Whoopee...the banks are saved !

TRUSt_NO_1_2

But many relatively well off people are going to be screwed.

Watch what is happening in the USA.

The taxpayers are going to pay....BIG TIME !!! (taxpayers= middle class, as the mega-rich and large corporations don't pay tax)

The UK government are following their (USA) every move step by step.

Let me keep it simple.

Jobs are disappearing at a rapid rate.
Wages/salaries are falling...despite the crap in the press.

The rich and mega-rich are becoming richer.
The rest are screwed....as in declining standard of living.


The banks got greedy and exposed their finances to the less well off (lower and middle incomes) on the back of a housing 'bubble',which they were too stupid to see was ...you guessed a bubble.
They have now stopped lending to the same 'poor' people to buy houses but want their losses bailing out by the government...who then have to fund this bailout from ?....
...yes the lower and middle classes (eg removal of 10% tax rate,congestion charges,council tax,speed cameras and on and on ...)

BUT...there are more losses waiting in the wings.
..and these losses will have no collateral (i.e a house) behind them..so maybe the banks are not out of the water.

TRUSt_NO_1_2

TRUSt_NO_1 wrote: »

......BUT...there are more losses waiting in the wings.
..and these losses will have no collateral (i.e a house) behind them..so maybe the banks are not out of the water.

The banks now have a massive pool of 'free' money (tax payer's money now and for the next 20 years) with which to vacuum up cheap shares on the world's stock markets (plus reposessed properties going very cheap)

Just wait for them (the stock markets) to totally collapse when earnings (losses) of many non-financials are posted and the banks will ride into town and clean up.

Then it's business as usual.
Banks lend to other banks ?
Lend to the public..ha...ha !!!
Why on earth would they want to do that when there is a sale of the century on the stock markets about to happen ?

purch

The rest are screwed....as in declining standard of living

"plus ça change, plus c'est la même chose" :eek:

.......as they say !!!!

cloud_dog

TN1 - Not for the first time I really don't get your point.

Yes, the banks (and our own personnal greed) have caused this havoc, and yes they are getting bailed out with our money, and yes the stock markets are in turmoil and are falling.

So, based on your scenario, the banks buy up companies cheap, creating demand for the shares and realistically increasing the SP; the outcome could be:

* The banks capital increases and therefore their SP increases
* The stock market starts to recover
* Hopefully a feel good factor starts to return, thereby self-fueling more investments / SP increases
* The banks SP / capital increases therefore the bail out investment capital becomes more and more valuable to the government / us tax payers

I'm less concerned with your point above and more with the longer-term inflation (hyper???) or deflation.

cloud_dog

wombat42_2

Err. Mr Obama has promised tax cuts to 95% of the population not tax rsises.

Milarky

wombat42 wrote: »

Err. Mr Obama has promised tax cuts to 95% of the population not tax rsises.

How is that suppposed to add up? If only 5% of the population has to pay any more it's a very inefficient way to raised money and pay for things

On the other hand when 'Income Tax' first appeared in the 1790s only landed types paid it too - the rest of the population was dirt poor.

However in this day and age governments can't go on pretending that 'only the rich' pay for things and everyone else gets said stuff 'free' - like prescriptions. There's no such thing as free and politics should have the honesty to promote the 'equality of sacrifice' argument to defend spending programs.

wombat42_2

Milarky wrote: »

How is that suppposed to add up? If only 5% of the population has to pay any more it's a very inefficient way to raised money and pay for things

On the other hand when 'Income Tax' first appeared in the 1790s only landed types paid it too - the rest of the population was dirt poor.

However in this day and age governments can't go on pretending that 'only the rich' pay for things and everyone else gets said stuff 'free' - like prescriptions. There's no such thing as free and politics should have the honesty to promote the 'equality of sacrifice' argument to defend spending programs.

Yep it all adds up to hyperinflation in a couple of years. The democrats were more keen on the bailout than the republicans. A sizable number of republicans opposed the bailout. If there was no bailout there would have been severe short term pain but would have been better in the long run as the bailout just adds to the debt problem.

Reaper

I wasn't going to reply to this thread as I didn't know where to begin. So I'll just pick out a few points.

The UK government are following their (USA) every move step by step.

The US is further ahead in their recession than us, but if you mean in terms of policy it is the other way round. The US abandoned their original plan to buy toxic loans off the banks and copied the UK's liquidity strategy instead.

The rich and mega-rich are becoming richer.

No. So far the crash has mostly affected the rich - they tend to be heavily invested in the stock market, whereas lower earners tend to stick to savings accounts which have been fully protected. Only as the recession starts to bite will it start to filter down to the rest of us.

The banks now have a massive pool of 'free' money

No they don't. That's the whole problem. They thought they did then discovered much of it consisted of loans on sub-prime mortgages which haven't a hope of ever being repaid.

The government has not just handed out money freely to the banks. They have lend money in exchange for securities or shares, but mostly they have provided short term liquidity - eg providing guarantees on loans between banks to encourage them to start lending to each other.

There is no pile of money ready to buy bargain stocks. Well, not here anyway. The Arabs do have piles of money and have been snapping up bargains. Maybe that would be a better subject for a rant.