Hard to explain how bad economic crisis is, says Cable

[Deleted User]

ILW wrote: »

The banks were one of the major sources of growth before the recession.
They were producing massive amounts of tax revenue.

True, but only a very small proportion of the money their profits.

The reason for most of the cuts was overspending by the government.

Most of the job losses in the early years were in the private sector. The cuts were introduced to tackle the deficit which became critical after we increased the nation's debt massively in order to bail some of the failed banks out in order to prop up the banking system.

The banks were not perfect and mostly to blame for the current situation.

Corrected for you.

And yes I would like some shares and I believe that many would become mini capitalists if they had them.

What a pathetically small shareholding that would be if it were divided amongst all the tax payers. It would be expensive to administrate and be pathetically small compensation. Given the scale of the damage that has been caused this would be a further insult to the intelligence of the tax payers.

Unfortunately nothing legal can be done to punish the banks thanks to Operation Merlin. Those donations get you far more than paying a fair proportion of tax don't they? And cheaper too

This leaves those that know they've been shafted with the choice of just taking it or breaking the law and punishing these people directly. It will be interesting to see what happens as the effects of the banks (especially investment banks) staff's actions continue to hurt our country.

[Deleted User]

Loughton_Monkey wrote: »

A nice and sentimental thought, but neither practical or necessary.

The Government didn't [technically] bail out the banks. The tax payer did. Every single one of us. All we have to do is wait for repayment of that loan, and automatically the tax payers - every single one of us - benefits.

We didn't waste £hundreds of millions issuing every taxpayer with an "IOU" so when it is solvent and can repay, why spend another £hundreds of millions issuing shares to every single tax payer?

Yes, and when looked at in isolation we will make a profit on them.

However this totally ignores the massive damage caused to the economy, currency, people's standards of living and jobs in the meantime. This far outweighs anything we are likely to 'make' on the deal.

ILW

[quote=[Deleted User];43826194]T
This leaves those that know they've been shafted with the choice of just taking it or breaking the law and punishing these people directly. It will be interesting to see what happens as the effects of the banks (especially investment banks) staff's actions continue to hurt our country.[/QUOTE]

How would that help anyone?

[Deleted User]

ILW wrote: »

How would that help anyone?

Who said it would?

I think that Operation Merlin was potentially a mistake by the banks. If you take the p1ss too much it can backfire.

The problem is if you deny people legal options and hence justice some of them will take the law into their own hands.

And no before you ask I'm not planning anything. I'm not one of the direct victims and I have responsibilities to my staff and my family.

All I'm thinking is that when all the cuts really kick in, regardless of what BS the banks keep pumping out, there is likely to be a reaction. It will be interesting to see what that reaction is.

nembot

[quote=[Deleted User];43817736]Politicians of all colours are not without blame for their soft stance on the banks, but the VAST majority of the damage was caused by the people that work for the banks.[/QUOTE]

Yes, exactly.

However, I do think governmental regulation could of limited this to a degree and apparently members of the house of lords highlighted many of these potential risks years ago, but any attempt to implement new legislation was thrown out by then labour government. The lords recent criticism of the independant auditors in terms of highlighting banks frightening debt is also spot on in my experience.

I dealt with one of the auditing companies on a regular basis as part of Sarbanes Oxley and let me tell you, they have absolutely no idea what they're doing. :eek:

sabretoothtigger

the VAST majority of the damage was caused by the people that work for the banks.
Yes, exactly.

I dont believe this is the case. Not because bankers are great, they are flawed profiteering collectives but we have always known this

If I say bankers are greedy you would not disagree much with me.
If I had said it a year ago, the same
ten years ago, most thought the same
twenty years
fifty
hundred
two hundred years ago Im sure people disliked money lenders and the whole process just the same
Shakespear wrote about Shylock and his pound of flesh in 1598

So none of this new, what changed and is most likely the cause now of problems is government
The biggest change in the last few decades has been the control of the worth of money.
This is where it gets hazy, pound is a pound right? Apparently not because what is money worth is under the decision of government and how they vary it is not clear to us.
So its not an easy target or clear where the problem is to most including me, but I suspect this most of all

People making or losing money in their business or investments is the same it always was.
People will always screw up some of the time.
So I would look towards the interference and betrayal of trust that 'goverment will always take care of you' attitude that is the problem and will keep being so till people realise otherwise


The reason we want a free and open market is because it is available to anyone.
They can do it right or they lose money, that is not societys problem.
Its the task and burden of any individual to find a reasonable honest profit in their work without losing money.
One person going bankrupt is not a problem, one company even a gigantic one is not a problem either but an entire government or country is. The solutions we got recently favoured the latter

Trying to lock everything down so only government can control who succeed or not is going to destroy that free market and the ability of many to thrive

ash28

[quote=[Deleted User];43819464]I'll bet they lobbied for it.
I take it you have no answer to the questions I asked?

Do you work for a bank by any chance? No wonder you're defensive.[/QUOTE]

You bet rightly then - banking, insurance and brokerage companies spent a fortune trying to get the act repealed, it was repealed by the Clinton administration in 1999.

In 1997 and 1998 alone, the three industries spent over $300 million on the effort: $58 million in campaign contributions to Democratic and Republican candidates, $87 million in "soft money" contributions to the Democratic and Republican parties, and $163 million on lobbying of elected officials.

There were concerns voiced at the time about the potential impact to the US and to the global economy.

In the 1980s Reagan lifted the financial regulation on savings and loan companies - result was an orgy of speculation resulting in the collapse of savings and loan institutions and, at the time, the biggest bailout in US history - dwarfed into insignificance by this one ofcourse.

[Deleted User]

sabretoothtigger wrote: »

I dont believe this is the case. Not because bankers are great, they are flawed profiteering collectives but we have always known this

If I say bankers are greedy you would not disagree much with me.
If I had said it a year ago, the same
ten years ago, most thought the same
twenty years
fifty
hundred
two hundred years ago Im sure people disliked money lenders and the whole process just the same
Shakespear wrote about Shylock and his pound of flesh in 1598

So none of this new, what changed and is most likely the cause now of problems is government
The biggest change in the last few decades has been the control of the worth of money.
This is where it gets hazy, pound is a pound right? Apparently not because what is money worth is under the decision of government and how they vary it is not clear to us.
So its not an easy target or clear where the problem is to most including me, but I suspect this most of all

People making or losing money in their business or investments is the same it always was.
People will always screw up some of the time.
So I would look towards the interference and betrayal of trust that 'goverment will always take care of you' attitude that is the problem and will keep being so till people realise otherwise


The reason we want a free and open market is because it is available to anyone.
They can do it right or they lose money, that is not societys problem.
Its the task and burden of any individual to find a reasonable honest profit in their work without losing money.
One person going bankrupt is not a problem, one company even a gigantic one is not a problem either but an entire government or country is. The solutions we got recently favoured the latter

Trying to lock everything down so only government can control who succeed or not is going to destroy that free market and the ability of many to thrive

Re: Free and open markets:

The sector as a whole has lacked competition for a long time.

The fact that we have banks that are deemed to big to be allowed to fail means we do not have a free and open market.


With regards to the rest:

Government regulation will always lag behind developments in any industry for obvious reasons. The lack of regulation was largely due to the lobbying by the banks to get better deals for themselves. All big business does it but a key part of this is party donations and threats to move their HO. Our politicians were either not looking at the bigger picture where the crisis the banks were building made them a liability not an asset to the country or were more interested in party funds and jobs for the boys after they finish their political careers.

The bankers chased their bonuses. Nothing wrong with that you might think. Some trades will be good and some bad. However given the vast amount of toxic assets they managed to acquire it leads one to question competence or integrity.

Given the scale of the problem it is hard to believe that they didn't know the issues they were causing. Therefore the natural conclusion is that they chased their bonuses for short term personal gain and didn't care that the organisation they worked for would suffer as a result.

The same applies to the management of the banks.

Therefore it is very hard to see the banks employees as anything other than guilty. Their attempts to continue their lies is increasingly offensive.

[Deleted User]

ash28 wrote: »

You bet rightly then - banking, insurance and brokerage companies spent a fortune trying to get the act repealed, it was repealed by the Clinton administration in 1999.



There were concerns voiced at the time about the potential impact to the US and to the global economy.

In the 1980s Reagan lifted the financial regulation on savings and loan companies - result was an orgy of speculation resulting in the collapse of savings and loan institutions and, at the time, the biggest bailout in US history - dwarfed into insignificance by this one ofcourse.

Bill Black makes some interesting comments on this and he was one of the investigators at the time:

http://www.youtube.com/watch?v=Rz1b__MdtHY

kabayiri

Loughton_Monkey wrote: »

"Britain is no longer one of the world's price setters."
"We are actually a poorer country."
"Britain was operating a model that failed..."

Vincie is my favourite nominee for the Nobel Prize for 'saying the bleeding obvious 5 years after everyone else'.

This was all true far, far before the so-called 'banking crisis'.

I suspect this is a bit harsh.

Up to the point of the election it seemed like everyone was in denial. None of the major parties in the election run up was honest about the financial situation with the wider public.

It was amazing how the mood changed so quickly once the coallition got in though.

I guess it's the nature of politics that they can't really be honest with the populace though. People just don't like to hear bad news.