.
And it's not because the Coalition is 'wrong'. It isn't. It's policies are,imao, the right(ONLY) ones to pursue. It's that the underlying structure is flawed and is now making the whole edifice wobbly.
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Evidently however, no-one anywhere, know how to do that little thingy, That's not just unfortunate --- that's disastrous in the long-term.
And it's not because the Coalition is 'wrong'. It isn't. It's policies are,imao, the right(ONLY) ones to pursue. It's that the underlying structure is flawed and is now making the whole edifice wobbly.
Friday, December 04, 2009
The Bonus fallacy and tournaments
Most people, I suppose, think of a ‘bonus’ as something extra. A pay ‘bonus’ in this definition means something earned by ‘defined exceptional circumstances’ – not something paid over as routine. So good work, increasing efficiency, improved customer satisfaction – all the might earn a bonus.
The ‘Financial Sector’ likes to claim that their ‘bonuses’ are just like this, a kind of posh term for ‘payment by results’ or ‘piecework rates’. This may be the kind of hot air that suggests the collective noun ‘a Wunch of Bankers’.
The reality may be the ‘Tournament System’ so ably described for lay readers in Tim Harfords book ‘ The logic of Life’. Specifically the chapter on ‘why your boss is overpaid’.
This is how I understand Harford’s argument.
Basically most jobs cannot easily be assessed by performance by results. And jobs that involve handling big flows of money are difficult to constrain in the public interest. So what happens is a pay system analogous to a top tennis tournament. The winner, the champion, the chair of the Board, is guaranteed a huge wad of cash. Second place wins much less but still a worthwhile consolation. The aim though is to inspire the twenty or so people in the immediate lower tiers to work their socks off in order to make the organisation work. They need to be guaranteed enough money not to be seduced into rival tournaments. In turn this premier league gives incentives for a strata of much less well paid potential contenders, the people who may actually create the wealth for the organisation if wealth creation is part of the deal.
It is actually irrelevant whether the people getting the top prizes are competent or even active in the organisation. All they have to do in this system is avoid doing conscious damage, and avoid distorting the company accounts too blatantly to make shareholders pay covertly for top corporate benefits.
But admitting that the pay structure is a kind of danegeld paid out to prevent other forms of legalised looting by corporate insiders would be highly embarrassing. So the term ‘bonuses’ has been conscripted to make the general public believe that some kind of payment by results is in place.
Trouble is that when huge losses are the financial order of the day, payment by results suggest no ‘bonus payments’, in the popular sense, should be made. But if you accept that the system is a tournament, it becomes unworkable without some element of obscene overpayments.
The RBS board (and others) are trying to maintain the ‘tournament system’ without actually admitting that is what they are doing. As I understand Harford, he also believes that an element of Tournament Economics’ is inevitable, so he does not suggest a solution.
Is Harford right? If so should we be bringing in the implications of ‘tournament economics’ into our political discourse?
The ‘Financial Sector’ likes to claim that their ‘bonuses’ are just like this, a kind of posh term for ‘payment by results’ or ‘piecework rates’. This may be the kind of hot air that suggests the collective noun ‘a Wunch of Bankers’.
The reality may be the ‘Tournament System’ so ably described for lay readers in Tim Harfords book ‘ The logic of Life’. Specifically the chapter on ‘why your boss is overpaid’.
This is how I understand Harford’s argument.
Basically most jobs cannot easily be assessed by performance by results. And jobs that involve handling big flows of money are difficult to constrain in the public interest. So what happens is a pay system analogous to a top tennis tournament. The winner, the champion, the chair of the Board, is guaranteed a huge wad of cash. Second place wins much less but still a worthwhile consolation. The aim though is to inspire the twenty or so people in the immediate lower tiers to work their socks off in order to make the organisation work. They need to be guaranteed enough money not to be seduced into rival tournaments. In turn this premier league gives incentives for a strata of much less well paid potential contenders, the people who may actually create the wealth for the organisation if wealth creation is part of the deal.
It is actually irrelevant whether the people getting the top prizes are competent or even active in the organisation. All they have to do in this system is avoid doing conscious damage, and avoid distorting the company accounts too blatantly to make shareholders pay covertly for top corporate benefits.
But admitting that the pay structure is a kind of danegeld paid out to prevent other forms of legalised looting by corporate insiders would be highly embarrassing. So the term ‘bonuses’ has been conscripted to make the general public believe that some kind of payment by results is in place.
Trouble is that when huge losses are the financial order of the day, payment by results suggest no ‘bonus payments’, in the popular sense, should be made. But if you accept that the system is a tournament, it becomes unworkable without some element of obscene overpayments.
The RBS board (and others) are trying to maintain the ‘tournament system’ without actually admitting that is what they are doing. As I understand Harford, he also believes that an element of Tournament Economics’ is inevitable, so he does not suggest a solution.
Is Harford right? If so should we be bringing in the implications of ‘tournament economics’ into our political discourse?
Labels: banks, bonuses, economic crash, economics, Financial markets, financial services, recession, tournements
Comments:
My father and mother are both bank employees, this is useful information for us about bonus and pay scales, i am here to find out some information about bank jobs, but this type of information we will get it very rare. Keep posting the new updates thank you.
Reshma M,
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Reshma M,
Online Bus Ticket Booking booking online is just a click Away!
Monday, October 20, 2008
Konjunktura nepabegs - keeping money in safe havens
‘The market will not go away’ a statement true in any language (in this case Lithuanian) because the dynamics of self-regulating systems adapt to any constraints regardless of what we may want to happen. So with the proliferation of bank deposit protection schemes, market awareness is leading to a scramble by some voluntary organisations to shift accounts between institutions to make sure that their money is spread between accounts that are individually covered to the maximum £50,000 This is quite a disruptive process…
With all the takeovers and so on there doesn’t seem to be a readily available roadmap though. Most people know that the Co-Operative bank owns SMILE online bank, so if you have a deposit in both you are ‘only’ covered to a maximum of £50,000 as the sum of both accounts. Useless to open anew account in one if you already have an account in the other. But if a bank now takes over another and you had deposits in both your maximum coverage is halved –and many may not realise this. Is the banking industry making this shift transparent?
Not all organisations seem to be covered by FSCS though. Are we in any way protected as a party for our party accounts?
With all the takeovers and so on there doesn’t seem to be a readily available roadmap though. Most people know that the Co-Operative bank owns SMILE online bank, so if you have a deposit in both you are ‘only’ covered to a maximum of £50,000 as the sum of both accounts. Useless to open anew account in one if you already have an account in the other. But if a bank now takes over another and you had deposits in both your maximum coverage is halved –and many may not realise this. Is the banking industry making this shift transparent?
Not all organisations seem to be covered by FSCS though. Are we in any way protected as a party for our party accounts?
Labels: banks, Financial markets, financial services, LibDems
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Thursday, September 25, 2008
Seven hundred thousand million and counting -find the lady
So how did the US Treasury come up with the figure of $700,000,000,000 as being the sum needed to buy up bad debts? Well according to the business journal Forbes a Treasury spokesperson admitted on Tuesday that:
Oh of course, get a mumble wad of cash and impose a really stringent audit check on it like this delimination of the powers of the Treasury Secretary under the plan:
That really will make sure the financial three card tricksters and leveraged pyramid sellers are put in their place through scrutiny of the outlay of taxpayers money in the bailout.
"It's not based on any particular data point. We just wanted to chose a really large number".
Oh of course, get a mumble wad of cash and impose a really stringent audit check on it like this delimination of the powers of the Treasury Secretary under the plan:
"Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency."
That really will make sure the financial three card tricksters and leveraged pyramid sellers are put in their place through scrutiny of the outlay of taxpayers money in the bailout.
Labels: credit crisis, Financial markets
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Wednesday, February 06, 2008
Meanwhile back with the Rocky banks..
A timely reminder that there is no such thing as THE Free Market untrammelled by ‘government’. All markets exist in some form of framework, if only to give us confidence to deal with strangers.
In the Financial Times (Feb 5th 2008) Martin Wolf explains why it is so hard to keep the financial sector caged and why it is important nevertheless to make the effort.
Discussion on Wolf’s article elsewhere (on Eurotrib) is of some interest, highlighting the implications of this approach as seen from a continental ‘anti Liberal’ worldview that sees the current uproars as ‘the Anglo Disease’.
In the Financial Times (Feb 5th 2008) Martin Wolf explains why it is so hard to keep the financial sector caged and why it is important nevertheless to make the effort.
….. the banking sector is the recipient of massive explicit and implicit public subsidies: it is largely guaranteed against liquidity risk; many of its liabilities seem to be contingent claims on the state; and central banks create an upward- sloping yield curve whenever banks are decapitalised, thereby offering a direct transfer to any institution able to borrow at the low rate and lend at the higher one.
The bigger point still, however, concerns macro-prudential regulation. As William White of the Bank for International Settlement has noted, banks almost always get
into trouble together. The most recent cycle of mad lending, followed by panic and revulsion, is a paradigmatic example…….In the end, we are left with a dilemma. On the one hand, we have a banking sector that has a demonstrated capacity to generate huge crises because of the incentives to take on under-appreciated risks. On the other hand, we lack the will and even the capacity to regulate it.
Yet we have no obvious alternative but to try to do so. A financial sector that generates vast rewards for insiders and repeated crises for hundreds of millions of innocent bystanders is, I would argue, politically unacceptable in the long run. Those who want market-led globalisation to prosper will recognise that this is its Achilles heel. Effective action must be taken now, before a still bigger global crisis arrives.
Discussion on Wolf’s article elsewhere (on Eurotrib) is of some interest, highlighting the implications of this approach as seen from a continental ‘anti Liberal’ worldview that sees the current uproars as ‘the Anglo Disease’.
Labels: banks, crash, credit, economics, Financial markets, globalisation, government, taxpayers
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Friday, February 01, 2008
Who runs Britain? The super-rich and some other people
Interesting that it is the daily Telegraph (and not for example the Grauniad) that is serialising extracts from the book ‘Who Runs Britain?’ by Robert Peston.
Parts are very relevant to the current uproars:
And he goes on to spell out some of the political consequences, all too relevant in the current heated atmosphere over ‘sleaze’.
Individuals can distort the system in their favour for colossal sums, way beyond the puny efforts of Conservative MPs passing taxpayers crumbs to their families. Of Sir Phillip Green and his wife, Robert Peston notes:
Once more it is interesting that it is the Telegraph that is publicising this, which suggests that at least some of its business-orientated readers will not entirely approve. Even though the outcome of fighting off Green’s predatory bid seems to have been beneficial for M+S…
Read the telegraph extracts :
1 Pointing fingers at the plutocrats (here)
2 Hedge Funds: the new global super powers page 1, page 2,
3 Sir Philip Green (The bidder for M+S)
Robert Peston ‘Who Runs Britain? The super-rich and how they are changing our lives’. Hodder and Stoughton Feb 2008.
Parts are very relevant to the current uproars:
When the going was good, investment bankers, hedge fund managers and partners in private-equity firms all did very nicely from the bonuses and the capital gains and the fees generated by the frenetic manufacturing of deal after deal after deal. Many of them are now paying a price for failing to understand the risks they were taking on. Don't weep for them. They have already extracted fortunes. It is most of us who are paying for their foolhardiness, as the pricking of a financial bubble they created has a negative impact on all our prosperity.
And he goes on to spell out some of the political consequences, all too relevant in the current heated atmosphere over ‘sleaze’.
Why should any of us care? For one thing, it's not healthy for democracy. The new super-rich have the means through the financing of political parties, the funding of think-tanks and the ownership of the media to shape Government policies or to deter reform of a status quo that suits them… since 2001, the private equity doyens Sir Ronnie Cohen and Nigel Doughty have contributed £1.8m and £1m respectively to Labour, the former Goldman Sachs partner John Aisbitt has given £750,000 and the hedge-fund executive William Bollinger has handed over £510,000…. the biggest cost from the swelling of the super-rich class is an erosion of the fabric that holds together communities and the nation. The plutocrats who live here behave as though the UK is permanently on probation.
Individuals can distort the system in their favour for colossal sums, way beyond the puny efforts of Conservative MPs passing taxpayers crumbs to their families. Of Sir Phillip Green and his wife, Robert Peston notes:
(Green’s) greatest coup was to receive a divided in 2005 of £1.2bn from Arcadia, the retailing business he had bought in the autumn of 2002 with just a few million pounds of his own cash. Actually, it would be more accurate to say that his wife received the dividend. He is the grafter, probably the greatest retailer of his generation, and she's the owner. Why are the superlative assets in her name? Well, as luck would have it, she became a resident of Monaco before he set new records for extracting cash from old-established businesses. So by vesting ownership in her hands, any dividend paid would avoid payment of tax to the British Exchequer.
On this one dividend - probably the biggest ever paid to an individual in the history of British business - there was therefore a colossal tax saving, estimated at £300 million. It would have been enough to build 10 state secondary schools…You might think that depriving the public purse of such a sum might put him in baddish odour with the Government. But there has not been so much as a hint of unpleasantness. In fact, the lovable rogue of the British billionaire class was even knighted - for his services to retailing - just a few months after dancing around the tax man. Green is the matchless hero, the nonpareil of the new monied class. Understand him and how he made his pile and you understand 21st century jackpot capitalism.
Once more it is interesting that it is the Telegraph that is publicising this, which suggests that at least some of its business-orientated readers will not entirely approve. Even though the outcome of fighting off Green’s predatory bid seems to have been beneficial for M+S…
Read the telegraph extracts :
1 Pointing fingers at the plutocrats (here)
2 Hedge Funds: the new global super powers page 1, page 2,
3 Sir Philip Green (The bidder for M+S)
Robert Peston ‘Who Runs Britain? The super-rich and how they are changing our lives’. Hodder and Stoughton Feb 2008.
Labels: banks, Financial markets, globalisation, hedge funds
Comments:
The funny thing is that today's 'super-rich' have less money in real terms than the very rich of the past.
It is the political classes who grant favours to the rich in return for support who run this place. The class which has bred so many MPs on all sides of the house.
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It is the political classes who grant favours to the rich in return for support who run this place. The class which has bred so many MPs on all sides of the house.
Wednesday, January 30, 2008
A dozen banks collapse, depositors wiped out
Story in Wall Street Journal. Fortunatly this collapse is in 'Second Life' not on Wall Street proper or our own shores - though the make-believe financial institutions were taking in actual real world money from eager depositors.
Though as this Metafilter report (30 Jan 2008) makes clear things are really fairly hairy in the so-called real world.
Wonder if this secrecy is reassuring...
Yesterday, the San Francisco company that runs the popular fantasy game pulled the plug on about a dozen pretend financial institutions that were funded with actual money from some of the 12 million registered users of Second Life. Linden Lab said the move was triggered by complaints that some of the virtual banks had reneged on promises to pay high returns on customer deposits.
Though as this Metafilter report (30 Jan 2008) makes clear things are really fairly hairy in the so-called real world.
According to the latest biweekly numbers released last Thursday by the Federal Reserve, for the two weeks that ended January 16th American banks had negative $1.3 billion in non-borrowed reserves. This is, historically, extremely unusual; just two months ago they had $30 billion (positive, of course) in non-borrowed reserves. The only reason some banks haven't been shut due to insufficient -- negative! -- reserve requirements is that the Federal Reserve is currently loaning them enough money through the brand new TAF (Term Auction Facility) program (also running in Canada and Europe) to make up their shortfalls. Today's TAF press release says that 52 American banks or institutions are currently receiving loans totaling ~$40
billion -- but the Fed refuses to name who they are.
Wonder if this secrecy is reassuring...
Labels: banks, credit, Financial markets
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Wednesday, November 07, 2007
Credit Crunch - are we going to be Piper Alphad into a crash?
The financial turmoil after the sub-prime mess in the USA continues. Sombre question – are we going to be 'Piper Alpha' cursed?
Piper Alpha was a North Sea oil rig that exploded in 1988 killing 167 people. After cleanup and compensation for victims the owners put in an insurance claim for £1 billion (one thousand million pounds). Because of re-insurance deals the result was a tide of claims across the insurance industry that finally totalled £16 billion. This wrecked Lloyds of London and caused the complete reorganisation of insurance in the City of London.
Why is this relevant to today’s credit problems? Well the primary insurers in 1988 sold on part of the risks to other insurers in various financial packages, and they in turn repackaged part of their risks in other financial instruments and sold them on. Sometimes the primary insurers purchased these repackaged instruments without realising they were actually taking on again part of the risks they had sold on. Come the day of reckoning and the claims went round and round and round…some people having to pay several times.
The sub-prime mortgages (sold to people who are bad financial risks) at the heart of today’s problems presented a risk for the original lenders. They repackaged some of this risk in further financial instruments and sold them on to other people, many of whom repackaged several of those packages and sold them on again – and so on and so on. Bottom line, nobody actually knows how many rounds of this pass the parcel act went on, nor what the actual level of dud values is incorporated in financial securities underpinning otherwise quite respectable holdings. Nobody knows what will happen in a Piper Alpha like unravelling goes the rounds.
The uproar in the Financial Markets is chronicled for example in the Financial Times, Daily Telegraph, Guardian and Independent.
I rather suspect that the concept of ‘a market’ is about to get one of its periodic mass bad press episodes, of the kind wearily summed up by ‘John Kenneth Galbraith’ in the phrase 'Financial Genius Comes before the Fall'. Of course the financial markets are not ‘The Markets’ that give choice in a free economy – but since defenders of ‘market systems’ have been shy of emphasising this elementary fact we cannot complain if the general public conclude for the next few years that markets in general are evil and political poison. The political and economic results could be grim, as Cicero notes…
Piper Alpha was a North Sea oil rig that exploded in 1988 killing 167 people. After cleanup and compensation for victims the owners put in an insurance claim for £1 billion (one thousand million pounds). Because of re-insurance deals the result was a tide of claims across the insurance industry that finally totalled £16 billion. This wrecked Lloyds of London and caused the complete reorganisation of insurance in the City of London.
Why is this relevant to today’s credit problems? Well the primary insurers in 1988 sold on part of the risks to other insurers in various financial packages, and they in turn repackaged part of their risks in other financial instruments and sold them on. Sometimes the primary insurers purchased these repackaged instruments without realising they were actually taking on again part of the risks they had sold on. Come the day of reckoning and the claims went round and round and round…some people having to pay several times.
The sub-prime mortgages (sold to people who are bad financial risks) at the heart of today’s problems presented a risk for the original lenders. They repackaged some of this risk in further financial instruments and sold them on to other people, many of whom repackaged several of those packages and sold them on again – and so on and so on. Bottom line, nobody actually knows how many rounds of this pass the parcel act went on, nor what the actual level of dud values is incorporated in financial securities underpinning otherwise quite respectable holdings. Nobody knows what will happen in a Piper Alpha like unravelling goes the rounds.
The uproar in the Financial Markets is chronicled for example in the Financial Times, Daily Telegraph, Guardian and Independent.
I rather suspect that the concept of ‘a market’ is about to get one of its periodic mass bad press episodes, of the kind wearily summed up by ‘John Kenneth Galbraith’ in the phrase 'Financial Genius Comes before the Fall'. Of course the financial markets are not ‘The Markets’ that give choice in a free economy – but since defenders of ‘market systems’ have been shy of emphasising this elementary fact we cannot complain if the general public conclude for the next few years that markets in general are evil and political poison. The political and economic results could be grim, as Cicero notes…
Labels: crash, economics, Financial markets, Galbraith, insurance
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Saturday, September 15, 2007
Genius, finances and the Rocks
I don’t want to be too pessimistic, but with the current Northern Rock uproars John Kenneth Galbraith’s little book ‘A Short History of Financial Euphoria’ looks all too relevant.
Basic point. Speculation buys up the intelligence of those involved.
The only safeguard against market shipwrecks is good market ‘seamanship’ which recognises what a wrecking coast and adverse winds and tides look like.
Unfortunately the power of money means that a period of prosperity lessens the sense of danger. So-called new financial instruments re-invent old methods of profiting from risks and those involved bask in reputations for financial genius. ‘The world of finance hails the reinvention of the wheel over and over again, often in a more unstable version’ says Galbraith.
All is well so long as the risks don’t come back to leverage disproportionate havoc, as has come about from the innovative repackaging of high risk loans in the USA. The real problem comes from the hedge funds, and from the fact that financial institutions have been borrowing and lending on packages of assets which have been packaaged and re-packaged so often nobody actually knows where the risks are, and how many times they have been multiplied by being repeatedly spread around.
‘Financial genius comes before the fall’, as Galbraith memorably summed up his argument.
One depressing component of any situation where geniuses are discovered to have the wheels coming off their cunning plans is that the Official Great And Good are required to make public pronouncements about the underlying situation being sound regardless of what the situation really is.
I sincerely hope they are this time right about the Northern Rock uproar and the associated troubles.
Basic point. Speculation buys up the intelligence of those involved.
The only safeguard against market shipwrecks is good market ‘seamanship’ which recognises what a wrecking coast and adverse winds and tides look like.
Unfortunately the power of money means that a period of prosperity lessens the sense of danger. So-called new financial instruments re-invent old methods of profiting from risks and those involved bask in reputations for financial genius. ‘The world of finance hails the reinvention of the wheel over and over again, often in a more unstable version’ says Galbraith.
All is well so long as the risks don’t come back to leverage disproportionate havoc, as has come about from the innovative repackaging of high risk loans in the USA. The real problem comes from the hedge funds, and from the fact that financial institutions have been borrowing and lending on packages of assets which have been packaaged and re-packaged so often nobody actually knows where the risks are, and how many times they have been multiplied by being repeatedly spread around.
‘Financial genius comes before the fall’, as Galbraith memorably summed up his argument.
One depressing component of any situation where geniuses are discovered to have the wheels coming off their cunning plans is that the Official Great And Good are required to make public pronouncements about the underlying situation being sound regardless of what the situation really is.
I sincerely hope they are this time right about the Northern Rock uproar and the associated troubles.
Labels: crackpots, economics, Financial markets, Galbraith, history, Markets
Comments:
You are guaranteed 100% of the first £2,000 and 90% of the next £33,000 by the government. Of course if Northern Rock goes bankrupt (a major possibility) you'll be asking for your money back, along with millions of other savers. You won't see a penny for months (or possibly over a year) and will lose the interest you'd have gained if you'd transferred your money on Monday. The price you'll pay is maybe a few tenths of a percent in interest. What price is peace of mind?
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# posted by 
: 3:10 pm, September 15, 2007
: 3:10 pm, September 15, 2007
