Financial Update Sun 18th January

The UK Government are spending the weekend finalising a plan to underwrite by insurance Bank lending. Since some Banks were bailed out they have been slow to lend, this being very serious for Companies who legitimately use loans for working capital. It is unlikely there is anyway a great deal of need for loans in retail loans as most people are reducing leverage. The Markets are very wary of Bank Stocks and there have been big falls. The VAT reduction seems to have had little effect and the Bank of England rate reductions are largely discounted now, although they do of course adversely affect many savers and the value of Stirling. The situation is still not really under control, various methods are in use but the system still slides. Part of this is that values of "toxic assets" is just not known. This causes worries that some are hidden. The main problem is that all these decisions have a political component, and may thus not what the Banks themselves would do. Unless a "bottom" to markets is found this situation will continue or get worse

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Car makers in trouble

General Motors, Chrysler and Ford in the US are in trouble due to the global financial situation and lack of demand. The same is true of many other car makers worldwide. In China there are several makers of innovative in production electric cars. These would welcome collaboration with other makers either by production under license, or by partnership. Both alternatives would offer new employment to any who have lost or are losing their jobs in these troubled companies. Do you think GM and the others should approach these Chinese Companies to their mutual advantage?

Gaza Situation

These of course are terrible events. But there is one question that needs to be asked. Israel of course is armed and resupplied by the US. In the first Gulf War one weapons system was used to destroy incoming Iraqi missiles. The missiles sent by Hamas into Israel are relatively old fashioned slow and short range. The question is: were these weapon systems offered by the US to Israel, and if so were they declined by them. If the latter is true there is a hidden agenda operating on the part of Israel.