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Government abandons its own golden rules on borrowing and debt...

You might remember that about ten years ago, when the current government was elected, Gordon Brown made a big deal about his strict new rules for government borrowing which were all part of his ‘no more boom and bust’ promise. Anyway, now that we’ve come to the end of the biggest boom in British history and are teetering on the precipice of the biggest bust in British history, Alastair Darling (the guy who replaced Brown when he got bumped up to Prime Minister) has decided that those rules aren’t quite as cast iron as they used to be. Neatly sidestepping the whole issue of the government’s abject failure to deliver on one of its key promises and abandoning...

posted on: Oct 29, 2008 | author: Lance

The Great British Bailout – what actually happened today?...

So, after the US government slashed interest rates to 2% and gave Wall Street a $500 billion taxpayer bailout, only to see all this achieve precisely jack shit as the American and international stock markets paused for a moment’s reflection before getting on with the business of falling off a cliff, guess what the UK government did today? That’s right – a £500 billion ($864 billion) bail out for the banks and a .5% slice off interest rates. After the announcement this morning, the FTSE paused momentarily for breath before continuing with its new favourite game of plummeting downwards at record speed, dropping by another 5.2%. Here’s how today’s bailout breaks down: £50 billion will be invested in...

posted on: Oct 8, 2008 | author: Lance

Time to stock up on tinned food, bottled water, and ammunition...

There’s so much big economic news breaking at the moment that it’s impossible to cover everything in any amount of detail – the whole Bradford and Bingley thing bears further discussion for a start (just how many failed banks is the UK government going to buy before the money runs out?) but events have overtaken us and right now there’s only one thing worth talking about: The US House of Representatives has voted down the $700 billion rescue plan for the US banking system which, if we’re honest, most of expected to be swept through without too many hiccups. At the time of writing, global stock markets are plummeting by record levels. By the time this news broke,...

posted on: Sep 29, 2008 | author: Lance

Lehman Brothers goes down, entire western global economy in chaos...

To anybody who’s been paying much attention to the international banking system over recent years, the spectacular failure of Lehman Brothers should come as no surprise. What is surprising, however, is that the US government didn’t step in to save the massive investment bank which, up until yesterday, most people would have imagined enjoyed the status of ‘too big to fail’ like many other privileged financial services organisations. Not to put too fine a point on it, this must be causing a lot of soiled underwear in the boardrooms of Wall Street and beyond – if the government is prepared to allow a beast the size of Lehman Bros to collapse, nobody is safe. And given that the...

posted on: Sep 15, 2008 | author: Lance