Saturday, January 03, 2009

Randall the Soothsayer

Last week there were predictions everywhere. Most papers did them, most blogs did them including this one. Of all the predictions that I can recall, it was Jeff Randell's in the Telegraph that I remember most clearly when he said,
The Government's bail-out of the banks will start to fall apart: more capital will need to be pumped in if all mainstream lenders are to survive.
How very right he was and who would think it would happen so soon after the turn of the year? According to this morning's Times, Alistair Darling will shortly make a decision on pumping yet more taxpayer money into the banks with a second recapitalisation bail-out because the first has failed and lending has dried up.

Interestingly the problem of lending not kicking off again has been one of the ongoing themes that the Tories have been banging on about, and any secondary action by the Chancellor will, I would imagine, be seized upon by them with a "told you so" tone and attitude.

13 comments:

Barnacle Bill said...

Putting interest rates up, to slightly above the Euro zone, would be far better move than throwing more money at the banks.
Also it might convince others we have someone in charge who knows what they are doing, not this making it up as we go along economic policy.
Have a look at what I have said this morning.

Letters From A Tory said...

I wish I was surprised that Labour are willing to borrow any amount at any time without any justification to keep themselves in power - but I'm not.

kinglear said...

This is the exact problem - there has been very little saving over the past several years, which means there is now no net cash for the banks to lend. Even a total of £30 odd billion into RBS makes hardly a dent in the tier 1 capital ratio - and they all need to get back to 7:1 lending ratios - not the insane 130 :1 and more that has been floating about.The banks need tow rite off ALL the dodgy loans leading to massive losses and THEN have a recapitalisation.

marksany said...

Jeff Randall really is the best pundit there is. He makes Peston look like a tool.

wv: cuptiona

DARWEN REPORTER said...

I predict a riot. Now that sounds like a good song title, methinks!

Elby the Beserk said...

Peston is a tool. Of New Labour. Brown's mouthpiece, and able therefore to affect the markets. Should have been arrested.

Michael Heaver said...

Oh dear. Oh dear oh dear. The Chuckle brothers have made another big boo-boo?

The Screech said...

What pisses me off is if we (the average pleb) apply for a loan of any kind, the first thing any responsible lender (and quite sensibly so) does is to make a credit check on the person applying, but who is doing a credit check on Davros and his little Darling when it comes to them deciding,"oh we want to borrow this so we shall just take it"? I'll bet a fiver to a pinch of shit that New Labour is not a name that is cropping up on the black lists of Equifax or Experian.

Gareth said...

Mr. Heaver,

That is very unkind to the Chuckle Brothers. They are more Bodger and Badger methinks. Mashed potato will be about all we can afford soon.

John M Ward said...

Jeff Randall? Well, of course he knows best! He's being fed information from the Other Side by his former partner, Marty Hopkirk (deceased)...

Anonymous said...

Why would banks' managements try to make money by lending when by not lending they can ensure they'll be flooded with cash to to keep on paying themselves that has been expropriated by the state from those who would otherwise be savers?

James Higham said...

The thing is, Dizzy, it just stands to reason that this policy will not work. It doesn't need a PhD to see that.

John Pickworth said...

But the bail-out of the banks simply has to work... because the saintly Vinnie Cable said it would!