We’re in the middle of a small orgy of kneejerk (or jerk-kneeing, if you prefer) bashing of bankers with self-inflated banker-bonkers, and not a few people trying to keep the ball rolling because it is convenient for their politics.
But it seems to me that some of the basic indicators on the Economy are beginning to return from extreme values to something a little closer to ‘normal’.
I’m not saying it’s all fixed, but the Gordonion Knot starting to loosen itself?
Here are a couple of graphs for a discussion starter.
Leverage of UK Banks has halved
The Bank of England’s Financial Stability Report for December 2012, says:
‘Leverage ratios, which compare a bankâs unweighted assets t o the book value of its available capital, have approximately halved since their historical highs of close to 50 in 2008.’
House Prices have fallen by 20%+
Media reporting loves to leave inflation out of House Prices and rent. According to the Nationwide, house prices are now back to the levels of roughly mid-2003.
That represents a fall of more than 22%.
Even in London, House Prices are only now at their 2008 peak in cash terms; a fall of some 13% after inflation.
Yet the newspapers echo with reports of all time high house prices, in cash terms.
Not being a banker, or an economist, but just a bloke with a numerical degree, I need some help with this!
I tend to think things are going the right way, and may improve when confidence returns very slowly.
That, unfortunately, would best have been done by implementing the austerity option at a more practical speed than we have seen.
What say you?