Kampeter put the boot into Crash Gordon: “Peer Steinbrück’s comments have nothing whatsoever to do with internal German politics as Prime Minister Brown has suggested. In questioning the British Government’s approach, Peer Steinbrück is exactly expressing the views of the German Grand Coalition. After years of lecturing us on how we need to share in the gains of uncontrolled financial markets, the Labour politicians can’t now expect us to share in it’s losses. The tremendous amount of debt being offered by Britain shows a complete failure of Labour policy.”
Banking Bill
Part 7 — MiscellaneousWeekly return
Section 6 of the Bank Charter Act 1844 (Bank to produce weekly account) shall cease to have effect.
And be it enacted, That an Account of the Amount of Bank of England Notes issued by the Issue Department of the Bank of England, and of Gold Coin and of Gold and Silver Bullion respectively, and of Securities in the said Issue Department, and also an Account of the Capital Stock, and the Deposits, and of the Money and Securities belonging to the said Governor and Company in the Banking Department of the Bank of England, on some Day in every Week to be fixed by the Commissioners of Stamps and Taxes, shall be transmitted by the said Governor and Company weekly to the said Commissioners in the Form prescribed in the Schedule hereto annexed marked (A.), and shall be published….
The fact is the banks have to earn a spread from the rate they lend against the rate they borrow, otherwise you get into the Northern Rock position with the cost of borrowing exceeding the return on lending. Politicians will nevertheless huff and puff regardless of reality.
UPDATE : The government is going to force banks to double their holdings of government bonds, supposedly to increase their “liquidity reserves”. Handy when the government is desperate to find buyers for gilts to keep itself afloat. If they have to buy gilts, it will make it even more difficult for banks to extend credit to corporate borrowers… doh!
UPDATE : This just in from a co-conspirator:
Hello Guido,
I’ve been perusing the great work of fiction that isGordy’soops, the Chancellor’s growth forecasts, and on page 1 of Annex A: The Economy we have this bullet-pointed gem:‘UK GDP growth of 3/4 % for 2008 with the economy contracting in the second half of the year’
Now, when the chancellor stood up at the dispatch box, three quarters of 2008 GDP growth were known:
Q1 0.3%
Q2 0%
Q3 -0.5%In order to hit the forecast 0.75%, the economy has to grow at feisty 1% in the fourth quarter. Has the Chancellor been outside recently?
UPDATE II :
Some querying via email of how the GDP quarterly statistics are precisely computed by someone who seems to know what they are talking about; “There are lies, damned lies and statistics”.As Monetary Authorities, we have been humbled and have taken heart in the realization that some leading Central Banks, including those in the USA and the UK, are now not just talking of, but also actually implementing flexible and pragmatic central bank support programmes where these are deemed necessary in their National interests.
That is precisely the path that we began over 4 years ago in pursuit of our own national interest and we have not wavered on that critical path despite the untold misunderstanding, vilification and demonization we have endured from across the political divide.
….leading central banks in the global economy are bailing out troubled economic sectors to achieve macroeconomic and financial stability….the Bank of England… providing a £50 billion lifeline to the UK’s banking sector.
Here in Zimbabwe we had our near-bank failures a few years ago and we responded by providing the affected Banks with the Troubled Bank Fund (TBF) for which we were heavily criticized even by some multi-lateral institutions who today are silent when the Central Banks of UK and USA are going the same way and doing the same thing under very similar circumstances thereby continuing the unfortunate hypocrisy that what’s good for goose is not good for the gander….
As Monetary Authorities, we commend those of our peers, the world over, who have now seen the light on the need for the adoption of flexible and practical interventions and support to key sectors of the economy when faced with unusual circumstances.
Via : Naked Capitalism
It is not all bad news though, Guido is short the FTSE….