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Quite right Nick!

So how come Paulson and Bush are refusing to meet Gordon Brown?

How exactly is Gordon Brown at the centre of things?

He has yet to own up for failing to supervise the Tripartite structure that allowed UK banks to get into this mess.

He should resign and call an election.

He is certainly ill qualifed to sort this out.

Super Brown to the rescue, complete with underpants on the outside of his trousers.

I feel my much economically safer now.

But what happens if they fail to save the global financial system?

4. At 4:37pm on 25 Sep 2008, stanilic wrote:
But what happens if they fail to save the global financial system?
= = = = = = =
The global (read USA) financial system will miraculously save itself....

........ as soon as it's squeezed every last cent from the last decent taxpayer!!

Follow the money!!!!

I think it'smore accurate to say McCain continued his campaign by pretending to suspend it and heading for Washington.

I have this image of him in a serious meeting of economists and bankers flapping around being mavericky and generally getting in the way. At least Brown understands the language.

Keep applying the lipstick, John!

"Thus, Gordon Brown, like presidential contender John McCain, is desperate to place himself at the centre of events"

Perhaps Nick, given the recent invitation, you might like to ammend this to

"Gordon Brown *is* at the centre of events"

?

Brown, Obama. McCain ... they are primarily politicians, not experts on economics or the global financial system.

In this sense, they are 'presenters', promoting the ideas that 'their people' have come up with.

So, if you accept that notion, then the skill of the politician is mainly in the choosing of his or her team and then delivering their output.

That is, in this case, the output of the economists who have to come up with the ideas and the 'spin' doctors whose skill is in telling the politician how to present the ideas in the most favourable way.

The politician has to take all this on board, be in the right place at the right time and then deliver the message in a convincing way.

Whether he or she actually believes in the message is almost beside the point, they just have to trust that their team knows what they are doing or the politician is going to end up looking like a fool.

Just ask George W. Bush, who as it turned out, choose his team very badly indeed and has suffered the consequences.

What must be understood is that it is the next President who will be landed with this. This is such a repeat of 1928 when the New York Stock Market was saved by various injections of cash, then puff, it was all gone, I would not want to be elected President if you paid me!

What appalls me is that all this money can be used to bale out the banks and bankers. They could actually pay off an awful lot of the mortgage debt, so as to remove the threat of people in America being thrown on the streets.

As for bank lending, what do you seriously think a bank is for. If it lends another bank money, and the other bank is willing to pay 4% then ok we'll lend you that money. However, if you were willing to pay 4% yesterday then we'll say 5% today, and the other bank is desperate so they have to pay, then the next day if you were having to pay 5% then you must have to pay 6%, and so it goes on. It's called capitalism, you know, making money. Banks are not benevolent societies. Remember Shakespeare and money, 'pimps and whores' that's all we've become, we are all pimps and whores now.

#8

Correction - I accept that politician Gordon Brown knows a lot more about economics/global finance than Senators Obama or McCain and therefore may add real value in this specific context.

Cerainly, regarding the specific deal on the table now, it is crucial that the correct tail is wagging the dog and not the other way around.

How you interpret that depends on your personal politicial position.

Flash Gordon is Batman after all in trying to save the world.... bet ya' he'll try to say he's the savior.

As for Bush, well he won't be the Chief much longer when the debt starts to bite.

Ah well, when the cats away the mouse will play, what's gonna go wrong or is our Batman ducking n' diving out of Ruth Kelly fiasco, after all Hank Paulson the US Chief Treasurer said he was too busy to see GB... what a snub that is, thanks Hank...

...hope US goes bust then we can tell you to go to hell.

No 11 ......hope US goes bust then we can tell you to go to hell.

Whoa boy, if the US goes bust we all go to hell!!

It's a repeat of 1998, when Brown claimed to be single-handedly saving the world, cracking down on hedge funds and speculators etc etc at a meeting of the G7.

That turned out well.

Her never fails to blow his own trumpet on these matters. He has to really because most of the rest of us jusr don't get it!

I am concerned that GB by giving his support
to the Bush plan is intervening in the democratic process of America.As I understand from watching the hearings both sides of the house are concerned about giving a blank cheque to the treasury secretary,the need for all the money up front,the valuation of the assets ,the moral hazard issue and need to help homeowners.All this seems sensible to me.I have heard Nick say that the PM explains that CEO's of Banks didn't understand the complexity of the CDO's.I have been informed that more worryingly the Treasury and FSA didn't either and if they did then they are culpable.Mr Brown will understand as the architect of complexity in the tax and benefit system.

BANKERS CRIMINAL NEGLIGENCE

What laid to the cause of the credit crunch was:

NO DETERRENT Have you noticed how this is being played down by the media?

NO PROPER REGULATION Yet homeowners and taxpayers are bound by regulation.

NO ACCOUNTABILITY AND NO TRANSPARENCY

UNSCROUPLOUS BANKERS WANT YOU HOMEOWNER AND TAXPAYER TO

BAIL THEM OUT WITHOUT HAVING TO PAY INTEREST AND PREMIUM. Yet the banks can increase interest rates for homeowners and borrowers. Insurance companies can put up your premium as a result of an accident?

WILL THIS CRISIS EVER HAPPEN AGAIN?

THERE ALWAYS HAS BEEN LEGAL AUTHORITY TO PREVENT SUCH BEHAVOUR MOST FOUL BUT YET IT WAS NOT IMPLEMENTED.

THERE IS NO LEGAL AUTHORITY BY WHICH SUCH CONDUCT CAN BE INITIATED. SUCH CONDUCT IS AND ALWAYS WILL BE UNLAWFUL.

SO WHY HAVE THE FINANCIAL SERVICES AUTHORITY NOT BROUGHT THE PREDITORY PERPETRAOR BANKERS TO JUSTICE AND TO CLAW BACK THEIR ILL_GOTTEN GAINS?

UNTILL THE FSA AND THE USA CONGRESS DOES THAT IT WILL HAPPEN AGAIN.

The funniest thing about all this is that Brown is backing the Bush plan which, if you read up on it, is a plan unlikely to work and there are better solutions on the table.

So our economic maestro is proving once again that he doesnt understand economics

FORENSIC-DEBATE @16,

I blame it all on excessive use of CAPITAL LETTERS.

Brown hoped to garner some kudos by giving the Poulson Plan his full support (remember Article 8 would have put Poulson above and beyond the rule of Law...nice!).

It's just a shame that Ruplican senators, no doubt at the behest of an ever increasingly vocal electorate, have rejected the Plan.

Please can someone let me know

How much is a billion?

Is it 100 million, 1000 million or a million million.

And then how much is a trillion?

And then is there a way of commodifying it that we can understand.

Thanks you

re: 20 Takethree

A billion is a thousand million (ie 1 with 9 zeroes on the end)

A trillion is a thousand billion (ie 1 with 12 zeroes on the end)

Having said that, I did think that a while ago a billion in the uk was assumed to be a million million, but that we changed it to use the american idea of it meaning a thousand million, but I might be wrong on that.

Now pardon me for being really obtuse, but apart from possessing minor items such as a mortgage and a pension (and please just don't go there), I am essentially ignorant regarding the vagaries of the finanacial markets (which may in fact be a qualification of some sort right now). It's just it seems to me that the problem actually isn't bad debt, because I'd bet a small (and getting smaller) amount of money that the combined value of all those duff mortgages in Louisana or wherever they are doesn't add up to 700 gerzillion dollars or whatever it is. The real issue is the compounding of those mortgages through synthetic investment vehicles (which may be obvious, but bear with me).
So x dollars of dodgy mortgages gets bundled up into some sort of 'fund'. Problem is this immediately gives it a market value independent of the value of the original mortgages. Then these 'funds' get lumped together and are in turn sold as - I dunno, 'superfunds' maybe - and in turn attract a market value which is essentially disconnected from their source. Hence 700 whatever dollars of bail-out plan (or not, as the case may yet be). Like I said, I may be a bit dense but this sounds to me like a very silly idea in the first place.
Because in any other place in the known universe this process would fail to compute. You'd get 'divide by zero' errors coming up on your calculator, or you'd have journalists accusing you of flogging anti-gravity, or perpetual motion, or snake oil.
But apparently not on the stock exchanges of the world. There, it's all just fine. Why?
It's because the problem isn't debt; it's growth. The economy is essentially zero-sum, meaning that there's a finite amount of money to go round and for one guy to get richer someone else has to get poorer - except under circumstances where the economy 'grows'. This seems like it really can happen, it's happening in China and apart from ecological imact we'll all probably be better off becasue of it. But the economy can only grow so much in a year. And that's a bad thing if you are an investment banker.
Collectively Investment Bankers are all looking for growth and expansion and all that good macho stuff so that they can make their margins and take their cut and drive their Porches; don't get all moral over it, we'd all like Porches (except me, I'd like an Aston Martin, but anyway). The problem is, there just ain't enough growth to go round.
So what did they do? They made some up.
They came up with these options and derivatives and SIV's and whatever, and decided that the finanical markets were no longer going to be bound by movements in the external economy (or gravity, or the speed of light) but could essentially fly as free as little pixies, unworried by mundane reality.
So, I hear you ask, what on earth (or elsewhere) is my point?
It's this; didn't somebody notice? Didn't somebody stop to think, hello, this can't go on? That this was a system with catastrophic failure built in from day one? Didn't somebody realise?
Or perhaps they did. Perhaps somebody has actually thought this through. Perhaps somebody thought, hey, when this crashes we can get out of jail free by stiffing the US (and eventually UK etc) taxpayer for 700 billion dollars, because this isn't maths, it's not even finance - it's poker.
So Cui Bono? Well I can't name names because I don't know them, maybe it's just that 'loose association of millionaires and billionaires' that Paul Simon used to sing about, but without wishing to be unnecessarily caustic I rather suspect their Poster-boy was on US TV the other evening telling the good old US taxpayer why they're going to have to bail out the NYSE et al again.
Take a deep breath; here comes the point; it's a scam. The whole credit crunch thing, it's a sting, a confidence trick. I'm not saying the problem isn't real, but the situation has been fabricated, not deliberately from day one, but cumulatively over time by people who gradually realised that if they thought big enough, thought bold enough - they could steal the world.
And you know what? They have.

This comment was removed because the moderators found it broke the house rules. Explain.

Already disillusioned with the practices and policies of politics, I ask myself "was Gordon brown a good Chancellor or not?" If he was a good Chancellor, surely he would of been expected to acknowledge and address the detrimental banking practices, products and services that has triggered the credit crunch. If he was a bad Chancellor, surely he is as irresponsible as the chief executives of the banks and the FSA.

I would like the politicians to tell us all what will happen to the Chief Executives of these banks who have earned £$millions out of this. I would also like to know whether there will be a compensation package for those who have lost their houses as a result of the irresponsible mortgage products and services they were sold. Let's cut to the chase!

I whole affair has lead me to believe that we, 'the people', need legal representation because I am in no doubt that the bail-out of these financial institutions will end there with no political, banking, FSA individuals being sacked or being marched to court. What a DISGRACE!!

re:22 carlfromhere

You're probably right; I'd also wager that most of the money being written off is some kind of derivative of the mortgages owed rather than the mortgages themselves.

It'd be interesting to find out how much the proportion is between the actual bad-debt of the end-customers against the bad-investments of the banks that they then made against those bad debts.

It's a great point you've raised I reckon, and hopefully the bbc reporters will be reading it and look into it.

22. carlfromhere

Great explanation....more realistic than the guff emanating from GB (or GB)