The banking crisis is nowhere near over: tottering balance sheets hold 440% of UK GDP, with £30 of debt for every £1 of assets.
Jesus. Crippled Jesus Christ on a bike.
There\’s a line in Polly\’s latest book which says something like …..those who are so far out of touch with reality, should we really listen to what they say on matters of political import? (and I paraphrase, apologies)……
To not know the difference between assets and capital in banking. Should we be listening to anything she says on such matters of political import?
And to think that none of the editors or the subs at The Guardian caught it.
Jesus.
Hmm. If that’s a commonly-held view among the ignorant masses, it’s no surprise that they’re baying for the lynching of the bankers…
The debts are ours not the banks.
£30 of assets for every £1 of liabilities doesn’t sound so bad does it…
But is Polly only half wrong? The banks turned their assets into debts for themselves by CDOing them. The assets are now dropping in value but the CDO debt remains. Falling house prices have also stemmed the cashflow from creating new CDOs.
Probably got her stats from Richard Murphy.
Depressing.
I also find it almost impossible to impress upon people the fact that global net debts are always zero. I am usually confronted by a patronising look and reminded that interest piles up and makes the debt bigger while the lender’s asset remains the same. Sigh.