Britannia Radio

This first  just shows what blithering idiots our masters  
(‘regulators’) are and what idiots we were to trust them.   The IMF  
gets a roasting here!

Read this - it’s hard not to explode but you - like I - may be lucky!
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The second examines the Institute of Fiscal Studies report today The  
outlook is so horrific that things can only get worse - though I fail  
to see how!

This lot will plump for ridding us of our debts by ruining even more  
people by massive inflation,  Remember when it comes that the  
inflation was predicted here AND has been deliberately engineered to  
ruin anyone who might stand their way by impoverishing them

xxxxxxxxxxxxxxx cs
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TELEGRAPH                        6.4.09
Iceland report a timely reminder that no regulatory system can be  
foolproof
I thoroughly recommend the Treasury Select Committee's report into  
the Icelandic banking crisis.

    By Damian Reece

It's not often that the working of our Financial Services  
Compensation Scheme (FSCS) makes for essential reading but the  
meltdown of the likes of Landsbanki and Kaupthing reveals details of  
one of the most dramatic stories of the credit crisis.

Although I know I shouldn't laugh I couldn't help an involuntary  
snigger when perusing the background section of the report about the  
Icelandic economy. The MPs quoted an "expert" body from June 2007  
which said at the time: "The medium-term prospects for the Icelandic  
economy remain enviable."

The credit crunch hit us two months later, having been brewing  
through wild volatility in capital markets which had already led  
plenty to question such over-arching ambition as Sir Fred Goodwin's  
pursuit of ABN Amro.
The experts in question? No less than the International Monetary Fund  
(IMF), which on Thursday was granted a trebling of its resources by  
the G20 as part of its $1.1 trillion (£750bn) economic aid package.  
We are promised reform of bodies such as the IMF now that they're  
being given so much money to spend and they should clearly start with  
the forecasting department if we're going to avoid all the cash going  
to waste.

Anyway, the lessons that savers should draw from the report are that  
the UK Government is not there to compensate British citizens who  
wander off into the wilder climes of finance in search of higher  
interest rates and what's good for a bank's shareholders is not  
necessarily good for a bank's customers – in fact, it can be  
downright damaging.

Apart from revealing some red faces at the IMF, the report also  
details the "impotence" of the Financial Services Authority (FSA)  
when dealing with concerns raised in 2005 by Tony Shearer, the chief  
executive of Singer & Friedlander, over its takeover by Kaupthing.

Shearer, despite alerting the regulator to his concerns over the  
fitness and propriety of Kaupthing to complete the acquisition of a  
UK bank, was forced into accepting the offer on the basis it  
maximised value for shareholders. The deal clearly didn't maximise  
value for depositors subsequently, something which will not be lost  
on the mutuals such as the Nationwide and the Co-op.

However, the FSA has started to put its house in order [Have we  
proof ? -cs]  and the implementation of Lord Turner's recent report  
cannot come soon enough.

But the danger of this week's thrust from the G20 of greater  
regulation is that it lulls consumers into a false sense of security.

We thought we had the best regulatory system in place in the UK until  
savers started chasing financial exotica, only for it to end in  
trauma and, in some cases, irretrievable losses. The regulators have  
proved largely powerless.

No regulatory system is foolproof and as time goes on it becomes  
slower and less capable of adapting to financial innovation. It  
becomes financially arthritic. It's happened before and will happen  
again regardless of how co-ordinated world regulation becomes.

Don't be fooled by rules and regs, it's still down to the buyer to  
beware.
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Telegraph’s BREAKING NEWS         6.4.09
UK seems close to fiscal U-turn
Gordon Brown’s time as global economic guru lasted only a few months.
    By Edward Hadas, breakingviews.com

Now that the UK prime minister is looking at a scary UK budget  
deficit – 11pc of GDP – he can no longer goad other world leaders  
towards more aggressive fiscal stimulus. A UK fiscal U-turn seems to  
be on the way.

The worse than expected recession is wreaking havoc on the  
government’s finances. Both receipts and revenues are moving in the  
wrong direction. The deficit will be far higher as a share of GDP  
than the 7pc it reached in 1976, when the UK needed help from the  
International Monetary Fund.

Even if GDP does start to recover in 2010, the budget will be grim.  
The government will need to ask the markets – or the Bank of England  
– for as much as £200bn both this year and next, according to the  
Royal Bank of Scotland.  [Wot them that can’t add up ? -cs  !!! :-) ]

Brown and his chancellor Alistair Darling seem to have taken note.  
The April 22 budget is expected to be more focused on future  
austerity than current stimulus. Last November’s pre-budget report  
already promised £38bn (2.6pc of GDP) of annual fiscal tightening.  
But more needs to be done.

The Institute of Fiscal Studies think tank estimates that at current  
trends the government’s debt will rise from the current 42pc of GDP  
to 90pc by 2050 – and stay there.   The IFS suggests that an  
additional £39bn will be required to get current expenditures,  
excluding interest payments, to equal tax revenues by 2015. Interest  
expense will be another 1.5pc or so of GDP.

That presents the government with unattractive alternatives. The IFS  
says one possibility is a five-year real freeze on spending. Another  
is a £1,250 annual tax increase on the average family. More likely is  
some mix of spending less and taxing more.

Another possible solution is to print rather than borrow for much of  
the government’s spending. That would free the government from the  
tyranny of fickle investors, at the cost of risking uncontrolled  
inflation.   [That’s not a risk;  it’s a dead certainty -cs]

The G20 called for tough medium-term fiscal plans. Brown has a chance  
to show that was more than mere talk.  [That’s all he can do - TALK  
and use fiddled figures! -cs ]