Saturday, 11 October 2008

Meltdown

The world financial system is teetering on the 'brink of systemic meltdown', Dominique Strauss-Kahn, the head of the International Monetary Fund (IMF) has warned in Washington. The usefulness of the IMF has declined in recent times, with Turkey its only major creditor, but now it is ready to lend to countries in difficulties, not least Iceland. IMF staff are rumoured to be already there, just as they came to London in the famous crisis of 1976.

Britain does seem to be making some headway in its talks with Reykjavik. The people of Iceland are not known for their ready smiles, but Icelandic civil servants looked particularly grim faced as they faced their British colleagues across the table in what looked like an understandably tense meeting.

According to a report I have just heard on Radio Scilly Iceland's prime minister intends to sue Gordon Brown over the use of anti-terrorist legislation to seize Icelandic assets in Britain. I am not a lawyer, but I think that the legislation is broadly written and could be applied in this case. As a political weapon it was one of the few that Britain had available for use against the wily Icelanders. Whether it was morally justifiable is a matter for debate.

However, it does seem that personal depositors will get their money back - eventually. In the meantime the fact that people cannot get access to their accounts is gumming up the housing market even more as Icesave accounts had been used to store deposits.

There is also a real problem for a number of charities who put money into the Northern Atlantic (they might as well have done). Prominent among these is the Cats Protection League and I have a personal interest as there my wife is a fund raiser for the local branch. One thing I have discovered at their coffee mornings is that you musn't mention dogs or the temperature will drop several degree and the word 'doggist' will be heard.

Already there have been emotional appeals on television for the 'government', i.e., the taxpayer, to bail out these charities. As far as I can tell, none of them is any immediate danger and this might be a situation where the Charities Aid Foundation could step in.

Another interesting sight was British entrepreneur Philip Green having his cover blown in Reykjavik, despite having used the discreet second airport favoured by the country's wealthy (some of whom have apparently made off to the Cayman Islands). Green is incredibly rich because he and his family own stores like Bhs privately and do not have to pay anyone a dividend. Hence, he is hoping to hoover up some of the substantial retail assets in Britain owned by Icelandic interests. If you have some money, you can really make a killing at the moment.

It's not all bad. It's been a lovely weekend weather wise. Dave Pender, whom I regard as a minor cult figure, was really rocking on Radio Scilly last night, in part because he was going to a party at 9 p.m. and promising to 'paint Hugh Town'. Apart from his classic 'Are you rocking, St.Agnes?' call (a bit doubtful as I think there are 54 people on St. Agnes and many of them elderly), he had a new cry of 'Bring it on St. Mary's.'

A trivia question: what has happened on St. Agnes that, as far as I know, is unique in British politics and which I included in a book I once wrote?

The Charities Aid Foundation is here: Charities

Dave Pender broadcasts on Radio Scilly from 6 to 8 on Saturdays, unless he has an off island disco engagement (he is reputedly king of the Five Islands disco scene). Radio Scilly has a number of excellent programmes, including Steve Watt's discussions of popular music, and you see the schedule and listen on online here:
Radio Scilly

Dave Pender's personal web site is here: Dave

2 comments:

OT said...

I see that you are getting a 5 per cent pay rise - it's an ill wind ...

Wyn Grant said...

A few universities are not paying it, some will certainly have to lay off staff. And they will not be afford any pay increase next year.