Bottomless Pits

Do you remember that Morland cartoon, the one with a perspiring Gordon Brown shovelling sand into small buckets, for Alistair Darling to pour into a bottomless pit? It was on the back page of The Times’ ‘Recession Budget’ supplement on November 25th 2008. I though it summarised our financial predicament with wonderful clarity.

The cartoon came into my mind again when I was glancing at statistics in the Bank of International Settlements’ Quarterly Review for December 2008. The deep hole in which the UK finds itself is visible in the data. Take table 2A, the external positions of banks, in all currencies vis-a-vis all sectors. The figures in this table come from the unconsolidated gross international on-balance-sheet assets and liabilities of reporting banks in 41 countries. (more…)