The Glass Box for Monday
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Will we break the glass box if we go over 50,000?
Aye,
ed
Need ? Easy terms available.
xx
ed
The motorcycle of choice for returning GIs was the Triumph NOT the Harley. Triumph Tigers are also the machines in "The Wild Bunch". So much for the "Historical Expert". There again, would a lady biker know the difference?
Ooops, My chauvinism is showing.
Was there really an interviewee called Patrick Divine Right?
However it may be spelled, that's what it sounded like.
Surely the caffeine is making me hallucinate.
I think Charles I should be told.
49000!!!
The item on the protest at Heathrow was extremely one-sided. In the time I was listening, you interviewed a protestor and someone else (I think maybe the Patrick Divine Right fellow) who was obviously in sympathy with them. Where were the people to present the counterargument, who would have stood up for the overwhelming case for going ahead with the expansion, and who would have deflated the rhetoric of these misinformed and arrogant people?
Sometimes I despair of your programme. It spends far too much time devoted to Eddie Mair's smart ars*d remarks. Your strapline said it right
A 5 per cent rise in NY we were told. Oh dear!
You mean 650 points eh?
And the London clearing banks are not keeping up their cash ratios because Mervyn King has set interest rates too high.
Well, keep that up Mervyn. you plonker, and you'll have a run on one or other of the high street banks 'cos of a cash shortage.
What is the point of Mair conducting an interview on something he knows nothing about with a head phone link to an edi ior who also knows nothing about it according to their own Glass Booth comments.
Anyway, monkeys at typewriters, another slump tomorrow is at least as likely as a boom.
The
And Frances, I remember "Divine Right's Trip" from the Whole Earth Catalog.
Must his kin.
xx
ed
Re Global Warming demo. I fly to Asia 3 times a year. I would rather the protesters directed their energies at rather larger polluters than the commercial airlines. America and our own use of massive amounts of munitions from the air and land. We protest, our government pollutes Shock and awe ring any bells? At least the planes I catch don't drop bombs. Your interviewee said 150,000 are dieing each year, Thats about the same as will die in Baghdad.
Mac (7):
I don't want this to sound narky, but wouldn't you be happier on the MoneyBox blog?
(If there is one...)
Eddie & Team:
That was a good item on the Rochdale Bongs. I had no idea some places in this country were still on local time. More like that please, as long as you don't turn into "Down Your Way".
Mac,
It's a "dead cat" bounce today, thanks to the governments underwriting all those dodgy mortgages. It'll fuel incredible inflation, and that new 'liquidity' will run down the drain.
It's a bit like the 'loans' the US gives Israel, never to be repaid. I saw somewhere that's running at around five billion p.a., but I might be wrong. Whatever it is it's going to the wrong place.
Grrrr!
ed
;-)
And Mac,
The "five percent" rise (actually about zero-point-five percent at the time) has now turned to zero-point-zero-one percent loss....
La, la, la!
ed
Stephen (6):
What has rarely been mentioned in the context of the Heathrow expansion is the strain this will place on the air traffic control system. The London TMA is already one of the most heavily-trafficked airspaces in the world, much of that traffic moving into or out of Heathrow; as we saw last December, the margins are already cut so close that a little bad weather causes utter disruption.
The new centre at Swanwick uses the problematic Lockheed-Martin software that even L-M can't get to work well, because this was cheaper than employing a sufficient number of competent ATC staff. It can barely stand up to the current traffic load (staff members have commented that it's not nearly as good as West Drayton).
I predict longer queues for takeoff and landing, heavier use of the Bovingdon stack, more inconsistent delays, and very probably some mid-air collisions; if the latter do not occur, it will be because of the pilots, not the National Air Traffic Services.
What's wrong with taking a train to an airport sensibly far away from the crowded airspace? The Americans I know who want to come to the Olympics in 2012 have already planned to fly to ParisCDG and take the Tunnel.
mac (7), if you could find it in yourself to express your obviously deeply held feelings about the markets without being abusive I really think we would all appreciate it.
Reasoned argument and strongly held views we like, passionate debate we love, but personal abuse does not help your case.
Ed (11),
;-(
SSCat (10) - No, he probably wouldn't be happier if he was there. We might be though.
After listening to the item about the environmental protests at Heathrow and hearing the do-gooders being interviewed, a revolutionary idea flash across my mind.
As I understand it, we humans breathe in oxygen and breathe out Carbon Dioxide. Think how advantageous it would be and the significant impact on CO2 emissions if all those protesters stopped breathing for a day...HOORRAAHH!...obviously the end result would be quite tragic but hey....no pain, no gain I say.
The environmental psychologist made a good point on human complacency regarding global warming. After all, it has been discussed for decades now and still people do not wish to change their lifestyles.
It's encouraging that Thames Police are employing young people as Community Police Officers, because, all too often the media focus on the negative aspects of some young people and disregard the life experience, skills, maturity and ability many of them have to offer.
Sounds of summer? Sorry but that one went right over my head!
Sounds of summer certainly came from Left Field, ten out of ten for surprise value!!!
A bit of a googlie, I guess you might say!!
Waiting with eager anticipation for Tuesday's "sound"!!!
n-n
I was looking forward to another few weeks of birdsong but the Rochdale bells made all well.
Anne P. Thank you for your comment. Both the usages I think you object to I picked up here!
What about 'cloth eared buffoon', 'fog horn voice', 'you're ugly', indeed the whole of Important Public Announcement. All of which was surely purely personal abuse.
But I didn't see you stepping up to the plate on those ones. P'haps I missed your admonitions.
As for RJD who bows to no one in his admiration of his own wit and acumen let me assure him I shall continue to laugh at him here and to find his every observation extraordinary.
I am truly grateful for the help this blog has given me - not least Anne P in another place. But Anne on Friday you were complaining I put my anti market arguments too often, today too rudely. Are you sure it's not that you just want the arguments buried?
(SS Cat) Moneybox never entertains anti -market arguments. Neither does PM despite ED's valiant blogging efforts.
I find this strange because I would have thought that an anti market critique was an indispensible part of the retrenchment, back from Thatcher via Balir.
I don't want to incite further disapprobation but surely the argument about whether the campers should go illegal deserves being revisited. For you would not be reading this, my repeated criticisms of markets as chaotic and unfair and inequitable, but for the kerfuffle caused by my earlier OTT remarks. Just as you would not have heard Divine Right (for it is he) if the camp that he says won't work hadn't ruffled legal feathers.
As for this blog, its great fun and before Aperitif steps in, I like Eddie Mair, what's not to like? I think his wish to be witty and sarcastic and his see saw interviewing style prevent constructive argument on the programme. But that doesn't make him not likable.
I sometimes wonder whether I understand the word (cue RJD's scorching wit). Today someone on the Beach said she liked people who wear their knowledge lightly. She also said she liked Dexter's Morse.
I post cos PM is listened to by 3 million people and comments are invited.
For me markets are dishonest. Why haven't the hedge funds admitted their laibilities? Why haven't the banks?
And as Ed rigthly says Dow is now down (yes, down) albeit by only 3 points, but down it is.
There is something odd going on in London the only centre not offering an accommodating monetary policy. Which does put banks at risk from the point of view of panicky depositors who fear they have run short of money. High street banks.
What one is supposed to call Mervyn King the thoroughly unreliable BoE honcho with such impeccably bad judgement I don't know but I welcome suggestions....
Anyway, to the Beach, with apologies to anyone I insulted accidently. This monkey will there read in disbelief the accounts of meteors seen again tonight. 'Cos on a hill under a clear sky on the north south road between Leicester and Loughborough at 2(!) this morning I saw (blimey I nearly got another telling off) sweet nothing.
Anne P. Thank you for your comment. Both the usages I think you object to I picked up here!
What about 'cloth eared buffoon', 'fog horn voice', 'you're ugly', indeed the whole of Important Public Announcement. All of which was surely purely personal abuse.
But I didn't see you stepping up to the plate on those ones. P'haps I missed your admonitions.
As for RJD who bows to no one in his admiration of his own wit and acumen let me assure him I shall continue to laugh at him here and to find his every observation extraordinary.
I am truly grateful for the help this blog has given me - not least Anne P in another place. But Anne on Friday you were complaining I put my anti market arguments too often, today too rudely. Are you sure it's not that you just want the arguments buried?
(SS Cat) Moneybox never entertains anti -market arguments. Neither does PM despite ED's valiant blogging efforts.
I find this strange because I would have thought that an anti market critique was an indispencible part of the retrenchment, back from Thatcher via Balir.
I don't want to incite further disapprobation but surely the argument about whether the campers should go illegal deserves being revisited. For you would not be reading this, my repeated criticisms of markets as chaotic and unfair and inequitable, but for the kerfuffle caused by my earlier OTT remarks. Just as you would not have heard Divine Right (for it is he) if the camp that he says won't work hadn't ruffled legal feathers.
As for this blog, its great fun and before Aperitif steps in, I like Eddie Mair, what's not to like? I think his wish to be witty and sarcastic and his see saw interviewing style prevent constructive argument on the programme. But that doesn't make him not likable.
I sometimes wonder whether I understand the word (cue RJD's scorching wit). Today someone on the Beach said she liked people who wear their knowledge lightly. She also said she liked Dexter's Morse.
I post cos PM is listened to by 3 million people and comments are invited.
For me markets are dishonest. Why haven't the hedge funds admitted their liabilities? Why haven't the banks?
And as Ed rightly says Dow is now down (yes, down) albeit by only 3 points, but down it is.
There is something odd going on in London the only centre not offering an accommodating monetary policy. Which does put banks at risk from the point of view of panicky depositors who fear they have run short of money. High street banks.
What one is supposed to call Mervyn King the thoroughly unreliable BoE honcho with such impeccably bad judgment I don't know but I welcome suggestions....
Anyway, to the Beach, with apologies to anyone I insulted accidentally. This monkey will there read in disbelief the accounts of meteors seen again tonight. 'Cos on a hill under a clear sky on the north south road in the country between Leicester and Loughborough at 2(!) this morning I saw (blimey I nearly got another telling off) sweet nothing.
PS Anne P is the reason only an 'Merican (there you are RJD one for your exceptional pedentry (and another)) could find a spellin' error in this poste.
Loved the piece on the best Tourism Officer in England. If he's only been in the job for 2 weeks he's certainly learned his brief on Rochdale and put it across. I doubt if Rochdale has had such good PR in a long time. The man deserves a pay rise :)
Dearest mac,
Please allow me ONE go at this:
thanks for your comment, and for taking the time - i am sorry that all i understood is that you're telling everyone that you are angry and cross, especially with RJD, and Martyn King.
we've got that, now, thanks!!!!
as for the markets, I havent a clue about what goes on. honestly. its my fault, i have never ever spent a minute looking at them.
if you think it is important, tell me about the markets, please!!! do it in a way i can understand. please leave out the vitriol because it just muddles up everything.
i understand enough about wanting to speak to '3 million people ' enough to understand that you feel incredibly strongly about telling us your message. it is just i dont get the message!! i just get ranty and ravey, angry and upset. I read all the words and I hear all the sounds, but I still dont get the "message".
even if it is true that 'going OTT' helps to get your message read in the first place, it will not help me to understand the message - I dont know what you are trying to say!!!
please mac have another go, tell me clearly and simply, as if i was there. something is up, and you want us to know!!! As far as I am concerned, if it takes a single post or a thousand, that's fine, as long as its simple and clear!!!
Finally, thankyou for your kind thoughts to all those people accidentally insulted!!
best wishes
nikki
i see what you mean Anne P, i did say all that once too often - and I wrote it up twice (those with an impositional turn of mind will be glad to hear) 'cos I thought i'd been deliberately left out and thought it was probably a war of attrition.
The ´óÏó´«Ã½ 10 oclock news with Evan Davies commenting somehow didn't mention that Dow is down even though the headline was 'markets recover (and so does my pension)' sort of stuff.
ps still like the strapline irony
Oh mac, how you twist my words! My comments about Colin Dexter were a reference to his sounding rather smug about his knowledge of obscure words, and that I prefer people to 'wear their knowledge lightly'. However, I stressed that I liked said Mr. Dexter and was grateful to him for Morse.
There are lots of people I like, but who have little foibles which can irritate. I even like you (from what I know of you) even though I can find you irritating as hell!
n - n
If we all had the same ownership fraction of every share that would be one step in the right direction.
'cos then instead of the few shouting the odds as to how much money they should have, everyone would benefit the same.
if they ran the industries where extra output costs less than the average as loss making
if they gave the market cost accountants and the cleaners the same salary
if.....
but i think you're pulling my RJD. You just want a thousand blogs.
No, I wasn't saying 'let me talk to millions' I was saying what we say must seem very different to non bloggers. (How many hits has the blog got?)
Are we representative of PM audiences?
I wasn't angry with RJD I expect 'remarks' in inverted commas from him as a matter of coarse.
In fact I wasn't angry. (I'm just going back to check) No, I wasn't. It was meant to read as the sort of lines the prog could have taken on markets which were more healthily skeptical than those the programme did take. (and it was as far back as (7) before RJD was a tadpole at this frog)
As it was the programme seemed supine.. You're talking about a financial community which has neither the interests of producers or customers at heart. The money men, a distinct economic interest.
If Eddie had made his remark about slump or boom tomorrow a serious one TO THE MONEY MEN THEMSELVES he'd have got my support. but he made it a media joke about Nils' possible appearances.
Yesterday he joked about the effect of ´óÏó´«Ã½ pronouncements on markets. Believe me they make a difference. Lets ask Ewan Davies how he got through a lead story on ´óÏó´«Ã½ 10 oclock news without saying Dow was down. But better lets make sure we're in a position to shout 'The Dow is down' when it is relevant to do so.(There you are rjd, you can write a whole solecitic frog of your own on that. Ionesco meets the theory of reference).
Think about the see saw question method that both Mair and Paxman use. It disappears as soon as markets are mentioned. Paxman has long ago retreated into making silly jokes about the numbers. Prove me wrong. I'd be very happy if you did. Show me how Mair - Paxman giggles are the foundation for a proper critique.
We have brought up nigh on a whole generation who think the judgments markets make are unchallengeable like a litmus test for acid.
The see saw method does destroy constructive dialogue but PM is miles from the balance needed for such dialogue on markets. At least the see saw method would show PM thought there was more to markets than the money (wo)men tell them.
n-n and Paul who is usually strong on these matters too, let me ask you both a question. Why if money was scarce was the Fed making it available so cheaply yesterday when profit is such a proper motive?
Hope I haven't bored you to death.
mac
Mac (7),
Regarding the BoE's restraint in not pouring flammable liquids on the fire, I recall a Chancellor called Barber, (I think it was), whose powering up of the printing presses led to certain difficulties in the seventies...not that anything is attributable to a single cause.
More money in existence with no new value for it to represent means devaluation (another name for inflation).
It isn't rocket science! (grins)
Salaami,
ed
Dave George
"The motorcycle of choice for returning GIs was the Triumph NOT the Harley"
I am assuming that GIs are from Iraq if we turned clock forward
What's the point with no limbs how can they ride the bikes and in any case with PDS disorder these nutcases will be a danger to other road users
it was! See namelink for more.
;-)
ed
Enjoyed the interview with Tim the Tourist Officer from Rochdale.
Eddie - you seemed to like him, so why did you cut him off in full flow just as he might have been going to tell us something about Rochdale that we didn't already know?
Hats off to him for doing a great job only 2 weeks in and coping with having to capture the Rochdale bongs on his phone.
nikki noodle (25) - You are admirably patient, but if it is cogent and intelligible debate you are looking for, I think you might be waiting a while. :o)
Just thought I should correct a factual error made during the interview with Jack Vettriano yesterday. (A pernicious error that most of the UK press seem to make when referring to Mr Vettriano and his body of work)
If you would like to see originals by Mr Vettriano, two of his works are held by and are usually on display in Kirkcaldy Museum and Art Gallery on the Fife Coast. It is a fine provincial Art Gallery with a great collection of Scottish Colourists and Glasgow Boys amongst others, if anyone is interested! and happens to be just down the road from where Mr Vettriano has (or at least had) a home.
mac - no I wasn't suggesting we bury the subject and I think nikki put it much better than I could in asking for an explanation. I don't always understand the economics and would be glad of an explanation of, for example, why it matters if the Dow is a couple of points lower when other markets are recovering and how much influence on the world economy it is likely to have whether PM mentions it or not.
As for the uses of language, there is a fine line between ranting amusingly and being hurtful and Eddie's occasional outbursts do sometimes make me uncomfortable - perhaps I should have said so at the time. Perhaps the difference is that Eddie's target was unknown to us and could even have been fictional, whereas we know Eddie and the froggers are real - I think:-)
A.
Okay, guys, it is nearly 10 a.m. Reveille sounded a long time ago - we should all be at our posts now and bombasting this Blog with everything we've got.
And a little more besides.
Give it 120% today, please, troops!
Loved the Rochdale man. I hope he visits the blog, he'd fit in very well here. And he could continue his list of reasons to visit his city.
Am I the only listener who thought the 'shooting chavs' item was a lot of fuffle about nothing?
Sid
Please, may we have a new Beach? I know it is against Tradition, but it takes about ten minutes to load the one we have and I can't bring myself to comment in a place I can't read! Once it gets over about 350 this machine can't really cope with it, and the two smaller ones can't get to it at all. The same has happened to a couple of other recent threads, and sorry Big Sis, I can't be pulling my weight if there's nowhere for me to post knowing what has already been posted.
Sid;
I missed PM yesterday (pressures of work and all that), but saw the chav-shoot video on the late news. I thought it was modestly funny.
Anything which sends up the chav culture with all of it's appalling lack of taste ('Bling', fake tans, jogging trousers that finish at mid-shin, most contemporary music, pitbulls, stardom for the talent-free, obnoxiously loud car stereos, etc. ad nauseum) is to be commended.
If it gives a job and a meaning to all those former huntspeople, so much the better!
Si.
Chris: As Eddie's trying to stick to his target of hitting 1000 postings on Friday, perhaps we can make a Gentleperson's Agreement to take over the previous day's Glass Box for Beachcombing purposes? That way we'll get quite a bit of space without being compromised by overload.
Just a thought
Well, London this morning, before you ask p'haps its 'cos we've got a Prime Minister (unlike France, Germany + US (all right, head honcho politician , rjd) prepared to spend his way out of a slump.
Anne P.
'Cos in percetage terms
(Dow when Europe closes minus Dow when Dow closes)
is a good indicator of
(Europe when Europe closes minus Europe when Europe opens again)
Anne P. again
and there was me thinking your mob had made personal share ownership important.
It would be nice if just one ´óÏó´«Ã½ news outlet didn't report the bourses in a way that maximises the Beeb pension funds.
How the Beeb reports these things is a good indicator of what important people like Gavin Davies ex-´óÏó´«Ã½ and Goldmann Sachs boss think. And they listen out for their own views percolating down properly!
Incidentally the Ewan Davies report ´óÏó´«Ã½ 1, 10 oclock news of Goldman Sachs dissembling its having to shore up its own funds Enron style, was expemplary
Anne P again. Who is 'us' in (35) then?
And her again.
I'm glad Eddie escapes your heavy handed irony when you tell him obliquely and second hand that he's being bloody rude.
mac....
I do not understand the reason for any of these imaginery marketplaces with their illusiory money and non-existent goods and services being taken as having meaning of any kind; since they do seem to have power, it seems to me that the chances that anyone shouting at or about them will have any effect on them whatever are somewhere between nil and zero. They buy things that do not [yet] exist, and thereby 'lose' billions of pounds when it is discovered that the money they 'used' to 'buy' the non-existent did not itself exist, and at that point I rather tend to wander away knowing that I have no chance on earth of understanding that mindset.
Please don't be rude to Anne P in your frustration with this 'it really doesn't *have* any meaning!' attitude. I very much doubt that it is All Her Fault either. Nor RJD's. And I know it isn't *mine*! I don't for a moment think that you mean to come over as hectoring us, but that is how it is beginning to feel. Do you suppose that you could accept that we really don't understand what you're explaining, and drop it until October 23rd?
Big Sister @ 41, OK, that might be the only way to go.
So what has happened to the aardvark?
It ties in with the 'seven words you remember from language lessons at school', for me: we had a chant we did as a French-class, which started "Je vais au marche pour acheter..." and went round with each person saying all the words that had come before and adding one of their own. The one I remember started 'du pain, de beurre et de cafe au lait' or some such: I can't remember the de, du, de la bits but I remember the vocabulary! (And it was the de de la that it was meant to teach us. *sigh*)
Malicious. Oh well.
Chris (43) and (44)
D'acc.
mac.
(poet. don't know it?)
Hi all...
I was editing yesterday. Thanks, most of you, for your comments... although I have to say this particular Glass Box is giving me one of those days when I hanker for the era before the Interweb. Gratuitous bile, fanciful conspiracy theorising, ranting about something we didn't actually say, and having a go at someone else for being a smartypants, while wallowing in a pit of smartypantsness - with no apparent sense of irony. It's just so wearing.
I can't find anywhere where we said the Dow was up five percent. Tell me when it was, someone. I can, however, find where we said it was up "point five percent". Which it was at the time.
Why is the Dow closing down three points no big deal? Well, just look at a graph comparing the various different indices over the past seven days and you'll see why.
And now I feel bad because I've actually engaged in this instead of ignoring it, which is what I should have done.
I'm pleased you liked the Rochdale man. He was a star and a genuinely lovely chap. I went on a canal boat holiday on the Rochdale canal a few years ago, expecting long leisurely stretches at the tiller, glass in hand. I have never seen so many locks in my life. It was exhausting.
I thought Bel Mooney was really entertaining on the Hell's Angels, bike makes notwithstanding. Not what you expect to hear somehow.
And Stephen (6) - I see where you are coming from in that we didn't hear the pro-expansion view. I just think I have heard it so often over the years and I thought it more interesting to go off on a different angle, with the extraordinarily named Dr Devine-Wright. Yes, he was broadly in agreement in aim, but he did suggest the protestors were being naive. But maybe we should at least have put the arguments for expansion to the protestors and to him.
Take care y'all. Must go, as I have to go and manipulate the money markets to make sure my pension fund keeps growing. It's all we do all day, you know. Eddie's on to his broker as we speak, trying to create a run on Guatemalan tea-cosies. If you have any, SELL quickly!
Toodle pip
Rog
Chris (43) I don't understand any of it either, posts or markets!
Roger, thank you for the tea-cosy tip; now all I need to do is find an alternative actual use for the things, and I might help humanity by buying the surplus and giving it for the alternative use.
Kitten-covers? With useful holes for them to stick their little questing paws through and catch passing blackbeetles?
What else might one use tea-cosies for?
Chris (43) - I think your chances of a sensible dialogue with the barking markets man are very slim. I haven't read a paragraph yet that was reasoned or logical. I like Roger Sawyers summary - "Gratuitous bile, fanciful conspiracy theorising, ranting about something we didn't actually say, . . ." I'd like to suggest that we ignore him and he will go away, but I doubt that he will. But ignore him anyway?
Many apologies to one and all for my mishearing the point in point 5 percent which is clear as day on listen again.
And Roger I certainly don't expect PM to report closing prices on Wall Street - before they happen!
But today, for example you could update your leading item of yesterday reporting a 0.5 percent rise in the Dow (so I now hear) (which was reported as positive news ) when on the day the Dow went down. If one is newsworthy why isn't the other?
London cf Europe today looks interesting too.
Are there risks for us in London's (BoE) position? Bank runs and panics?
Sorry again, it was a genuine mis hearing.
I still think stock market and housing booms fund spending that crowds out govt expenditure like my state pension.
Roger, you'd be odd if you didn't worry about your pension and the effect stock markets have on it. I thought the ´óÏó´«Ã½ licence system was a beacon for equality in an unequal world. The private pension system isn't.
I'll post this at Tues too so as many of my critics as poss. see it (the apology I mean).
Irony? You mean the man Eddie described as with 80s facial hair, ugly and with a fog horn voice really had dulcet tones and was good looking according to your presenter?
Were you on blog duty that day?
Thanks to Danny G(19).I hadn't a clue either. Also n-n.I've learned something from mac,I think.When the Fed and the European Central Bank puts billions into the market,where does the money come from and who pays it back?
Roger;
Thanks for the discourse. Don't feel hacked off about your answer. If you feel criticism is unjust then you are more or less obliged to respond on behalf of your team.
Part of the problem, and it's reflected here, is that so many listeners do not understand how the markets work, all they know is that the FTSE100 going up is 'Good' and conversely a fall is 'Bad'.
In simplistic terms they are correct, of course. Moreso because anyone with a private pension plan, including a large slice of middle Britain, has their pension fund invested in stocks, shares and bonds. Their future comfort in retirement is directly dependent on how the market performs.
Mac is a bit mono-thematic about all this. It seems that he (?) regards all stock markets and private ownership of anything as heresy. Comments on other threads indicate that he believes in the Marxist ideal of shared ownership of everything equally by everyone.
That's fine, he's as entitled to his opinion as the next guy. But he does tend to crow over the losses (which hurt savers and investors) whilst remaining quiet or grumping over any rises in the markets.
He is very difficult to read and seems to have taken particular offence at a couple of the Bloggers, who get rather snide comments thrown their way on a regular basis. But they can fight their own battles if they wish.
No-one has apparently complained about mac, I certainly shan't be doing so, as I said he's entitled to his opinion. In fact if he wants people to avoid him like the plague all he has to do is keep right on going. His message won't put people off discussion with him, but his semi-incoherent style and lousy attitude already seems to be doing so.
Si.
I'm so late with this I nearly put it on Tuesday's GB.
I listened to the interview about Hell's Angels, and it seemed rather poorly connected to the shooting on the M40.
As for the Heathrow protesters, although I detest the place I would like the said protesters to go across to South America (rowing, of course, the green way) and address their enviro-friendly comments to those who are chopping down forests.
Witchi;
It's quite simple really. Because the US central interest rate went down to around 1% after 9/11 it was very easy for banking institutions to borrow money to lend on. They only had to pay 1% interest on their borrowing, but could charge interest of 2.5 - 4% to anyone who borrowed that money from them.
That's fine, as far as it goes. They made their profits in the margin between 1% and 2.5%. The same as a 'Bureau de Change' makes its profits by giving you different rates for buying and selling your Euros when you go on holiday. The margin is the profit.
But with borrowing so cheap for the banks and building societies (and lending on to ordinary punters also relatively cheap) that encouraged the lending institutions to lend to people with lower grade credit ratings, because the cost for THEM to repay the building society for their mortgage was correspondingly lower.
A competition developed as a race to the bottom. With stunning amounts of cash swilling around the banks and building societies at insanely low interest (to stimulate the US economy from slumping after the Manhattan attacks) the lenders were willing to lend to borrowers with increasingly poor credit ratings, poeple whom they would never have considered in normal times (known in market terms as 'Sub-Primes'). In short they abdicated all common sense in evaluating their risk when lending.
But they aren't THAT stupid. They did what a racecourse bookie does when he receives a very large bet at dodgy odds. They bundled up their risky lending into smaller parcels and sold that risk off to other financial institutions, both in the USA and abroad. This is known to a bookie as "hedging your bets". So if that bet comes up the bookie pays out big, but also collects on his hedged bets with the other racecourse bookies. So everyone gets a little pain, but no one man suffers the full hit.
When US interest rates began to rise a couple of years ago (to more normal levels) those who suddenly couldn't afford their mortgages started handing in the keys, saddling the lending institutions with an increasingly large number of properties which no-one wanted to buy from them, because the cost of a mortgage had risen with the interest rates.
The law of supply and demand took over. With no-one buying those houses their value fell. So the lenders have now got an asset book full of property which was overvalued for the mortgage they originally lent. In other words they found themselves in negative equity. When a lender finds it self in negative equity, and without the mortgage repayments it had expected coming in, its ability to lend more money dries up. And this drying up of ready cashflow was spread around the world by the hedging of that original debt.
Couple that with the fact that no-one knows who is exposed to this risk, or how much they are exposed, then financial institutions stop lending money to each other, because the bank asking for a short -term loan might turn out to be in financial trouble. This causes what is known as a 'credit crunch'.
When banks stop lending in a credit crunch everyone starts looking around at the costs of their investments. Pension funds holding banking sector shares will assess their possible risk to a bank collapse and start selling shares if they perceive a risk. Institutions exposed to bad debts will sell some of their share-holding to convert that holding to cash, thus injecting some cash back into the system.
But once a big sell-off starts it gathers momentum. As share prices fall, so do the profits for those who have previously bought those shares. So they sell quickly whilst they still have a profit to take, which accelerates the fall.
If this remains unchecked you have a crash, akin to that suffered in the South Seas Bubble, the Wall Street crash, or the dot com bubble bursting. More normally once investment companies see that there are bargains to be had they will come back in and start buyig again. This is what commentators mean when they talk about a correction in the markets.
But it needs confidence that your investment is sound and it needs either liquid cash or credit facilities to buy. So long as there are perceived risks out there confidence will be low. And so long as the location of the risk is unknown credit facilities will be restricted.
One upshot is that the financial institutions will be far more wary of lending to poor risks, which they should have been anyway. And correspondingly they will want to court good risks, by competing for their business. So someone will a good credit rating may find it easier to borrow as a result.
It's far more complex in reality, but that's the gist of it. the entire global banking system is built on confidence. Knock that confidence (which is what the 9/11 killers were trying to do) and the world suffers.
The only people who could take any glee from this at all are those to whom a free market system is anathema. Only a madman would want to see a return to a global crash like Wall Street and the human misery that followed.
Si.
Thanks for all the positive comments re Rochdale.
Personally I don't understand the money items on the Blog, but I agree with Roger Sawyer about Bel Mooney - not the usual person you would expect PM to find to make a comment on such a subject. Well Done!
To 'UptheTrossachs' and 'RachelG' I have to say that I thought PM gave me more time than I was expecting, but I could fill the programme with Reasons To Visit Rochdale! I know the heritage bit was a bit obvious, but I was talking Victorian clock towers after all. Incidentally the original tower had a carillion with 14 tunes so that it could play a tune a day for a fortnight. Not bad for the 1870s!
With 7 million tourist day-visits a year we don't do too badly, but it's not all the Co-Op and Gracie Fields, nor even Lisa Stansfield, Andy Kershaw and Mike Harding (who? See Radio 2). Rochdale covers an area from the Manchester boundary to the Pennine boundary with Yorkshire. The Town Hall represents the peacemaking initiatives of Rochdale in bringing Lancashire & Yorkshire together instead of fighting each other.
Home to the best steam railway in England (East Lancashire Railway). Mediaeval buildings. The Pennine Bridleway National Trail. The afore-mentioned Rochdale Canal (re-opened in 2002 and still sprouting waterside pubs and restaurants in stunning scenery). Hollingworth Lake gives a miniature taste of Lake District scenery without having to travel so far - and it used to be known as 'The Weavers' Seaport' when textile workers spent their spare time on the trip boat there rather than travel to the coast. Home to Zen Internet - born here and never moved away because it's such a great place. 4-star B&Bs and hotels. TV chefs (Andrew Nutter). And don't forget the perpetual sunshine. OK that last one might be a bit over the top...
I could go on (and I do). If you need to know more - just come and visit. Or call Rochdale Tourist Information Centre.
And thanks to Roger Sawyer for following up the story. That man will go far - if Eddie lets him.
Si (52) - And I'm afraid he broke one of the essential rules of blogging by impersonating an existing frogger.
btw I like your understated analysis "semi-incoherent style and lousy attitude"
Wow - Si, thanks so much! So the money that was coming in from the central banks was essentially to boost confidence? Have I got that right?
Si (54) Thank you so much. I thought I understood some of it but your explanation is so lucid I now really do. Brill.
AttaSi! That post @ 54 is economics 101.
Si at (54)
The slump in the 30's. That was due to markets was it?
And the risks are unknown because of the honesty of the hedge funds and the banks?
Annd repossession/ mortgage failure is the right way to run a housing policy is it?
The South Sea bubble and the dot com bubble bursts were due to confidence crashing were they? The hint is in the word 'bubble' in the first place. Markets are prone to swings of exessive exuberance and pessimism.
Since the bourses are still about 16 percent above 'fundamentals' these falls still leave the markets far from reality.
Goodness me, Simon Worral you have swallowed that market stuff whole. Now you're leading Anne P astray. She was on the verge of joining the Communist Party before you started.
Si at (52) how do you know no one's complained?
rjd, you my friend could start an argument in an empty room, and since you obviously like badinage, have often had to. And you are inimitable.
Just think, I'd have convinced Si with better style and kindly words. Glad to know you're that flexible.
Someone suggested I listen to
Moneybox. Careful there, Vincent Duggleby thinks (by extrapolation) markets still over valued.
Lets hope equitable government spending fills the holes these falls create in spending power.
OK, Chris, I've stowed it, buttoned it, put a sock in it, - hey a post competition asking for a 'shut it' line each. rjd would win, he must have heard most.
Shouldn't Si be taken on as your correspondent on financial matters? His post made sense.
(I see Mac in the sender bit and don't read on because, having tried, I find the style heavy-handed and the content incomprehensible)
Should these be separate comments? the Rochdale man - I lived there till I was 13, never been back. He makes it sound appealing!
mac hinny
good grief, I don't remember standing for election as a Keeper of Sanity, particularly since there are a fair few here who'd say I wasn't even slightly qualified to an opinion on that. However, if you reckon I gotta have that as a role
*clears throat*
*takes a deep breath*
here goes then...
By virtue of the authority vested in me, I hereby request and require you to cease and desist from any and all activity on this plane of existence of the frog and return immediately to your dimension of origin or to the nearest convenient alternative dimension of your choice.
*whooof!*
That was hard work. Also, I fear that my fridge may never be the same again. Luckily there's a bottle of reasonable fizz in the cooler in the NCMB on the Beach. So next time I am able to download the Beach, once it stops being 400+ posts long and inaccessible to the hard-of-computing, we could open that, sit in a corner and get quietly slarmy. Or I might sing a little, if nobody would mind too much...
(O blah. Malicious. Well, I shall try again. And again if necessary. Pertinacity be my watchword.)
Si at (54) + (52).
So the 30's slump was caused by markets was it? You're sure you can't blame that on Al Qieda too?
And the South Sea bubble and the dot com bubble burst because of a crash in confidence did they? The hint is in the word bubble in the first place.
And no one knows where the bad risks are because of the consummate honesty of each bank and hedge funds in owning up that its with them!!!!
The markets are still about 14 percent over valued. We can only hope that equitable government spending fill the hole left by the crash(es).
Si you have swallowed that market stuff wholesale and now you're polluting others with it. Anne P was that close to joining the Communist Party before you started.
Just think, if my style had been a little better I would have won you over too with a few kindly words.
Is mortgage failure/repossession really the proper way to run a housing policy. Apparently markets do it like that.
rjd. you could start an argument in an empty room and knowing how much you like badinage you must have done so often.
OK Chris, I've buttoned it, stowed it, put a sock in it, shut it..... hey, a blog game, a different one line version of 'shut (the ...) up' for each frog. rjd would win of course. He's heard more than anyone.
PS Lets spin this thing round. What is it that markets do for their proponents exactly that planning can't. The answer used to be, a la Hayek and Kirzner, that the market was information efficient. Like all those private equity funds hiding their losses keeping people in the dark. (Ho, ho)
PPS Hey, I really need that split screen advice to compare and contrast the versions of my blogs they're pulling or rejecting compared with what they're letting stand.
PPPS I promise not to mention rjd again, there. He is a gentleman for defending Witchiwoman whose good name i took in vain. But I did apologise, an apology i repeat here (since rjd realised he would have to remind her of her distress to cover his point about markets), which Witchiwoman accepted graciously weeks ago now.
Si, I'm glad everyone trusts you on markets and the profit motive.
Actually you, I think, agree with Marx who believed in 'to each according to his ability' and that equality was a pipe dream (Critique of the Gotha Programme).
I don't. That seems to me to be 150 years out of date. We can afford equality these days it seems to me.
(I think you get inequality in Marx because in those days you needed rich people to make savings for investments. If equality ruled, no one would make savings 'cos no one was rich enough to.
So for Marx societies were too poor for equality.
For Nick Stern world average income is about benefit levels here. I can live with that.)
Well, Roger, when I was a little girl, back in the mists of time, my grandmother used to put a knitted tea-cosy on the old brown teapot.
At non-tea times (of which there were not very many) the tea-cosy was mine to play with. Of course, it was a hat, with holes for ears. Not my ears; wrong place. But it'd do very well for elves, say, or large-headed cats.
I now have a brown teapot, bought in Edinburgh when I was 19. No tea-cosy, though.
Does anyone in frogland still use a tea-cosy? (Wonders idly)
This has got to be one of the best glass boxes or worst.Hey ho.
Tim Nuttall @ 55, well said sir! I do have some friends in Rochdale, daft as a bursh all three of them, and I have to say that I have always found it a pleasant place to visit, but your enthusiasm is an eye-opener.
I just hope that you are properly appreciated by those who pay you. Bonus time, I'd've thought.
oh for goodness' sake mac, give it a rest do.
Frances O @65, I have three tea-cosies inherited from my mother, none knitted (one is in the shape of a printed fabric hare, which is profoundly scary), but no proper teapot because everyone in this family uses casual teabag-in-a-mug techyknowledge. Sad, really, all these mismatches.
Look t'other way a mo' chris,
si:
So cheap money which caused the problem in the first place is the solution too?
Si, you're beginning to make me see the wisdom of the BoE strategy.
Why should flooding the markets with printed paper MONEY unbacked by gold, produced by unaccountable central banks, restore confidence in STOCKS and SHARES then?
mac
ok chris, scroll on!
I am afraid that we are in 'the nature of explanation' territory.
My explanation is that of inherent dangerous instability (of markets, rjd, not me).
But that is not the sort of explanation so many of the bloggers on the Beach want really.
What they want is an explanation that offers the comfort of amelioration. Even at the cost of contradiction. Cheap money is both cause and solution to the crisis in Simon's comforting account. (So London was wrong to refuse it as solution. Don't ask. It spoils the feeling of comfort. And don't ask what London will do tomorrow now its policy seems to have collapsed)
I think those most discomforted (most upset) by what I am saying are those who are only too aware of how unstable markets are but who refuse to contemplate alternatives.
My crimes are in sentiment not syntax.
Again I apologize for not hearing your correspondent's 'point' on Monday. London was falling by over 1 percent, in line with Dow by the time you were on air today, Tues, but we heard nothing of it. Which is my (sort of) point.
I saw mervyn on the box and heard the report on your prog. Evidently the inflation figures were not a blip this month which they always are when they are unfavorable. Well, inflation in share values seems at an end anyway.
Nighty night. Sweet dreams of wealth beyond avarice.
mac
I've read and re - read Simon Worrall's apologia (see below) for this particular crisis and I remain worried that he is giving a one sided impression.
His account differs a little from the standard net account For some curious reason he over stresses 9/11 and down plays the dot com boom crash (that he does at least mention) and the housing booms and busts throughout the world which extended far beyond the bottom (subprime) end of the market.
Why? Because causes which are endogenous to the way markets behave make markets the culprit. Al Qieda does not appear to be an organic consequence of markets themselves at least on the surface.
The total indebtedness defaults in the subprime market are about 75 billion pounds but markets have lost over 100 billion in London alone.
Those defaults are the fault of markets and their effects across the world are too. A fraction of that 75 billion injected in the mortgage industry (oh dear, free housing I hear you cry) would have settled everything.
But markets don't work like that.
'Explaining' how the markets collapsed as if the collapse was inevitable and somehow a reasonable consequence of a chain of circumstances from 9/11 on, is to perpetuate the myth that markets are reasonable and natural - - and irreplaceable.
Worrall may think he's explaining the crash but I fear his effect is to justify it.
In market failures like the present one, when it isn't one usual market mechanism at work and at fault it's another.
To see how these markets in general fail we need to look behind particular crises and find the general causes - which are simply the principles behind market behaviour. The mono theme is Worrall's (this crisis) not mine.
He uses a catch all term to 'explain' further - namely 'confidence' or rather in this case lack of it. The problem is that he neglects to mention that it is the confidence or otherwise of a very few market makers who determine our economic welfare.
And of course their own.
It is as if the participants in Cash in the Attic could call the value of their own possessions and so of everyone else's as well. ('Those shares that
yesterday were worth 100, well, today we say they are worth....' well, '200' in a boom, and '50' in a crash like this).
I fear those happy with Worrall's explanation will refuse to see their way through his warm words to adopting a skeptical and critical stance towards, in this case, financial markets. That seems to me to be the rhetorical effect of his words.
The first step is to realize, surely, that the 'law of supply and demand' only frustrates us if we let it. As cause, we can frustrate it as easily as we frustrate the law of gravity in making sure our buildings don't crash.
To say the 'law of supply and demand took over' is to say we let it, not to say that it was inevitable that things should turn out as they did.
In a word, subprime defaults cannot be the cause of the crash. How markets deal with those defaults is.
Big Sister, I think it's now time for this thread to be given over to the aardvark.
A bit like giving someone's increase to the caterpillar, by the sound of it, but
I love my love with an A because he is admirable, I hate him with an A because he is annoying, I took him to the sign of the Antelope and fed him on anchovies and ale; his name is Andrew and he comes from Andover -- is that too longwinded to play? Perhaps break it up into bits?
Chris Fish,
"I do not understand the reason for any of these imaginery marketplaces with their illusiory money and non-existent goods and services being taken as having meaning of any kind; since they do seem to have power, it seems to me that the chances that anyone shouting at or about them will have any effect on them whatever are somewhere between nil and zero.">
Like our chances of effecting a change in the warlike behaviour of Our Great Leaders?
The markets are one of the most exaggerated examples of abstraction. Money itself is but an extreme abstraction - useful as a medium of exchange between eggs and shoes, for example, but the markets have taken this abstraction to unbelievable extremes, trading in representations of representations of packages of representations of representations, etc.
The medium of exchange has become the principle subject of the market.
The sad fact is, however, that, due to the fact that 'credit' is another word for belief, the markets do have a very real power to affect all of our lives, especially when such things as personal debt are at such unprecedented levels.
xx
ed
Ed @ 75, it seems to me that the illusion is running out of control, and that the credence that has been given to it is similarly out of control. As with a genuine juggernaut, trying to stop it gets people crushed. Any interference by governments is either futile or makes matters worse, as a rule. And I go on thinking that whilst people can observe and report what it does, nobody can say why or predict what it will do next. Too many hands on the tiller for its direction to be predictable.
In any case railling about it doesn't help!
Vyle (53),
The forests are being cut down to supply our demand for cheap timber products, and perhaps vegetables grown on the cleared land for the few years before its fertility is exhausted. The vegetables, of course, will be flown into our markets.....
As to the markets, there is some acerbic observations
It's also not been notied that the real winners in the market, like at the racetrack, are the middlemen, whose percentage is 'earned' on all bets, whether winners or losers.....like certain Sheikhs in arms deals.
Salaam/Shalom
ed