Global Debt Storm - Osborne

[I1L2T3]

I'm not splitting hairs. My words are perfectly clear and concise. The overwhelming majority of individuals and corporations were perfectly able to meet their repayments before, during and after 2008.

 

To expand; if governments had properly regulated banking, and not overspent themselves, a good deal more individuals and corporations would still be able to. Sadly, many have suffered through absolutely no fault of their own, but at the fault of aforementioned governments and banks.

 

Cause and effect - an overriding principle of the entire universe - should be remembered. The effect known as the 'banking crisis' was caused. It was caused by governments like New Labour's who simply couldn't keep it in their trousers (metaphorically speaking). Once we accept that simple fact we can put right what was and is wrong.

 

Ok, you are starting to make more sense now. The problem is that the system can only continue while individuals, companies and governments can afford to meet repayments.

 

In the sub-prime household crisis people DID stop making repayments. Masses walked from their debts. It threatened a global banking collapse. Banks had to be bailed out.

 

In our latest phase of the crisis, sub-prime sovereign states are struggling to make repayments. The impact is exactly the same. It kills liquidity in the banking sector. There will be more bailouts, more printing of money to keep the system afloat. We will pay for it again - the Tories have not done anything to prevent that.

 

Osborne is right that it is a global crisis and like you said earlier it's the same one that started in 2007. My OP was making the point that he's only chosen to acknowledge the global naure of it perhaps now that he will no doubt be prepping for the next taxpayer funded bailouts.

[MrSmith]

Ok, you are starting to make more sense now. The problem is that the system can only continue while individuals, companies and governments can afford to meet repayments.

 

In the sub-prime household crisis people DID stop making repayments. Masses walked from their debts. It threatened a global banking collapse. Banks had to be bailed out.

 

In our latest phase of the crisis, sub-prime sovereign states are struggling to make repayments. The impact is exactly the same. It kills liquidity in the banking sector. There will be more bailouts, more printing of money to keep the system afloat. We will pay for it again - the Tories have not done anything to prevent that.

 

Osborne is right that it is a global crisis and like you said earlier it's the same one that started in 2007. My OP was making the point that he's only chosen to acknowledge the global naure of it perhaps now that he will no doubt be prepping for the next taxpayer funded bailouts.

 

When did the Tories ever say the banking crisis wasn't a global problem?

[Wildcat]

I'm not splitting hairs. My words are perfectly clear and concise. The overwhelming majority of individuals and corporations were perfectly able to meet their repayments before, during and after 2008.

 

To expand; if governments had properly regulated banking, and not overspent themselves, a good deal more individuals and corporations would still be able to. Sadly, many have suffered through absolutely no fault of their own, but at the fault of aforementioned governments and banks.

 

Cause and effect - an overriding principle of the entire universe - should be remembered. The effect known as the 'banking crisis' was caused. It was caused by governments like New Labour's who simply couldn't keep it in their trousers (metaphorically speaking). Once we accept that simple fact we can put right what was and is wrong.

 

There are no laws to stop people doing bad deals. When the deals go sour, it is not usually the Govt.s responsibility. The banks were lending worthless bits of paper to each other until BNP Paribas decided to stop playing this game of poker where everyone was bluffing. It was banking decisions that caused this crisis. Easy to say there should have been tougher regulation with the benefit of hindsight, but who was? Not the Tories they were extolling the financial miracle in Iceland. One person who was, was Joseph Stiglitz, someone who's ideas, I seem to recall you don't much like. Perhaps you would do well to consider that whatever criticisms you have about lack of foresight and the taking expert advice on... are criticisms that can continue to be directed at you.

[I1L2T3]

When did the Tories ever say the banking crisis wasn't a global problem?

 

When did they say it?

 

Until now our problems have apparently been caused by profligate public spending, according to the Tories. I'm not denying that is part of the problem but there is no way we would be embarking on the scale of austerity we are now if we hadn't had to bail out our banks that had become seriously damaged by a global banking crisis.

[Wildcat]

When did they say it?

 

Until now our problems have apparently been caused by profligate public spending, according to the Tories. I'm not denying that is part of the problem but there is no way we would be embarking on the scale of austerity we are now if we hadn't had to bail out our banks that had become seriously damaged by a global banking crisis.

 

The consequences of them suddenly deciding to restrict lending has had the most toxic effect.

[MrSmith]

When did they say it?

 

Until now our problems have apparently been caused by profligate public spending, according to the Tories. I'm not denying that is part of the problem but there is no way we would be embarking on the scale of austerity we are now if we hadn't had to bail out our banks that had become seriously damaged by a global banking crisis.

 

The Tories have never denied the banking crisis; they have always claimed our problems were a combination of both, the banking crisis and government spending.

[Wildcat]

It was only after Paulsen let Lehman Brothers fall, when it was Northern Rock that was facing a crisis that even he realised that the banking crisis could suck the global economy and Govts down with it, without state intervention.

[I1L2T3]

The Tories have never denied the banking crisis; they have always claimed our problems were a combination of both, the banking crisis and government spending.

 

Really? You know, I've lost count of the times they've banged on about the mess that Labour left them. And until today I've not heard them once acknowledge that our debt issues are partly due to a global banking crisis.

[Wildcat]

The Tories have never denied the banking crisis; they have always claimed our problems were a combination of both, the banking crisis and government spending.

 

That's odd, because I don't ever recall them putting Gordon Brown's policies in to context and qualifying their criticisms.

 

The really sad thing is, their policies are not so different... they are both dancing to the bankers tune whilst we are ripped off.

 

Gordon Brown to his credit however did do what he could to invest in our futures, through spending on employment programs, education he may have been dancing to the wrong piper but he did have a conscience, something I have yet to see from George Osborne

[I1L2T3]

It was only after Paulsen let Lehman Brothers fall, when it was Northern Rock that was facing a crisis that even he realised that the banking crisis could suck the global economy and Govts down with it, without state intervention.

 

I was reading an article on the Wall Street Journal recently. The notional value of the derivatives market is $700 trillion. The turnover in derivative trading is $3.6 quadrillion per year.

 

The GDP of the USA is $15 trillion.

 

That is the banking crisis from hell. As we will find to de-leverage that derivatives market and unwind the positions the banks hold without collapsing the global economy requires more money than the global economy could generate in decades.