Weekly international investment round up to 14 October 2008
An increasingly important figure emerging from the current financial crisis is Gordon Brown.
The British Prime Minister’s bail out plan involves a huge injection of liquidity into the banking system, a massive cash boost to prop up lending between banks and incentives to kick-start investments and to get loans to businesses and for mortgages moving again. His strategy has been rigorously promoted on both side of the Atlantic with Europe and America now implementing similar measures it turn offering the battered investment markets a joined-up approach by the world’s richest nations at long last. However, in an attempt to keep the beleaguered capitalists happy the dreaded ‘n’ word (nationalisation) is desperately trying to be avoided.
Wisely, the canny Scot was trying to play down his role by stating “No one country can solve a global problem on its own. We are working together in Europe and across the Atlantic and around the world.” But as America looked on, Mr Brown was implementing his plans to take a majority stake in some of Britain’s biggest banks namely the Royal Bank of Scotland, Lloyds-TSB and HBOS under a multi billion plan to bail out the British banking industry.
James Gordon Brown was the second son of the Reverend Dr John Ebenezer Brown, a Church of Scotland minister, he was raised in the Scotland’s Firth of Forth area which is the region he represents today as a Labour MP.
This gifted intellect is often portrayed by the British press as a ‘dour Scot’ who has trouble connecting with the public and this media image is unfortunately not assisted by his disability. Mr Brown was left blind in one eye after a rugby accident at the age of 16 and has only restricted vision in his remaining eye with reports saying this is also getting worse.
Obsessed by politics from an early age his anti-establishment instincts saw him controversially elected Rector of his University at the age of 20 where he exposed their pro-apartheid investments in South Africa before writing ‘The Red Paper for Scotland’ in 1975 in which he called for “a positive commitment to creating a socialist society”. A strained 10 year tenure as Chancellor to Tony Blair’s PM was ended last year when he claimed the top job in British politics.
The markets reacted positively at the beginning of this week to the resolute global banking action turning the broker’s screens into a sea of green for the first time in what seems to be an eternity. Echoing Gordon Brown’s lead the American government is likely to take major equity stakes in several of their banks but again, don’t mention the ‘n’ word!
Those British banks accepting Mr Brown’s help will have to agree for the government having a say in how they are run and that their executives see their excessive bonuses limited or removed altogether.
Over recent times the world and in particular its financial systems has completely changed. In Britain, ‘Thatcherism’ is now officially dead, slain by Brown’s new-age form of socialism.
Mark Lamb is Director of FPC Investment Consultants who are Independent Financial Advisers and regulated by the MFSA to provide investment services under the investment services act 1994. For further details please contact Mark Lamb, by email on email@example.com by phone on 21318008 or through FPC’s website www.fpcmalta.com
This article does not intend to give investment advice and its contents should not be construed as such. Information in this article has been obtained from various public sources and is given by way of information only. Readers are always encouraged to seek independent financial advice before making any investment decision.