Wednesday, 8 October 2008

Unfettered capitalism

So is the current money and stock market meltdown the precursor to the end of unfettered capitalism?

I don't know frankly but I do sit and wonder about it all.

a) how can one bank (HBOS) be under so much threat when others aren't? Is HBOS really that badly run? Or is it that people just hate that goon Howard in the tv ads?
b) maybe all those building societies that became banks shouldn't have done. In both the case of the Abbey and Halifax I voted against demutualisation - although I never moved my business. I sold my Abbey shares ages back but held onto the Halifax ones. Whatever given both have been taken over and Halifax / HBOS is about to be taken over again I'm not sure that the few hundred quid everyone got as a result of the demutalisation was worth it now?
c) How the hell is Iceland in the position it is? About a year ago I wondered where all the Icelandic money was coming from as some Icelandic consortium bought Army and Navy. Now I know - they didn't have it they just borrowed it - an old adage "If you owe the bank £200 it's your problem, if you owe them £200,000,000 it's their problem" - very true that.
d) I heard a guy from the premier league say "We shouldn't think like the French that debt is bad just that you need to ensure you amount of endebtedness is comensurate with your income". Well I tell you son my father thought debt was bad and I'm glad I've sort of followed his principles, I'm fortunately not in a debt position myself but have investments etc. I do worry about. But look at my son - at uni and he'll have a stonking debt (in my terms) by the time he leaves. Frankly why worry though it doesn't seem to be an issue still - maybe the govt will bail him out if he screws up. He's looking at various ways out - clearly never earn a lot is a good one as you never pay back the student loan, stay in Wales (if he does they clear some of the English debt to put him on a par with Welsh students - their fees are much much lower) (but I mean, live permanently in Wales?! He'll have to support Ospreys of something equally bad :-)), possibly move overseas as looks like they've not considered the brain drain issue.
e) Who drives these markets? Why is "double digit growth" important? Who to? Are we all to blame as we are the people who demand good returns on our investments in our pensions or whatever? I read a report on my company and us failing to grow at double digit rates was sneered at - btw we are one of the largest in our field and earn billions a year - how the hell do we keep growing? Surely there's some limit somewhere?
f) "there's nothing to fear but fear itself" - very true.

So I glance down my RSS reader at the news stories coming in and just wonder where it'll stop. Looks like some major UK retailers will go to the wall soon as they cannot borrow to stock their shelves or the insurers will not insure them to ensure the suppliers will supply on credit.

Is capitalism a human instinct? - survival of the fitest - the strongest in the pack gets to lead or gets the most women etc. So is greed an inbuilt human trait? Look how the socialist experiment of the 20th century ended up, that didn't work out well.

Now the great depression of the late 20s early 30s hardly killed off capitalism so I doubt this blip will since as soon as the dust finaly settles those that have profited from the downturn will be the people others seek to emulate to get a bit more and it'll all start off again and how long will the memories be? There are 4 billion people in this world who live on income less than $3000 a year (that's about £1700). You know I don't feel that badly off really in comparision - I have warmth, health, good living conditions, sanitation, power etc. It's a shame our govts can pump billions to maintain this creaking system - rather than just taking say $100 billion of all that and giving all those folks a $25 bonus...


  1. It's pretty scary,
    and No, Mr. punxxi is only going to wear that outfit to golf in, so, he will only have it on 3 times a week ;o)
    I linked you, hope it's ok.

  2. And what's wrong with the Ospreys?!!!