Armageddon outa here
Back from a week's admin leave thinking maybe it had all been a terrible dream.
Surely we can't really be in the Second Great Depression. Surely our High Street banks can't really be bust. And surely even this government can't really have hocked my unborn grandchildren to the Chinese.
I'm rather afraid it can. And I'm rather afraid this ain't no dream.
In fact, while I've off been administering, things have taken a further sickening lurch to the bad - US GDP has plunged even further, stocks, bonds, and property have all tanked again, and taxpayers have been forced to swallow yet more hundreds of billions of toxic debt.
Things are now so nightmarish, the head of the Audit Commission - a senior official with unfettered access to The Secret Files - has blurted out that "the Armageddon scenario... begins to look a distinct possibility".
The Armageddon scenario. Blimey. According to Wiki, that particular scenario comprises Red Giants, White Dwarfs, global pandemics, galactic meteorites, and invasion by little green men from outer space.
And now we know this is all in The Secret Files! So HTF is the government preparing?
Insurance. Yes, that's the key. If we could just get some Armageddon insurance from somewhere, we could all rest easy in our beds.
And the good news is that insurance is precisely what the government is arranging.
The bad news is that instead of arranging Armageddon insurance for us, they've somehow been bounced into making us provide it to the banks. Doh!
And what a shocking deal we taxpayers are getting. In the case of RBS, we're insuring £325bn of toxic assets for a laughable fee of 2% (less than it costs to insure your car ex-NCD, and only 0.3% more than it costs to insure a default by the HMG).
So how much will we lose?
Nobody knows of course. "Bankers and analysts close to the situation" reportedly say £50bn. However, Wat Tylers some distance from the situation look at the fact that these £325bn of toxic assets have been specially selected by the insured, and that we taxpayers bear 90% of the losses beyond the first £19.5m, and say we're in the hole for the thick end of £275bn.
Enter Armageddon. Because £275bn is A Lot of Money, and what the head of the Audit Commission is worrying about is the Armageddon scenario in which HMG borrows so much "there will be insufficient lenders to match the planned level of borrowing". It's something we've been fretting about for months, and we are drifting closer every single day.
Next up is Lloyds. They too have a pile of busted assets they want to shuffle off onto us, only they haven't yet been able to agree their "insurance" deal with HMG. Which presumably means they want even sweeter terms than RBS got.
Fair enough you might be thinking - they're only in trouble because clothead Brown strongarmed them into buying busted HBOS. But they could have said no: they could have looked at the books first.
They didn't, and banking analysts reckon the old HBOS corporate loan book is even more toxic than the fiscal legacy Brown has already amassed for us. In the words of one, "we would avoid this stock".
Absolutely spot on.
Our leaders only seem to have one policy, which is to mortgage more and more of our futures on bailing out the banks. We are sleepwalking straight into The Scenario.
PS Tyler watched the Wells/Korda Things to Come on a very old black and white TV some time around 1963. It scared the living crap out of him. Not for what was on the screen, but more for what it said about our inability to stop predictable disasters. The film was made in 1936, three years before the balloon went up. Clearly, people could see these ghastly things to come. And yet they were unable to stop them. They came anyway.
Appeasement... wishful thinking... failure to confront... attempting to borrow your way out of a collapsed debt bubble rather than facing up to a necessary and inevitable structural adjustment... stoking up even worse horrors to come... kind of idea.