Political Thoughts - the magazine

I sold all of my shares in the summer of 2007 on fears of the sub-prime crisis. I am still irritated because the FTSE rose a further 700 points from August and peaked in October 2007. The fear of sub-prime risk was sufficient in mid 2007 to make me sell so why are so many journalists saying that no-one could have foreseen the crisis? The subprime crisis "hit" in the UK in February 2008 with the Nationalisation of Northern Rock (BBC 2008) and FTSE shares started to nosedive after May 2008. So who foresaw the crisis? On February 21st 2007 Business Week warned of a spread in the risks associated with sub-prime repayment failures to the financial system in general ( Business Week article ) The Economist magazine, perhaps the most influential economics journal, ran an article every few days on the coming storm throughout 2007 (A list of a few of the articles is appended) On 9th August 2007 Business Week reported that the subprime crisis was going global (See Business Week artic...

The British electorate (2008) have been told that Britain has little in the way of National Debt and is well placed to ride out the coming recession. The currency markets have taken a different view. Why? The Organisation for Economic Cooperation and Development (OECD 2006) gives figures for National Debt that show that the UK had a Gross National Debt that was around 50% of GDP in 2008 before the Credit Crunch. However, the UK government differs from some of the other OECD countries because it does not declare the most important source of debt: public pensions. Government liability to service public pensions now stands at over £1000,000,000,000, yes £1 trillion (Institute of Economic Affairs 2006) If the pension liabilities of the UK government and other undeclared debts such as the Public Finance Initiative are added to their declared liabilities then UK debt is around 120% of GDP. This is second only to Japan amongst the large global economies. However, Japan has a huge ...