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Tuesday, October 21, 2008

UK prime minister Gordon Brown is the cause of the UK's money problems.



Video - 1992

UK prime minister Gordon Brown is the cause of the UK's money problems.

In recent years, Gordon Brown has:

1. Scorned demands for tighter regulation of banks and the economy. (Be wary of bull market in Browns)

2. Ridiculed the German government for worrying about highly leveraged hedge funds.

3. Ignored warnings from the IMF that Britain risked a credit and housing bust.


Now the UK is having to borrow a lot of money.

According to the Financial Times, 21 October 2008, the UK government borrowed an extra £37.6bn in the first half of the year.

This half-year borrowing figure is the highest since the second world war.

And the situation is expected to get worse as the economy weakens and tax revenues decline. (Brown set to borrow more)

And Gordon Brown has outraged shareholders of Lloyds Bank and Bank of Scotland (HBOS) by arranging a most unsuitable merger.

Mr David McLachlan, in a letter to the Financial Times, 21 October 2008, writes:

"Lloyds TSB has never needed to be rescued – it has a sound business model, is conservatively funded, and is highly profitable and well able to withstand the current recession... If... the takeover of HBOS proceeds... then a very substantial amount of the value in Lloyds TSB will have been transferred needlessly, and arguably illegally, from existing shareholders to the government." - Outraged Lloyds shareholder not alone

The purpose of the merger seems to be political - to help to damage the Scottish economy and frustrate the nationalists.






Gordon Brown is not the first UK politician to get into financial difficulties.

Anthony Barber, in the early 1970s, liberalised the banking system and this contributed to boom followed by bust.

Nigel Lawson, in the 1980s, produced tax cuts which led to a housing bubble which eventually burst.



Hedge Funds


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