Gordon Brown's 10 worst financial gaffes

[jshell]

AshVX220 said:

Do we know why he sold the Gold? Was it used to fund anything particular or just to inflate the government wallet?

I thought it was to finally settle the the debts we had with the US over WWII...

[JonRB]

Timesonline said:

9. Cutting VAT

"It would be funny if it wasn’t so serious," said a tax accountant when asked about the Brown-Darling brainwave to cut VAT by 2.5 percentage points. As a nation of shoppers, rather than shopkeepers, a chopped down sales tax sounds like a good idea, providing a vital boost to hard-pressed families at a time of financial hardship. There were two problems. It costs £12.5 billion a year and it has made little discernable difference to those hard-pressed families because it is shopkeepers, rather than shoppers, who have pocketed much of the benefit.

I don't agree with this. Shopkeepers did not "pocket much of the benefit". They were already discounting goods by way more than 2.5% to try to stimulate sales. Then they had to absorb the massive costs of repricing everything to the new lower price and updating their systems. The cut in VAT probably cost retailers far more than it saved the shoppers and it was inevitable that the reduction wouldn't be fully passed on.

Edited by JonRB on Tuesday 11th August 15:35

[FourWheelDrift]

Ps. Most of our gold is now in China, if they haven't already sold it on for a big profit.

[IanMorewood]

NoelWatson said:

IanMorewood said:

NoelWatson said:

IanMorewood said:

NoelWatson said:

Is #2 a fair criticism?

Yep, the old saying of buy low sell high applies, he sold at an all time low.

How do you know in advance that it is an all time low?

You look at the published (inflation adjusted) figures for the years/months gone by. If it’s low you don’t sell if you don’t have too.

So you are proposing that there is a guaranteed way to make money, using a combination of futures prices, from the gold markets?

Yep you can buy a copy of my theory, send cheque for £199.95 payable to cash to the usual address.


Gold like all other comodoties is cyclical depending on supply and demand, in 97-99 there was little demand and a major over supply, by 2001 the demand was back and price moved steadily back up again.

[Spiritual_Beggar]

FourWheelDrift said:

Ps. Most of our gold is now in China, if they haven't already sold it on for a big profit.

For his next trick, who knows..... he may even buy it back off them at a hugely inflated price!

[HiRich]

You do know that the EU introduced a law limiting gold sales by member states, because of GB? Even the EU underestimated how stupid people can be.

[Dunk76]

HiRich said:

You do know that the EU introduced a law limiting gold sales by member states, because of GB? Even the EU underestimated how stupid people can be.

Now that I didn't know.

For all I criticise the EU, at least they can spot a moron and his actions.

[Digga]

Dunk76 said:

HiRich said:

You do know that the EU introduced a law limiting gold sales by member states, because of GB? Even the EU underestimated how stupid people can be.

Now that I didn't know.

For all I criticise the EU, at least they can spot a moron and his actions.

The EU is a collection of morons. In action.

[FourWheelDrift]

Digga said:

Dunk76 said:

HiRich said:

You do know that the EU introduced a law limiting gold sales by member states, because of GB? Even the EU underestimated how stupid people can be.

Now that I didn't know.

For all I criticise the EU, at least they can spot a moron and his actions.

The EU is a collection of morons. In action.

Makes it easier for them to spot another one then

[oyster]

JonRB said:

Timesonline said:

9. Cutting VAT

"It would be funny if it wasn’t so serious," said a tax accountant when asked about the Brown-Darling brainwave to cut VAT by 2.5 percentage points. As a nation of shoppers, rather than shopkeepers, a chopped down sales tax sounds like a good idea, providing a vital boost to hard-pressed families at a time of financial hardship. There were two problems. It costs £12.5 billion a year and it has made little discernable difference to those hard-pressed families because it is shopkeepers, rather than shoppers, who have pocketed much of the benefit.

I don't agree with this. Shopkeepers did not "pocket much of the benefit". They were already discounting goods by way more than 2.5% to try to stimulate sales. Then they had to absorb the massive costs of repricing everything to the new lower price and updating their systems. The cut in VAT probably cost retailers far more than it saved the shoppers and it was inevitable that the reduction wouldn't be fully passed on.

Edited by JonRB on Tuesday 11th August 15:35

And so what if it wasn't fully passed on.

How many retailers and possible tens of thousands of jobs have been saved by retailers able to keep that extra 2.5% and therefore keep the creditors at bay during the recession.

[CobolMan]

I'm surprised nobody's commented on his love of PFI - that's going to be a millstone around the taxpayer's neck for decades to come.

[dangerousB]

NoelWatson said:

So you are proposing that there is a guaranteed way to make money, using a combination of futures prices, from the gold markets?

Not just gold markets.
Guaranteed is a strong word, but my bro' trades futures and does exactly (for the sake of brevity) what you're alluding to. It's not quite as straightforward as "using a combination of futures prices" to dictate trades, but strategically aligned to that.
And, I may add, he does extremely well at it, so even to a non trader like me, it's evident that he's right a great deal more than he's wrong.
Wish the same could be said about Brown!!!

[NoelWatson]

dangerousB said:

NoelWatson said:

So you are proposing that there is a guaranteed way to make money, using a combination of futures prices, from the gold markets?

Not just gold markets.
Guaranteed is a strong word, but my bro' trades futures and does exactly (for the sake of brevity) what you're alluding to. It's not quite as straightforward as "using a combination of futures prices" to dictate trades, but strategically aligned to that.
And, I may add, he does extremely well at it, so even to a non trader like me, it's evident that he's right a great deal more than he's wrong.
Wish the same could be said about Brown!!!

Are futures not a zero sum game?

Edited by NoelWatson on Tuesday 11th August 19:17

[tank slapper]

CobolMan said:

I'm surprised nobody's commented on his love of PFI - that's going to be a millstone around the taxpayer's neck for decades to come.

Yes. Our local hospital was built under this and the terms of the arrangement are absolutely ridiculous. They favour the private contractor so heavily the trust will be paying enormous sums for the next 30 years or so. Add to that the control that is placed on day to day operation, like having to get the PFI contractors approved maintenance man to put up a shelf (at extortionate rates) and various other silliness.

[Menguin]

NoelWatson said:

TonyToniTone said:

NoelWatson said:

Does this magic index look into the future and determine that it was indeed the low point?

And can you confirm that it was the all time low please - Bloomberg doesn't show me this

The index along with other events would have stopped me dead in my tracks from selling half the UK's gold reserve at a 20 year low.

All time means up until the current point on the index - please dont tell me you pay for Bloomberg and dont know this.

But it wasn't an all time low, that is my point. Furthermore, how do you know that the price in 1999 was twice what it was going to be in 2009? There appears to be some people that are able to travel into the future on here.

Are you purposely being obtuse? How do you determine the price of anything? By comparing it to past prices. If it has never been lower in real terms then it is an all time low. I don't think the phrase relates to all of time past present and future. Brown sold when it was at a much lower point than it had been, where it had been decreasing for a number of years. Gold is a finite resource, so the price is bound to go up at some point.

[Dunk76]

Menguin said:

NoelWatson said:

TonyToniTone said:

NoelWatson said:

Does this magic index look into the future and determine that it was indeed the low point?

And can you confirm that it was the all time low please - Bloomberg doesn't show me this

The index along with other events would have stopped me dead in my tracks from selling half the UK's gold reserve at a 20 year low.

All time means up until the current point on the index - please dont tell me you pay for Bloomberg and dont know this.

But it wasn't an all time low, that is my point. Furthermore, how do you know that the price in 1999 was twice what it was going to be in 2009? There appears to be some people that are able to travel into the future on here.

Are you purposely being obtuse? How do you determine the price of anything? By comparing it to past prices. If it has never been lower in real terms then it is an all time low. I don't think the phrase relates to all of time past present and future. Brown sold when it was at a much lower point than it had been, where it had been decreasing for a number of years. Gold is a finite resource, so the price is bound to go up at some point.

I thought it was more of an issue that he announced he was dumping vast reserves before he actually did it, thereby causing the price to plummet before disposal, which was the real issue?

[fadeaway]

oyster said:

JonRB said:

Timesonline said:

9. Cutting VAT

"It would be funny if it wasn’t so serious," said a tax accountant when asked about the Brown-Darling brainwave to cut VAT by 2.5 percentage points. As a nation of shoppers, rather than shopkeepers, a chopped down sales tax sounds like a good idea, providing a vital boost to hard-pressed families at a time of financial hardship. There were two problems. It costs £12.5 billion a year and it has made little discernable difference to those hard-pressed families because it is shopkeepers, rather than shoppers, who have pocketed much of the benefit.

I don't agree with this. Shopkeepers did not "pocket much of the benefit". They were already discounting goods by way more than 2.5% to try to stimulate sales. Then they had to absorb the massive costs of repricing everything to the new lower price and updating their systems. The cut in VAT probably cost retailers far more than it saved the shoppers and it was inevitable that the reduction wouldn't be fully passed on.

Edited by JonRB on Tuesday 11th August 15:35

And so what if it wasn't fully passed on.

How many retailers and possible tens of thousands of jobs have been saved by retailers able to keep that extra 2.5% and therefore keep the creditors at bay during the recession.

Your joking right? First up take into account the cost of updating everything to apply the new VAT rate (price tickets if passing the saving on, cash registers, accounting systems, invoice systems....).

Then there's the fact it was just 2.5%. Companies are discounting by 20% - 50%. 2.5 is neither here nor there.

I don't think it made any difference at all, and has just left us with even more debt to pay off in the future.

[Dare2Fail]

fadeaway said:

Then there's the fact it was just 2.5%. Companies are discounting by 20% - 50%. 2.5 is neither here nor there.

I don't think it made any difference at all, and has just left us with even more debt to pay off in the future.

Exactly. 2.5% is absolutely bugger all. Take a really expensive purchase like a TV for £1000. Are you telling me that someone would buy the TV now that it 'only' costs £975 instead of it's original price of £1000.

2.5% was never going to stimulate the market and was never going to result in a noticeable difference to the nations wallets and purses.

[JonRB]

fadeaway said:

Your joking right? First up take into account the cost of updating everything to apply the new VAT rate (price tickets if passing the saving on, cash registers, accounting systems, invoice systems....).

Then there's the fact it was just 2.5%. Companies are discounting by 20% - 50%. 2.5 is neither here nor there.

I don't think it made any difference at all, and has just left us with even more debt to pay off in the future.

That's kind of what I was trying to convey.

Dare2Fail said:

2.5% was never going to stimulate the market and was never going to result in a noticeable difference to the nations wallets and purses.

Indeed. In fact, I'd go as far as to speculate that some businesses actually may have folded as a result of it. Faced with the costs of pulping and reprinting their catalogues, reworking their website (and finding some pillock hardcoded 1.175 in several places), re-printing all their price tickets / paying staff to re-price stuff. The cost must have been immense.

Edited by JonRB on Tuesday 11th August 23:16

[Mclovin]

home information packs another example of incompetance....law society was against it i think and yet they still went ahead...

the worse is acting in complete ignorance of the voting public....nobody wanted to go to war and yet they still went ahead with 2 of them resulting in putting us at risk from these crazy religious idiots...