Some inconvenient truths – MoneyWeek

Still,itisn’thalfasirritatingastherealstateofoureconomy。

Inflationisatitshighestlevelsincetheearly1990s,withenergyandfoodpriceswreckingthebudgetsofourpoorerhouseholds。

Commercialandresidentialpropertypricesarefalling,asisconsumerconfidence。

Wearerunningamassivecurrent-accountdeficit(around5%ofGDP)alongwithawhoppingbudgetdeficitofaround3%ofGDP。

Andofcoursethecreditcrunchisgettingworse,notbetter:theglobalsecuritisationmarketisbarelyfunctioningandtheUK’sbanksarereininginborrowingasfastastheycan。

AtthesametimeTheTimesreportsthattwomillionpeopleintheUKhaveresortedtotakingoutloanswithinterestratesofupto100%fromProvidentFinancial。

“Currentmarketconditionsarefavourableforus,”saiditschiefexecutive,withsomeunderstatement,earlierthisweek。

Thewholething’sacompletemess–andonethereisnowaythatpoorAlistairDarlingcansortoutinnextweek’sbudget。

Ican’tthinkofmuchtosaythatwillbeofmuchcomforttoGordonBrown(nor,forthatmatter,doImuchwantto)butitshouldbringhimsomesolacetoknowthatheisnottheonlyone-timeherofindinghimselfwalkingonless-exaltedgroundthanafewmonthsago。

Heisjoinedbyallsortsofgroups:thecountry’spropertypromotersareoneofthemostobvious,butafewnewentrantsmustsurelybetheemployeesandex-employeesofGoldmanSachs。

Foryearsnowwe’veallbeeninaweofthemandtheirastonishingmoneymakingabilities,butafewrecenteventsappeartohaveproventhemtobejustasuselessatmostthingsastherestofus。

Theydidn’texactlycoverthemselvesingloryintheireffortstofindaprivatesectorsolutiontoNorthernRock,didthey?

ThenthereisRonBeller,theex-Goldman’smanwhohasjustlosthalfhisfortune(putat$80mbytheEveningStandard)inthespectacularcredit-relatedcollapseofhishedgefundPelotonPartners。

Heishardlywavingtheflagforprudentmoneymanagement。

Backin2003hehadsomuchmoneyknockingaroundinhiscurrentaccountthathedidn’tnoticehissecretarynickingafewmillionquidfromit。

Nowitturnsoutthatfarfromsensiblydiversifyinghisportfolio,hekeptreinvestinghisprofitsbackintohisfund。

Thisisamanwhoneedsagooddepositaccounttokeepwhathehasleftsafe:there’salistofthebestratesavailablehere:comparesavingsaccounts。

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