A Message From The City of London

porterly

We've been duped.

A year ago we were told the world economy was in melt down. Now we all have to pay more tax to bail out the banking and investment sector. Fast forward a year and the stock markets have shot up and the investors are sitting on massive profits.

Big bonuses are on the way again, and in the City wine bars they are celebrating like it’s the 90s again (the whisper is that if the banking sector didn’t actually plan this crisis, then they missed a trick and should engineer another crisis like this every couple of decades!)

A year ago a steady stream of big companies used the press to spread the gloom and justified cutting jobs and overheads. A perfect scenario for the directors and management. Lower cost base, more profits, bigger dividends, and bigger boardroom bonuses.

The investment banks and analysts talked up the recession, forecasting years of depression. Markets fell. Then they bought into the market on the way down. Once it became impossible to deny any longer that companies – having slashed overheads – were trading through the downturn and still making profits – the markets surged up. Now they are all sitting on massive profits. Very nice thank you.

A few investment analysts in the sector have continued all summer to talk about a double dip recession. Why I wonder? Perhaps they want to keep investors on edge, so that any bad news can precipitate another fall, so they can buy in again and repeat the exercise. But the market isn’t listening just yet. Nor will the market stop rising until enough fund managers feel they’ve made enough to pull back, and wait for the next buying opportunity.

So what is driving the market? Why are stocks racing to valuations which stretch all the fundamentals? Are the banks and investment sector pulling the strings again? Well the government prints all that money, to encourage the banks to lend. But do you see them lending? Where is all that money going? Is it going back into the financial markets, and driving up the share prices? If extra cash is sloshing about those with access to it aren’t going to keep it in a bank account earning a pittance in interest, not when there’s money to be made in the markets.

So the message from the City is, thanks everyone we’re having a ball.

ruggedtoast

Yes - for anyone struggling to make ends meet and paying a rising tax bill to fund these jokers, its sickening.

I was in the States recently which is further ahead than us in the recession, people are absolutely fuming about Obama's Wall Street bail outs - I doubt he'll get a second term to be honest unless things really pick up.

purch

We've been duped

Speak for yourself sucker !!!!

porterly

purch wrote: »

Speak for yourself sucker !!!!

Is that your reaction to anyone who hasn't done as nicely out of the crisis as you have? Nice.

inspector_monkfish

All city workers are pure evil.
Fact.

purch

Is that your reaction to anyone who hasn't done as nicely out of the crisis as you have?

Waaaaay too many assumptions there for someone who only joined this morning :cool:

ruggedtoast

inspector_monkfish wrote: »

All city workers are pure evil.
Fact.

Theyre not all evil. They have, however, seemed to have done a lot better out of the crisis they caused than anyone else from where I am sitting.

StevieJ

Hey inspector Sterling is up gainst the OZ$, a rare occurrence of late.

inspector_monkfish

steviej wrote: »

hey inspector sterling is up gainst the oz$, a rare occurrence of late.

its up against pretty much everything last couple of days

long live the pound!!

inspector_monkfish

ruggedtoast wrote: »

Theyre not all evil. They have, however, seemed to have done a lot better out of the crisis they caused than anyone else from where I am sitting.

oh they are mr toast. trust me.

ruggedtoast

inspector_monkfish wrote: »

oh they are mr toast. trust me.

Well I think thats the problem!