"They think it's all over..."

and I'd like to add," it is now" * , but sadly folks this is just the beginning.

Warning! this blog contains economics and politics!! (and a smidge of yarn)

13/10/08 the day that the UK govt.stepped in with £37bn and effectively nationalised 3 major banks RBOS, HBOS, Lloyds TSB with conditions requiring that the banks do not pay executive bonuses and focus on helping the man in the street and small businesses.

Cometh the man, cometh the hour~. Gordon Brown, the UK PM has taken a lot of flak over recent months as his detractors would have you believe that the financial crises are of his making and he should go and let others sort it out (whether it's another Labour PM or a Tory PM depends on who is talking.)

However in a bold move he has stabilised the ship and left the opposition with not much to say. Brown is an intelligent man and he thrives on dealing with complex problems with tons of minute detail (needed at the moment), he's not good at sound bytes, baby kissing (except his own) or rousing the public to a frenzy of adoration. (1997 Blair and family on the steps of No. 10).

As a people watcher, it was interesting to see the press conference that he gave with the the Chancellor, explaining what was being done and why: they stood tired, but unbowed, shoulders square and resolute but not hubristic, they spoke calmly and simply.

It was fascinating to see Cameron's ( and in Scotland, Salmond's) posture: saggy, loss of muscle tone in the face, at a loss for what to say. Now is not the time for orators (which Cameron is) but that time will come. The Tories and the SNP have to rethink their pitches to capture the public imagination again.

Scotland however has received a massive blow to its national psyche: getting a government bailout for banking is humiliating. What are the Scots good at? Engineering, science and being careful with money. In the past the SNP have claimed that Scotland could operate independently as well as other small countries like Norway, Finland and ... Iceland. Oops.

(I'm not Scottish although I live in Scotland. I love living here, it's a great place to raise the kids, the Scots are passionate about art, poetry and sport (lots of boxes being ticked here), they are generally tolerant of other cultures, they are interested in ideas, literature is highly valued. I support devolution but not independence.)

So, its not all over yet: the banks were overstretched and needed to be stabilised. If they weren't stabilised then the effects would be horrendous- many small to medium companies need to borrow regularly to pay the employees wages because the income stream for their products/services is uneven. If the banks are not lending then wages are not paid, people fall behind on their mortgages, small businesses go bust and an especially vicious circle develops. Governments have to step in to stop this, but then the financial sector needs to sort itself out to truly reflect its assets and not get overstretched.

Some jobs will be lost, the public needs to save more and spend less, the fat cats need to eat less oak smoked flaked tuna and have canned munchymeat like everyone else.

This all made for fascinating TV yesterday and that is always good for knitting. I put the embroidery detail on the Discworld square and now only to need to find some feet shaped buttons for it. I feel a need to read Pratchett's Making Money too, the man is so prophetic it's scary.

I knew I wouldn't be able to read only 1 Discworld book per month!


*from the late, great Kenneth Wolstenhulme the commentator on the 1966 World Cup final.
~ I can't find an agreed source for this, its often used in sporting commentaries but seems to be an amalgam of several other phrases.