tag:blogger.com,1999:blog-5867260065662559631.post5030095483816880643..comments2024-03-28T13:30:14.573-07:00Comments on CanSpeccy: British Budget BaloneyCShttp://www.blogger.com/profile/03399620869685840906noreply@blogger.comBlogger5125tag:blogger.com,1999:blog-5867260065662559631.post-34337993130299512142012-03-20T14:04:53.495-07:002012-03-20T14:04:53.495-07:00What you say about the size of the UK financial se...What you say about the size of the UK financial sector's foreign debts is correct. However, those debts are almost exactly matched by UK foreign assets. The net foreign debt is quite small.<br /><br />I'm not able to judge the risks that Britain's banking sector faces or what chance there is of losses devolving upon the taxpayer. However, <a href="http://stumblingandmumbling.typepad.com/stumbling_and_mumbling/2008/12/uk-overseas-debt-scare.html" rel="nofollow">this blog post</a>, puts things in perspective and suggests that there's no need for panic.CShttps://www.blogger.com/profile/03399620869685840906noreply@blogger.comtag:blogger.com,1999:blog-5867260065662559631.post-72024298269269105992012-03-20T13:04:52.623-07:002012-03-20T13:04:52.623-07:00I read in the Telegraph some weeks ago that the UK...I read in the Telegraph some weeks ago that the UK's debt to GDP ratio is around 500% as compared to around 300% for coutries like the USA, Germany and Canada. The difference between the UK and these other countries (c. 200% of GDP) is almost entirely made up by bank debt. My own view is that though individual bankers may make huge sums personally,the City overall imposes a burden on the UK taxpayer who seem to have to pick up their losses. Nothing new in this - you may recall 20 years ago when the UK Insurance market (Lloyds) went burst, that the poor taxpayer had to step in again.Roderick Russellhttp://zerzetzen.wikispaces.comnoreply@blogger.comtag:blogger.com,1999:blog-5867260065662559631.post-89496967940392928622012-03-19T19:28:25.846-07:002012-03-19T19:28:25.846-07:00As for banks, they seem to be one of Britain's...As for banks, they seem to be one of Britain's few competitive industries, generating about 8% of GDP.<br /><br />True banks have made rash loans in the housing market, but only with the connivance of governments. <br /><br />For example, in Canada we have a bigger property bubble than the US had at the point of implosion, with average prices now twice those in the US and affordability in some cities, notably Vancouver, close to the lowest in the World.<br /><br />But Canada's banks are acting entirely prudently because the Government of Canada allows them to unload the risk of mortgage default, almost $600 billion of it, onto the taxpayer via the Canada Mortgage and Housing Corporation, a Government-sponsored enterprise which guarantees everything, including liar loans, ninja loans and monster minimal down payment loans.<br /><br />In the US it was the same, with Federal Government intervening during the expansionary phase of the property bubble to prevent states from outlawing predatory lending practices.CShttps://www.blogger.com/profile/03399620869685840906noreply@blogger.comtag:blogger.com,1999:blog-5867260065662559631.post-83129773899531196762012-03-19T19:23:08.665-07:002012-03-19T19:23:08.665-07:00As for banks, they seem to be one of Britain's...As for banks, they seem to be one of Britain's few competitive industries, generating about 8% of GDP. True banks may make rash loans at times but only with the connivance of government. For example, in Canada we have a bigger property bubble than the US had at the point of implosion, with average prices now twice those in the US and affordability in some cities, notably Vancouver, close to the lowest in the World. But the banks are quite safe because the Government of Canada allows them to unload the risk, almost $600 billion on the taxpayer, via the Canada Mortgage and Housing Corporation, a Government-sponsored enterprise which has guaranteed everything, including the liar loans, and ninja loans and monster minimal down payment loans.CShttps://www.blogger.com/profile/03399620869685840906noreply@blogger.comtag:blogger.com,1999:blog-5867260065662559631.post-34162130694514923942012-03-19T14:53:29.021-07:002012-03-19T14:53:29.021-07:00Re your quote - “to compete with the Third World, ...Re your quote - “to compete with the Third World, Third World wages are necessary”. Surely not Canspeccy! In Canada we can compete in export markets with the third world, at the things that we do well, where the requirement is for a highly educated and skilled work force and capital intensity. Indeed in Canada we have the extra advantage of huge natural resources to exploit. May I suggest that you are too pessimistic? As for the UK – Well, while I do think pessimism may be the order of the day it has nothing to do with 3rd world wages, and everything to do with incompetent bankers and corrupted elites who have burdened the country for years to come with unmanageable levels of debt.Roderick Russellhttp://zerzetzen.wikispaces.comnoreply@blogger.com