Friday, 28 August 2009

Nobody warned us

Back in June I blogged about just nine of the many articles that warned of what was to come. At the time I asked
"So did Gordon Brown and his highly skilled paid team not read the major UK newspapers, the BBC reports, the Bank of England's reports or those of the IMF between December 2003 and 2008? If they did not read them then they were surely negligent as they should have. If they did read them and did not act then they were surely negligent as why did they not act, did they assume they knew more than the experts? Maybe they really believed that Gordon Brown had abolished "boom and bust" economics. "
In fact it seems that Gordon Brown was even more culpable, Paul Waugh in The Standard reports that:
"Gordon Brown ignored a stark warning that "toxic" bank loans could lead to global financial collapse, a leading US hedge fund chief has revealed.

Jim Chanos said that Mr Brown, while Chancellor of the Exchequer, was given a briefing that predicted banks were in dire danger - more than a year before the crisis hit last year.

Mr Chanos, who made his name correctly predicting the downfall of Enron, said that Mr Brown and other G7 finance ministers were told of the "canary in the coal mine" but chose to carry on regardless.


At a closed session at the US Treasury in April 2007, G7 finance ministers were warned that banks were holding massive loans that could never be repaid. Mr Chanos told a BBC Radio 4 documentary: "We were completely and officially ignored." ."

Maybe David Cameron and George Osborne could start the new session of parliament by pointing out yet another "Brownie".

The financial crash was foreseeable, you can find plenty of articles on this blog for a start. When people started to live beyond their means and rely on the increasing value of their house via equity release etc. then alarm bells should have started to ring. However Gordon Brown and Tony Blair needed to give the impression of continued prosperity ahead of the 2005 general election. In effect they were buying votes, it's just a shame that it was on the back of increasing debt and the resulting near bankrupting of the UK.

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