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scooterscot
7th January 2011, 16:42
BBC News - Bank bonuses 'to run to billions in 2011' (http://www.bbc.co.uk/news/business-12131092)


So everything is back to normal then? As long as there's debt to sell we're OK? This can't be the future? Are the banks really untouchable? Who the @£$£ is in charge of our country? Certainly not the government.


Tony Benn - Cabinet Minister in the 1964–1970 Labour Government




"As a minister, I experienced the power of industrialists and bankers to get their way by use of the crudest form of economic pressure, even blackmail, against a Labour Government. Compared to this, the pressure brought to bear in industrial disputes is minuscule. This power was revealed even more clearly in 1976 when the IMF secured cuts in our public expenditure. These lessons led me to the conclusion that the UK is only superficially governed by MPs and the voters who elect them. Parliamentary democracy is, in truth, little more than a means of securing a periodical change in the management team, which is then allowed to preside over a system that remains in essence intact. If the British people were ever to ask themselves what power they truly enjoyed under our political system they would be amazed to discover how little it is, and some new Chartist agitation might be born and might quickly gather momentum."

Green Mango
7th January 2011, 16:55
BBC News - Bank bonuses 'to run to billions in 2011' (http://www.bbc.co.uk/news/business-12131092)


So everything is back to normal then? As long as there's debt to sell we're OK? This can't be the future? Are the banks really untouchable? Who the @£$£ is in charge of our country? Certainly not the government.


Tony Benn - Cabinet Minister in the 1964–1970 Labour Government

Bonuses are down by a fair chunk on 2009 the last full year of LABOUR.

I believe the government is going to pass laws to encourage more of the bonuses to be paid in
company shares in order that the bankers are encouraged to be more responsible.

The bankers are close to the money and the rewards are great. Sickening it may be but with the
LABOUR government failing so pitifully to regulate the banks what could we expect.

I blame the bankers, the LABOUR set up regulator, the LABOUR government which made such
terrible decisions as the RBS takeover of ABN AMBRO to go ahead without any enquiry.

OwlHoot
7th January 2011, 17:16
It's really quite easy to understand - The City makes pots of money for the country, and the Government for the most part pisses money down the drain, mostly to bribe voters and placate would-be rivals in one way or another.

Also, as Clause 9 of Magna Carta (http://en.wikipedia.org/wiki/Magna_Carta) is still in force, it would be unconstitutional as well as financial suicide for the Government to meddle unduly with city banks and institutions. Thick as they may be, most politicians can dimly perceive that (well apart from socialists like Tony Benn and his ilk and typical Lib Dems).

As I've often pointed out here in the past, the main blame for the current debt crisis lies with Governments, especially in the US, pressuring banks into making unsound property loans to millions of immigrants and poor people over the last ten to twenty years, which otherwise banks would presumably have been reluctant to do on favourable terms. Remember all that talk in the UK about social funds a few years ago? So even there one can see where Government meddling has led us.

Bagpuss
7th January 2011, 18:35
Owlhoot, your post is wrong in so many ways. The taxpayer recapitalized the banking industry to the tune of trillions worldwide, and the credit default swaps vehicles were not created by governments.


YouTube - The Crisis of Credit Visualized - Part 1 (http://www.youtube.com/watch?v=Q0zEXdDO5JU&feature=related)

scooterscot
7th January 2011, 18:48
Somebody once told me to have more than one egg in the basket. As long as there's taxpayers money to prop up the system / golden egg, we're alright. What happens when revenues collected by the treasury falls less than is expected over the coming years? Raising taxes is just going to push more people out the door surely.

vetran
7th January 2011, 19:13
Simple to fix, the government just sends the banks new terms and conditions every month along with their loan statement, 500 sheets of annoying advertising and the letter that says despite closing all their branches and insisting all their customers learn punjabi & chinese so they can talk to the new telephone banking service, the service charges are going up 60%.

On one of the booklets tucked in the leaflet for incontinence chairs in the small print on page 623 they state any bonus payments to staff will result in foreclosure and debt collection agents being assigned. See how the Banks like their own tactics used on themselves.

AtW
7th January 2011, 19:28
Also, as Clause 9 of Magna Carta (http://en.wikipedia.org/wiki/Magna_Carta) is still in force, it would be unconstitutional

So it's ok for Tony Liar take country into war but nothing can be done about ze City?

:rollin:

OwlHoot
7th January 2011, 19:28
The taxpayer recapitalized the banking industry to the tune of trillions worldwide, and the credit default swaps vehicles were not created by governments. ..

You're talking about attempted remedies and evasive maneuvres, once the dodgy credit was in the system, in other words results not causes.

AtW
7th January 2011, 19:34
What happens when revenues collected by the treasury falls less than is expected over the coming years?

You just borrow more and use PFI scams to keep debt off the books.

HTH

Gordon Brown.

VectraMan
7th January 2011, 19:38
I'm so sick of hearing how the bankers are to blame for everything. If it's true that the banks were allowed to carry on in a fashion that was harmful to the country at large, then the government should have stepped in to stop them. That's the government's job. You can't blame the bank(er)s, only the government.

AtW
7th January 2011, 19:42
You can't blame the bank(er)s, only the government.

So you think police should be blamed for no stopping all criminals well in advance and criminals should get off free because it's someone elses fault not to stop them?

Members of previous Govt should certainly go to jail for criminal negligence, but so should top bankers of banks that required tax payers support - the whole bonus thing is totally wrong because those banks should use that money to repay taxpayers (with profit for risk taken) and also increase capital base of the bank, ffs - they got fook all their own money yet they lend 10-20 times more!

VectraMan
7th January 2011, 20:11
So you think police should be blamed for no stopping all criminals well in advance and criminals should get off free because it's someone elses fault not to stop them?

Ah but to be a "criminal" you have to break the law. The police can't be blamed for non-criminals doing things that aren't yet illegal. If the government had legislated to stop the banks doing what they were doing, and the regulators had failed to uphold it, then yes you'd blame the "police". If the banks had done something illegal, then you could blame the bankers. As it stands you can only blame the government for failing to create the laws in the first place.

Actually I don't think it's that simple. I blame everybody. Everybody is responsible for the level of personal debt to some extent. Blaming the banks, and getting all upset about bonusses is a typical socialist reaction. If you're a socialist, there's conveniently always "somebody else" who's to blame for your problems, and bankers are the perfect scapegoat.

AtW
7th January 2011, 20:15
Everybody is responsible for the level of personal debt to some extent.

I did not have any debts, nor do I have them now. Do you blame me? Choose your words wisely. :eyes

Bagpuss
8th January 2011, 00:26
You're talking about attempted remedies and evasive maneuvres, once the dodgy credit was in the system, in other words results not causes.

Not at all the Banks have been lobbying to remove the controls for years

IMF study links lobbying by US banks to high-risk lending | Business | guardian.co.uk (http://www.guardian.co.uk/business/2010/jan/04/imf-study-links-lobbying-high-risk-lending)

"Highlighting 33 pieces of federal legislation that would have tamed predatory lending or introduced more responsible banking but were the target of intense lobbying, the IMF found that the efforts by banks to resist the legislation overwhelmingly succeeded."

The Banks also lobbied for the repeal of the Glass Stegall Act

Events following repeal
The repeal enabled commercial lenders such as Citigroup, which was in 1999 the largest U.S. bank by assets, to underwrite and trade instruments such as mortgage-backed securities and collateralized debt obligations and establish so-called structured investment vehicles, or SIVs, that bought those securities. Elizabeth Warren,author and one of the five outside experts who constitute the Congressional Oversight Panel of the Troubled Asset Relief Program, has said that the repeal of this act contributed to the Global financial crisis of 2008–2009.
The year before the repeal, sub-prime loans were just five percent of all mortgage lending. By the time the credit crisis peaked in 2008, they were approaching 30 percent.

Glass (http://en.wikipedia.org/wiki/Glass%E2%80%93Steagall_Act)

So saying they were forced by Government is absolute tosh, they lobbied for removal of legislation that was designed to prevent financial crashes. No doubt the Banks are to blame and corrupt/inept government for allowing them to do it (although Governments probably didn't understand the complexity). One thing for sure the taxpayer bailed out those idiotic feckers.


I'm so sick of hearing how the bankers are to blame for everything. If it's true that the banks were allowed to carry on in a fashion that was harmful to the country at large, then the government should have stepped in to stop them. That's the government's job. You can't blame the bank(er)s, only the government.

They aren't to blame for everything obviously some banks/bankers had little to do with this, but those who did are the largest stakeholder, Bigger than Government or those wanting loans. They actively sought to create large gambling institutions based largely on a Ponzi scheme the long term consequences not fully known. They chose not to have enough liquidity should the proverbial hit the fan. While the scheme pays off everyone looks clever, but that's not a reason to mitigate the absolute greedy stupidity. Government were duped no doubt and no doubt it will happen again.

The_Equalizer
8th January 2011, 02:27
I am not sure any of you will bother to read this, but I think it's well worth your time:

Positive Money (http://www.positivemoney.org.uk/)

I've got this nasty feeling that the current system is buggered. Even on a very simple measure, how on earth would anyone in their twenties 'buy' a house?

Platypus
8th January 2011, 11:51
I am not sure any of you will bother to read this, but I think it's well worth your time:

Positive Money (http://www.positivemoney.org.uk/)

I've got this nasty feeling that the current system is buggered. Even on a very simple measure, how on earth would anyone in their twenties 'buy' a house?

I did read it. Too simplistic. Poorly argued.

KentPhilip
8th January 2011, 12:10
[url=http://www.bbc.co.uk/news/business-12131092]

Tony Benn - Cabinet Minister in the 1964–1970 Labour Government

That quote by Tony Benn doesn't add up. The only "pressure" put on the government by the banks in the 70's was as a result of the socialist government going into debt (again!) and having to go cap in hand to the banks and then the IMF.

Banks help to solve problems, they don't create them.

scooterscot
8th January 2011, 12:27
Banks help to solve problems, they don't create them.

I thoroughly disagree.

Banks greed caused the problem in the first place.

It's very easy to blame it on the little one for taking out a risky mortgage etc, but if the product were not available in the first place.

Perpetuated with the idea of continuous wealth generation, without consideration for ethic or moral, banks exploited anyone and anything for profit. They could have stopped way back and sat with smiles on their faces content with the profit they had made. But no, they kept going. We the tax payer even assisted propping up this deeply flawed system.

Someone shall always come worse off in this system and I don't believe that is a direction we should be heading.

OwlHoot
8th January 2011, 12:34
That quote by Tony Benn doesn't add up. The only "pressure" put on the government by the banks in the 70's was as a result of the socialist government going into debt (again!) and having to go cap in hand to the banks and then the IMF.

Banks help to solve problems, they don't create them.

Exactly - Bagpuss may be right that the banks lobbied to relax the regulations, but to a large extent that was because they were already in a pickle, or knew one was imminent, having already widened credit availability at the Government's encouragement or even behest.

We'll never change the opinion of someone like scooterscot though. It's just too easy and comforting and intellectually lazy to simply blame the banks for everything, especially when encouraged in that belief by sneaky politicians. No wonder the tabloids and every loud mouthed pub bore in the country thinks the same way.

P.S. I can well understand how easy it was for the Nazis to make the Jews a scapegoat for Germany's financial woes in the 1920s

Doggy Styles
8th January 2011, 12:46
Governments are the problem, not banks.

You've got to be realistic - you've got to have banks, they do what they do, and they net the UK coffers many billions. It won't do us any good to hack away at them out of revenge or envy.

If banks are taking too many risks with some products, it is up to our government to regulate or legislate against those products. We used to do that when the BoE had full responsibility for supervising banks, until about 2000, and in those days I don't remember people railing against all banks.

Green Mango
8th January 2011, 12:50
I thoroughly disagree.

Banks greed caused the problem in the first place.

It's very easy to blame it on the little one for taking out a risky mortgage etc, but if the product were not available in the first place.

Perpetuated with the idea of continuous wealth generation, without consideration for ethic or moral, banks exploited anyone and anything for profit. They could have stopped way back and sat with smiles on their faces content with the profit they had made. But no, they kept going. We the tax payer even assisted propping up this deeply flawed system.

Someone shall always come worse off in this system and I don't believe that is a direction we should be heading.

That is too simplistic, it was poor legislation, poor regulation, poor oversight by government and banker,broker and the morgage lender themselves who collectively caused the problems. In other words may parties share the blame...

Freamon
8th January 2011, 13:13
I am not sure any of you will bother to read this, but I think it's well worth your time:

Positive Money (http://www.positivemoney.org.uk/)

I've got this nasty feeling that the current system is buggered. Even on a very simple measure, how on earth would anyone in their twenties 'buy' a house?

They are correct to say that banks create money, but this bit is wrong:


Laws that make it illegal for you to print your own £5 or £10 notes have been in place since 1844. But those laws haven't been updated to account for the fact that almost all money now is electronic. Because of this loophole, banks worldwide now have the power to create money, effectively out of nothing

Banks were able to create money long before computers existed.

scooterscot
8th January 2011, 13:13
That is too simplistic, it was poor legislation, poor regulation, poor oversight by government and banker,broker and the morgage lender themselves who collectively caused the problems. In other words may parties share the blame...

I agree. They were however instrumental creating the situation that now exists.

Keeping it simple is not a flaw.

KentPhilip
8th January 2011, 13:16
I thoroughly disagree.

Banks greed caused the problem in the first place.

It's very easy to blame it on the little one for taking out a risky mortgage etc, but if the product were not available in the first place.

Perpetuated with the idea of continuous wealth generation, without consideration for ethic or moral, banks exploited anyone and anything for profit. They could have stopped way back and sat with smiles on their faces content with the profit they had made. But no, they kept going. We the tax payer even assisted propping up this deeply flawed system.


But it is right to blame it on the "little one", if it is indeed their fault. People should accept that when they make a mistake they have to accept the consequences of that mistake.
Has it not occurred to you the reason why they are referred to as a "little one"? It's because for the most part they are greedy, unhealthy, feckless, lazy, thick, ignorant, overweight fools. Everybody else learns how to get on in life.

Freamon
8th January 2011, 13:18
Banks were able to create money long before computers existed.

A quick look at their explanatory video confirms that they actually have no idea how money creation works:

2) Who Creates Money? | Positive Money - Fixing Social & Economic Problems by Ending Fractional Reserve Banking (http://www.positivemoney.org.uk/whats-wrong-fractional-reserve-banking/who-creates-money/)

There is a much much better explanation here:

Banks Create Money (http://ingrimayne.com/econ/Banking/Overview10ma.html)

scooterscot
8th January 2011, 13:29
We'll never change the opinion of someone like scooterscot though. It's just too easy and comforting and intellectually lazy to simply blame the banks for everything, especially when encouraged in that belief by sneaky politicians. No wonder the tabloids and every loud mouthed pub bore in the country thinks the same way.

P.S. I can well understand how easy it was for the Nazis to make the Jews a scapegoat for Germany's financial woes in the 1920s

That belief must be an incredible comfort. Reducing the opinions of others to the lowest common denominator, ergo it must be true.

The last time a tabloid touched these hands I cannot remember. I do not blame the banks for everything however they played their hand.

The fact that the government were unable to do anything about the bonus situation only highlighted their ineptitude as capable managers whilst showing each and every voter how powerless they actually are. This is what happens when we're dependant on one industry. It's a sad state of affairs, even the unions are becoming powerless, they could not close a corner shop if they tried.

We're fast approaching a fully fledged bilateral society of the haves and the have nots in proportions never seen in this country before. The poverty I've witnessed on our own doorstop to those living in the city you might think you crossed continents, actually it was a 30 minute train ride outside of the M25.

scooterscot
8th January 2011, 13:30
It's because for the most part they are greedy, unhealthy, feckless, lazy, thick, ignorant, overweight fools. Everybody else learns how to get on in life.

Yes I've been to Newport. All the more reason why the options should not have been put in front of them in the first place.

I don't consider my dog to be the most intelligent creature in the universe. If however I put too much food in bowl she will leave some for later. The fat cat just buries his nose and keeps eating.

scooterscot
8th January 2011, 13:35
Banks Create Money (http://ingrimayne.com/econ/Banking/Overview10ma.html)

No. Business create money, banks steal it. Or at least they have been for the last year on the interest paid on my savings whilst charging goodness knows what on their other products.

VectraMan
8th January 2011, 13:38
It's very easy to blame it on the little one for taking out a risky mortgage etc, but if the product were not available in the first place.

I disagree. It's the drug dealer argument: is the drug dealer soley to blame for people taking drugs? I don't think so, and I don't think the banks can be blamed totally for risky mortgage lending. Of course we should have regulation, and safeguards to protect the ignorant as much as possible, but at the end of the day taking out a mortgage you can't afford is the responsibility of the borrower. Otherwise we're just saying that people shouldn't be held accountable for their own financial decisions, and where does that leave us?

scooterscot
8th January 2011, 14:04
I disagree. It's the drug dealer argument: is the drug dealer soley to blame for people taking drugs?

So are you saying we should legalise drug dealing and have police come down hard on the users. I like it. Let's tax the users for their irresponsible behaviour.

Desperate people do desperate things, a civil society would beckon those with control to cater the desperate for they never know when the tables might turn. Oh I forgot it doesn't matter, unethical risk taking is punishable by bonuses.

Paddy
8th January 2011, 14:18
So you think police should be blamed for no stopping all criminals well in advance and criminals should get off free because it's someone elses fault not to stop them?

Members of previous Govt should certainly go to jail for criminal negligence, but so should top bankers of banks that required tax payers support - the whole bonus thing is totally wrong because those banks should use that money to repay taxpayers (with profit for risk taken) and also increase capital base of the bank, ffs - they got fook all their own money yet they lend 10-20 times more!

AtW you are so hypocritical. It is rare if not impossible in the UK to prosecute bankers because they are too wealthy, they pay for the best lawyers and are friends with the judges.

When the Russian government prosecute the wealthy for theft and corruption you then cry foul.

Paddy
8th January 2011, 14:22
It's really quite easy to understand - The City makes pots of money for the country, and the Government for the most part pisses money down the drain, mostly to bribe voters and placate would-be rivals in one way or another.

Also, as Clause 9 of Magna Carta (http://en.wikipedia.org/wiki/Magna_Carta) is still in force, it would be unconstitutional as well as financial suicide for the Government to meddle unduly with city banks and institutions. Thick as they may be, most politicians can dimly perceive that (well apart from socialists like Tony Benn and his ilk and typical Lib Dems).

As I've often pointed out here in the past, the main blame for the current debt crisis lies with Governments, especially in the US, pressuring banks into making unsound property loans to millions of immigrants and poor people over the last ten to twenty years, which otherwise banks would presumably have been reluctant to do on favourable terms. Remember all that talk in the UK about social funds a few years ago? So even there one can see where Government meddling has led us.

The bankers were given tax payers money to lend to UK business. Instead they used the money to make gains on the Chinese and Indian stock markets so they can get bonuses. They take bonuses on projected profits, not real time profits. Ie Their bonus is tax payers money.

VectraMan
8th January 2011, 14:34
So are you saying we should legalise drug dealing and have police come down hard on the users. I like it. Let's tax the users for their irresponsible behaviour.

I think there's a good argument for that.

How is it that Ocean Finance have their own TV channel, and you get TV ads for pay day loans at 3000% APR, yet the mortgage lenders are treated as if they're the minions of Satan for offering more than 3.5 times somebody's salary at a reasonable rate? Seems like the priorities are slightly wrong there, and that's where your point about protecting desperate people should apply.

You can't say the same about anybody buying a house at ridiculously over inlated prices with a mortgage they couldn't afford. Anybody doing that made a choice, perhaps encouraged by peer pressure of parents and anybody who told them to "get on the housing ladder or your life will be ruined", but a choice the same.

scooterscot
8th January 2011, 14:43
The bankers were given tax payers money to lend to UK business. Instead they used the money to make gains on the Chinese and Indian stock markets so they can get bonuses. They take bonuses on projected profits, not real time profits. Ie There bonus is tax payers money.

WHS -

scooterscot
8th January 2011, 14:48
I think there's a good argument for that.

How is it that Ocean Finance have their own TV channel

They do?


and you get TV ads for pay day loans at 3000% APR, yet the mortgage lenders are treated as if they're the minions of Satan for offering more than 3.5 times somebody's salary at a reasonable rate? Seems like the priorities are slightly wrong there, and that's where your point about protecting desperate people should apply.
.


Because one loan is based on thin air and the other is asset backed.

AtW
8th January 2011, 15:40
When the Russian government prosecute the wealthy for theft and corruption you then cry foul.

Russian Govt tends to prosecute unfairly rich men only when they are politically dangerous and refuse to pay them off - in such cases Russian Govt fabricates cases and uses corrupt judges: I can't support that whether in Russia or in UK.

In the UK bankers are not prosecuted because they are very good at having right contracts in the first place that make it impossible to sue them - all the risks are basically yours, however there are existing laws that can be used to make directors of firms personally liable for criminal negligence etc - when very large company goes bust then in my view directors should more or less automatically go to jail (rather than use golden parachutes) unless there are REAL circumstances when they could not have done anything.

Freamon
9th January 2011, 01:21
No. Business create money, banks steal it. Or at least they have been for the last year on the interest paid on my savings whilst charging goodness knows what on their other products.
Businesses don't create money. Businesses create wealth. That's the difference.

Wealth != Money.

Banks don't create wealth, they just create money.

Freamon
9th January 2011, 01:23
The bankers were given tax payers money to lend to UK business. Instead they used the money to make gains on the Chinese and Indian stock markets so they can get bonuses. They take bonuses on projected profits, not real time profits. Ie Their bonus is tax payers money.
No, the bankers were given tax payers money to stop them going bankrupt.

The whole govt spiel about "banks should lend more to businesses" is just a smokescreen. The fact is, banks don't have the ability or willingness to go back to lending stupid amounts of money to businesses, and businesses don't have the ability or willingness to go back to borrowing stupid amounts of money from banks. The govt knows this, but the "banks are bad for not lending" line helps to shift the blame away from the govt for ******** up the economy.

Bagpuss
9th January 2011, 02:58
Governments are the problem, not banks.

You've got to be realistic - you've got to have banks, they do what they do, and they net the UK coffers many billions. It won't do us any good to hack away at them out of revenge or envy.

If banks are taking too many risks with some products, it is up to our government to regulate or legislate against those products. We used to do that when the BoE had full responsibility for supervising banks, until about 2000, and in those days I don't remember people railing against all banks.

Would the powers of the BoE have spotted the rise in the use of dodgy financial instruments? CDS didn't exist before the late 90s, so I doubt there would have been any tools to measure the growth in them. The tools we had were sufficient in measuring the old definitions of money and the expansion of such, but pretty useless with these new get rich quick devices. The liquidity ratios they may have been able to do something about and the likelihood of banks becoming casinos. However given all the power they wield I'm sure any Government (especially a less socialist one) would have been persuaded boom (and tax receipts) would last forever. No I don't buy the "it wouldn't have happened" argument.

Banks were the problem, then to a lesser degree Governments for being duped. That's not to say all Bankers are immoral shysters, some deserve their remuneration.

Paddy
9th January 2011, 09:09
Would the powers of the BoE have spotted the rise in the use of dodgy financial instruments? CDS didn't exist before the late 90s, so I doubt there would have been any tools to measure the growth in them. The tools we had were sufficient in measuring the old definitions of money and the expansion of such, but pretty useless with these new get rich quick devices. The liquidity ratios they may have been able to do something about and the likelihood of banks becoming casinos. However given all the power they wield I'm sure any Government (especially a less socialist one) would have been persuaded boom (and tax receipts) would last forever. No I don't buy the "it wouldn't have happened" argument.

Banks were the problem, then to a lesser degree Governments for being duped. That's not to say all Bankers are immoral shysters, some deserve their remuneration.

WHS


When you find out how our banking system really works, you should be furious! First of all, banks operate on a system called the “fractional reserve system.” What that means is the banks only have to have 10% in assets of the money they lend out. So, if they lend you $100,000 to buy a house, all they are required to have in assets is $10,000. By the way, they cannot lend out any of their $10,000 in assets. But here’s the swindle. that $100,000 they lended to you goes on their books as an asset! That means they record your promise to pay as an asset and now they can loan out ten times that much or $1,100,000. Then the process starts again…once they loan out $1,100,000 that is recorded as an asset, now they can loan out $11,000,000…and on and on and on.

So, you might be wondering where all that money is coming from if they are only required to have 10% in assets. The answer is..IT COMES FROM THIN AIR! Literally! Banks print money from nothing. The original $100,000 lended to you by your bank is nothing but numbers on a computer screen which you are expected to pay back from your hard work with interest

TheConspiracyZone : THE FEDERAL RESERVE SWINDLE: WHAT IN THE WORLD IS WRONG WITH OUR MONEY? (http://theconspiracyzone.podcastpeople.com/posts/31561)

Freamon
9th January 2011, 09:40
TheConspiracyZone : THE FEDERAL RESERVE SWINDLE: WHAT IN THE WORLD IS WRONG WITH OUR MONEY? (http://theconspiracyzone.podcastpeople.com/posts/31561)
Like most conspiracy theorist websites, the explanation of FRB from this one is completely incorrect.

Paddy
9th January 2011, 10:00
Like most conspiracy theorist websites, the explanation of FRB from this one is completely incorrect.


The banking system issues multiple IOUs to depositors and borrowers, yet these IOUs are based on the same initial deposits.

Fractional-reserve banking - Wikipedia, the free encyclopedia (http://en.wikipedia.org/wiki/Fractional-reserve_banking#cite_note-0)

Fractional Reserve Banking (http://www.lewrockwell.com/rothbard/frb.html)

http://www.marketoracle.co.uk/Article14123.html

Doggy Styles
9th January 2011, 10:34
Would the powers of the BoE have spotted the rise in the use of dodgy financial instruments? CDS didn't exist before the late 90s, so I doubt there would have been any tools to measure the growth in them. The tools we had were sufficient in measuring the old definitions of money and the expansion of such, but pretty useless with these new get rich quick devices. The liquidity ratios they may have been able to do something about and the likelihood of banks becoming casinos. However given all the power they wield I'm sure any Government (especially a less socialist one) would have been persuaded boom (and tax receipts) would last forever. No I don't buy the "it wouldn't have happened" argument.

Banks were the problem, then to a lesser degree Governments for being duped. That's not to say all Bankers are immoral shysters, some deserve their remuneration.The BoE had a better chance than the tri-partite arrangement that replaced them, in which no-one knew who was monitoring what.

Nobody could have stopped banks doing what they did, since they were working within the law. It follows then that changes in the law were required, and that is why our government was at fault - changing to a weaker system that missed the danger signals, and therefore not acting to stop the dangerous activities.

When the BoE had carte blanche and schemes had to be approved by them, they occasionally used to make what some bankers at the time thought unreasonable interference in their operations, simply on the basis that "it didn't smell right". You might think that dictatorial and unfair, but for the most part it worked.

Freamon
9th January 2011, 12:19
Fractional-reserve banking - Wikipedia, the free encyclopedia (http://en.wikipedia.org/wiki/Fractional-reserve_banking#cite_note-0)

Fractional Reserve Banking (http://www.lewrockwell.com/rothbard/frb.html)

http://www.marketoracle.co.uk/Article14123.html
This explanation...

When you find out how our banking system really works, you should be furious! First of all, banks operate on a system called the “fractional reserve system.” What that means is the banks only have to have 10% in assets of the money they lend out. So, if they lend you $100,000 to buy a house, all they are required to have in assets is $10,000. By the way, they cannot lend out any of their $10,000 in assets. But here’s the swindle. that $100,000 they lended to you goes on their books as an asset! That means they record your promise to pay as an asset and now they can loan out ten times that much or $1,100,000. Then the process starts again…once they loan out $1,100,000 that is recorded as an asset, now they can loan out $11,000,000…and on and on and on.

So, you might be wondering where all that money is coming from if they are only required to have 10% in assets. The answer is..IT COMES FROM THIN AIR! Literally! Banks print money from nothing. The original $100,000 lended to you by your bank is nothing but numbers on a computer screen which you are expected to pay back from your hard work with interest
...is bollocks.

Banks cannot count loans they have made as part of their capital. They also cannot lend out "10 times as much" as their capital instantly.

The banking system allows the total amount of money lent to be a multiple (10x or more) of the total amount of capital, but a bank cannot instantly lend their deposits out 10x over. They can lend 90% of the deposit. This loan money will then appear somewhere else in the banking system as someone elses deposit, at which point that bank can lend out 90% of it (81% of the original amount) and so on.

The explanation above makes it sound like an individual bank can make massive profits simply by lending money it doesn't have. This isn't true.

scooterscot
9th January 2011, 13:17
They also cannot lend out "10 times as much" as their capital instantly.

The explanation above makes it sound like an individual bank can make massive profits simply by lending money it doesn't have. This isn't true.

Cough.

What about J P Morgan? They've been flogging silver they don't have. Isn't that like fraud? "wrongful or criminal deception intended to result in financial or personal gain"

http://forums.contractoruk.com/general/62669-silver-stocks-fraud.html


Tell you what I'll sell you me brand new Maserati for an immediate cash sum of £10k, delivery is in 2018.

Freamon
9th January 2011, 13:45
Cough.

What about J P Morgan? They've been flogging silver they don't have. Isn't that like fraud? "wrongful or criminal deception intended to result in financial or personal gain"

Not under current regulations. Short selling has been around as long as the markets themselves. If JPMS wants to sell contracts for silver they can't deliver, that's their risk to take. He who has sold what isn't hisn', must buy it back or go to prison.

Paddy
9th January 2011, 14:01
This explanation...

...is bollocks.

Banks cannot count loans they have made as part of their capital. They also cannot lend out "10 times as much" as their capital instantly.

The banking system allows the total amount of money lent to be a multiple (10x or more) of the total amount of capital, but a bank cannot instantly lend their deposits out 10x over. They can lend 90% of the deposit. This loan money will then appear somewhere else in the banking system as someone elses deposit, at which point that bank can lend out 90% of it (81% of the original amount) and so on.

The explanation above makes it sound like an individual bank can make massive profits simply by lending money it doesn't have. This isn't true.

Do you know what is M1, M2, M3 ???

An example. If MF’s TAT Shop prints a £100 gift voucher and sells it for cash. MF gets £100 and there is a voucher that can be gifted to friends, exchanged for services etc until one day someone daft enough decides to buy something at TAT Ltd. MF would be printing money just like the banks do with cheques etc, these days it’s just printed figures.

Money supply - Wikipedia, the free encyclopedia (http://en.wikipedia.org/wiki/Money_supply)

Thirst for Justice - The banks lend 70 times their capitals (http://www.prolognet.qc.ca/clyde/70times.htm)


Today, over 95% of our nation's monetary transactions are done by cheque, and less than 5% by cash. This is what allows the banks to lend more money than they actually have. For example, with $1 million in cash reserve, a chartered bank can lend $10 million in credit, or bookkeeping money (not paper money, but figures written in bank accounts). The only restraint to this creation of credit is the fear that too many people show up to the bank and ask to be paid in cash, since the bank could only repay in cash about one consumer in ten. One of the ways for the banks to protect themselves against such a possibility is to encourage depositors to leave their money at the bank as long as possible, by paying higher interest in fixed deposits, which are tied up with a bank for one, two or three years.

Freamon
9th January 2011, 18:13
Do you know what is M1, M2, M3 ???

Yes.



An example. If MF’s TAT Shop prints a £100 gift voucher and sells it for cash. MF gets £100 and there is a voucher that can be gifted to friends, exchanged for services etc until one day someone daft enough decides to buy something at TAT Ltd. MF would be printing money just like the banks do with cheques etc, these days it’s just printed figures.

No. Banks cannot just "print £100" and lend it out. They have to have the £100 first.

A gift voucher is not cash. Firstly it cannot be used to tax. Secondly I believe according to accounting rules, the shop has to keep the £100 in the bank until the voucher has been redeemed.



Money supply - Wikipedia, the free encyclopedia (http://en.wikipedia.org/wiki/Money_supply)

Thirst for Justice - The banks lend 70 times their capitals (http://www.prolognet.qc.ca/clyde/70times.htm)


For example, with $1 million in cash reserve, a chartered bank can lend $10 million in credit, or bookkeeping money (not paper money, but figures written in bank accounts).
This explanation is also incorrect. With $1 million in cash reserve, a bank can lend out $900,000.

If that $900,000 turns up as a deposit at another bank (which is likely), that bank can lend out $810,000. And so on.

Spacecadet
10th January 2011, 14:51
I thought bonuses are taxed at the 50% top rate of tax anyway.
I.e. banker gets £1,000,000 bonus
he takes home £500,000
government gets the other £500,000

AtW
10th January 2011, 15:38
I thought bonuses are taxed at the 50% top rate of tax anyway.
I.e. banker gets £1,000,000 bonus
he takes home £500,000
government gets the other £500,000

Yes, that's why Govt does not mind those bonuses to paid upfront in full: that's why Liebor let City do whatever they wanted so long as they generated short term money.

Paddy
10th January 2011, 15:57
Yes, that's why Govt does not mind those bonuses to paid upfront in full: that's why Liebor let City do whatever they wanted so long as they generated short term money.

Ye of naivety brought up on porridge and babushka’s dumplings.

Banks will dodge bonus tax | Pre-budget report | The Spoon | Comment is free | guardian.co.uk (http://www.guardian.co.uk/commentisfree/2009/dec/09/banks-bonuses-pre-budget-report)


The most direct and obvious way to avoid a bonus tax is to stop paying it as a bonus. Pay it early, like one of the Asian banks who stumped up two years of bonuses ahead of the announcement (I would imagine UK banks doing the same could be charged with incitement to riot). Alternatively, pay the bonus in the form of a salary or after, say, a five-year period.

It is manifest here that there are infinite loopholes in the definitions of bonus and salary alone, making this an unenforceable tax. Worse still is that the salaries into which these bonuses may be filtered are themselves subjected yearly, along with the bonuses, to fiendishly clever avoidance schemes of standard tax laws.

Financial heads always boast of the enormous amounts of money their industry pours into the government coffers. I would wager that most of the nation, if not the world, would be astounded at the difference between what should be paid and what is paid.

There are myriad ways to avoid tax: share and options schemes are among the most popular. Shares are issued in a shell company, sometimes offshore and by virtue of investment in this fictional entity, one can end up paying capital gains tax rather than income tax.

Jog On
10th January 2011, 16:31
I think a lot of people were to blame for the credit bubble. I remember people going into BTL on "no money down" deals and putting deposits on credit cards and calling it leverage.

The whole culture was out of control and like all other bubbles came to a rude awakening and had an unpleasant aftermath as we've all seen and are still seeing. Yes the banks and financial people had a lot to do with it, but the govts didn't act to keep things in check and Joe public enjoyed some fat times as well without much of a plan of how to prepare for the poo hitting the fan

I spent money i didn't have and to some degree I do feel that the banks had a big hand in that when they gave me credit facilities I didn't ask for and aggressively sold me fininacial products I wasn't looking for. But at the time I enjoyed the money and ignored the voice at the back of my mind telling me that this was going to come round and bite me in the behind one day. It did - and I blamed the banks for a while but I'm glad now that I don't any more, I knew what I was doing was irresponsible and ignored that instinct. I think many other people did as well and I think a lot of these people are blaming 'the bankers' for decisions they made.

It was a bubble that burst and now we're in the correction. People need to stop pointing fingers and just get on with it. I didn't see anyone complaining about bonues when the good times were rolling. As annoying as it may be, maintaining a bouyant financial sector is key to getting back into the next bubble..:eyes

The bailed out 'public' banks could have paid it all back by now but why haven't they? Because the govt wants to see it's stake in the banks rise for a good 5 or so more years. Dirty Spekulants!

AtW
10th January 2011, 16:46
Ye of naivety brought up on porridge and babushka’s dumplings.

Banks will dodge bonus tax | Pre-budget report | The Spoon | Comment is free | guardian.co.uk (http://www.guardian.co.uk/commentisfree/2009/dec/09/banks-bonuses-pre-budget-report)

The date on that article is 9 Dec 2009 - it was SUGGESTION that amount of money raised from bonus tax won't be high.

Here is what actually happened: Budget 2010: Bank bonus tax raises £2bn | Business | The Guardian (http://www.guardian.co.uk/uk/2010/mar/24/budget-2010-bank-bonus-tax) (note date AFTER tax was in force)

"Darling was also forced to admit that his early estimates for the one-off 50% tax on bankers' bonuses were far too low and that instead of raising £550m it had actually brought in £2bn. He is using this windfall to fund his £2.5bn growth package to stimulate the ailing economy."

Primary Conclusion - bonus tax raised more money than anticipated.

Secondary conclusion: Paddy is an idiot who should stick to iMacs and generally STFU when adults talk about things such as economics and finance.

AtW
10th January 2011, 18:51
Ye of naivety brought up on porridge and babushka’s dumplings.

Banks will dodge bonus tax | Pre-budget report | The Spoon | Comment is free | guardian.co.uk (http://www.guardian.co.uk/commentisfree/2009/dec/09/banks-bonuses-pre-budget-report)

"In 2010, banks paid 50 per cent tax on bonuses above £25,000 paid to staff. Labour’s tax yielded £3.5 billion for the Treasury, before lapsing as the previous government intended. "

Source: Ed Miliband: tax bankers' bonuses - Telegraph (http://www.telegraph.co.uk/news/newstopics/politics/ed-miliband/8249974/Ed-Miliband-tax-bankers-bonuses.html)

So bonus tax worked, at least once when it was introduced and they could not react quickly enough with "tax optimisations"...

OwlHoot
10th January 2011, 19:00
... is an idiot who should stick to iMacs and generally STFU when adults talk about things such as economics and finance.

Oh, the irony. :laugh