The sharp-eyed among you will have noticed an almost dearth of incisive comment about the global banking crisis. Although I am an Accountant with a Politics degree, I have a blind spot when it comes to Economics. I did study a bit as part of my Graduate Conversion Course (accountancy training) but I had to squint to decode a demand vs supply graph, and it all got too heavy from there on in.
I wish it were over. No doubt Robert Peston really knows his stuff, but it's getting too much, he's everywhere. I wake up with Robert Peston on the radio, I have my tea with Robert Peston on the TV, my night-time cocoa is brought to me by Robert Peston. I just wish he'd learn to string a sentence together without putting 'you know' between every bloomin' you know phrase.
Despite me knowing nothing about Economics, it has not come as a surprise that the banking system has collapsed. Too long we have been expected to respect these people who just play with pretend numbers. I could never be an out-and-out full-bloodied socialist because I do believe in real investment and entrepreneurship - venture capital - but I do feel that Stock Market is a glorified betting shop. It is discussed so often in terms that can only be described as pretentious wank...silly men on the telly getting orgasmic at what the 'Numbers' are doing, and imagining that 'The Market' somehow has the ability of independent thought. (And then you get wimpy weather men in cardigans trying to out-macho the business men by using 'Numbers' to inform of forecast temperatures).
I did have an attitude that anybody with 'shares' is a capitalist who ought to be taken out and shot at dawn, then I remembered I abhor capital punishment, so considered a fine and some community service to be their just reward. Then I learnt that just about everybody (except me) is a share-owner. Many people have occupational pensions that are at least partly invested in shares; I am in the peculiar, unfunded, Civil Service Pension Scheme. Anyone with bank deposits is likely to find that they are at least partly invested in shares - and that also goes for people who save with mutuals such as Building Societies and Credit Unions.
Whereas my savings are in Government Bonds, which is how Government Funds borrowing to purchase banks. Damn, I've become part of the 'share-owning democracy!'. As a good old Clause Four Democratic Socialist, I am having a good old chuckle as Good Old Clause Four Socialist Gordon Brown and his audacious sidekick known only by the codename of 'Darling' march in and nationalise the Banks. Tony Blair would be turning in his grave, were he dead. So would Thatch*, too.
Remember, I know nothing about Economics so please, you know, correct me on bits what I get wrong. But the way I see it is:
In the short term the Government is going to spend yours and my money to buy shares in these Banks at a time when Bank shares are pretty damn low. In the short term this will cost the Government enormous amounts of money, which they will have to borrow via Government Bonds. In the long term (whatever that is) banking will return to normal (whatever that is), and the Government will be faced with a dilemma - whether to sell these shares at maybe 50% profit - but have to pay Capital Gains Tax(!)- or whether to hang onto them and reap the dividends. They couldn't off-load them all at once because that would depress the Sacred Market, so for several years, surely, they will combine drip-selling shares and drawing the dividends. Either way, surely, that will cause another problem for Brown and his sidekick Darling. Whether to cut taxes or increase spending on schools, hospitals and public transport. I'm sure they will have worked it out by the 2010 budget Insert Big Grin Here. David Cameron would be spinning in his grave, were he dead.
It can't be that simple, can it?
I have noticed quite a lot of talk about gold recently. Apparently, people are getting out of shares and buying gold. Is it just me or is that innumeracy? If I had gold, I'd sell it, now, when the price is shit hot, and buy shares, which are almost certainly bound to go up.
And then we get the Iceland thing...Iceland as a country, reportedly, is bankrupt. Reportedly, several months ago Iceland the country was reported to be the Toxic Waste of the Global Banking System. I don't think I have many , if any, regular Icelandic readers, but for those out there, I'm sorry, it mustn't be nice. I'm told there was a news report this morning that residents of Iceland, concerned about imminent devaluation and possible Zimbabwe-scale inflation, are stocking up on staples, which is what I would do in the circumstances. Human nature being what it is, prudent stocking-up becomes panic-buying.
In my imagination, a whole sub-section of British society is right now down at a well-known high street supermarket (which discriminates against the childless), stock-piling against disaster, because they've only heard part of the story and have decided to worry.
Like someone told me last week she is really worried that NatWest Bank will collapse before the end of the month and those who bank with them, like her, and me, won't get paid. I couldn't honestly say it absolutely won't happen, but I don't see any point in worrying about it, because if a major bank did collapse that way leaving millions destitute, Something Would Have To Be Done. So, I see no point in worrying about a hypothetical theoretical, when it's not like I - or she - haven't enough real and imminent problems already.
* champers round my place when she pops her clogs
