Some Tittilation And The Economy
Unlike the US, Britain is trying to bring its deficits to balance and announces government cuts of £175 billion - no small beer this. Most of the roll backs to come from the military and Super Gee argues down the Trident from four to three submarines saving us £22B right there. Why we need more than one beyond me but the military knows our protection best. Some of the savings BTW will be re-channelled to the war in Afghanistan, where it should be, as the troops suffer from lack of modern equipment and, in some cases, the right clothing and gear for the mountainous terrain. Shameful. Our new found discipline comes inside striking distance of the next national election which will happen June 2010, unless Labour calls a snap-poll which seems unlikely given their lack, ahem, of popularity. The Tories regain the plank with their no-nonsense approach to fiscal responsibility. The problem, as I see it (and in agreement with my hero Paul Krugman), that we are not at the end of the Western World's recession - we may not even be near the middle. Today, for instance, government announces that US employers fire 263,000 workers in September making unemployement 9.8%. Yet the Dow touches 10,000, Ben Bernanke suggests the recession over, and the economy recedes at a slower rate .. all positive indicators, no doubt, but I do remember the ugly '90-92 which really ended in '96 .. I was working on a number of banking m&a's and, as my old mentor Dick Bott used to say: "A bank like an oyster - as pure as the water around it" (or something like that). While the official recession may have ended by '92, it took another three or four years for the US to recover. Bank balance sheets told us this beforehand. And today, our financial institutions remain dire, despite American tax dollars, while no money lent. Bank analysts not in the business of forecasting yet any schmo can see we have a ways to go before terra firma.
