Gordon Brown says: London is not 'Reykjavik on the Thames'

[arjay]

From The Times
February 1, 2009

Gordon Brown says: London is not 'Reykjavik on the Thames'
David Smith at Davos

GORDON Brown mounted a spirited defence of his government’s economic record at the World Economic Forum in Davos yesterday, pointing to the country’s low inflation, low interest rates and low public debt.

He dismissed suggestions that London was “Reykjavik on the Thames” and rejected the comments of Jim Rogers, the investor, who warned a few days ago Britain was finished.

“You’re not going to build your policy around the remarks of self-interested speculators,” the prime minister said.

Brown refused to say when he thought the global economy would pull out of recession, saying it was dependent on international co-operation and, in particular, the G20 summit on April 2 in London. He said it was important to avoid financial protectionism. Other business leaders and policymakers at Davos warned that economic recovery was unlikely before the end of the year.

Brown’s comments come as the Bank of England prepares to cut interest rates to a record low this week. The Bank’s monetary policy committee (MPC), which has cut rates from 5% to 1.5% since October, is expected by the City to reduce them further, to 1%, this week.

This would mark a new low for rates in the Bank’s 315-year history, and some analysts think it will go further.

Michael Saunders, an economist with Citigroup, predicted a reduction to 0.5% on the back of new gloomy forecasts from the Bank, set to be published in its quarterly inflation report later this month.

However, the “shadow” MPC, which meets under the auspices of the Institute of Economic Affairs, believes rates have fallen far enough and the Bank should concentrate on other “unconventional” measures to boost the money supply.

For the second successive month, the shadow MPC has voted 6-3 to leave rates on hold, while calling for the Bank to introduce so-called quantitative easing. The majority on the committee said further rate cuts were futile because the key issue was the supply of money, not its price.

Hope was expressed at Davos that the world economy could pick up by the year’s end.

John Lipsky of the IMF said: “The economic news is going to be bad for a while, but we believe we can return the global economy to growth by the end of this year and towards trend growth during next year.”

http://business.timesonline.co.uk/tol/b ... 627301.ece

[westerby]

From The Times
February 1, 2009

Gordon Brown says: London is not 'Reykjavik on the Thames'
David Smith at Davos

GORDON Brown mounted a spirited defence of his government’s economic record at the World Economic Forum in Davos yesterday, pointing to the country’s low inflation, low interest rates and low public debt.

He dismissed suggestions that London was “Reykjavik on the Thames” and rejected the comments of Jim Rogers, the investor, who warned a few days ago Britain was finished.

“You’re not going to build your policy around the remarks of self-interested speculators,” the prime minister said.

http://business.timesonline.co.uk/tol/b ... 627301.ece

Yeah, reminds me of when Joe Kennedy, US ambassador to the UK, told Roosevelt that Britain was finished in 1940. Rogers lives in Asia and now invests in stock linked to the Chinese economy. He believes that London as a World financial centre is dead and that it should move East, so it's in his interests to talk down the British economy. I wonder if he realises what damage he can cause just by opening his trap.

[arjay]

Also, a lot of these pundits and financial advisors/experts will often talk something up or down because it suits them or suits their investment portfolio.

What better thing to do, if you have just bought into a share when it is at a very low price, to then announce that you think it is oversold, and due to rise, thus encouraging others to buy into it and further drive the price up!

I couldn't believe how ridiculously low Lloyds and Barclays shares had got a week or so back, and so bought a few (1200 and 1000) at 45p and 52p respectively. Within the week they had more than doubled in value, and are still too low IMHO. So please do buy some!!

That doesn't alter the fact that a few months previously I had had similar thoughts and bought some then at about 4 times the price they are now!! But I do take the view that pretty much everything is too low currently and will recover. I just have to sit it out/stay the ride!! :-"

[westerby]

I did the same, I bought Barclays shares the other week and then watched them go up after the open letter was published by Barclays. I'll hold onto them because I think BARC.L seem more responsible in how they handle their affairs than other Banks.

[arjay]

There's more reading here:-

http://business.timesonline.co.uk/tol/b ... 627450.ece

[westerby]

There's more reading here:-

http://business.timesonline.co.uk/tol/b ... 627450.ece

Yeah, some valid points in there. John Monks, for example, indicating that it would be easier for a global corporation to make workers redundant in UK than it would be in France or Germany where workers are better protected.

[JimboPSM]

Jim Rogers is a former business partner of George Soros.

George Soros made an extremely large amount of money in 1992 when the UK was forced to abandon the ERM and the pound fell approx 30%.

As I pointed out on another thread George Soros had recently been shorting the pound against the USD to 1.40.

Investors? Financial gurus? Speculators? Manipulators? - draw your own conclusions as to whether one or more of these descriptions fit the activities of these gentlemen.

The lessons of history........

[izzix]

selling the pound short by hedge funds and soros has been in there as well .

[westerby]

Investors? Financial gurus? Speculators? Manipulators? - draw your own conclusions as to whether one or more of these descriptions fit the activities of these gentlemen.

I'm thinking along the lines of repugnant, immoral, reptilian, you get the picture.