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The Conservatives back in 10 Downing Street.
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So the defense of the bankers is "we operated within the rules".
Sounds rather like "we were just following orders". That defense wasn't good enough either.
There is no denying that they over reached, got greedy and contributed to the situation in which we now find ourselves.
Don't go confusing people with your facts there, Dustin.
People know the bankers are just wicked (a) because they went to posh schools and are posh and everyfink and (b) their newspaper tells them so.
I do seem to remember hearing a certain G Brown live on the radio telling me that the banking crisis was entirely caused in America, and not the fault of anyone in this country. Still, we have to hate the bankers, the media tell us to.
The vast majority of banks were and still are on a sound financial footing, including LBG/HBOS etc, a small minority of institutions over reached, Lehman Brothers, Fannie Mae etc, this brought down the house of cards when world markets got jittery.
For the most part the banking crisis was due to confidence and fear of the unknown.
Northern Rock would have stood if it hadnt been for that idiot Robert Peston.
The "banking crisis" isn't really the problem at all, despite desperate media attempts to say so.
The problem, both here and in Greece, is governments spending more than they've got. Not a popular message. Over to Bob Crow to tell us how he'll bring on massive strikes if they dare to stop doing it.
Well, I don't.
I am posh though.
Mutts, Having worked in the City for 25 years I'm guessing I might know a bit about how it works though. In the same way that I'd value a teachers viewpoint on the education system more than what the press/public say etc etc etc.
But do you seriously believe the bankers are to blame for a government overspend?
Another 2,600 jobs going at RBS, so thats another 2,600 on 6 figure salaries and multi million bonuses out the door
I think the City is very good at offloading its share of the blame for where we are. Yes, it contributes a good chunk of GDP. But it also skews the economy in the SE and has promoted a culture of greed as opposed to a healthy profit motive.
Much of that contribution to the economy is due to deals for the sake of making deals, eg Cadburys. Sure, it earned the city slickers a fortune but it also lost a whole load of people their jobs. Not sure where the benefit to the economy was there.
Politicians also to blame, of course, by not regulating properly and letting the city guys get too big for the economy and for their own good. Nobody comes out of this with much credit.
But ultimately, yes I do pin much (not all) of the blame on the banks for where we are. Had they not got so ahead of themselves they would not have needed so much public money. They owe the rest of us.
And finally, as for the argument often heard that if we don't pay top dollar we don't get the top brains. If these top brains were to make good on their threats and emigrate if made to pay tax like the rest of us then they would leave us financially poorer but morally much better off.
Ultimately thats capitalism , the vrtues of which are another argument altogether.
Oh and yes Cadbury had provisionally looked at outsourcing to Poland (I think) , Kraft were going to try to save the plant.
Believe me the kids were gutted, last time we went round Cadburys we picked up enough freebies to keep them in chocolate for a month.
The point being that these deals are done with as much an eye on what the City gets out of it as what the seller and buyer get. Never mind the people who actually do the work in the company.
They were probably unaware that the factory even existed. All they wanted to do was score a fee. Who cares about the wider economy?
I don't know how to resolve all this, but I do think it makes sense to split the banks up so that the casino gambling guys can't screw us all over again.
Blaming Peston for the Rock's collapse
Why do people seem to feel that bankers and city firms are due criticsm when they make certain deals, make profits, and jobs are lost as a result.
When you go out shopping do you look for competitive prices, do you buy things (most products these days) that are produced in China's sweat shops?
People criticise the manufacturing job losses accross the UK over the last decades but at the same time we all want pay rises. Who here would choose to buy a TV for £750 manufactured in Reading when you could buy the same TV manufactured in Shanghai for £500!
I'd take issue with the idea that business deals are done to make money for the City. Kraft saw an ooportunity to buy Cadburys at a decent price so that they can make more profits for their shareholders. Yes, some of those shareholders will be large pension funds, but the management of Kraft wouldn't have been thinking about which inidividuals or organisations the profits would be going to.
I work for a privately-owned business but we'd do the same thing. If a competitor or a complementary business could be bought for a good price and generate more profit we'd do it, with very little involvement from 'the City'. That's just business, not greed.
Agreed, Mike. Companies making money and the economy growing is a good thing.
Spending what you can't afford isn't. And that seems to be the root of the fiancial problems. People taking out loans they couldn't repay. Banks lending money they were unlikely to get back. Government spending more than it had. It's the 'buy now pay later' mentality that's the problem - maybe we're entering an era of sense. Or maybe not - we'll see.
when will the economy be fully grown then? When is there enough?
just a thought
Bankers did not just passively submit to parameters. They have consistently and successfully lobbied against regulation. For instance in the early 1990s a lobby group was set up within the banking industry specifically to keep CDS out of the scope of regulation. These were instruments designed to enable banks to get round lending limits.
The state of the economy isnt just about the deficit. It is also about the asset bubbles. The banks did benefit from these bubbles - but when things went south they turned to the government. Part of the reality is that many bonuses should not have been paid as the banks couldnt measure properly whether the deals were profitable or not. Despite the free market deregulation tendancy of bankers they always seem to have a put option to place the losses on the government and therefore on the taxpayer. Alan Greenspan should get more criticism for keeping interest rates low and enabling markets to go crazy.
Many bankers did not deserve all the big bonuses and salaries over the last couple of decades - all a lot of them were doing was selling pieces of paper to each other. As it turns out much of that was shitty paper.
"The vast majority of banks were and still are on a sound financial footing"
Given the amount of trading that banks do with each other it is not realistic to pretend that a couple of 'bad' banks were all that was involved. If governments had not stepped in with taxpayer money lot more banks would have failed and a lot more bankers would have lost money. It is scarey to think that many bankers think they have dodged the bullet and can go back to the old ways.
If population and dependency rates (i.e. ratio of earners to non workers) is constant then there is no real need for economies to grow - that also assumes fixed prices, no inflation and no expectancy to get any better off finanically
If , on the other hand , the population grows then ergo the economy needs to grow by the same ratio to keep standards of living/wealth or whatever you wish to call it constant.
If the economy remains static, then a greater popultaion will lead to higher unemployment (no new jobs)
Put another way, the UK has grown, our dependency rate has grown (more older/retired people) therefore to keep up, the economy needs to grow.
but you are right, how do you define ' enough' stuff?
she fucked the country around way more than Blair/Brown have done
she helped set into motion personal greed, social unrest and paved the way for the banking crisis as nobody had/has control of the banks and City......
if Cameron carries that Thatcher legacy into the future, I suspect he won't last long as people will not want to be screwed by another long Tory government the way Thatcher screwed us
but hopefully, the LDs will bring a sense of reality and responsibility to the Tory "make the rich, richer and screw the poor" attitudes. and get the PR system voted in
PR will mean continuing coalitions and for me that will allow this country to get away from the ridiculous swings of Labour v Tory conflict politics and to a more measured consensus view of the best for everyone
Cant agree with that. For companies who had their working capital turned off abruptly there was very much a crisis and a problem. And for the people and companies who in turn sold to those companies they quickly became aware of that crisis and very quickly had a very real problem.
Dont know how you've managed to be insulated from that, but well done.
I am aware of that idea Dustin. The "enough" thing is the flaw. When can we ever say "we are alright" we have enough to live in comfort and replace when need be. I guess we have all witnessed more and more goods that were not around in our early years. We never thought we were missing out or lacking because we didn't have them. These goods somehow get re-defined as "needs".
On the employment front, if we find we have enough and say no more growth, surely all can work less hours without great impact because we feel we have "enough". I am certain a great deal of anxiety and many of our social ills will diminish in such a society.
growth for growths sake is dangerous IMHO
I can understand perfectly the gripe about bonuses being paid, indeed despite being in the city for 25 years, I also agree that many should have been withheld.
However equally only a small percentage of traders have been involved in the dodgy paper, there are still loads in tradirtional products: fx, money market, corporte and government paper , equities, commodities and so on
I still would suggest though the buck must surely stop with the regulators, accountants and government. Sure banks will try to duck around it , as you say with the lobby groups, as they are acting as self interested capitalists (and I make no apology for that), but if nothing is done then are they really the most culpable? I don't think so.
Further, the auditors and accountants should have been savvier, but as I've said from the outset, many things can be signed off as long as the huge fees are going to be guaranteed for the next 12 months and the exchequer see another healthy tax bill being settled.
Fair point about some banks possibly being in the poop owing to the government intervention, and yeah, think that may well be correct. However the issue goes deeper, if banks can't borrow, then the situaton becomes worse for companies and individuals too. Without the added liquidity, solvent banks (barclays for example would have been forced to borrow at elevated levels internationally, with the costs , naturally, being past on to the customers.
so more of "make the rich, richer and screw the poor"
oh - and who re-regulated the city ?