How many ways can PM Brown's utterly thick economic policies destroy a company? Many, it seems.
Case Study: FlyGlobeSpan
We have learned today, reported by Das Herald Sturmer, that FlyGlobeSpan was owed GBP 34 million by London City credit card handling firm E-Clear
Brown causes a credit crunch through deregulation (allowing high street banks to behave like merchant banks), changing accountancy pracises to allow financial companies to lie about their true capital positions, expansion of household and government debt and then bail-outs and quantative easing. People have less money to spend as the economy contracts and corrects the damage these policies caused. People lose jobs and have less money so companies like FGS have fewer customers.
These policies have resulted in the massive derivatives scam which has, as John McFall acknowledged, led to the the UK's entire financial services sector to be insolvent. So, now we have a situation where a credit card holding company is not passing on money it owes to its clients hence FGS going into insolvency. No-one can know that this company and every other financial services company is able to pay its debts because Brown is allowing them to lie so that he can cover up how much damage he's done. And in the meantime pours lots of cheap taxpayers money into these bottomless pits..
I've read a lot of garbage on comments pages about how FGS was badly run or that it was a pirate outfit and so on. The truth is that it is credit starved and owed money by a London firm that is probably bankrupt. FlyGlobeSpan is just the latest firm to go into Brownruptcy!
Time for Scotland to put on the independence parachute and bail ourselves out.
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4 comments:
Alex, did you notice the only customers who wouldn't recieve any compensation ?
Yes the mugs who paid up front with cash of course.
If you pay things on the never never then they will look after you.
Some years ago Bob, I had tickets to fly with Duo. They went bust. The Credit Card was refunded in full within a day ( online banking ). I have seen since then a novel approach where you get charged a fiver a ticket or more to use a cc to book flights. Despite that I have, and have advised everyone I discuss such matters with, to only ever book using a credit card. That fiver is insurance.
I pay my card off every month. If you are dumb enough to pay the minimum then you will be paying a lot for the never never. But pay it off, don't spend what you don't have, and you get insurance your purchase of a fridge to a villa in Marbella will be delivered.
Anon
I was being a bit sarcastic. I am one of the mugs who would have paid cash for my ticket so would have lost my money. I don't like to pay by credit card although I'm continually forced to. Have you tried to hire a car ? It's impossible unless you pay by credit card.
Interesting points. As a result of the 'credit crunch' I think all the old wisdoms are going to have to be challenged.
Credit card default rates are huge. This has pushed that sector into an even more perilous state.
With the entire financial sector concealing the truth about their balance sheets, I think we can expect to see more of this type of thing.
Right now, I don't trust money. It is being devalued and can go to zero value. If you keep money, I wouldn't trust it in banks - their insolvent and if the government devalues to avoid hyper-inflation then there will be a bank holiday meaning you can't get your cash out or you can get some of it a bit at a time. They'll hold it till they've devalued and then it's too late to invest in gold or commodities etc.
Right now I would take advantage of the January sales. When the retail sector realises that consumption has nose-dived you can expect to hear of more closures in the retail sector. There'll be sales galore with discounting off everywhere.
Consumption collapse is going to set alarm bells ringing and people are going to realise that 'stimulus' was fantasy economics. Business will have to alter forecasts and that is going to hit employment.
My feeling is spend while your money still has purchasing power and get rid of debts as next year could see a huge interest rates hike.
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