Sterling's plunge close to parity with the euro has added more than £3bn to the amount the Government must pay to Brussels over the next three years. The figure has been inflated because the Government has to pay it in euros. The increase comes on top of a trebling of the UK contribution to the EU - from £2bn this year to £6.5bn in 2010-11 - details of which were tucked away at the end of Alistair Darling's Pre-Budget Report in November.The report revealed that Britain's net contribution to the EU will rise to £4bn next year and £6.5bn the following year. However, the Treasury has confirmed that Mr Darling's figures were calculated at a time when £1 was worth €1.4. Opposition politicians last night condemned what they called the "perverse" additional penalty imposed on Britain by its troubled currency. But they claimed the problem was the legacy of the Government's decision to give up part of the UK rebate in 2005.
Sterling's plunge close to parity with the euro has added more than £3bn to the amount the Government must pay to Brussels over the next three years. The figure has been inflated because the Government has to pay it in euros.
The increase comes on top of a trebling of the UK contribution to the EU - from £2bn this year to £6.5bn in 2010-11 - details of which were tucked away at the end of Alistair Darling's Pre-Budget Report in November.
The report revealed that Britain's net contribution to the EU will rise to £4bn next year and £6.5bn the following year. However, the Treasury has confirmed that Mr Darling's figures were calculated at a time when £1 was worth €1.4.
Opposition politicians last night condemned what they called the "perverse" additional penalty imposed on Britain by its troubled currency. But they claimed the problem was the legacy of the Government's decision to give up part of the UK rebate in 2005.
Oh my... *Lunatic*, n. One whose delusions are out of fashion.
In November, a survey by Nielsen, the market research firm, and trade body the British Retail Consortium (BRC) found that 21 per cent of families had no spare cash left after essential living expenses. However, sector insiders expect this to grow to at least 25 per cent by the spring. A PricewaterhouseCoopers (PwC) survey last week showed that six in 10 people believe they will have less disposable income in 2009 than they had last year. Those in the lower socio-economic DE classifications were particularly gloomy, with nearly 70 per cent convinced they would have less money to spend on the high street.
In November, a survey by Nielsen, the market research firm, and trade body the British Retail Consortium (BRC) found that 21 per cent of families had no spare cash left after essential living expenses. However, sector insiders expect this to grow to at least 25 per cent by the spring.
A PricewaterhouseCoopers (PwC) survey last week showed that six in 10 people believe they will have less disposable income in 2009 than they had last year. Those in the lower socio-economic DE classifications were particularly gloomy, with nearly 70 per cent convinced they would have less money to spend on the high street.
Romania faces an imminent economic crisis in 2009, the signs of which were already visible in late 2008, Oxford Analytica says in a report, quoted by Romanian news agency Mediafax. Oxford Analytica experts say Romania faces its first economic crisis since the fall of communism, as its 2008 performance, with a record economic growth of about 9% in the first nine months of 2008, was significantly slowed down by the global financial crisis.The monetary policy was reviewed and marked by restrictions in the last three months of last year and sectors such as industry and the banking services needed government support.But no bank in Romania was affected significantly by the international turmoil despite problems in the loan segment. Erste and Raiffeisen had to erase debts of hundreds of millions of euro following the Lehman Brothers and Icelandic bankruptcies, but Oxford Analytica experts forecast a profit recovery for the two banks active in Romania, given the support provided by the Austrian state.
The End of the Financial World as We Know It | New York Times Op-Ed - Michael Lewis
AMERICANS enter the New Year in a strange new role: financial lunatics. We've been viewed by the wider world with mistrust and suspicion on other matters, but on the subject of money even our harshest critics have been inclined to believe that we knew what we were doing. They watched our investment bankers and emulated them: for a long time now half the planet's college graduates seemed to want nothing more out of life than a job on Wall Street. This is one reason the collapse of our financial system has inspired not merely a national but a global crisis of confidence. Good God, the world seems to be saying, if they don't know what they are doing with money, who does? Incredibly, intelligent people the world over remain willing to lend us money and even listen to our advice; they appear not to have realized the full extent of our madness. We have at least a brief chance to cure ourselves. But first we need to ask: of what? <...> There are also a handful of other perfectly obvious changes in the financial system to be made, to prevent some version of what has happened from happening all over again. A short list: Stop making big regulatory decisions with long-term consequences based on their short-term effect on stock prices. ... End the official status of the rating agencies. ... Regulate credit-default swaps. ... Impose new capital requirements on banks. ... Close the revolving door between the S.E.C. and Wall Street. ... But keep the door open the other way. ... The funny thing is, there's nothing all that radical about most of these changes. A disinterested person would probably wonder why many of them had not been made long ago. A committee of people whose financial interests are somehow bound up with Wall Street is a different matter.
This is one reason the collapse of our financial system has inspired not merely a national but a global crisis of confidence. Good God, the world seems to be saying, if they don't know what they are doing with money, who does?
Incredibly, intelligent people the world over remain willing to lend us money and even listen to our advice; they appear not to have realized the full extent of our madness. We have at least a brief chance to cure ourselves. But first we need to ask: of what?
<...>
There are also a handful of other perfectly obvious changes in the financial system to be made, to prevent some version of what has happened from happening all over again. A short list:
Stop making big regulatory decisions with long-term consequences based on their short-term effect on stock prices. ...
End the official status of the rating agencies. ...
Regulate credit-default swaps. ...
Impose new capital requirements on banks. ...
Close the revolving door between the S.E.C. and Wall Street. ...
But keep the door open the other way. ...
The funny thing is, there's nothing all that radical about most of these changes. A disinterested person would probably wonder why many of them had not been made long ago. A committee of people whose financial interests are somehow bound up with Wall Street is a different matter.
Also, the entire essay is actually divided into two parts (I quoted from both above):
The End of the Financial World as We Know It
How to Repair a Broken Financial World Truth unfolds in time through a communal process.
It really shows that the Wall Street people are such thiefs.
It's not hard to compare the current crisis management with the one we had in Sweden back in 1992, and the main difference is: patriotism. Or rather the lack of it.
The regulators and bankers in the US quite clearly don't care about America. They put the special interests of the financial lobby in front of everything else. The FED doesn't care the least about unemployment, inflation or financial stability. Only about stock prices.
In Sweden, the bank CEO's and the public officials all knew each other and solely worked in the interest of the public.
I'm really quite shocked by the behaviour of the US elite. They are a bunch of thiefs who do not put their country first. Peak oil is not an energy crisis. It is a liquid fuel crisis.
The fact is that recent economic numbers have been terrifying, not just in the United States but around the world. Manufacturing, in particular, is plunging everywhere. Banks aren't lending; businesses and consumers aren't spending. Let's not mince words: This looks an awful lot like the beginning of a second Great Depression.So will we "act swiftly and boldly" enough to stop that from happening? We'll soon find out....The biggest problem facing the Obama plan, however, is likely to be the demand of many politicians for proof that the benefits of the proposed public spending justify its costs -- a burden of proof never imposed on proposals for tax cuts....All of this leaves me concerned about the prospects for the Obama plan. I'm sure that Congress will pass a stimulus plan, but I worry that the plan may be delayed and/or downsized. And Mr. Obama is right: We really do need swift, bold action. Here's my nightmare scenario: It takes Congress months to pass a stimulus plan, and the legislation that actually emerges is too cautious. As a result, the economy plunges for most of 2009, and when the plan finally starts to kick in, it's only enough to slow the descent, not stop it. Meanwhile, deflation is setting in, while businesses and consumers start to base their spending plans on the expectation of a permanently depressed economy -- well, you can see where this is going.
So will we "act swiftly and boldly" enough to stop that from happening? We'll soon find out.
...
The biggest problem facing the Obama plan, however, is likely to be the demand of many politicians for proof that the benefits of the proposed public spending justify its costs -- a burden of proof never imposed on proposals for tax cuts.
All of this leaves me concerned about the prospects for the Obama plan. I'm sure that Congress will pass a stimulus plan, but I worry that the plan may be delayed and/or downsized. And Mr. Obama is right: We really do need swift, bold action.
Here's my nightmare scenario: It takes Congress months to pass a stimulus plan, and the legislation that actually emerges is too cautious. As a result, the economy plunges for most of 2009, and when the plan finally starts to kick in, it's only enough to slow the descent, not stop it. Meanwhile, deflation is setting in, while businesses and consumers start to base their spending plans on the expectation of a permanently depressed economy -- well, you can see where this is going.
Ouch. The WSJ's Real Time Economics blog has a post linking to Raguram Rajan's prophetic 2005 paper on the risks posed by securitization -- basically, Rajan said that what did happen, could happen -- and to the discussion at the Jackson Hole conference by Fed vice-chairman Kohn and others. The economics profession does not come off very well....Larry Summers, I'm sorry to say, comes off particularly badly. Only my colleague Alan Blinder, defending Rajan "against the unremitting attack he is getting here for not being a sufficiently good Chicago economist", emerges with honor.
The metaphor used by Larry Summers (comparing the development of derivatives to the development of transports) is, IMHO, totally inappropriate, and I'm surprised (well, half surprised...) that no other economist debunks it.
"Dieu se rit des hommes qui se plaignent des conséquences alors qu'ils en chérissent les causes" Jacques-Bénigne Bossuet
