Call Sign October 2011
Page 16
Commercial Banks throughout Europe were
We've heard politicians and "experts" talk about it, but this is...
told by the ECB (European Currency Board)
that they must hold a certain amount of
A CAB DRIVER'S VIEW
Sovereign Debt (debt that is held by sovereign
nations such as Greece). This then forced
these banks to loan huge amounts to countries
OF THE DEBT CRISIS!
like Greece and Ireland. The Greeks used the
money for almost ten years, providing a disas-
trous financial fest to just about anybody,
and government), but with pressure from
including the provision of full pensions for vir-
the centre, the current ECB will not allow it
tually everyone over 50 years of
because many of the banks and institutions
age as well as funding a bloated
in Britain, France and Germany hold a mas-
public sector. Now the chickens
sive amount of this debt already. RBS
have finally come home to roost.
(Royal Bank of Scotland) is one such bank
The Italians are in much of the
that could fail; all of this could lead to
same boat, they borrowed a huge
another catastrophic financial situation,
amount knowing that for ten years
even larger than Lehman Brothers.
the average GDP (gross domestic
product) in the Italian economy
So what is a cab
was averaging just one percent! In
no way could they come even near
driver's answer?
to paying off the interest on the
Well I just drive a cab, but even I know
debt they were borrowing. In fact,
that someone somewhere has to stand
Italy has mustered just 0.3% growth
up and be counted, otherwise the prob-
between 1999 and 2007 and now is
lem will only get worse - much worse.
weighed down with a public debt
When financial institutions lent money
burden of 120% of GDP.
to countries such as Greece, Portugal
One argument was that banks were
and the other weaker EU nations, they
not at fault when they were told to
were actually entrusting their money to
take on the sovereign debt of those
subprime borrowers (an American
countries but - and it's a very big but -
term for high risk individuals) mas-
they knew that before the Euro came
querading as high quality sovereign
into being that the rates charged on
nations. Too many people believed
these loans to countries likely to
the propaganda of a brave new
default such as Portugal, Italy, Greece
cial
world with financial deregulation
and Spain or `PIGS' were always much
bigger finan
rds an even
ing towa
spewed out by supporters from the
higher than those charged to more fis-
Are we head
ast one?
than the l
US and EU. It is always thus that the
cally sound countries such as Germany,
catastrophe
majority of people will convince themselves
France and the UK. So if they always
that the world, especially the financial world,
knew of this, why did they lend! The
put simply was just greed.
has changed but in fact basic rules of finance
most likely answer was that they would
To overcome the problem, one solution is and economics have always existed. What you
receive a much higher rate of return (interest)
from countries like Greece, who ordinarily for the current debt holders of all these nations cannot afford... you cannot have!
would have been naturally downgraded com- to take a major `haircut' (serious financial loss
David Paul Baker (D22)
pared to the big three in Europe. The answer to bond holders and institutions both private
CAB SALES BATTLE!
The TX4 is
currently
leading the
Following the increase in price of the latest
sales battle
Mercedes Euro 5 Vito, the London Taxi Company's
TX4 appears to have pulled away in terms of new
cab sales.
Released figures show that May 2010 saw 67
TX4s against 26 Vitos sold. One year later in
The Flower Mill
May 2011, Vito sales were almost unchanged
(down 1 to 25) whereas the TX4 shot up
almost 30% to 93 vehicles.
Creating Beautiful Flowers For Weddings
June 2010 saw 32 Vitos sold with the TX4
showing sales of 89 taxis. In June 2011 the
figures showed the Vito up 6 to 38 sales while
Tel: 07854 738895
the TX4 went downwards to 80 cabs sold.
July 2010 saw 33 Vitos sold with the TX4
totalling 82. Twelve months on and July 2011
Web: www.theflowermillessex.co.uk
saw the Vito drop to 25 and the TX4 also go
downwards to 67.
Email: theflowermill@yahoo.co.uk
August 2010 saw 25 Vitos against 84 TX4s
but in August 2011 the £42,000 Vito price
tag seemed to have sunk in with just 24 Vitos
Covering Essex & The Surrounding Counties
sold, whereas the TX4 saw a 32% jump up to
111 cabs sold.
With the TX4 scheduled to shoot up by £3000
"It is at the edge of a petal that love waits"- William Carlos Williams
early next year as the Euro 5 version hits the
market, comparisons will/span> be interesting...
