History

Rather dull couple of weeks in terms of activities. Bridge has been good, thanks to my partner, additionally I have commenced a garden sort-out - mowers started first time - followed by some borders weeded.

Have watched Brown and Darling doing their thing over Northern Rock - what a shambles. Having been involved at the outset, when the Bank of England took over Johnson Matthey in 1984 - under Bank of England rules - (which amounts almost to being locked in a room with the other clearing banks and told that we could not leave until we had come up with a solution (already shaped by BoE)) the whole NR strategy lacks any form of leadership, understanding or decisiveness. History has taught this Government nothing. Seemingly the Government did not have the courage to take command and for that we will have the NR saga with us for the next six years or so.

If NR had been left to fail there would have been some flak but no risk to £100b of tax payers money. The tax payers are now exposed to a variety of additional costs/expenditure either from trading losses, asset write downs, legal costs, litigation, redundancies and the cost of Government time. Understandably the Government should not be involved in the day to day running of NR but it will and therefore there will be an opportunity cost for that time - ie dealing with the EU or shareholders of NR or the concerns of other high street banks.

We are now where we are. Nevertheless I would like information on four aspects (1) Given that NR is financed short term how is this to be refinanced long term - on competitive basis. (2) who actually is going to want to buy NR after it has been run down (3)Based on general risk and rewards concepts what level of reward should the tax payer expect for risking £100b (4) What is the state of the NR pension fund - is there a deficit. Dont hold your breath.

For years and years bankers operated on the golden rule of matching long term lending with long term deposits - simple really.

Its not just Northern Rock, the UKs problems extend to a trade deficit, falling pound, inflation - fuel, heating, food - data losses, failing local servies. Yet New Labour think its all still fine. Is this denial or are they just living in another world.


When all the dust has settled and Joe Bloggs takes the hit, as we all surely will, our current Government leaders will all find seats in the House of Lords with the words "not me guv, it was the global economy etc etc."

If we are to learn anything of value from NR and other current issues its possibly that, should another Scot wish to become UK Prime Minister then he/she should first gain experience by running and ruining the Scottish economy.