Dante Posted January 21, 2009 Posted January 21, 2009 Lord Myners, the banking minister, said the Government's toxic debt scheme will run for at least five years and may last for "eight or nine years". The value of sterling also fell to its lowest level against the dollar in more than seven years after a well-known investor said the British currency was "finished". Mervyn King, the Governor of the Bank of England, said on Tuesday that the Bank was preparing to print extra money in a desperate attempt to kick-start the beleaguered British economy. Shares in Lloyds Banking Group, Britain's biggest bank following the takeover of HBOS, fell by 47 percent at one point - wiping billions off the bank's value. Shares in the bank have now fallen by more than 85 percent over the past year. Shares in Barclays also fell sharply, closing the day more than 20 percent lower. There is growing speculation that Royal Bank of Scotland (RBS) is set to be nationalised after its shares fell in value by more than two-thirds on Monday. Shares in RBS fell by more than 12 per cent yesterday. As the pound plunged, Jim Rogers, a former partner of George Soros, the man renowned for his attack on sterling on Black Wednesday in 1992, told fellow investors: "I would urge you to sell any sterling you might have. It's finished. I hate to say it, but I would not put any money in the UK." The falls have come following a £350 billion bailout package announced by Gordon Brown and Alistair Darling, the chancellor. The centrepiece of the package is a "toxic debt" scheme which involves the Government insuring banks against future losses on bad loans. Ministers have refused to put a cap on the taxpayers' exposure to bad debts which experts fear could be more than £200 billion. Lord Myners confirmed that the Government was planning to be involved in shoring up high-street banks for almost a decade. "The duration of the policy will be important, because we need a policy that will take financial markets through this economic downturn and beyond the next cycle," he said. "So we are probably talking about a policy duration of no fewer than five years and probably no longer than eight or nine years." The minister added that it will take six to eight weeks of intensive negotiations with the banks for the scheme to be agreed. He said that the Government would be employing external accountants, actuaries and lawyers to sift "over a billion items of individual data" from each bank seeking assistance. The Government had hoped that other countries would launch similar toxic debt schemes to that unveiled in Britain. However, the plan met with a cool reception yesterday at a meeting of European finance ministers. City experts believe that the toxic debt scheme may not prove enough to alleviate the impact of the credit crisis. RBS said earlier this week that it is expecting to announce losses of up to £28 billion for 2008. Fears are now growing that other banks will also declare big losses when they announce their results over the next month. Manus Costello, an analyst at Merrill Lynch, an investment bank, said: "We expect Lloyds Banking to lose money in 2008, 2009 and 2010, largely a result of bad debt provisions." Simon Maughan, an analyst at MF Global Securities, said the share price falls reflected concerns that other banks may be nationalised. He said: "There are now a number of big banks that are circling the plug hole and the closer that you get to the hole the faster that the water moves." www.telegraph.co.uk 1 € = 0.927865541 British pounds
McPhee Posted January 21, 2009 Posted January 21, 2009 1 € = 0.927865541 British pounds This is why we won't be joining the Euro any time soon i think, we'd lose one hell of a lot of money. On top of that the projected losses incurred by businesses from the VAT cut is already pretty high, if they all had to convert to the Euro i think we'd see a fair few go under
Nolan Posted January 21, 2009 Posted January 21, 2009 This is why we won't be joining the Euro any time soon i think, we'd lose one hell of a lot of money. On top of that the projected losses incurred by businesses from the VAT cut is already pretty high, if they all had to convert to the Euro i think we'd see a fair few go under Looking at it as 1=.92 it doesn't seem too bad, but that's 80 of every 1000. Plus I don't know squat about VAT.
thirtynine. Posted January 21, 2009 Posted January 21, 2009 Euro ftw, we should have joined at the start then we would have so much less currency fail
ReZourceman Posted January 21, 2009 Posted January 21, 2009 Made of failz. All LEGO from BL is done on either USD or EURODOLLARS so its teh suck. Meh cant buy anything for a month anyway.
Serebii Posted January 21, 2009 Posted January 21, 2009 I dunno...I like the USD -> GBP exchange rate at the moment. It's beneficial for me :p
ReZourceman Posted January 21, 2009 Posted January 21, 2009 I dunno...I like the USD -> GBP exchange rate at the moment. It's beneficial for me :p How comez?
EEVILMURRAY Posted January 21, 2009 Posted January 21, 2009 I dunno...I like the USD -> GBP exchange rate at the moment. It's beneficial for me :p I agree, it's not been as good as it has been, but we still make some savings. GBP > CAD is even better.
Jimbob Posted January 21, 2009 Posted January 21, 2009 I'm letting everyone into my secret recovery plan, i'm moving abroad. Buy things from my new company. I'm also creating a batch of jobs as well, good pay rates as well. Could be the only way to save the economy. I joke, i'm not going anywhere really. Basically, the economy is in shambles due to foriegn imports/exports. That is where it is weak, not here in the UK but abroad.
jayseven Posted January 21, 2009 Posted January 21, 2009 lol... some guy who hated sterling 15 years ago declares war on it today, and we take that to be Werd? Pft. If we've got 10 years of painful struggle for investment, then that's what we'll have. British public won't dump the pound, especially if it's not at some hardcore boss level. Mind you, in 10 years time China and India = booooooom takeovertheworld.
LazyBoy Posted January 21, 2009 Posted January 21, 2009 lol... some guy who hated sterling 15 years ago declares war on it today, and we take that to be Werd? Pft. If we've got 10 years of painful struggle for investment, then that's what we'll have. British public won't dump the pound, especially if it's not at some hardcore boss level. Mind you, in 10 years time China and India = booooooom takeovertheworld. Over my dead body, that corrupt ass f*cking country needs a revolution or somethings. It has a rich/poor divide that is just evil. China on the other hand, I'm looking forward to it.
Serebii Posted January 21, 2009 Posted January 21, 2009 How comez? Google Revenue comes through in USD. If I get any surplus after server costs I keep it for my savings. With this exchange rate, I can get more :P
The fish Posted January 21, 2009 Posted January 21, 2009 I want the Euro, but most of you know that already... :awesome:
flameboy Posted January 21, 2009 Posted January 21, 2009 See I don't see it as the currency being dead just in need of a very big revival! The problem with being the Euro is your choices about what you can do to help you economy are very much tied with the rest of the EU and limits how much you can manage things. This of course falls down if the euro gets stronger and the pound flounders, but I have little doubt the euro will soon drop we are seeing a domino effect across the world.
DCK Posted January 21, 2009 Posted January 21, 2009 See I don't see it as the currency being dead just in need of a very big revival!I don't see the Titanic as being sunk, but just in need of a lot of duct tape! (Just kidding, it's not that bad).The problem with being the Euro is your choices about what you can do to help you economy are very much tied with the rest of the EU and limits how much you can manage things.The whole point of the Euro is greater financial stability. You don't need to manage stuff when things are going great, like in the rest of the EU This of course falls down if the euro gets stronger and the pound flounders, but I have little doubt the euro will soon drop we are seeing a domino effect across the world.I doubt the Euro will drop as much as the pound; its the currency of the most stable economies in the world combined. We might not have as much control over the currency, but that only means that you can't mess it up for others. Besides, there's a power shift - because of the weak US Dollar, the Euro is becoming more and more the preferred international coin.
Haden Posted January 21, 2009 Posted January 21, 2009 Over my dead body, that corrupt ass f*cking country needs a revolution or somethings. It has a rich/poor divide that is just evil. China on the other hand, I'm looking forward to it. Government oppression ftw! At least India is a democracy and gives refuge to the Dali Lama. Indian society is well bad heirachy wise though.
LazyBoy Posted January 21, 2009 Posted January 21, 2009 Government oppression ftw! At least India is a democracy and gives refuge to the Dali Lama. Indian society is well bad heirachy wise though. Ha, yeah if you got the money. The country is still run by warlords for god sake. I mean f*ck, if that's democracy, 9 year old girls walking down train tracks naked looking for something to eat whilst 20 km away men live in 5 story houses and consume banquets at each meal, I want nothing to do with it. That country made me sick.
Shino Posted January 21, 2009 Posted January 21, 2009 Yeah, like there isn't corruption and salary disparity in China... The only difference is that poor people aren't allowed to beg on the streets or even walk in said streets.
LazyBoy Posted January 21, 2009 Posted January 21, 2009 Yeah, like there isn't corruption and salary disparity in China... The only difference is that poor people aren't allowed to beg on the streets or even walk in said streets. What China has isn't corruption, its guanxi, its just labelled as corruption by foreigners who don't understand it. Salary disparity exists but less than any other country in the world (China proper), and everyone in China proper, non autonomous regions, is guaranteed a job by the state. The Chinese government are moving people out of poverty at an extraordinary rate, in rural areas poverty has plummeted to 15 million in 2007 from 250 million in 1978. Read that again. I have spent extensive time in both countries and I can firmly say that China is a country that, although not perfect, is improving at a ridiculous rate, compared to India which is just a sick, sick country. If I had just western press to go on I'd believe the same as you guys.
LazyBoy Posted January 21, 2009 Posted January 21, 2009 So China isnt corrupt, yet local authorities let companies get away with poisoning baby food for cash? They were hung - hardly call that getting away with it.
Haden Posted January 21, 2009 Posted January 21, 2009 Ha, yeah if you got the money. The country is still run by warlords for god sake. I mean f*ck, if that's democracy, 9 year old girls walking down train tracks naked looking for something to eat whilst 20 km away men live in 5 story houses and consume banquets at each meal, I want nothing to do with it. That country made me sick. Like I said its a screwed up country all I am saying is damn you want the Chinese government? Some of the stuff they get up to is fucked up to say the least. There whole pretence for being in Tibet is a joke and yet they treat it like a non issue. There are loads of great parts of China and the people seem awesome from documentaries I have seen but there is no way in hell I would swap the UK government however bad it seems at time for one that has the human rights record of China.
LazyBoy Posted January 22, 2009 Posted January 22, 2009 Like I said its a screwed up country all I am saying is damn you want the Chinese government? Some of the stuff they get up to is fucked up to say the least. There whole pretence for being in Tibet is a joke and yet they treat it like a non issue. There are loads of great parts of China and the people seem awesome from documentaries I have seen but there is no way in hell I would swap the UK government however bad it seems at time for one that has the human rights record of China. This is a good post. The UK government do a good job of of running the UK, but a country of 1.3bil? When one in three children live in poverty? If a country is taking over the entire world, yeah I want China. As for Tibet, I say what I always say, they have far more reason to be there than the UK does to be in the Falklands. But you never hear about that do you? Well except in Argentina.
Shino Posted January 22, 2009 Posted January 22, 2009 What China has isn't corruption, its guanxi, its just labelled as corruption by foreigners who don't understand it. You labelled it, I never heard that word before. But reading on it, it does seam like a system that can justify corruption and trade of influence in important places. From what I understand its not even a friend network favours, its simply a network of people with no real connection other than knowing other people that can do favours. Salary disparity exists but less than any other country in the world (China proper), and everyone in China proper, non autonomous regions, is guaranteed a job by the state. The concept of China proper is appalling on its own, the idea of a main China and a less important China sounds more like colonialism than anything else. And looking at the Gini coefficient, China is inequality of income is actually one of the worse (maybe its because it accounts all of China), and its steadily growing, poor people may be getting better then they were 30 years ago but considering how China was at that time, the only way to go was up, while rich people are getting rich faster, creating disparate social classes (there goes communism). The Chinese government are moving people out of poverty at an extraordinary rate, in rural areas poverty has plummeted to 15 million in 2007 from 250 million in 1978. Read that again. I have spent extensive time in both countries and I can firmly say that China is a country that, although not perfect, is improving at a ridiculous rate, compared to India which is just a sick, sick country. If I had just western press to go on I'd believe the same as you guys. I do agree they're getting better fast and that its beneficial for the country as a whole, maybe its even the right system for them at the time, but they can't keep up with it for much longer. Its unsustainable and an advanced society will require more than just money. As for Tibet, I say what I always say, they have far more reason to be there than the UK does to be in the Falklands. But you never hear about that do you? Well except in Argentina. I don't think the population of the Falklands prefers to be Argentine instead of British.
LazyBoy Posted January 22, 2009 Posted January 22, 2009 You labelled it, I never heard that word before. But reading on it, it does seam like a system that can justify corruption and trade of influence in important places. From what I understand its not even a friend network favours, its simply a network of people with no real connection other than knowing other people that can do favours. It's an aspect of their society that has been around since the Chinese state begun. Its intricacies are the subject of 1000 word dissertations, but it was explained to me as making business partners part of the family, allowing greater trust. So if you want to do business with someone, you take them out for dinner, show your respect to them and get to know them. Its worked like that for a while, and the chinese themselves seem to have no problems with it. The concept of China proper is appalling on its own, the idea of a main China and a less important China sounds more like colonialism than anything else. And looking at the Gini coefficient, China is inequality of income is actually one of the worse (maybe its because it accounts all of China), and its steadily growing, poor people may be getting better then they were 30 years ago but considering how China was at that time, the only way to go was up, while rich people are getting rich faster, creating disparate social classes (there goes communism). It mainly happens in the big three cities (from what i've seen doesn't even exist outside of there) and as a result of ex-pats and other foreigners going over there and taking advantage of the exchange rate. I do agree they're getting better fast and that its beneficial for the country as a whole, maybe its even the right system for them at the time, but they can't keep up with it for much longer. Its unsustainable and an advanced society will require more than just money. This is a point of opinion. Personally, even though we'll see changes, I reckon the core of Chinese government will stay like this for a while. They've tried true democracy, they've tried republicanism. Its either this or back to a monarchy. Alright, exam tomorrow. I'll answer the rest tomorrow. Thanks for the discussion lads.
Recommended Posts