Reply to: Economic recovery.

[petergriffin]

Well it helps to have central banks shovelling money in the direction of the asset-wealthy

Once you start (1971, the Nixon shock) you cannot stop. If you thing fractional reserve lending is acceptable (I don't) then you have no other option than throwing money at the super rich, and then keep re-inflating the bubble once the previous pops.

Everybody blames Gordon Brown for poking a massive hole in Britain's finances but what Osborne is doing is even worse, the difference is he has set up a time bomb that he hopes will blow after he's left the office. It usually takes 18-24 months for the plebs to realize that the peak has been reached. He might well make it.

[BrilloPad]

Well it helps to have central banks shovelling money in the direction of the asset-wealthy, and holding down interest rates. It helps more than just a little.

Indeed. And what you are about to go bust claim to be too important to fail. Heads they win, tails we lose.

[Zero Liability]

Do you mean in absolute or relative terms?

The gap between rich and poor has never been wider. And its getting bigger.

Well it helps to have central banks shovelling money in the direction of the asset-wealthy, and holding down interest rates. It helps more than just a little.

[bobspud]

While I agree with your sentiments, owning shares means that they do own the company, by definition.

If the shareholders want their numbers (legally) arranged in a certain way, to publicly comment on the business, and all the other stuff that you don't like, who is empowered to stop them?

Complaining is one thing, having a realistic way of doing something about it is another.

The ownership part is dependent on the number of shares owned however most sensible companies keep their external holdings below 49% so that there is a sensible controlling interest. Making the 49% of shares effectively working capital with a right to share profits (when the board sees fit)
The structures of the Non - Executive Board and Executive Directors are there to run the company not some twat like Charles Icahn that runs around threatening to dump stock if he does not get his way. The clue is in the name non-execs make recommendations, The execs are there to execute and run the company on a day to day basis. Shareholders get the job of shut up and let the board run the company with the option to vote out the board at an AGM or sell the shares if they are not happy.

The practices that have gone on in the last decade or two where banks loan money to the company only for it to then give that money away as dividends to the investors can dump the stocks and profit while the company is left holding a debt for eternity should be a criminal offence.

The recovery should be about searching for new value and gaining new customers through better products and services.

[Doggy Styles]

No they own a share. The share has annual voting and or dividend rights. They should not be wading around mouthing off in the press like some of the yanks do on a regular basis. The companies need to get back to creating value first with profit driven from that motive rather than wanking around with balance sheet tricks so that they can show profits. It took Apple many years to get their product set sorted but now all they have are a bunch of investors baying for growth and missing the point that big products don't turn up just because its quarter end.

While I agree with your sentiments, owning shares means that they do own the company, by definition.

If the shareholders want their numbers (legally) arranged in a certain way, to publicly comment on the business, and all the other stuff that you don't like, who is empowered to stop them?

Complaining is one thing, having a realistic way of doing something about it is another.

[AtW]

Economic recovery is not yet secure, says George Osborne - Telegraph

Businesses are “not investing enough” and “not exporting enough” and the nation risks becoming too reliant on the City of London, the Chancellor will say.

Banks are too busy lending money for mortgages. Businesses cannot compete against overseas goods when they have way too much red tape to go through.

If he really wanted businesses to export he'd provide with some corp tax cut for revenues that came from abroad, especially outside of EU.

[bobspud]

Who will tell the investors to STFU? The investors own the company.

No they own a share. The share has annual voting and or dividend rights. They should not be wading around mouthing off in the press like some of the yanks do on a regular basis. The companies need to get back to creating value first with profit driven from that motive rather than wanking around with balance sheet tricks so that they can show profits. It took Apple many years to get their product set sorted but now all they have are a bunch of investors baying for growth and missing the point that big products don't turn up just because its quarter end.

[Doggy Styles]

The trouble is businesses are locked in a death grip of having to care about what investors think.

We need a new paradigm where investors get told to STFU and vote with their feet or buy more stock. Once companies are more satisfied about being able to invest in their own growth instead of paying dividends we will be in a better place.

Who will tell the investors to STFU? The investors own the company.

[doodab]

Let's say the richest 0.1% of the population generates 90% of the GDP.

But that simply isn't true. They might provide 90% of the financial capital but in terms of adding value they do very little other than allocate it to whatever they believe will give them the best returns. It's this myopia as much as anything that has got us into the mess we're in.

[petergriffin]

Do you mean in absolute or relative terms?

The gap between rich and poor has never been wider. And its getting bigger.

And it will get even bigger. I am talking of the super rich.

Let's say the richest 0.1% of the population generates 90% of the GDP. If you are a Chancellor and have to, so to speak, "stimulate the economy", would you throw money at the 99.9% who contribute to the 10% or at the 0.1%?

To keep the bubble going more working and medium class will have to lose their job, their homes, become homeless or even commit suicide. And in this country the peasants don't have the balls to go out and protest like in Ukraine and Greece because they're too fat and drunk.

[BrilloPad]

Like I said before the poor have too much money.

I am sure that Goerge will find some other bubble to inflate before the gen el.

Do you mean in absolute or relative terms?

The gap between rich and poor has never been wider. And its getting bigger.

[BrilloPad]

The trouble is large companies have been hoarding cash for the last 5-6 years. The FTSE 100 have approaching £200bn in cash. Large American corporations (excluding financials) have approaching $2 TRILLION cash. If they're not going to spend it now, when are they? Is there still some financial apocalypse to come? Apple alone has $150bn which may never get spent as it's all offshore.

Quarterly or 6 monthly reporting creates a short term share price orientated view which doesn't help. Maybe the Keynesian way is the solution and we spend billions on infrastructure and housing (the UK could do with it) but look at the problems China is having now after an infrastructure and property bubble.

The only solution seems to be to have another world war for 4-5 years to stimulate demand.

Big companies are hoarding. Small companies are going to the wall.

[Ticktock]

2) ... convert their gold in cash ...
It's a matter of few years, if not months, before China will pursue option 2. Be ready.

So, you're saying buy shares in Cash4Gold now?

[petergriffin]

There are two possible scenario:

1) China insists in subsidizing their shadow banking system through financial repression, Chines government defaults, they can't buy US bonds, US goes belly up, the whole world goes belly up.

2) China stops subsidizing their shadow banking system, convert their gold in cash, US goes belly up, the Yuan becomes the world reserve currency.

It's a matter of few years, if not months, before China will pursue option 2. Be ready.

[edison]

Economic recovery is not yet secure, says George Osborne - Telegraph

Businesses are “not investing enough” and “not exporting enough” and the nation risks becoming too reliant on the City of London, the Chancellor will say.

Banks are too busy lending money for mortgages. Businesses cannot compete against overseas goods when they have way too much red tape to go through.

The trouble is large companies have been hoarding cash for the last 5-6 years. The FTSE 100 have approaching £200bn in cash. Large American corporations (excluding financials) have approaching $2 TRILLION cash. If they're not going to spend it now, when are they? Is there still some financial apocalypse to come? Apple alone has $150bn which may never get spent as it's all offshore.

Quarterly or 6 monthly reporting creates a short term share price orientated view which doesn't help. Maybe the Keynesian way is the solution and we spend billions on infrastructure and housing (the UK could do with it) but look at the problems China is having now after an infrastructure and property bubble.

The only solution seems to be to have another world war for 4-5 years to stimulate demand.