The 'OCCUPY' movement; Why so much dedication by protestors, but little progress ?

First of all I would like to make clear that 'Anti-Crisis Economics' or 'X-Economics' is neither activist or protest group.

However, the information currently made available through these blogs will shortly create enough understanding of the current financial system, the problems within it and the proposals of how financial businesses should be working. ......One of the problems of the Occupy Movement is that ..............

1...........The public do not quite know what they have been protesting about.
Much of this is down to the press,.....for a number of reasons.

         A)A lot of the press do not understand what the problems with the financial system are.
             They have qualifications relating to journalism but may be finance is not their thing....

         B)Many national news papers have a political view which protects capitalism as their standard procedure regardless of the problems that unregulated capitalism has on everyone throughout the world.
This can also be said for TV companies.

Most of the news paper articles I have seen on capitalism protests seem to come up with this same phrase; 'Its about corporate greed.' This phrase is repeated again and again on different occasions which in my mind makes it look like the real reasons given by protesters are not reaching the news papers or TV screens. This one has probably been substituted for more detailed explanations which the news paper owner may prefer to keep from the public for reasons which may affect a corporation that owns a news paper (or TV company), or may be has been influenced by a wealthy individual from a large business or a political figure.

2............The protesters in many cases will not know the extent of the problems in the financial world or specifically what they are. However, there are plenty of good reasons for them not to know these details....

- You will not find what the banks do today in any degree course or at any other level. You will get a kind of image of banking that would fit into some kind of make believe world where the selfless financiers are bettering the world through their investment of our money.    I believe this to be for the simple reason that the banks do not want the world to know what they really do. The governments that are in control of education have their own reasons for what seems to be an eduction system that protects capitalism. The problem is that the kind of capitalism that is being protected is a destructive kind.

-Even qualifications in Economics are completely useless. I was going to study economics myself after leaving the finance industry only to find that economics barely recognises the existence of the stock markets and doesn't recognise the problems that banks and various types of investment can cause within the economy. Having worked within the stock markets I knew that the stock markets and the banks were a very influential force in economics ! After a lot of thought I decided a degree in Economics would be a complete waste of time as it would give a false image of what the real influences of economics really were.

-There are obviously plenty of books on banking and qualifications that go with them. The image of banking given in the books and portrayed by the education authorities is misleading. Ive read enough pages of these books to discover that they have gaping holes where question need answering, but these questions strangely go straight over the heads of the so called experts, who have no doubt got their degrees. The problem is , the degrees they have got will be as biased as the stuff they are writing!

 What I do on these blogs is give information about stock markets, banking and the influence on businesses and economics.............But all these books and banking courses are supposed to be on exactly the same subjects........I don't want to tell you whose wrong and who's right. Take a look at some banking books. Then take a good look at these blog posts.......Then make up your own mind..................

COMET IN ADMINISTRATION; INVESTORS TO BLAME?

Comet, the electrical retail store went into administration today.

There are a number of factors which contributed to this......

Many we hear about every day, in relation to other businesses which have suffered similarly.

The problem is the press and media are reporting a one sided explanation of the circumstances. The point of view which has been portrayed by the executives and may be financiers involved with these companies. This may be of a view that those involved may want to portray....................

In February 2012,  Comet was bought by private equity company, Hailey Holdings & Hailey Acquisitions in tandem with advisory private equity company OpCapita LLP for a token £2 ($3.23).

(You should note that;
Hailey Acquisitions was formed as recently as 2nd November 2011 and registered at Companies House in the U.K. ! There are no other companies under it's control other than Comet. The name may be a coincidence or may be not.)

The buyers received a £63 Million dowry payment from the seller. A dowry is basically a gift. Some may call it a bribe. This kind of thing should not need to go on. If this kind of thing went on in the stock markets it would be illegal. This is because it would be perceived as manipulation of the markets. If you don't think a  share is worth buying on it's face value, then you should not be encouraged to buy that share because the seller has slipped a few notes into your back pocket. In this particular episode, the amount going into the back pocket is a cool £63 Million ....Instead of a share in a company, it's a whole company... .............. It wouldn't be quite so bad if the money belonged to the seller, but it will be investors money that will be used for this gift incentive.  ....................... Those investors will obviously suffer as a result of this payment. The executives of Kesa Electricals, the business that owned Comet will however not be affected by the loss. In fact they will be charging their investors for their services, regardless of how badly their performance may be.

OpCapita is run by ex banker Henry Jackson. OpCapita has taken over just four businesses since it was formed including Comet. Of the four, two have gone into administration. The other company to go into administration was one of Britain's higher profile companies, MFI.

Although Hailey Holdings and OpCapita received the £63 Million dowry payment, they will not need to invest all of this in Comet as their investors are other investment companies. Their main investment is led by  Grey Bull Capital, an investment company based in London. Also investing were Elliot Advisers from the United States.....................................................

For the benefit of outsiders to this business, some of the things to note are as follows:-

Hailey Acquisitions was formed in November 2011. Just three months later, it was taking over one of the U.K.'s biggest retailers! ...................................If you have started, and currently run your  own business, this will be difficult to comprehend. ................................There is no sign of building up a reputation and a customer base............So how is it then that a business that has been formed so recently take over a high Street retailer of such importance to the U.K?  ....... ...................................  ..............................................................................to be continued....................

Mitt Romney ; This is the Wrong Man for President

I'm amazed by the support that this man has received, including one claim from Piers Morgan in a recent news paper article that "Mitt Romney may be the United States' cleanest politician ever. "With the information that has been available on this politician, I find it amazing the previous editor of the U.K.s Daily Mirror could come out with such a rediculous statement. My opinion of the British press was not very high to begin with, but has plummetted when a generally respected person can come out with a statement as ridulous as this. I have to say that I am highly suspicious that this has something to do with Piers Morgan's celebrity status in the States.

ALTERNET.COM, an American web site recently gave some more accurate details about Mitt Romney.

"Far from the respectable business man he claims to be, Romney has long engaged in horrific practices that mock American values."

"Republicans like to paint Romney as an entrepeneur whose activities at Bain Capital have benefited Americans."

"Romney has spent his career offshoring and outsourcing American production processes and associated jobs to countries like China where human labour is valued in the market at a very low wage rate."

"The sub-human conditions at these production facilities represent things that Americans are strongly opposed to. Child abuse, squalor, forced over time and peanuts for pay."

"A report recently released by the 'Institute for Global Labour and Human Rights' reveals that while Romney was deeply invested at a firm called 'Global Tech', low pay and horrific conditions were status quo at it's Chinese appliance factory. At this factory a fence topped with barbed wire encloses the workers and prevents outsiders from entering."

"From April through to August 2000, Romney and his 'Brookside Capital Partners Fund',an affiliate of Bain Capital, the company Romney formed- poured around $23 Million into the Global-Tech sweat shop in Dongguan, China. Among the defects outlined in the report were the following :-

"* Factory workers made 24 cents an hour in 1998 and less than 2$ a day. Wages in Global-Tech were less than 2% of average U.S. wages."

"* Whilst being CEO, Romney appears to have been un-interested in calling for improvements at the facility. Today the sweat shop is still a horror where starvation wages prevail and workers wrights are non-existent. Over crowded filthy dormitories, rotten food,routine 15-16 hour shifts. 105 to 112 hour weeks are the  norm."

"* The appliance factory has 800 student interns, 16 year olds forced to work repetetive exhausting 15-16 hour shifts on assembly lines with no over time pay."

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"On February 16 2012, Mitt Romney brought hypocrisy to new heights, assuring the public that, "We will not let China steal jobs from the United States of America.""

Like I tried to say in August, this is definitely the wrong man !
 

MANGANESE BRONZE, Black Cab Manufacturer in Administration

Manganeze Bronze is the company that owns the company that manufactures the City of London's Black Cab. It is manufactured in Coventry. Identical cabs are also manufactured in Shanghai by Geely, one of China's biggest vehicle manufacturers.  Geely supplies the world with the black cabs whilst Manganeze bronze supplies the U.K. only. This was as a result of an agreement by Geely and Manganeze Bronze in 2007. Geely owns 20% of Manganeze Bronze as a result of an agreement which gave them rights to produce the legendary black cab.

After the sale of part of the company to Geely, Manganeze Bronze sold the production plant in Coventry to a property company. Manganeze Bronze has been renting the building back since. This would raise question marks in many people's eyes as to whether Manganeze Bronze was seriously continuing long term interests of production of the cabs in the U.K.

Although selling off the plant may have short term benefits to Manganeze Bronze, such as cash flow the long term problems and added costs should have been predicted. The new owners of the plant are leasing the plant, obviously at a cost which the property under ownership by Manganeze Bronze would have been far lower.

Manganeze Bronze had been attempting to make a finance deal with Geely which would allow the Coventry plant to continue manufacturing.

The company has just announced that it is going into administration, after a failure to negotiate a deal that was acceptable to Manganeze bronze.

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What is most significant about this is how predictable it all seems to be.........


From the day Geely began manufacturing the cabs, they became competition to Manganeze Bronze. In fact, unfair competition in that Geely had far more freedom with the world as a market bar the U.K. whilst Manganeze Bronze left them selves with only the British Market to sell to. This was obviously part of the agreement when Geely bought 20% of the company.

The final straw for Manganeze Bronze happened when Geely could not offer a deal acceptable to Manganeze Bronze to refinance the company......The problem is Geely could have a new market for their cabs if the plant in Coventry was to close....London and the U.K. The place where the cabs began........Geely therefore have an incentive not to hand over the finance.

As for other investors....................Well who is likely to want to invest in this after the hole that Manganeze Bronze has dug the business into, by giving away too much of the market to Geely ?

The apparent short sightedness of Manganeze Bronze executives raises question marks as to what the long term plans for this business really were.......................

......................Unfortunately, this all looks like it may have been a master plan to move production of these cabs from Britain to China. May be I am wrong. But this type of thing has gone on all round the world in many different industries. It's resulted in many different industries moving from countries like the U.S. and the U.K., oversees...................Many of them had been bought in order to close them down ! Much of the finance comes from banks who probably don't always know what is being planned. But without any doubt, many of the banks often know exactly what is happening.

British Gas / N Power to Raise Consumer Price by 9%

 The British privatised power industry is again beginning to increase prices for the U.K. consumers. Both British Gas and N Power are raising their prices in the region of 9% in the coming weeks.

The graph below shows the difference in price for U.K. consumers (Customers of the biggest 6 electricity providers) and the wholesale price over the past five years.

The graph shows that where the wholesale price dropped two-thirds through 2011, the big electric providers pretty much maintained their prices.

This price level has been maintained through 2012 even though the whole sale price has at times during this period has decreased significantly, which will have increased income for these companies.

So here are the influential factors...............

THE REGULATORS

The problem with these private companies is that there is little to prevent these companies raising their prices to improve profits. We have all seen what is a failure by so called regulators, who seem to have plenty of talk and waffle about what should be happening, but in reality, rarely have any affect.
Strangely, the F.S.A., the U.K. banking regulator seems to suffer what seems to be identical problems to Ofgem, the U.K. power regulator. The idea is that billions of pounds of our taxes go to these regulators for them to prevent us from being ripped off by the businesses in these respective industries. However the slowness of their reactions, often total lack of reaction to some situations, and also their often what seems to be un-justified defence of their industries or businesses with in them, will draw conclusions to many cynical people that the regulators, are merely to create a buffer between complaining cusomers and those industries. Therefore allowing these private companies to keep their priority of making money, and not being inconvenienced by pesky customers.

THE GOVERNMENT

 There are added costs which are as a result of penalties against new green policies which are also adding to the costs of these businesses. The problem is that, if companies are being given penalties whilst they do not comply to new higher standards, this is actually a hinderence to the companies becoming greener ! The potential investment is going to the government. This could have the affect of the companies not investing enough in green energy and could risk the company's existence in the future.
Either the government has not given this enough thought, or the scheme is purely a way for the government to get more money out of these companies due to many avoiding paying taxes, and has little to do with green energy.

PRIVATISATION

Before all these companies existed, both electricity and gas were provided by national owned companies. If it was like this today, there would not be a number of companies apparently competing in the same market to buy gas in bulk, power stations, fuel for the power stations etc. Basically, this means privatisation pushes up the price as the sellers of these commodities knows that if one business is not willing to pay a certain price, another company probably will. Privatisation has therefore not really improved competition on the retail side, which is one of the apparent advantages according to people like David Camerron, it has simply increased competition on the wholesale side. Instead of Russia only being able to sell to one national business in any particular country, which would create more stability in this market, the Russians know there are many different buyers within each country where privatisation is rife, such as in the U.K. Therefore claims by various politicians that privatisation is a more efficient way of supplying our power are completely without foundation.

BORROWING

Companies in a good position to lever money out of their customers, for example in the power industry tend to get into major debt. This is because the banks know that we all need heat and electricty, and therefore know that the companies are likely to be able to increase their prices to recover money to pay off loans and other costs associated with the debt such as interest payments. Therefore the businesesses can easily get money from banks to buy other assets including other companies, or simply get a mortgage simply to pay off existing debt ! However, the banks enthusiasm to lend to these businesses can bring major difficulties to these companies. However, a temporary solution could be to encourage competing companies to also get into debt. This strangely enough would create temporary stability as competing companies would be in the same situation. This would be quite easy if you were to tell the executives of these companies that the debt could fund a nice pay rise as well as some new assets such as company cars ! However, this would be to the customers cost as they will be paying the usual costs of running the business as well as some un-necessary costs associated with debt. This is likely to result in many customers not being able to fuel their homes. If people are going to die as a result of the needs to feed bankers bonuses and the life style of the executives of these companies, those people can expect that the majority of the voting public are going to want to see a change in the way our vital sevices are provided. .......................Many of these companies are in debt and they have been run badly, on the finance side of the business at least, due to banking and various types of inefficient investment. That is investment that creates un-sustainable demands on a business. There is a possibility that some of these 'business people' who I really have to correctly refer to as landlords of the services mentioned (No offence to landlords intended, but they are their to syphon profits from these businesses whilst doing little to earn it, just like landlords), could find themselves being upstaged by operators who could run these services, with much lower costs. Due to a much more responsible attitude to finance. Electricity companies, gas companies, water companies, health companies could be run at much lower costs if it wasn't for demands associated with interest and returns on investment generation, along with leverage from banks. In short, they would have to be run in the way a nationally run  business would be run.

....Before you say that privately opereated businesses perform better than national run businesses, well you may have an argument if I didn't know better. It's true that many National businesses may appear to  have struggled as compared to private businesses when you judge them buy surplus cash or profits There are a number of reasons for this..........

The first is that ,the companies didn't need to make a profit.
 Prices charged to customers were based on the costs of providing the service. To charge much more than the actual cost would have been greed. Yet politicians defending privatisation will use this as there ace whenever privatisation of industries comes under scrutiny. They will always bring up the profits the new privatised businesses acheive in comparison to the lack of profit or surplus cash from pre-privatisation.........The businesses were not trying to make a profit.........Hence prices did not keep rising..............They employed more people, and those people were not treated like slaves, doing the work of would be redundant staff.

Second...... Loyalty or responsibiliy to the customer.
National  companies have employed more people than their private counterparts. Afterall the services that are being provided are for the people and you would not want any of those people to be left without heating, water, electricity etc. As a national company, if some body was being left without any of these services , then as a provider, you would not be doing your job. So the priority of these industries was to provide a service to the people. And that is all the people.
 Today things are different. These private businesses are now controlled by people who directly or in-directly have investments in them. Whatever form is financing these business, they are all affectively in debt to any one who has shares in them or to the private equity company that may own it, along with the banks who hand the debt to private equity companies to buy them. (This is un-related to any extra debt which the company may have which  may be used to buy assets, or use for running costs.)
Debt to investers, share holders, private equity managers, banks (Private equity companies constantly borrow money and then re-finance before the previous debt is paid off. Therefore if a company is owned by private equity, it will constantly be in debt ! This makes the banks a kind of share holder in a lot of these utility companies.)

The responsibility to investors, share holders, private equity companies, pension funds and banks means that supplying a service to all the people is no longer a priority. The customer is secondary to all of these investors.

To acheive returns on investments and to pay off debt to banks, these companies are run at a minimum cost as far as staff are concerned. National companies would have more staff. But the companies were nationally owned, and a few extra staff would have been no major problem. The people paying for them know that they, or family members need jobs.

So may be private investment can make a business reduce the costs to the public. But, this has nothing to do with private investment or the way executives run these companies when privatised. The same kind of measures could have been adopted if there was a need to do so by the government, whilst they were in control.

If national run companies were expensive to run,  then much of this wasted money would be down to the government departments not giving them enough attention. Also some near retirement people were probably employed along with disabled people. The privatised businesses are less likely to employ these people, as they will be looking to acheive something closer to 100 % efficiency from their wages budget. (This is not to say that people with disabilities are less able to do the job, but they are less likely to take on a person if there was any doubt)  In fact being of age or having a disability are not the only characteristics which may cost you your job if a business is intent on cutting costs. Just being British could become a disadvantage as many investment incentivised companies actively seek foreign workers. The foreign workers accept lower wages due to the extra value their wages have when sent back to their home country. This is a situation that many british potential workers living in a country where homes are targeted by investors putting an un-realistic pressure on prices, and costs of living have difficulty competing with.

GOVERNMENTS DISTANCED FROM THEIR RESPONSIBILITIES BY P0RIVATISATION..........................



THE FINANCIAL WORLD INFLUENCING THE WRONG KIND OF GOVERNMENT
CANDIDATES...................................



THE MEDIA & PRESS MIS-LEADING THE PUBLIC ON THE PROS & CONS OF PRIVATISATION AND INVESTMENT IN BUSINESSES......................................



 

The Bank of England's For Ever Low Interest Rates; Who Really Benefits?

Why does the Bank of England continue with a low base interest rate, giving home owners with mortgages a much easier time than those who may want to buy homes, but are curretly renting?

The only logical reason I can put this down to is that the low interest rates are not to help the home owners but to help another type of customer of the banks. This is business linked to the stock markets which includes the buyout business.

Many big businesses ( many of which have recently gone bust like the oil refinery company Petroplus ) are vastly affected by interest rates.

Vast privatised industry based businesses would have collapsed just like Petroplus recently, if it wasn't for the low interest rates. Many of these businesses were loaded up with debt by the banks in the build up to the financial crisis and there has been little change since then.

It looks like the home buying market has been near to sacrificed so this commercial buyout and stock market activity can thrive. Obviously, the low interest rates haven't saved all of the companies that have been loaded with debt. Some of the victims of this debt include National Health Trusts. Many are close to collapse even with the low interest rates. If these trusts do collapse, it won't be due to the excuses that will be given to  the press and media by these businesses and the banks. It will be a pure matter of lacklustre banking practices.

Currently, house prices are still dropping in the U.K. We know that there is no shortage of demand for homes. Despite the ongoing recession  and economic crisis lots of us still have jobs and could certainly afford the costs of buying a house. The continued falling prices is only increasing the affordability for a reasonable proportion of the population.

There have been a number of schemes from the government, but these would seem to have gone almost unnoticed by the banks.

But still, the banks continue to refuse to lend to would be home buyers.

If the banks' only source of income was the lending for home loans, this wouldn't be such a problem. But this is not all they do. The problem is that if the banks can not see much income from mortgages, they have the option of using the money to be gambled on the stock markets or big company buyouts. This isn't to say they can't make money from home loans. I am absolutely sure they still could. Its just that the stock markets are more profitable. For reasons explained on other posts, the buyout world is just a way for the banks to be drip fed by every one of us through the businesses they lend billions of dollars to !

 The other influential factor is that banks are required to hold more money than they used to. This was a correct decision by the governments. But how have the banks dealt with this new requirement ? Well it's clear a sacrifice would have to be made whilst the banks re-accumulated cash on their balance sheets. The problem with the stock markets is that they are pumped up with cash that's invested from all kinds of sources. But for the stock markets to operate, the level of cash needs to be maintained at a high level. To reduce this cash by 5% could cause a catastrophic crash in the stock markets and this would affect the 'stock market' values and shares of companies.

I am fairly sure a  sacrifice has been made to conserve the stock markets and its at the cost of the people's ability to buy their own home. As I mentioned earlier, if banks, like building societies used to in the past, only lent to the public without entering the stock markets, then the banks would be lending mortgages now. We wouldn't have the housing crisis and the the dropping prices. Banks would be earning profits from this business, though not as much as they do currently. What really matters is the economy would be in a lot healthier state. The stock markets would not look so good. But they really only serve the finance world whilst creating problems for everyone else.

It would be disturbing to think people are being deprived of their own homes in order to protect businesses which have been loaded to the hilt with, in the majority of cases pointless debt and also to protect the availabiliy of cash to be used by stock brokers in the stock markets. But if you try to find any other logical explanation for the policies of the Bank of England, you might be looking for some time. The idea that many people have is that for some reason, the government likes to help home owners. But the help given to home owners by the banks has absolutely no logic what so ever. Its not helping first time buyers get on the housing ladder. Yet politicians will pass this policy off as their way of helping home buyers. Its rubbish. It helps home owners but not new buyers.

 Many home owners are paying far less than the cost that would be paid by a person renting the same home. Whilst this goes on, home prices are still falling in the U.K. Unbelievably rent is still rising ! There are no benefits to the housing market.

Big businesses have been collapsing not so much due to economic conditions but due to the debt they have been burdened with. If it wasn't for the low interest rates, many more businesses would have gone out of business.

The low interest rates are therefore hiding the real damage done to big businesses by the banks and the governments which have given  the banks too much freedom. Without this cold tap that the Bank of England turns on and off, the economy in the business world would look a lot worse .... if they didn't have the policy to cool things off a bit. The problem is, this may cool things down, but it doesn't deal with the problem. These problems have not gone away, they are just being temporarily hidden. Lots of companies are in major debt and its there to stay,...atleast for some time.

-What is worse is that as you will see in the coming months in X-ECONOMICS is that the low interest rates are not just protecting businesses with existing debt from the build up to the financial crisis but is being taken advantage of by buyout companies, hedge funds and financial people currently who are generating new business due to the low interest rates. The low interest rates are actually encouraging the banks and the other financiers involved to continue to load debt onto major companies.......This debt will undoubtedly cause problems and prolong this recession as the costs of these companies are rising due to this debt..................Pay and bonuses will cotinue for the bankers involved.....and the people often referred to by the press as entrepeneurs, will also benefit with increased wealth....................Reward only for  irresponsiblity, stupidity and greed !

The irritating aspect of this for would be home buyers is that it isn't that the banks are not lending. Banks are lending, but not to buy homes. They are lending for the corporate buyouts like the one that affected Robert Wiseman Dairies a few months ago( - and yes it looks like this has had a bearing on the farmer protests recently. See other posts)  They also lent a fortune for the floatation of 'Face Book'. The banks use investors money to buy the company and then sell it off as individual shares. The banks over valued it but there was certainly was no holding back by them, even though every one seemed to think it was over-valued. Still, they won't have lost money as the price only crashed after the banks had parted with the shares !  The banks' biggest asset is probably the press and media who give this type of business too  much free advertising. In the mean time if you want money to buy a house, your best bet is to set your self up an internet based e-mailing service and then sell it to the world with the help of the banks.They'll only be too glad to help.


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(If you was to beleive the Prime Minister of the U.K. David Cameron you may beleive that there is now , as he put it,a fire wall between investment banking and retail banking. I have to say that if this really happened it would cause a crash in the stock markets. Once your money is in a deposit account, it can be borrowed for all kinds of investments, which include private equity, hedge funds, stock markets etc. If this division between investment banking and retail banking really did happen there would be a sudden surge in mortgages and a boost to the housing market. This would cause a total collapse of the stock markets.What has happened I beleive is the that the potential housing market's investment has been used to prop up the stock markets! This is partly a result of the banks having to hold on to a larger reserve of cash. A decision had to be made and they made the right decision for the banks but the wrong one for the people).

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 However, having said that, many companies of the type that were originally nationally owned industries are not so affected by their debt quite as much. This is because, if the debt is rising, the price charged to customers just keeps rising to cover the rising costs.

The really important point Im trying to get to is this. Rail travel providers, gas ,electricity, telephone and water companies are all constantly getting into debt due to new so called investment by new investors. Yet we are suffering increases in prices constantly by all of them even while the interest rates are at an all time low !  The economy is currently subsidizing these companies by reducing the interest they are having to pay on their debt !

If we are suffering price hikes of say 8% within one year, which are figures which have been quoted for price rises to both gas and rail travel for a couple of companies in the U.K. in 2012, then what the hell is going to happen when their costs go up even more when the interest rates go back up?

These business have got it easy at the moment due to the low interest rates. I can only see the situation getting worse atleast for the customer.......

There is a possibility banks take advantage of these companies due to the importance of them to all the people. Therefore they are more willing to lend for new buyouts or the purchase of a new contract , like the finance for 'First Plus' to buy the contract which Virgin did not bid high enough for in the past week. It is absolutely apalling that the government has handed this contract to the business which was willing to borrow the most money to buy the contract. They out bid Virgin who had been running it for 15 years. The only message this sends from the government is ; If you win one of these contracts, make sure you charge the customers enough so you have enough in reserve to win the next bid ! Therefore encouraging the operator to rip off the customers.

So much for the government's schemes to get people back to work. They seem more attracted to schemes to make sure they won't be able to afford to get to work !

It is of real concern that the British government's lack lustre policies just seem to encourage more of the same behaviour which, despite other excuses and explanations that may have been made, contributed to the economic crisis which we are now stuck with. And I emphasize the 'stuck' part because this 'recession' is going no where !

One of the 'problems' for the banks when lending to ordinary home buyers is that when the costs go up, the home buyers have little in reserve to find extra cash to cover the increased costs. ( For example when interest rates go back up). This means there will be the home reposessions which not only nobody wants, but it brings bad publicity to the banks.........

But if the banks lend to businesses we all depend on, there is more scope for the borrower to cover rising costs such as rising interest rates. The business just has to raise prices to cover the rising costs and tell the media and press that the rising prices are as a result of economic conditions. A companies demize may be blamed for the same reasons !

......but in this situation they use the press including the 'Financial Times' to manfacture excuses to divert attention away from the banks to other parties such as the recession or economic crisis.

Basically, the banks putting businesses out of business is an accepted part of the business world. But only because the bankers and the executives of these companies along with the press and media who religously listen to these executives and bankers have managed to cover up the real reasons for businesses to collapse, often without warning to those with investments in those companies.

The home buyer finance market is therefore suffering as a result of illusions that are being created in the business finance world. .....
....This will probably contine until the ordinary people with deposit accounts and pension funds choose to invest their money where they know how it will be invested...............

Mitt Romney; Would He Make a Good President for the U.S. ?

Much of Mitt Romney's campaign to become the next president of the United States is based on his business back ground.

He has claimed that he has created jobs during his business career.

Mitt Romney has spent his business career mostly in the private equity and buyout business. This has involved using mountains of invested money to buyout companies and re-sell them later at a profit.

What is for sure is that he has created unemployment as many of the companies he has loaded with debt have gone bust and employees have lost their jobs.

 He has also been responsible for thousands of redundancies which have been made in companies after acquistion by Bain Capital. This is standard procedure for these companies.

Bain Capital have been successful in making money for investors, but this is not as difficult as you may think it would be for a number of reasons.

1......If you are aware of a growing amount of money going into this type of business, it creates a supply and demand issue for the mountain of cash. Growing funds in the lead up to the financial crisis meant it was relatively easy to buy a company and sell it within a few years at a nice profit. Much the same way as there was a lot investment in property which had the same result on house prices. (The mountain of cash is money that has accumulated in all kinds of investments including pension funds and deposit accounts- Basically growing investments in general).

2......If you were struggling to find a buyer from another buyout company then there is always the option of a floatation on the stock markets. Stock markets don't tend to think things through so much as the stock brokers and hedge funds work much more short term. Many companies end up being floated on the stock exchanges after Mitt Romney's team have loaded them up with debt. And many collapse shortly afterwards.
 (It is difficult to understand this should go on without being outlawed, but part of the reason it continues is that the press and media seem to turn a blind eye to what is really going on. Much of this is due to the support given by the press and media to the stock markets.  The truth is the stock markets are used as a dumping ground for companies that Private Equity Firms, Hedge Funds and other types of buyout company want to off load because they want to use the capital to invest elsewhere !)

3........ Cutting costs of an acquired company are easy when you know you are not going to keep it for long. One way is making redundancies. Another way of accumulating cash and cutting costs is selling parts of the company off.

So you see there is nothing difficult about the way Mitt Romney has earned his money. I don't see how being president of your country and a back ground of private equity go together. If Romney becomes president it will be because he has successfully misled the United States People.

Mitt Romney and the company he formed, 'Bain Capital' are responsible for;-
 ...................Thousands of redundancies
....................A number of complete business closures
....................Companies getting into massive unjustified debt
....................A lower standard of product or service by many of these businesses
...................Increased prices due to added costs by Bain Capital and increased debts

Although Mitt Romney left Bain Capital some years ago he still receives a pension of many millions of dollars based on the profits of the buyout and private equity business.

Much of the money for his election campaign will come from damage that he and his company has created which probably dates back to what will probably be seen as the beginnings of the 2007 financial crisis. Yes, I believe it goes back to the eighties and the private equity and buyout business was very much at the very beginning.

Should he become President ?
The answer is a definite no.

 But of course he does give millions to charity. But surely, we all would if we were worth $200 million. If he makes it to president then the press and media will have done a terrible job in explaining his real credentials. Its really important that the way these types of business work, is made clear to all the people. Because what we really need is companies like Bain Capital to stop running the world, which is what they are doing currently.