To be fair, as I have said before I think that there are a lot of people who are been affected by this crunch (and incidentally were affected by the bubble but everyone likes to take a free ride there) who don't understand finance, which is fine and I think as a finance professional we as an industry have a responsibility to educate people. i think Mr Peston does a good job of making things simple to understand but in doing so he misses the point.
As is often the case the beauty of finance is in the detail and I think that Mr Peston glosses over it too much. Take for example his blog entry talking about China's stimulus package:
Wen Jiabao announced that China's budget deficit this year will be 950bn yuan.
That sounds like a big number - and it is an all-time record for China.But, in relative terms, it's a flea bite compared with public-sector borrowing in the
UK.Converted to sterling, that 950bn yuan is equivalent to roughly £100bn.
If you just read the first paragraph you could be forgiven for mistaking the world was about to end. But wait a minute, that's in Yen, how many yen could I get for a pound, oh I think I could get roughly 9.5 Yen for each of my sterling.
To be fair I'm been picky, if he didn't include the words "That sounds like a big number" I would be OK. But he did and it just illustrates a growing contempt on his part for the rational argument.
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