A Trip To Ladbrokes Solves The Problem?

What to make of the Eurozone ‘situation’ then?

One thing for sure is that it is impossible to see anything other than Greece and Portugal leaving the Euro……unless there is a complete overhaul of the fiscal policy in the Eurozone. Eh? Let me put this another way……

Unless there is one tax system applied consistently across all member states, the Eurozone will fail. As with all tax systems, the rich pay tax and subsidise the poor……so, German taxes need to pay for Greece / Portugal / Ireland. The Eurozone is essentially Germany with some hanger-ons and unless they agree to a common tax system, an exit seem inevitable.

Interesting that Merkel recently said that Germany must do everything in its power to retain every country in the Eurozone. However, with a German election around the corner, this is unlikely to be a vote winner. I guess time will tell. 

Ladbrokes currently have Greece leaving the Eurozone at 6 – 4 on and bookies rarely get it wrong.

Perhaps if Greece put a few quid on themselves leaving the Eurozone, the winnings could solve the financial problems!

Just a thought……

RBS Smoke & Mirrors

Don’t be fooled by the results / spin / headlines coming out about RBS at the moment.

The news that excited the gullible, was that RBS are close to repaying all of the money that it borrowed from us in loans (circa £75 billion). Commendable, but only half the story.   

RBS is carrying a huge value of bad debt that could turn sour and force more write offs, is not profitable and there is the small matter of the £45.5 billion we taxpayers ‘invested’ in a 81% stake of the company shares (which we have received no dividend and stand to make a significant loss when considering the current share price).   

Perhaps the headlines should have read, ‘We’re Still In A Mess – It’s Just Not As Big As It Was’.

It Not My Fault Guv'na

It wouldn’t be a normal month if I didn’t bleat about my least favourite man in the UK economy. 

Before I kick off with this one, let me make something very clear……I do not hold a grudge against Sir Mervyn King, the governor of the Bank of England. Well, except the small one relating to the issue of the banking collapse happening on his watch. The most culpable yet retained his role until his second 5 year term comes to an end next year. Thankfully.     

You would think that after such colossal failure, you would keep a low profile and dodge a few bullets……but not our Merv. A Radio 4 interview last week proved too good an opportunity to miss to blame everybody except the Bank of England and announce the obvious……“light touch regulation of the banking sector did not work”. Genius.

If Mervyn King had thought more regulation was important, surely he could have done something about it. He didn't and he must take responsibility for the fact the he missed the biggest financial crisis in a century.

There is no doubt that we are going to get more regulation of the banks but there could barely have been much less. Maybe the stable door is being shut at last. But the most influential figure in the UK economy left the stable door open in the first place.

Actually, come to think about it I reckon that grudge is pretty much warranted……unfortunately. 

A Time To Celebrate?

Last week saw the second anniversary of the Coalition Government. It came and went without much fuss, probably due to the fact that there was little to celebrate.

If it wasn’t a time for celebration, then it was certainly a time for reflection. So exactly what have we learnt from the past 2 years?

1.     Two party leaders in Government does not double personality, charisma or charm. Both are sadly lacking on all counts.

2.     The Government and Bank of England are still powerless to control the banking sector. The banks hold all the Ace cards and the rest of us have to fall in line. Sad, but very true.

3.     The Coalition Government inherited a mess of colossal proportions, which the Labour Government did extremely well to cover up for so long. Paul Daniels would have been proud of that one.

4.     The ‘fix’ to the inherited mess is austerity measures that will see cuts to public services like never before.

5.     The rest of the world sees the UK as a reasonably safe haven because of the plan in place to tackle the problems and the austerity measures that are taking place. I think that should perhaps read ‘safer’ rather than ‘safe’ – the UK is simply a better bet than Greece, Ireland, Portugal and Spain. Actually, come to think of it……it’s not much of compliment really is it. 

6.     Austerity leads to mass unemployment.

7.     Unemployment leads to a stagnant economy at best.

8.     The Private Sector is the key to driving the UK to economic salvation and job creation. The Coalition Government has forgotten to offer any measures to stimulate Private Sector growth though. Bugger.

9.     Labour’s choice of leader makes the Coalition Government’s job far easier than it should be. Ed Miliband is watery at best, pathetic at worst and embarrassing most of the time. I’ll give him just one more year. Shocking.

10.  Boris Johnson is more popular in the Conservative Party than David Cameron and is favourite to replace him as the party leader. God help us.

Ultimately the Coalition Government’s term will be judged on the success of the Austerity measures……let’s hope there is some pleasure that follows the first 2 years of pain. 

Happy 10th Birthday

The Journey……

Fresh from marriage in 2001, Steve & Rachel became somewhat disillusioned with their jobs in the financial world. Morals and ethics seemed rare to the point of extinction, with actual customer needs a secondary consideration before company profit.

Having considered all manner of alternative companies and positions, it became apparent very quickly that working in an environment of ethical and professional brilliance simply did not exist. This left just one option.......to create it themselves.

Undeterred by the statistic that only 4% of all new businesses survive 10 years, Davison Smith Financial Management was born.

Sticking to the principle of client need before corporate greed, Davison Smith Financial Management has grown from strength to strength and 3 May 2012 represents the 10th anniversary since its formation.

Our Gratitude...

We do not take trust or loyalty for granted and it keeps us honest and humble each day. We are eternally grateful for your part in helping Davison Smith Financial Management reach 10 years and become part of the 4%.

With Heartfelt Thanks

Steve & Rachel