Saturday, 21 February 2009

Uk Industry, What Industry?

It seems that a UK car plant, employing directly or indirectly 6000 workers is on the brink of closing down.

It looks like the selling of all our industries will come home to roost over the next 12 months. Its a sad state of affairs that I can't only immediately think of one major manufacturer that is totally British based and owned, of cars or any anything else.

Thats another big problem that will hit hard during the depression: foreign owned manufacturing being dropped here and taken abroad. The same thing happened with the banks: Iceland was slapped and had its banking assets seized under anti-terror laws, then all the other banks decided to pull out, leaving a big hole for UK banks to fill. Thats why no-one can get loans, because the number of banks in the market has suddenly decreased by a huge percentage.

Manufacturing has to go the same way, as owners look at profits and then see how easily/cheaply they can shut facilities here, compared with the rest of Europe. After all, our flexible (read expendable) labour market is the whole reason foreign companies like Toyota, Nissan and Honda came here in the first place and why Tata bought into Land Rover and Jaguar.

One more nail in the coffin of this country. I really do have doubts as to whether we could get a loan off the IMF if it ever came to it. Just what could we guarantee the loan with, or generate the cash with which to pay it back? A nation of minimum wage callcentres and shops isn't going to generate enough wealth to make a dent in the Trillions of pounds worth of debt the country owes.

I really do wonder how bad it has to get before the Mainstream Media, the government and their propaganda arm (the BBC) will start to acnowledge what is happening.

Or are things so scarily bad that they daren't risk letting us know?

Friday, 20 February 2009

How and Why did the Credit Crunch Happen?

Various financiers will go into great detail as to why the credit crunch happened: sub-prime markets causing lack of confidence, dodgy mortgage deals, dodgy debt packages, but that nit-picks at what is a very simple reason: Ego.

The whole crisis has been caused by the egos if those at the top in government, finance and industry.

The government massaged their ego for letting the economy run on nothing but credit for several years, to a totally unsustainable level, so they could say that the economy hadn’t failed while they were in power.
Their ego wouldn't let a revaluation happen on their watch. Instead, they promoted ever higher levels of debt, never queried whether it would be sustainable.

Even now, they try to push the same stubborn donkey up the hill, by pouring billions into the banks, in an attempt to get them lending again. Its not going to happen, because the banks won't lend money to pay for what they know are overvalued goods.

Not only that, the egos of those at the top woin't allow them to admit they were wrong.

Those in finance continued with bad (and sometimes illegal) practices, so they could take obscene amounts in bonuses. Their egos wouldn't let them take lower or no bonuses, because that would look bad campared to their friends in other finance houses. The greed pushed others into fraudulance most notably the Madoff scheme, but even those at the bottom of the pile were at it, selling mortgages to people that couldn't pay for them.

Industry, with company directors agreeing to huge bonuses even when the company’s fortunes are in decline. Happy to bleed a company dry, then move on to the next victim or their parasitical practices. Performance-related-pay is one thing, but to be rewarded for failure should be seen as anti-social as drink driving.

Even the ordinary working man was affected. Rather than save, he went out and bought the latest car or the latest flat screen TV, maybe extended his house. All massaging his ego, all to make him look good, all on easy credit.

All of the above are the people that need to learn humility and restraint. Letting nature take its course and letting the banks and companies fold would be better, the man on the street might them be chastened enough to start saving for the next crisis. Everyone needs to suffer the pain of a recession, otherwise it’s straight back to the excesses of the past. Its already a given that the government will be humbled come the next election.

You can see the fear in the eyes of those that are part of the establishment. They've tried to pump billions into banks in order to return to the status quo. It hasn't worked. They are now about to start printing excess money, in effect devaluing everything we own.

What next for this once great nation? These are unprecedented times and I fear we will see unprecedented actions.

Unless our government leaves it's ego behind and is humble and honest, explains the situation, plans a comprehensive strategy and takes the population with it, allowing us all to work together in the best interests of the country, the future is uncertain.

Thursday, 19 February 2009

Decrease in Tax take, Increase in benefit payouts

Well well, its only taken 2 days for the news I commented on to filter through to the mainstream media.

Seems someone has noticed that theres a huge fall in tax revenues and a corresponding hike in benefit costs. Its bloody obvious Einstein. The housing market has dried up, so stamp duty revenues must be through the floor compared to 2006, plus less income tax and N.I from the hundreds of thousands that joined the dole over the last 6-12 months.

Oh and to answer Tony McNulty who in channel 4s "Dispatches" this week (about what help there is for the unemployed) said that lots of people may be going onto jobseekers, but lots are coming off... well yes they would if their experience is anything like mine. I was on jobseekers for 6 months then had it stopped, because it only gets paid for 6 months, then "reviewed". What that actually meant is that I got nothing, because my missus is expected to support us, even though her wage is less than our rent. So yes, we're dropping off the jobseekers stats, but we're still unemployed McNulty you wanker.

Anyway, back on topic, if this is any indication as to what is to come, its fairly bleeding obvious that we're going to be in a huge deep hole come the end of the year.

Notice how the news has gone quiet on Iceland? Thats because what happens to them now, will happen to us in 12 months time. They had riots and a new Prime Minister. I'm sure we'll have the riots, but as to what happens politically is anyones guess.

Tuesday, 17 February 2009

The Economy: Like watching a Car Crash in Progress

I have serious fears for the future of my country. In fact I predict that it'll be bankrupt sometime early in 2010.

How does that work, you might ask, given that no-one has yet mentioned the fact. I'll tell you: because not all of UK PLC's debts have been identified, quantified and totalled.

As an example, today it was "discovered" that the government will need to put more money into those PFI initiatives that have gone too far to face the axe. Thats because the PFI contractors are finding it hard to get credit to finance their PFI activities. How that all works in practice (we loan them money to build (say) a hospital, which they then lease back to us while paying off the loan we gave them...) I still can't get my head around. All I can say is that after several interested parties have made profit out of the scheme it looks an extremely inefficient way to deliver a hospital and a misuse of taxpayer's money.

Another nugget of news is that the CBI reckon the government will need to find another £100-150bn thanks to the depression. This is because of reduced tax revenues and the increased burden of a larger than planned number of people claiming benefit. I expect that figure to grow during 2009.

Its already been widely reported that there is a public sector pension shortfall. Conservatively estimated at around £690bn. I predict that this figure is grossly conservative, because it's based on higher interest rates than at present. Plus, as councils and the civil service start to shed staff to save costs, the draw on the public sector pension pot will grow, so the government's liability in this area isn't restricted to "just" £60bn and will increase significantly. The same goes for the state pension: employers will just shed anyone of pensionable age in order to reduce staff costs as employment law allows it to happen without redress from the employee.
Anyone thinking like me that we'll have a £1Tn pension shortfall by the end of 2009?

As the depth of the depression becomes aparrent, it will become increasingly clear that the figures we know about will increase and there will be other liabilities and bailouts to come to be added to the mountain of national debt.

So financially, the situation looks very bleak for the UK. Certainly public spending can't continue at its current rate, but the government still insist on ploughing on with pet projects like ID cards, the NHS database, ContactPoint, et al.
What should happen with them is like with every other person that faces tough financial times: you cut non-essential spending. They and any other superfluous projects should be stopped immediately, as we're doing fine without them, so they're really not necessary, they're a luxury we can't currently afford. Unless of course the contracts with the suppliers means it will cost us more to cancel the projects that see them through to completion. Nothing would suprise me in government.

I hear the budget has been delayed, so I just wonder what's going to be in it. I'm sure the truth won't be spelled out in the Chancellor's speech, we'll have to pick at the fine print in order to get the full picture. I doubt it will be cheery news.

Finally, just what will happen when the country goes bankrupt is close to or actually defaults on loan payments? That's an interesting point. Will we be strongarmed into new alliances or changes in policy in return for renegotiating repayment terms? It would be an interesting exercise to see where the bulk of our liabilities lies and therefore who would have greatest influence over the conduct of the UK government.

I'm watching 2009 with great interest, but what happens in 2010 fills me with great trepidation. The UK will emerge from 2010 a changed nation.

Stella Rimington States the Obvious

Stella Rimington, ex-head of MI5 says that the Government is exploiting anti-terror laws. Well duh!

When an old guy can get chucked out of the Labour party conference for heckling under anti-terror laws, when our bins can be snooped on under anti-terror laws, when the assets of foreign banks can be siezed under anti-terror laws, then the laws are being abused and exploited.

I'm just glad someone that used to be at the heart of the establishment has said it publicly. If anyone is qualified to speak on the subject, it's her.

Monday, 16 February 2009

Doomsday a bit Nearer?

Today the BBC posted a very important article. The sad thing is, it didn't appear to make it to their front page.

While the economic catastrophe has taken all the attention of our leaders and the press, something of earth-changing importance happened today. This:

Pakistan has ceeded one of its provinces to Taliban control. Their President says that Pakistan is fighting a losing battle against Islamic extremists.

Why, you may ask, do I single this bit of news out and classify it as Earth-Shattering?

Pakistan has the bomb. Yes THE Bomb, the atomic, nuclear, big daddy of weapons. It also has ballistic missiles.

You tell me what sort of mess we'd be in if the Taliban got control of them.

Sunday, 15 February 2009

An introduction


I'm Delphius. What is a Delphius I hear you ask. Its me, it was my nickname at school and its a name I've used throughout life, whereever I've been. Google it and you'll find out quite a lot about me. I don't know why you'd want to do that though.

Anyway, this is my first blog, an introduction.

I'm over 40. I'm unemployed. Married, with kids. I'm mightily pissed off that the great country I saw as a kid has been run into the ground. Throughout my lifetime, I've seen The United Kingdom trashed by the party political system. I'm also concerned about the way the present is shaping the future. I have a knack for reading between the lines, gathering information from different sources and putting them together to predict outcomes. I predicted the riots of the early 80s. I was predicting the bursting of the debt bubble in the early 2000s and said the longer it goes on, the worse it will be and the longer the recovery.

The country I saw in the sixties, has been systematically ruined since then by both Labour and Conservatives. In the seventies it was ruined by the Heath and Wilson governments until Callaghan's Old Labour government ran us onto the rocks in 1978. It was then dragged up by its bootstraps by the Conservatives, by selling off the unprofitable nationalised industries. Then once the grand project was complete they went back to their dogmatic roots, and forgot the small guy.

Then Labour got in in 1997. A new hope we thought. Promising to be like the Conservatives, but with a caring heart. Well, what a load of crap that was.
They went on a pensions fund and insurance raid, costing us, the little man billions. then they taxed us more, to give it us back in tax credits. In effect paying for a whole layer of government that we have to pay for.
The most devastating thing Labour did was to disband the financial regulatory framework the Conservatives left behind. It worked, but I assume the bankers complained at their expensive dinners over caviar and champagne, they could make more money for the country if the shackles were released.
Bingo! We find ourselves in the worst financial crisis for perhaps 100 years. A depression in all but the technical sense.

So, here stands the UK at the dawn of 2009. Almost bankrupt, on the verge of begging funds from the IMF, with no way of generating revenue (no manufacturing or any serious wealth creating economy). Jobs are being shed at record rates. Theres a recruitment drive on at jobcentres around the country to keep up with demand. I know, I've applied for one for those jobs!

I'm angry that my country, a nation that in my lifetime was great, has been reduced to such a level.

Actually, I'm not angry, I'm fucking apoplectic.