Explaining The Greek Debt Crisis

OK, so we all know what the Greek debt crisis is really about: Greece borrowed more money than they can pay back. So far so simple.

We also know what is the necessary solution: a default on the debts. This could be “soft”, say extentions of maturities or an agreed lowering of coupons. It could also be hard: Greece just declares that it can’t and won’t pay and challenges creditors to come get their money if they’re hard enough.…

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Northern Rock Privatisation

George Osborne has announced that Northern Rock is to be privatised: good. That should end the talk that it should be given away to the politically favoured.

Northern Rock is to be sold rather than remutualised or floated on the stock market, the Chancellor has confirmed.

There’s been a campaign, led by Compass and Chuka Umunna, to have it “remutualised”. To turn it back into a Building Society rather than leave it as a shareholder owned bank which is sold off.…

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Southern Cross: Solved

The Southern Cross problem seems to have been solved. Solved in the only logical manner that the Southern Cross problem could have been solved.

At a meeting on Wednesday, Southern Cross, its lenders and the landlords’ committee reached an agreement that “the continuity and quality of care to all 31,000 residents will be maintained and that every resident will continue to be well looked after”.

In a joint statement, the company, its lenders and its landlords said: “The company and the landlords will work towards a consensual solution to the company’s current financial problems, which will be delivered over the next four months.”

The basic problem is simple enough to outline.

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UK Consumer Economy At 30-year Low

That’s the headline, that the UK consumer economy is at a 30-year low.

UK consumer economy at 30-year low, says Sainsbury’s chief executive

That’s not what was actually said nor is it what anyone really means.

Mr King, who joined Sainsbury in 2004 after stints at Marks & Spencer, Asda and Mars, said: “I have been doing groceries for 28 years. It’s the toughest it has ever been for consumers.”

Even that is nonsense in most senses.…

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Inflation Won’t Cut The Budget Deficit

It’s a time honoured escape for governments with large debts. Inflate them away.

Unfortunately, it’s not actually all that easy in the modern world.

At the same time, the consultancy claimed the UK is the least well-placed of seven major developed economies – including the US, Germany, Japan and France – to take advantage of soaring prices because a fifth of all Government debt is inflation-indexed.

With welfare payments also linked to prices, high inflation makes it more difficult to cut the budget deficit.

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Sex Offenders and the Human Rights Act

Sex offenders will be able to apply, under the Human Rights Act, to get off the sex offenders register.

This has caused the usual amount of huffing and puffing from those who don’t understand the whole point of human rights. The basic story:

A Supreme Court ruling has forced the Government reluctantly to draw up new rules allowing serious sex offenders put on the register for life to have their place on the list reconsidered.

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It’s All Obvious Or Trivial Except……

Why that as a tag?

I should point out that I’m not an economist: a degree 25 years ago does not qualify me as such. But I am fascinated by the subject, call me an interested amateur perhaps. This blog (and it will be a blog, a commonplace book of what interests me rather than a series of essays or pronouncements) will be, as my personal blog has been for years, infused with my (mis) understandings of the subject.…

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