Spending Cuts & Economy - Austerity Forever!

[Perry Vale]

Liam Fox calls for end to protection of NHS spending

The automatic protection of spending on the National Health Service should not continue after the next election, says former defence secretary Liam Fox.

The promise to increase spending on the NHS - even when many departments faced big cuts - was one of David Cameron's key messages at the 2010 election.

But Dr Fox says the idea that "throwing money" at it "will make it better" had been "tested to destruction".

The Conservative MP for North Somerset was a GP before entering Parliament.

With the BBC running down the NHS every single day on their behalf, I'm sure they believe they can get away with full privatisation now.

[Perry Vale]

Remember HSBC threatening to quit the UK to relocate to Hong Kong if we brought in too many banking regulations? Shame we didn't let them go....

HSBC £70bn Capital Black Hole Revealed by Forensic Asia

A Hong Kong-based research firm has warned investors that HSBC has overstated its assets by £50bn and will therefore need to inject £70bn worth of capital by 2020.

According to a report, entitled HSBC Holdings: End of the Charade, by Forensic Asia, two of its senior analysts Thomas Monaco and Andrew Haskins, had initially pegged HSBC has having between £38.7bn (€46bn, $63bn) and £57bn of "questionable assets" on its balance sheet.

These range from loan loss reserves and accrued interest to deferred tax assets, defined benefit pension schemes, and opaque Level 3 assets.

[Perry Vale]

Police to ask home secretary to approve use of water cannon across country

Chief constables are to press the home secretary, Theresa May, to authorise the use of water cannon by any police force across England and Wales to deal with anticipated street protests.

The Association of Chief Police Officers (Acpo) says that the need to control continued protests "from ongoing and potential future austerity measures" justifies the introduction of water cannon in Britain for the first time.

The London mayor, Boris Johnson, has already announced a consultation on the introduction of water cannon on to the streets of London ready for use by this summer.

Hopefully ready in time for England's exit from the World Cup.

[Rob McCow]

How they can justify this when there are ongoing hosepipe bans and threats of drought in the south east I don't know!

[Perry Vale]

It's either that, or they shoot you...

They say that the alternative tactics to the use of water cannon to disperse a crowd or protect vulnerable premises are the use of baton rounds, batons, mounted officers, vehicle tactics, police dogs or even firearms.

[Andrew Curnow]

Anticipating riots I guess. So that would be dealing with the symptoms rather than addressing the problem, yes brilliant work Home Secretary!

[Rob McCow]

mounted officers, vehicle tactics, police dogs

Man, they must be ordering some BIIIIGGG hosepipes. g

[Stuart Wallis]

Why aren't they hiring The Lads? Are the government ashamed of the fact that there's an organisation more criminal and at the same time more competent than they are?

[Perry Vale]

Judge the Royal Mail sale in three months, said Vince Cable. Time's up

"There's no way we will sell Royal Mail 'on the cheap'," promised the government in its Royal Mail: Myth-Busters factsheet, issued before the sale of most of our stake in the public asset, last October. Many commentators at the time thought the sale was irrational and the company grossly undervalued.

When shares finally opened for conditional trading, their price jumped from the government's valuation of 260p-330p each to more than 450p. The business secretary, Vince Cable, dismissed this as of "absolutely no significance … it is froth and speculation". He asked to be judged on what the price looks like in three months' time.

Well, three months have come and gone and the price of the shares is, at the time of writing, sitting pretty at over 600p each, with a high of 610p a few days ago – an 80% climb on their original price. This suggests that the company was undervalued by a giant £2.8bn: six times the projected saving this year by the imposition of the bedroom tax; six times the amount of money the government hopes to save by the imposition of a levy that is causing misery to thousands of vulnerable people and their carers up and down the country. And Royal Mail could have further to go yet. JP Morgan predicts the price will settle at about 700p a share. Earnings-per-share forecasts bear this out – they estimate a 30% gain this year.

[SiHart]

Well who'd have thought it, eh?

[Rob McCow]

How very annoying.

Although not annoying, I'm sure, for anyone able to buy shares immediately after it was sold off. One could almost believe it was done as a huge money-making wheeze for somebody - but who?

[Stuart Wallis]

I'm saying nothing...

It's Tell Sid all over again, and look where that got us!

[Rob McCow]

Interest Rates (the amount of money that savings gain over time... or something) have been held at 0.5% per year since 2009. So anyone with a lot of savings will have not seen much interest on them. On the other hand, borrowing is relatively cheap because you don't have to pay much extra on them!

BUT! Interest rates may be about to go up! Meaning that anyone borrowing money from the banks will suddenly have to pay a lot more back to service their loan.

George Osborne has revealed that he has drunk a dangerous cocktail that may result in raised interest rates, even though it's got nothing to do with him and it's the Bank of England who will make the decision entirely independent of political influence, so they say and they may be right.
http://www.bbc.co.uk/news/business-35249887

Although, we've been threatened by interest rate rises before:

"UK interest rates 'to rise in 2015' Bank figure says"
http://www.bbc.co.uk/news/business-26282194

"UK interest rates will rise three times in 2011, hints Mervyn King in inflation letter"
http://www.telegraph.co.uk/finance/p...on-letter.html

And most terrifyingly of all:

"Interest rates 'may hit 8%' by 2012 says think tank"
http://www.bbc.co.uk/news/business-11052076

[Perry Vale]

Although, we've been threatened by interest rate rises before:

"UK interest rates 'to rise in 2015' Bank figure says"
http://www.bbc.co.uk/news/business-26282194

"UK interest rates will rise three times in 2011, hints Mervyn King in inflation letter"
http://www.telegraph.co.uk/finance/p...on-letter.html

And most terrifyingly of all:

"Interest rates 'may hit 8%' by 2012 says think tank"
http://www.bbc.co.uk/news/business-11052076

Unfortunately, their policies are the thing that's stopping them from doing so. Seven years of Quantitative Easing (creating imaginary money) and zero interest rates has left the sytem in a worse state than before, with more bubbles than an Ibiza foam party.

The more likely scenario is negative interest rates, where the banks charge YOU to put money in. There could be a slight increase first (as the US have just done), but that will bring on another recession so will be quickly reversed when things go wrong again.

A lot of people are pointing towards China becoming the trigger for a finacial crash with recent events, but that will be like blaming the last snowflake to fall for being the cause of an avalanche. China is slowing down because they now make all the shit for those of us in the west, and we in the west are buying less from them because we've been in an economic downturn for some time.

IMO.

Edited to add: BTW, I wouldn't take any notice of any economic reporting from the BBC, they're run by Rona Fairhead - a HSBC director. Try doing a search on the BBC website for a 'negative' HSBC story...

[Andrew Curnow]

Well, there is a programme called 'The Bank of Cheats' all about HSBC on their iPlayer...

http://www.bbc.co.uk/programmes/b052sk1h

The interest rates thing is interesting though, I don't see a rise happening any time soon. Mind you, I definitely don't see them going for negative interest rates either.

[Perry Vale]

Well, there is a programme called 'The Bank of Cheats' all about HSBC on their iPlayer...

True, although this relates to a story that broke in 2010, 4 years before Fairhead took over at the BBC, and relates to the Swiss arm of their business.

There's a relevant quote from the BBC article on that iPlayer show....

http://www.bbc.co.uk/news/business-31248913

The bank now faces criminal investigations in the US, France, Belgium and Argentina, but not in the UK, where HSBC is based.

This is what they're worried about, because an investigation here could ultimately lead to the bank losing their license in the US.

You won't find any mention on the BBC about the £1 billion fraud HSBC carried out in the UK on british consumers between 2003 & 2010, but you can read about it here (from the whistleblower who uncovered it)....

http://nicholaswilson.com/

Really worth a read....

[Rob McCow]

Really I just wanted to group together all the "interest rates are going to rise" stories. They keep saying it's going to happen...

I wouldn't trust the BBC, Telegraph and Daily Mail and their predictions for the future. I scarcely trust any news outlet to give even a moderately unbiased opinion of what's happening in the present.

[Perry Vale]

Sorry, it was a late addition to my post, and ultimately off-topic.

[Perry Vale]

This was predictable...

Janet Yellen and Fed left with face full of egg after interest rate rise blunder

Turn the clock back a month. It is the week before Christmas and the Federal Reserve has just raised interest rates for the first time in almost a decade.

The mood in the markets is upbeat. A so-called Santa rally is in full swing. Dealers say the US central bank has played a blinder by keeping Wall Street sweet. If there were Oscars for central bankers, Janet Yellen would be picking up the golden statuette.

Four weeks and one market meltdown later, the Fed’s decision no longer looks quite so clever. Indeed, if things continue as they have since the turn of 2016, the increase in US interest rates will go down in the annals as one of the great economic blunders.

The rationale for higher borrowing costs always looked questionable. Interest rates were pushed up not because inflation was a problem but because the Fed expected inflation to be a problem some time in the future. Sure, unemployment was coming down, but wage growth was not going up.

Yellen and her colleagues had a choice. They could act pre-emptively and raise rates while inflation was low, or they could wait until they could see the whites of inflation’s eyes. They chose the former and they chose wrong.

Almost all the data since the Fed raised rates has been weak. Plunging oil prices were supposed to encourage consumers to spend, but they are saving rather than spending the windfall. Retail sales fell in December and for 2015 as a whole were at their weakest since 2009.

[Rob McCow]

http://www.bbc.co.uk/news/business-35362397

"Investors have decided the world is a riskier place," said Laura Lambie, senior investment director at Investec Wealth Investment.

Well if we can't invest in the World because it's too risky, where can we invest?

[Philipnet]

Well it's simple.
If you can't Buy the World, you Sell it!

[Perry Vale]

http://www.bbc.co.uk/news/business-35362397

Some observers think that many markets were riding for a fall.

Mainstream media is very clever after the fact. I searched BBC News website for "markets heading for a fall" and came up with nothing....

[Dirk Gently]

Well if we can't invest in the World because it's too risky, where can we invest?

They don't. They hold on to their money & wait for the fall, then jump all over the cheaper stock & pray for the rise to be soon.
People are moaning about the slow down in China. Yes it is slowing, but it's still growing at a faster rate than anywhere else, albeit at a slower rate.

[Perry Vale]

It's coming for all of us....

Japan adopts negative interest rate in surprise move

In a surprise move, the Bank of Japan has introduced a negative interest rate.

The benchmark rate of -0.1% means that the central bank will charge commercial banks 0.1% on some of their deposits.

It hopes this will encourage banks to lend, and counter the ongoing economic slump in the world's third-largest economy.

[Philipnet]

Japan adopts negative interest rate

Oh my goodness!
(although not exactly the first though that came to mind )


This put's the Fed's increase to 0.5% at the end of last year into at odds with what's going on in Asia.
Was the Feb move too pre-emptive? or is this recession only affecting the Asian markets?