Hard to explain how bad economic crisis is, says Cable

macaque_2

ILW wrote: »

The banks were one of the major sources of growth before the recession.

Churning debt does not qualify as growth and the fact that Gordon Brown was able to skim these ill gotten gains does not make it any better (and in the way he spent the money, probably worse).

The banks will never repay their debts. They have enjoyed stealth subsidies in the form of cheap money underwritten by HMG and lent this out at userous rates. They have also had a field day ripping off the public. Interest on deposit accounts? 0.5%. Interest on loans and credit cards? 5 to 30%. That says it all.

If the banks really want to undo the damage they have done, they can compensate small companies for the damage they caused with their unfair lending practices and compensate borrowers and lenders for userous spreads.

worldtraveller

Cable speaks well! The people that think that we will come out of this crisis in the short term are, IMHO, sadly deluded. The negative signals were here in the early noughties, but nobody took any notice. They continued their prostitution to easy credit. QE just continued the smoke & mirrors illusion, for a time. I'm still waiting for someone to tell me exactly why they believe that things should get any better soon. Exactly what is going to bring about the recovery of the UK economy? People have been living in a rarefied atmosphere for the past 10-15 years, thinking that things will always be that way, with, basically, a singular reliance on the financial sector to pay the bills. Easy credit was available and Brown continued to bloat the unproductive public sector, both significant factors in booming house prices . Unfortunately, IMHO, we are now seeing, and will continue to see, the negative results of these issues for many years to come.

sabretoothtigger

I'm still waiting for someone to tell me exactly why they believe that things should get any better soon. Exactly what is going to bring about the recovery of the UK economy?

Global GDP growth, Technology advances

UK is a highly developed economy able to provide unique products in quantity and quality.
If your customers get richer then so do you generally, Asia is due to get alot richer we just have to make sure we provide for their needs like we traded with USA

We are better off then USA for a couple good reasons and we also have less of a spoilt child type bias holding us back from changing when needed, we havent been the worlds golden child for many years.
Also we have positive population growth which helps reduce debt burden in favour of natural growth

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.

That was politics that decided that though not a free market.
Government is the largest debt creator so how can they judge banks guility when they are worst of all

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.

Guilty of greed. Nothing new, didnt we have greed is good in the eighties

didn't care that the organisation they worked for would suffer as a result.

How many people work for a company they couldnt care less about. We arent really naming anything unique there.
Companies will fail and be wrong greedy or whatever. Nothing will stop human nature to overdo things, what is especially wrong this time is government interfere in those mistakes when there is no solution to failure in business

Trying to make things better causes greater greed, risk taking, etc


Only thing I want is bonuses to be in 10yr shares. If the company goes broke, the result is quite simple.
There has been a few small moves to this

abaxas

sabretoothtigger wrote: »

Global GDP growth, Technology advances

UK is a highly developed economy able to provide unique products in quantity and quality.
If your customers get richer then so do you generally, Asia is due to get alot richer we just have to make sure we provide for their needs like we traded with USA

We are better off then USA for a couple good reasons and we also have less of a spoilt child type bias holding us back from changing when needed, we havent been the worlds golden child for many years.
Also we have positive population growth which helps reduce debt burden in favour of natural growth

Still doesnt get away from the fact we are unable to feed ourselves without trade.

StevieJ

abaxas wrote: »

Still doesnt get away from the fact we are unable to feed ourselves without trade.

Didn't realise we were starving.

geneer

Looks like this economic meltdown and recession is going to run and run.
It hasn't even started to bite.

I am compelled to reitterate:-

Thanks Again Property Bulls.

abaxas

StevieJ wrote: »

Didn't realise we were starving.

We are not as we rely on others selling us food.

Just making the point that we are 100% reliant on others to be able to feed our population. Ie we have larger things to worry about.

StevieJ

abaxas wrote: »

We are not as we rely on others selling us food.

Just making the point that we are 100% reliant on others to be able to feed our population. Ie we have larger things to worry about.

I dare say we could be self sufficient in food if we needed to be.

ninky_2

trying to pin down what caused the banking crisis is a bit like trying to find the cause of mental illness. you can navel gaze into your past, your parents, your school days etc etc as much as you like. chances are you'll just find the causes you want to find, be left with a big bill for psychoanalysis and still feel depressed / phobic etc.

i'm a great believer in cognitive therapy which deals not so much with the causes but rather the here and now and ways forward.

to decide a way forward there needs to be some sort of consensus on what the goal is. i'm not sure we are anywhere near thinking about this. i guess people say they want a "healthy" economy - but what does that actually mean?

you can't reach a goal if you haven't set it and i don't think we've set it yet. as a suitable reducing the deficit just doesn't cut it imho.

[Deleted User]

sabretoothtigger wrote: »

Global GDP growth, Technology advances

That was politics that decided that though not a free market.

They had to be bailed out and they knew it. The banks employees created the problem. We, via our governments, picked up the pieces afterwards.

Government is the largest debt creator so how can they judge banks guility when they are worst of all

Comparing private industry to governments is nonsensical. They perform very different roles.

Guilty of greed. Nothing new, didnt we have greed is good in the eighties

Their greed isn't necessarily an issue.

Being so greedy that they collectively created a £ multi-trillion hole in the world economies could be argued as going a tad too far.

How many people work for a company they couldnt care less about. We arent really naming anything unique there.
Companies will fail and be wrong greedy or whatever.

Too many. The difference in this case is that these people are well paid partly because they have responsibility not just the possibility of earning the banks money.

The fact that they ignored this responsibility means that they should be held to account.

Trying to make things better causes greater greed, risk taking, etc

Rubbish.

Keeping incompetent irresponsible staff and effectively granting them impunity for their actions is the real failure of our government.

Only thing I want is bonuses to be in 10yr shares. If the company goes broke, the result is quite simple.
There has been a few small moves to this

This isn't a bad idea although I would prefer to see a delayed payment or no bonuses.

Stopping these lowlifes from making political donations would also be a good idea.

These two things might help reduce the scale of the next crisis they create but it does nothing to deal with our current crop of bankers.