Thursday, January 03, 2008

... and a wonderful hangover

I'm referring of course to the gloom and doom in the finacial papers over the last few days. Yes there's a huge hangover. Yes there are credit market problems ( serious ones). Yes there will be a lot of pain, especially in the City and across the country. Yes rail fares are hugely up - yes the electricity and gas prices are hugely up.
But I wonder. Being contrarian by nature ( Mrs. Lear says I am just plain contrary) I had a smell today that because it is looking so gloomy and everyone says so, maybe - just maybe - this could be the point at which the Banks, the Governments etc etc etc wake up and start to do something useful.
I got a smell today, because a friend of mine, who has been struggling with his bank since August, suddenly got the money he has been asking for - no strings attached ( well, not more than usual).
It was sent out on 31st December. Noone - NOONE - sends out offer letters on 31st December.
So maybe the Banks have been told - a la USA in the 60s - if someone is asking for money, give it to them.
I'm not saying I necessarily condone it.
But it just might allow the Banks enough time to rebuild their tier 1 capital, take the full write offs that are required - and continue to make money,whilst helping their clients to remain solvent.
And overall, that has to be good for the economy.

2 comments:

Winchester whisperer said...

Perhaps the man who wrote that letter knew he was going to lose his job in January? Don't like what Darling's saying about the FSA being able to freeze deposits. I'd have thought that would cause people to lose trust in the banking system rather than increase it.

kinglear said...

ww- Darling is a complete prat. The BofE report is - as ever - behind the times.