Banking Crisis and Fraud

I have mentioned before that  I am surprised that nobody mentions fraud in connection with the  banking crisis and sub prime lending. At last, I have found somebody else who thinks there has been fraud. To quote George Soros in his new book The New Paradigm for Financial Markets he says “The sub-prime area, which dealt with inexperienced and uninformed customers, was rife with fraudulent activities. The word “teaser rates” gave the game away”. The teaser rate refers to the starting interest rates for mortgages which increased hugely after the first few years. I am glad to be in such prestigious company. website http://robthill.wordpress.com

Media Failures

It is my opinion that we have not been well served by the British media in this present economic crisis. Given that it is impossible to accurately predict the future, pundits in all the different media have been little better than soothsayers in their utterings. The fact that there has sometimes appeared to be a consensus does not suggest prescience so much as feeding from the same trough. The layman should have been able to ascertain without too much trouble more analysis and less speculation. I would like to see a detailed analysis of several past recessions including the Great Depression couched in terms where I could readily compare what is happening today with previous downturns. I would like lots of statistics in percentages to show me whether or not our current situation is in any way comparable. Somewhere I have seen a small scale graph which demonstrated that, the Great Depression apart, recessions do not really affect the upward march of GDP in a highly developed country such as the USA. Will this one be similar? Nowhere have I seen details of the banking crisis. Was there no alternative to governments providing vast sums? I have lost track of the hundreds of billions of dollars that have been made available. Did this actually mean that the banks required these huge amounts to balance their books? Put another way, were the debts of the banks billions more than the assets? If that were the case, at some point they must have been trading while knowingly bankrupt which is surely illegal or it is for Mr Bloggs in his corner shop. Why has no journalist exposed this or government’s possible connivance? The British media are becoming increasingly insular. In order to judge the competence of our own government and its agencies we should be able read about the actions that other governments are taking, not just the USA, and how effective their measures have been so far. These should not be isolated one off reports but should receive the similar coverage to that which we receive about the domestic situation. Gordon Brown is claiming to lead the world. Is he? website http://robthill.wordpress.com

Jaw Jaw not War War

I think I would be right in saying that it is very rare for one side or the other to win decisively in a conventional war let alone in a guerrilla vs conventional forces situation. In guerrilla wars it is usual for the local population to be at least neutral if not hostile to the incoming forces. The British found this to be the case in the Boer War over a century ago and it required huge numbers of troops and the removal of many of the local population to concentration camps to eventually secure victory. Nearly all wars end in some form of negotiation, even surprisingly in situations of unconditional surrender. And yet governments persist in launching conventional forces against countries they regard as enemies. Is it perhaps that politicians with no military experience rely too heavily on generals for advice? In the face of a handful of guerrillas it would be unnatural of military commanders to admit that they are powerless. Men bred to fight are not likely to think first of possible defeat. It is therefore tempting to suggest that one cuts out the war bit and goes straight to negotiations. That is of course simplistic but what it does suggest is that conventional methods of dealing with an enemy by military might are not enough. Guerrilla or asynchronous warfare perhaps requires asynchronous tactics. For example, Afghanistan being a large country would appear to be impossible to patrol with such intensity as to deny the Taliban any access to the people who I suspect at best after so many generations of conflict will not take sides. So do the Taliban have vulnerabilities? One would appear to be their reliance on using Pakistan for training camps. Should we not therefore make every effort to seal the border rather than waiting for them to to disperse across Afghanistan itself? We are told that the Taliban derive their income from the opium trade. If the West were to directly compete to purchase the poppies driving up the price paid to farmers, this would eventually deprive the Taliban of their income. What the West does with the poppies is immaterial. Guerrillas rely on mobility. There are now very high tech means of surveillance which could in effect make any movement visible. Study of the normal communication networks of local people must surely make it possible to readily identify unusual movement by even small numbers of people who are then more than likely to be guerrillas. Judiciously placed no go areas would keep the locals out and have the effect of highlighting guerrilla incursions. Adoption of these types of strategy would require re-allocation of resources rather than additional expenditure and might even be less expensive in the long run than the present stalemate. I further wonder how Israel after so many years of conflict with the Palestinian militias can be so confident of success with this particular present operation and why they think it will turn out so differently from all the previous Israeli operations. website http://robthill.wordpress.com Posted via email from robthill’s posterous Housing Crisis What Crisis? I am inclined to think that this recession could have far-reaching consequences in terms of housing. It is a comparatively recently that the ownership of one’s home has become the overwhelming orthodoxy. It does in theory have advantages over other forms of access to housing. But it has been carefully orchestrated for the advantage of the financial and building industries; why should people want to join a housing ladder as opposed to having a home of their own. The word ladder implies movement and aspiration, reaching ever higher. It makes it somehow shameful to be content with your existing home. It leads in many cases to people spending all their energies climbing it, buying a house, upgrading it in some way, selling it and moving upward. Would it not be better for the soul to have a nice Sunday afternoon walk with friends and family than to spend it re-papering the lounge for the umpteenth time. However, if lending and therefore borrowing persists in being difficult for several years to come as banks encouraged by government attempt to return to the previous status quo, even the theoretical advantage of house owning may become less attractive. We have had an extended period of time when repaying a mortgage on a rising value has been beneficial but a mortgage on a static value may not be so good. It is claimed that there is a chronic housing shortage. If the government were to genuinely support a low-cost housing initiative and instead of providing the banks with the wherewithal to rebuild their funds, which they so foolishly squandered, left them to sink or swim on their own and instead poured the money directly into house building that shortage could be reduced and house values could be stabilised. This would allow a variety of tenancy and part or joint ownership schemes to be created which would perhaps suit a higher proportion of the population than the present one size fits all mortgage system. It would also remove the, as it has turned out, false projections of ever increasing GDP and wealth not based on goods produced but on goods consumed. It is obvious that no politician with an eye to short-term popularity would suggest consumer led increases in GDP was a work of the devil but we have heard about consumer this and consumer that for several years without anybody, politician, journalist or other public figure, campaigning against it. We the people have been badly let down. website http://robthill.wordpress.com The Recession and its Future Course It is amazing how many media pundits are making predictions about the present recession. Most do not even bother to present evidence to back up their scenarios. And yet somehow there is a consensus that it will last through 2009, things will get worse, house prices have a further 15 % to drop and that unemployment will reach three million. These figures might as well be a guess. We are actually in an unprecedented situation. There is no accurate way of predicting the what will happen. Depending on future government interventions (unknown at present even to the Civil Service) and the feelings of many ordinary individuals it could be that house prices drop more or less than that. Anyway we will not know that the bottom of the market has been reached until well after the event. Given that many of our bigger companies are now wholly or partly foreign owned we may suffer disproportionate job losses. Both figures are actually only of interest to minorities but provide the media with easy tales of disaster. It must be a small minority of the entire house owning population who want to sell and retain the capital accrued. Anyone selling to buy another property will perhaps receive a reduced amount for their sale but the purchase should also be similarly reduced so any effect of lower prices is of little consequence in terms of a place to live. Negative equity is only a problem in limited circumstances such as an inability to meet the monthly payments. Similarly a million extra unemployed is very hard on individuals but is only about about 5% of the working population. The unpredictability of the future course of the recession is especially true as this government along with other Western administrations flounders in a mire of short-term emergency initiatives which so far have had little effect. If they continue to try this measure and that the effect becomes even more unpredictable. For instance, the reduction in VAT has done little or nothing and yet the plan is to return to the normal rate either before the recession ends or we are in the process of recovery. While the reduction may have had little effect the increase will surely come at an inopportune time which could well set back any recovery by several months. The scale of government, really taxpayer, debt is such that it will dampen economic activity for decades. Most of this money has gone to prop up a failing system, namely the banks, without any visible plans to institute any kind of meaningful reform to isolate the riskier forms of lending and borrowing. There are now some signs that there will be a change of direction in the next few weeks. As we know no details the outcome is unknown. What is more, this is a recession that is having an effect across the world, not just in the capitalist West so that the multiple influences on the eventual outcome are almost as complex as our weather system and we all know how accurate predictions of long hot summers have been in recent years. How many of us can remember the day to day effect on our lives of previous recessions, in the eighties and nineties? I suggest very few, because we adapted to whatever changes came in our circumstances and got on with our lives. The memories of those times have generally faded. Of course for any soothsayer or forecaster to say any such thing about the present crisis would instantly reduce their sales potential, be it of newspapers or government policy. In fact it is only too plainly visible that Gordon Brown is reveling in his role as world saviour and will certainly never make the mistake of a previous Labour prime minister by saying “Crisis, what crisis?” website http://robthill.wordpress.com Recent Posts School Computers - A Scarce Resource robthill1 wants you to see a photo Reflections on the Scottish Learning Festival 2009 Keynote Question and Answer Session - Fiona Hyslop Online Shopping - the Good and the Bad Archives October 2009 September 2009 August 2009 June 2009 May 2009 April 2009 March 2009 February 2009 January 2009 December 2008 November 2008 October 2008 September 2008 August 2008 June 2008 May 2008 April 2008 March 2008 February 2008 January 2008 November 2007 August 2007 June 2007 April 2007 March 2007 February 2007 January 2007 December 2006 November 2006 October 2006 September 2006 August 2006 July 2006 June 2006 May 2006 April 2006 March 2006 January 2006 November 2005 July 2005 May 2005 April 2005 March 2005 May 2004 April 2004 Tags computing computing studies cpd data processing ICT discipline edubuzz Education eeepc teachmeetperth email England exams exclusion flash glowscotland government ICT information islay librarian literacy Moray House numeracy O Grade opensource policy Politics sandaig school schools science scotland Scottish Scottish Education selection teacher technology van der Kuyl Blogging Andrew Brown Don Ledingham’s Edubuzz Ewan McIntosh’s MFL Blog John Connell John Johnston’s Blog Tessa Watson Will Richardson’s Education Blog Blue Skies Education John Connell Education Ewan McIntosh’s MFL Blog John Connell John Johnston’s Blog Will Richardson’s Education Blog glow John Connell ICT Ewan McIntosh’s MFL Blog John Connell Will Richardson’s Education Blog Podcasts Ewan McIntosh’s MFL Blog John Johnston’s Blog Will Richardson’s Education Blog Scottish Education John Connell Neil Winton my del.icio.us Blog Stats 6,956 hits Feeds etc Log in Entries RSS Comments RSS WordPress.com Theme: Blix by Sebastian Schmieg . 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