Probably a fairly brief post after a long day's writing.

I've been watching the Bloomberg page with the FTSE 100 on it today to see what happened to Lloyds Bank. It carried on going down first thing this morning and then started rising so that for quite a lot of the day it was the day's top riser. Now it's started falling again and, last time I looked, it was the index's biggest loser.

I was taken by surprise by the massive sell off on Friday. After all, what's £1.5 billion of losses for a modern banker? In fact, in the case of Lloyds it was about 10% of its market value at friday lunchtime. Hopefully, this talk of Lloyds' superior and stricter valuation method (compared to HBOS's) is true but they could have done with preparing the ground for the announcement.

My view is that the government shouldn't take Lloyds over but, of course, we all now know that things can be much more dire than we realise. incidentally, the current government in general and Gordon Brown in particular have ben given a lot of stick for not doing enough to protect final salary pension schemes. The Lloyds/HBOS merger could be another nail in the final salary coffin if it doesn't come right because in effect Lloyds TSB shareholders stepped in to save the government from having to take over HBOS outright and most of those shares are in the hands of pension funds and life assurance companies (presumably).

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After all the gloomy news over the weekend, it's beginning to look like the politicians haven't quite risen to the enormity of the challenge facing them. True, Ed Balls has warned us that the economic situation is the most serious in a hundred years and we can assume that he wasn't completely off message. On the other hand, the Treasury Select Committee's interrogation of the bankers last week didn't shed much light on possible ways forward. Apologies, sincere or not, really don't cut it as a solution to the problems the world faces now. And even Mervyn King is saying that the government can't start saving revenue now, which is what the Conservatives appear to want.

Aside from the fact that no one can remember the Conservative Party minding about banking models before 2008, the underlying problem is that the UK's political establishment don't seem to realise that public don't entirely believe that there's enough talent among all the parties to sort out all our difficulties. They need to start thinking that the alternative to the present government should possibly be a national government.

Although, I don't believe the blame game is going to get us very far, I do see one exception to this. The Tories shouldn't be taking too much heart from Gordon Brown's falling popularity; the fact of the matter is that popularity is not really what's needed now. Everyone can all enjoy moaning about the Prime Minister but the important thing is the belief that he and the Chancellor aren't in a panic.

Mention of a coalition government brings to mind wing collars and pince nez, appeasement and failure to help Republican Spain. In particular Labour politicians see it as a wilderness period. However, it also saw the beginning of successful rearmament and a long period of above trend investment in industry.

If UK politicians and their counterparts in other democratic countries don't work together more, not only will they not have enough collective wisdom to sort out the economic problems but they won't have the capacity to face down (or merely solve)threats from abroad either.

The likelihood is that we won't see a coalition government but the main political parties should at least act as if it was a sensible next step.

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The same need for working together is evident in the US, too. Tim Geithner's plan has come in for a great deal of criticism but adversarial politicking doesn't seem to be the right environment for the clever ideas to rise to the top.

My own view is that the federal government should just guarantee everyone's mortgage payments against the threat of unemployment. that would remove a lot of the fear that's paralyzing America and solve a big proportion of the toxic asset/debt problem. It also gets around the trust issues that come up if plans to insure the banks against their toxic assets or have a 'bad bank' buy them are considered. Of course, there are different trust issues but they involve ordinary people rather than bankers.

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I've had one good walk, in the vicinity of Chiddingfold. Very pleasant but also very muddy. It connected two walks I've had previously.

On Saturday we took off to the beach which was great. The vehicle access to West Wittering is going to close for road repairs today, for 3 weeks, so we were glad we didn't postpone our visit for another week. While we were there we saw what appeared to be a German Shepherd club having a communal walkies - a very odd sight - like a tribe heading off to celebrate the solstice.

Sadly, the Squirrel Inn at Hurtmore, great for beer and grub, has closed all of a sudden; I'm still trying to find out what happened. The Wood Pigeon at Wormley has also closed but longer ago, I believe.