A Happy and Prosperous Year for 2009!!

A year ago I sent the same hackneyed message to my readers in cyberspace not realising that 2008 would be a devastating year for equity and property holders pretty much everywhere. The FTSE 100 index is down over 30 pct and this has led to similar losses in UK personal pension plans. This would be exacerbated if investors held and did not get out in time bank stocks such as Bradford & Bingley, Royal Bank of Scotland and Halifax (HBOS). One of the saddest experiences was to see Alliance and Leicester throwing in the towel and deciding to go for self-immolation with the bid from Banco Santander. The Spanish bank might have built up some favours with the British government but its UK subsidiary Abbey is often cited for poor performance in the personal finance pages of the British press on Saturdays.
However, Banco Santander did act decisively and did not mess about. From what I saw about the demise of Bradford and Bingley, the Spanish bank did help out the British financial authorities by quickly agreeing to acquire the retail deposit and branch side of the former building society.
Our premier Gordon Brown supposedly rescued the world's financial system. However, I don't think he used the breathing space after the collapse of Northern Rock up to the nationalisation of Royal Bank of Scotland to shore up the financial system. You got the impression that Gordon Brown and UK Chancellor Alistair Darling were more concerned about being bamboozled by Richard Branson than mitigating the cost of the Northern Rock bail-out to the taxpayer. As it is the UK Treasury nominally controls over half of the mortgage lending but the banks are only willing to lend on very high deposits.
Brown and Darling should be praised for rescuing RBS and HBOS, who were tellingly both led by non-bankers. Unfortunately, both banks might end up fully nationalised if the terrifying forecasts about their property lending are realised.
The credit crunch has produced some more hilarious moments. A lot of rich people in the United States have taken a hit with the Madoff scandal. Here, in the UK Sir Tom Hunter can't really be a billionaire if some of his retail interests go into administration. A lot of British property companies are looking at the abyss yet again. Lending to them was not obviously sub-prime but in 2009 it will be interesting to see where companies such as British Land might end up.
www.searchaccountant.co.uk
The Germans and the IMF have publicly criticised Brown's economic policies. Yet the Bank of England has engineered a fall in sterling and sharply cut interest rates. Spain and Italy must only look with envy. Greece seems to be a failed state. Yet Spanish and Italian banks benefited from not being allowed to invest in esoteric instruments such as SIVs, which have so hit Barclays. Unfortunately, for the European Union when the moment of truth came, the member countries have followed their own rescue policies. The Germans are concerned about picking up the tab for any EU package and they don't seem to be as enthusiastic about the European ideal.
A personal fact finding mission to Deutschland to find out if this actually the case is off the agenda at the moment with the current level of the pound to the
euro.
In the past few years following our current account deficit, European companies picked off British firms in areas such as chemicals, industrial gases and building materials. I supposed these investors wished they had waited and could have picked up UK PLC for less.