Hedge funds which gambled on how much money would be recovered from the bankrupt carcass of Lehman Brothers are set to make hundreds of millions of pounds from a full payout to creditors of the European arm.
Five years on from the collapse, payouts to Lehman's creditors in Europe are on course to top 100 percent sometime next year, following a recovery of assets by administrators and legal victories over other parts of the ex-U.S. investment bank.
The collapse of Lehman Brothers on September 15, 2008, plunged the global financial system into chaos. Its European arm, headquartered in London, was the largest and most complex part of the group because it was a hub for trading and investments, spanning asset classes and dozens of countries.
Closing down the business and trying to recover assets for creditors has involved unwinding thousands of derivatives contracts and share trades and figuring out who owns what, making it the most complex bankruptcy of a single entity ever. Original creditors, including hedge funds which had Lehman as their prime broker, banks, and trade suppliers such as a photocopying or legal firms, may not all be winners, however.
Thursday, 19 September 2013
Wednesday, 18 September 2013
No split here!
The Lib Dem conference is living up to the title of what next!
Rumours abound of a leadership challenge and there is no shortage of media rhetoric concerning Nick Clegg’s current position, however, there does not appear to be anyone who wants to take the place!!
How on earth can there be a leadership challenge if there are no upcoming leaders waiting in the wings? There are some nice juicy rumblings most notably between Vince Cable and Danny Alexander as their tug of war as the media puts it gets even hotter. If either of these two are approached on the subject of leadership, they become rather distant.
So who is waiting in the wings?
Rumours abound of a leadership challenge and there is no shortage of media rhetoric concerning Nick Clegg’s current position, however, there does not appear to be anyone who wants to take the place!!
How on earth can there be a leadership challenge if there are no upcoming leaders waiting in the wings? There are some nice juicy rumblings most notably between Vince Cable and Danny Alexander as their tug of war as the media puts it gets even hotter. If either of these two are approached on the subject of leadership, they become rather distant.
So who is waiting in the wings?
Tuesday, 17 September 2013
What the voters want!
Our political class actively want to be out of step with public opinion, and are sorry they accurately represented it the other day. A survey of Tory MPs revealed that many actually want to vote again on attacking Syria, so that they can authorise this lunacy, even if it is only an incredibly small pinprick with no discernible purpose. And it is not just the Tories. Ed Balls, the Shadow Chancellor, also wants Another Chance To Bomb.
He confided to an elite TV show: ‘Our jaws dropped when the Prime Minister suddenly took the idea of military action right off the table. I wasn’t expecting that, nor was Ed Miliband. If David Cameron is going to put that back on the table, we will look at that.’
Well, if they so fervently want not to represent us, I will say it again.
We do not have to elect these people. I have reluctantly come round the view that we should bring in compulsory voting in this country, provided every ballot paper contains a slot at the top marked ‘None of the below’. And if the numbers voting ‘None of the below’ exceed 30 per cent in any constituency, nobody is elected for that seat. Parliament would get a lot smaller. MPs would become a lot more interested in us and in what we think.
He confided to an elite TV show: ‘Our jaws dropped when the Prime Minister suddenly took the idea of military action right off the table. I wasn’t expecting that, nor was Ed Miliband. If David Cameron is going to put that back on the table, we will look at that.’
Well, if they so fervently want not to represent us, I will say it again.
We do not have to elect these people. I have reluctantly come round the view that we should bring in compulsory voting in this country, provided every ballot paper contains a slot at the top marked ‘None of the below’. And if the numbers voting ‘None of the below’ exceed 30 per cent in any constituency, nobody is elected for that seat. Parliament would get a lot smaller. MPs would become a lot more interested in us and in what we think.
Monday, 16 September 2013
The Liberal Democrats
As you know the conference season has started and these ^^ people do not know whether they are coming or going.
Half of them are saying the worst thing they have done over the last three years is join the Tories, half of them are saying it is the best thing since sliced bread!
Surely they should gather up all the successful polices that have been ratified into statues over the last three years that were a deliberate act on behalf of the Lib Dems and promote them?
I am curious what the keynote speech is going to be about.
Half of them are saying the worst thing they have done over the last three years is join the Tories, half of them are saying it is the best thing since sliced bread!
Surely they should gather up all the successful polices that have been ratified into statues over the last three years that were a deliberate act on behalf of the Lib Dems and promote them?
I am curious what the keynote speech is going to be about.
Friday, 13 September 2013
erm, why no news?
The Davos economic forum is held every winter in the Swiss Alps, I have just found out about the summer one which is held in China.
The biggest surprise at this week’s Dalian forum was the East-West divergence of opinion on the economic outlook, both in the months ahead and in the very long term. Western economists mostly believe that developing countries in general, and China in particular, are threatened by serious financial crises as U.S. monetary policy begins to be tightened, probably as soon as the Federal Reserve Board’s meeting next week. The consensus view is that emerging economies have invested and borrowed too much, taking advantage of the Fed’s easy money and will now face painful de-leveraging similar to what Europe and the U.S. experienced five years ago. This de-leveraging means, in turn, that the glory days for developing economies are probably over, and most of these countries, perhaps including China, may never escape the “middle-income trap” that has prevented further progress in many developing economies.
Surprisingly, however, the Chinese economists in Shenzhen seemed largely unperturbed by the Western warnings, preferring to concentrate on environmental, governance and public health issues and the details of financial market design. In Dalian, too, the sense of financial foreboding was strangely absent, as speakers from other developing countries agreed with their Chinese colleagues that higher priorities than debt management were structural issues such as demographics and education, governance and corruption, bank regulation and competition, energy and urban design.
If China can manage and control its way to ever-greater prosperity, despite the sudden outbreak of skepticism among Western analysts, the same will probably be true of many other emerging economies, which increasingly look to China, instead of the West, for support and guidance.
The biggest surprise at this week’s Dalian forum was the East-West divergence of opinion on the economic outlook, both in the months ahead and in the very long term. Western economists mostly believe that developing countries in general, and China in particular, are threatened by serious financial crises as U.S. monetary policy begins to be tightened, probably as soon as the Federal Reserve Board’s meeting next week. The consensus view is that emerging economies have invested and borrowed too much, taking advantage of the Fed’s easy money and will now face painful de-leveraging similar to what Europe and the U.S. experienced five years ago. This de-leveraging means, in turn, that the glory days for developing economies are probably over, and most of these countries, perhaps including China, may never escape the “middle-income trap” that has prevented further progress in many developing economies.
Surprisingly, however, the Chinese economists in Shenzhen seemed largely unperturbed by the Western warnings, preferring to concentrate on environmental, governance and public health issues and the details of financial market design. In Dalian, too, the sense of financial foreboding was strangely absent, as speakers from other developing countries agreed with their Chinese colleagues that higher priorities than debt management were structural issues such as demographics and education, governance and corruption, bank regulation and competition, energy and urban design.
If China can manage and control its way to ever-greater prosperity, despite the sudden outbreak of skepticism among Western analysts, the same will probably be true of many other emerging economies, which increasingly look to China, instead of the West, for support and guidance.
Thursday, 12 September 2013
Economics of austerity
Paced by housing and energy, the U.K. recovery is likely to accelerate this year and budget deficit projections have declined as well. Unfortunately the European economy remains stagnant though there is some evidence that 'stimulative' policies are gaining traction in Japan. Around the world the idea of “austerity” is fiercely debated. This all makes a reconsideration of the principles that should guide fiscal policy opportune. This requires recognising that policies need to be set in light of economic circumstances.
A prudent government must over time seek to balance spending and revenue collection in a way that assures the sustainability of debts. To do otherwise leads to instability and needlessly slow growth and courts default and economic catastrophe. Equally, however, responsible fiscal policy requires recognizing that when economies are weak and movements in interest rates are constrained as has been the case in much of the industrial world in recent years changes in fiscal policy will have significant effects on economic activity that in turn will affect revenue collections and social support expenditures. In such circumstances, aggressive efforts to rapidly reduce budget deficits may actually backfire, as a contracting economy offsets any direct benefits.
It is a truism that deficit finance of government activity is not an alternative to tax finance or to supporting one form of spending by cutting back on another. It is only a means of deferring payment for government spending and, of course, because of interest on the debt, increasing the burden on taxpayers. A household or business cannot indefinitely increase its debt relative to its income without becoming insolvent, and neither can a government. There is no viable permanent option of spending without raising commensurate revenue.
A prudent government must over time seek to balance spending and revenue collection in a way that assures the sustainability of debts. To do otherwise leads to instability and needlessly slow growth and courts default and economic catastrophe. Equally, however, responsible fiscal policy requires recognizing that when economies are weak and movements in interest rates are constrained as has been the case in much of the industrial world in recent years changes in fiscal policy will have significant effects on economic activity that in turn will affect revenue collections and social support expenditures. In such circumstances, aggressive efforts to rapidly reduce budget deficits may actually backfire, as a contracting economy offsets any direct benefits.
It is a truism that deficit finance of government activity is not an alternative to tax finance or to supporting one form of spending by cutting back on another. It is only a means of deferring payment for government spending and, of course, because of interest on the debt, increasing the burden on taxpayers. A household or business cannot indefinitely increase its debt relative to its income without becoming insolvent, and neither can a government. There is no viable permanent option of spending without raising commensurate revenue.
Wednesday, 11 September 2013
Let the economic arguments begin...
George Osborne has just said "I told you so".
What the speech gave was higher than predicted growth now proved, he claimed, that the cuts did not strangle the recovery as Labour had said they would. Next he insisted that the recovery was not based on "the wrong sort of growth" that is, a return to spiralling house prices and consumer debt. Finally he argued that it was only by sticking to current economic policies that living standards will be raised.
What George Osborne doesn't want you to know about the economy:-
1. This is still the slowest recovery for more than a century
2. The economy is 2.9% smaller than before the crash [the US is 4.5% larger]
3. Unemployment hasn't fallen for six months and underemployment is at a near-record high
4. His deficit reduction plan failed and he's forecast to borrow £245bn more
5. Most people are still getting poorer and that won't change soon
What the speech gave was higher than predicted growth now proved, he claimed, that the cuts did not strangle the recovery as Labour had said they would. Next he insisted that the recovery was not based on "the wrong sort of growth" that is, a return to spiralling house prices and consumer debt. Finally he argued that it was only by sticking to current economic policies that living standards will be raised.
What George Osborne doesn't want you to know about the economy:-
1. This is still the slowest recovery for more than a century
2. The economy is 2.9% smaller than before the crash [the US is 4.5% larger]
3. Unemployment hasn't fallen for six months and underemployment is at a near-record high
4. His deficit reduction plan failed and he's forecast to borrow £245bn more
5. Most people are still getting poorer and that won't change soon
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