The Budget

[Jonnyboy]

Seems to me its mainly American banks that caused all the problems - the rates of repossessions of houses over there is very high showing that it was their banks that lent irresponsibly and had a knockon effect on the rest of the western world...

[trousers]

Seems to me its mainly American banks that caused all the problems - the rates of repossessions of houses over there is very high showing that it was their banks that lent irresponsibly and had a knockon effect on the rest of the western world...

 

And the point that most people conveniently gloss over is that no-one forced the general public at gunpoint to take out loans they couldn't afford.

 

Yes, the banks were stupid to loan money to the general public who couldn't afford to pay it back, but the general public we're equally stupid to take the money in the first place.

 

We are, indeed, all in this together...

[miserableoldgit]

Tell me Verbal what do you make of your fellow anarchists and anti capalists yesterday Proud of them no doubt. Who is going to pay for the damage , Us tax payers.

 

Shame they kicked off yesterday, Destracted the attention to the genuine peaceful TU march through london.

Quite. I also wonder how many of the "protesters" who targetted Topshop, HSBC etc. and were chanting "Pay your taxes" were actually paying theirs or were milking the system. If they weren`t "whiter than white" themselves they have no room to complain, let alone turn the Central london into a war zone and scare and intimidate innocent shoppers/members of the public and their kids.

I heard one charmer, who "occupied" Fortnum and Masons, on the radio yesterday and according to her it was all the fault of the police and she blamed the media for portraying it in the way that it did. I watched it live on TV during the day and the media only reported things as they happened.

[dune]

And the point that most people conveniently gloss over is that no-one forced the general public at gunpoint to take out loans they couldn't afford.

 

Yes, the banks were stupid to loan money to the general public who couldn't afford to pay it back, but the general public we're equally stupid to take the money in the first place.

 

We are, indeed, all in this together...

 

The general public tend to be thick and listen to words such as "boom and bust is a thing of the past".

[Seaford Saint]

And the point that most people conveniently gloss over is that no-one forced the general public at gunpoint to take out loans they couldn't afford.

 

Yes, the banks were stupid to loan money to the general public who couldn't afford to pay it back, but the general public we're equally stupid to take the money in the first place.

 

We are, indeed, all in this together...

 

I think that is a load of tosh mate.....the general public were duped by those with an interest to make assertions about how not buying mnow etc would mean they'd be left behind, or second class. I have seen this twice in the two recessions I lived through. What makes me laugh is how the media on all this go to the same experts for their opinions. These same experts were saying how everything was rosy right up to the time that it was not....the banks were too big to fail and the banks knew it.

 

Its not that the public was thick, its that the public are manipulated time and time again.

[dune]

Its not that the public was thick, its that the public are manipulated time and time again.

 

Labour wouldn't have been in power for 13 years if the public weren't thick.

[badgerx16]

Labour wouldn't have been in power for 13 years if the public weren't thick.

Don't leave yourself open to such easy ripostes : If the public weren't so gullible Maggie would have only served one term.

 

Labour were in power for 13 years for the same reason the Tories were in for too long before them - voter apathy and the venal failings of FPTP.

[trousers]

I think that is a load of tosh mate.....the general public were duped

 

I think we'll have to agree to disagree on this one.

 

For one, I wasn't duped. I've always set my own risk thresholds when borrowing money. I certainly steered clear of those 100%+ mortgages and maxing out on credit cards, etc, even though it was tempting at the time to keep up with my peers. Instead I settled for a much smaller house than some friends/colleagues saddled themselves with. I'll leave you to guess who is better off now....

 

Just because some people aren't savvy enough to work out they're being duped doesn't mean that they ('the general public') should dissolve themselves of any blame whatsoever.

 

We all played our part, no matter how small, in the banking 'game'....the Tories, Labour, the bankers, the general public. All of us.

 

Just my opinion of course.

Edited 28 March, 2011 by trousers

[Verbal]

And the point that most people conveniently gloss over is that no-one forced the general public at gunpoint to take out loans they couldn't afford.

 

Yes, the banks were stupid to loan money to the general public who couldn't afford to pay it back, but the general public we're equally stupid to take the money in the first place.

 

We are, indeed, all in this together...

 

Not in the real world. Let's look at who we're calling stupid. The banks in the US designed sub-prime loans, and ridiculous short-term discounts, in order to move as much 'product' as possible. Now they knew perfectly well that they were lending to people who in no way could afford those loans, and that the loans themselves were fuelling a property bubble. In the inevitable defaults, The only safety net for the bankers and their loans was precisely that bubble. If someone couldn't pay, turf them out, make a fast buck on the price rise, and get some other poor schmuck in to pick up an even bigger sub-prime. But the bankers weren't stupid. They KNEW these loans were dangerous. So they shattered each loan into tiny pieces and re-parceled it up with the tiny pieces of other loans - good loans mixed with bad. They called these packages 'derivatives', traded them, and suddenly found they had a new market. Trading in derivatives shot up. So now you have a double bubble, in which the bankers are getting exceedingly, obscenely rich - profiting hugely from the poorest in American society.

 

Then you have the first set of victims - people near the breadline, on practically minimum wage, being sold the dream by these bankers and their brokers of infinite property price rises - and the nightmare of failing to be on board this life line to property ownership. I defy you or anyone to say that that nightmare hasn't had a powerful influence on their thoughts about buying a house. But for many people in the western US in particular, it drove them to make the simplest of calculations: can I make the mortgage payments this month. Sub-prime allowed them to say yes.

 

The second set of victims of course are all of us. The bankers have made their vast profits and retired to their mortgage-free mansions. We are the ones picking up the bill for one of the greatest banking scandals - if not THE greatest - ever. So when you call people stupid from the crow's nest of the banking industry, it sounds amazingly like: I'm alright Jack and thanks for the cheque - now **** off.

Edited 28 March, 2011 by Verbal

[trousers]

Not in the real world. Let's look at who we're calling stupid. The banks in the US designed sub-prime loans, and ridiculous short-term discounts, in order to move as much 'product' as possible. Now they knew perfectly well that they were lending to people who in no way could afford those loans, and that the loans themselves were fuelling a property bubble. In the inevitable defaults, The only safety net for the bankers and their loans was precisely that bubble. If someone couldn't pay, turf them out, make a fast buck on the price rise, and get some other poor schmuck in to pick up an even bigger sub-prime. But the bankers weren't stupid. They KNEW these loans were dangerous. So they shattered each loan into tiny pieces and re-parceled it up with the tiny pieces of other loans - good loans mixed with bad. They called these packages 'derivates', traded them, and suddenly found they had a new market. Trading in derivatives shot up. So now you have a double bubble, in which the bankers are getting exceedingly, obscenely rich - profiting hugely from the poorest in American society.

 

Then you have the first set of victims - people near the breadline, on practically minimum wage, being sold the dream by these bankers and their brokers of infinite property price rises - and the nightmare of failing to be on board this life line to property ownership. I defy you or anyone to say that that nightmare hasn't had a powerful influence on their thoughts about buying a house. But for many people in the western US in particular, it drove them to make the simplest of calculations: can I make the mortgage payments this month. Sub-prime allowed them to say yes.

 

The second set of victims of course are all of us. The bankers have made their vast profits and retired to their mortgage-free mansions. We are the ones picking up the bill for one of the greatest banking scandals - if not THE greatest - ever. So when you call people stupid from the crow's nest of the banking industry, it sounds amazingly like: I'm alright Jack and thanks for the cheque - now **** off.

 

Fait points. Perhaps the word I was looking for was 'gullible' rather than 'stupid'.

 

Edit: and if it was all so obvious, why did successive governments (Tory and Labour) do nothing to stop it?

Edited 28 March, 2011 by trousers

[dune]

Don't leave yourself open to such easy ripostes : If the public weren't so gullible Maggie would have only served one term.

 

Labour were in power for 13 years for the same reason the Tories were in for too long before them - voter apathy and the venal failings of FPTP.

 

Our country was always going to end up on its knees because of Labour because that is what labour governments have always done.

 

Tax and spend, borrow and spend, bust. That's Labour for you in a nutshell.

[badgerx16]

Our country was always going to end up on its knees because of Labour because that is what labour governments have always done.

 

Tax and spend, borrow and spend, bust. That's Labour for you in a nutshell.

And of course 'Black Wednesday' was down to Labour's mismanagement of the economy, wasn't it ? £3.4 Bn down the drain due to Tory incompetence. George Soros saw it coming, so why not the Treasury ?

Edited 28 March, 2011 by badgerx16

[EastleighSoulBoy]

Fait points. Perhaps the word I was looking for was 'gullible' rather than 'stupid'.

 

We were sold the dream, from those now far off days of the Thatcher years where we were exhorted to achieve through buying our council house and selling at a profit. For many it was the only way to get on the home ownership ladder. Councils either didn't or were not allowed to use that money to build further affordable homes. The logic in that escapes me as we have an ever expanding population and therefore all needs, infrastructure wise, increase. Many got caught up in the live now pay later culture fuelled by the I want it now ethos. Meanwhile the financial institutions were working out more ways to sell us money. Cars, holidays, second homes. It's almost as if a need/greed was engineered and then fed by the same concerns.

 

No government, be it Labour or Tory, stood back and said Whoa! Why? Because they all, MPs etc, had their noses in the trough directorships, consultancies, speech circuits, biographies etc.

 

We're all in this together really rankles with me because the working man, the middle class and the unemployed are more in this together than others. 'They' are still perceived to be riding high, and roughshod, over the rest of us. So 'in this together' does not mean a lot to me.

[dune]

And of course 'Black Wednesday' was down to Labour's mismanagement of the economy, wasn't it ? £3.4 Bn down the drain due to Tory incompetence. George Soros saw it coming, so why not the Treasury ?

 

That £3.4 billion is loose change down the sofa compared to the mess that we've inheritted from the Blair/Brown years.

[Seaford Saint]

I think we'll have to agree to disagree on this one.

 

For one, I wasn't duped. I've always set my own risk thresholds when borrowing money. I certainly steered clear of those 100%+ mortgages and maxing out on credit cards, etc, even though it was tempting at the time to keep up with my peers. Instead I settled for a much smaller house than some friends/colleagues saddled themselves with. I'll leave you to guess who is better off now....

 

Just because some people aren't savvy enough to work out they're being duped doesn't mean that they ('the general public') should dissolve themselves of any blame whatsoever.

 

We all played our part, no matter how small, in the banking 'game'....the Tories, Labour, the bankers, the general public. All of us.

 

Just my opinion of course.

 

Did you try getting a mortgage i n the early 80's? All I could get was an endowment mortgage (you could not get a repayment mortgage) .....remember them? We are all encouraged to take out a pension...I did one and got conned again....then there was the mortgage indemnity you had to take out that lasted 25 years apparently even though most hme owners move within 5 to 6 years?

 

In case you think I got in trouble, I got close once but no I didn't get into trouble. When interest rates hit 15% it was a bad time but just before this happened you had adverts saying "there's never been a better time to buy a house" .....what I am saying is this. The population was duped....home ownership, etc etc. The power and influence of the media should be questioned in all this.

[badgerx16]

That £3.4 billion is loose change down the sofa compared to the mess that we've inheritted from the Blair/Brown years.

The Treasury is estimated to have spent £27Bn propping up the Pound during the 1992 crisis. And as for the mess 'inherited', try reading the other current discussion on this thread, you may actually learn something if you remove your blinkers for a minute.

[bridge too far]

I know very little about how markets work, but I found this very interesting article from the FT. It seems to underpin something I heard some time ago, namely that many in the financial sector who caused the banking crisis also benifitted from it by, in simple terms, backing a losing horse and profiteering from that.

 

http://www.ft.com/cms/s/0/c0f176d4-0fdd-11dc-a66f-000b5df10621.html#axzz1HsvZCrLS

[badgerx16]

I know very little about how markets work, but I found this very interesting article from the FT. It seems to underpin something I heard some time ago, namely that many in the financial sector who caused the banking crisis also benifitted from it by, in simple terms, backing a losing horse and profiteering from that.

 

http://www.ft.com/cms/s/0/c0f176d4-0fdd-11dc-a66f-000b5df10621.html#axzz1HsvZCrLS

No, no, no ! Bridge you are so wrong ! It was all the fault of Blair & Brown, haven't you been keeping up ? The bankers were all innocent victims of their gross incompetence.

[Special K]

Fait points. Perhaps the word I was looking for was 'gullible' rather than 'stupid'.

 

Edit: and if it was all so obvious, why did successive governments (Tory and Labour) do nothing to stop it?

 

Because they put the responsibility for financial regulation and control with the toothless FSA which saw/sees it's job as trying to get financial institutions to comply with the rules rather than coming down on hard on them when they try and con the consumer (endowment mortgages, etc). Successive governments are/were happy to have a loose regulatory body - something they could use in hushed tones to encourage more and more to move to the City.

 

What the Coalition has proved is that no government has the ability to stand up to the City as it depends on it so much. So after a period of (barely) false contrition and lip service the City will be back to what it does best - conning the consumer to pay for it's short term bonuses.

[Verbal]

Fait points. Perhaps the word I was looking for was 'gullible' rather than 'stupid'.

 

Edit: and if it was all so obvious, why did successive governments (Tory and Labour) do nothing to stop it?

 

Because the banks are too big to fail. Ask yourself a simple question. Where do all these HUGE bank bonuses come from? They don't come from thin air. They have to come from SOMEWHERE. Before the crash, it was gimmicky financial instruments like derivatives (among many others, of course), which held up mansions built on sand just long enough to make a vast killing. After the crash, so much of the merchant and investment banking industry went to the wall or was consolidated that it wiped out competition. The costs of banking services shot up; they gambled only on economic sure things; investment levels tumbled; and bank profits rocketed accordingly. Unfortunately for the rest of us, as public sector jobs get shredded by spending cuts, so too do private sector jobs by the banks' new (and hugely profitable) financial conservatism. So the bankers win yet again, because they are the most feather-bedded state scroungers of all - knowing full well that they can either risk all and be bailed out or risk nothing and profit from turning the economic tide sharply downward. What's desperately needed now is more competition in the banking sector - but what government can possibly advocate that after all that's happened? The bankers can't lose; we can't win.

[Seaford Saint]

Labour wouldn't have been in power for 13 years if the public weren't thick.

 

You still dont get it..... there is nothing between them.....no differences at all.

[saintfully]

You still dont get it..... there is nothing between them.....no differences at all.

 

This. There's no point discussing whether to vote for the dark or light party when they're both blue.

[Lord Duckhunter]

Because the banks are too big to fail.

 

What's desperately needed now is more competition in the banking sector - but what government can possibly advocate that after all that's happened?

 

We did have competition to the banks but between Govt's of both colours and the public themselves, we conspired to change all that.

 

30 years ago, if you wanted a mortgage you went to a Building Society and if you wanted a loan you went to a bank.There needed to be some fluidity between the two otherwide the Societies couldn't compete in a modern market, but starting with Thatcher and carried on since, it went too far. In the 1980's Societies were suddenly allowed to borrow money from the money markets, rather than from investors, they were allowed to demutualise. The upshot of this was for all intense and purposes they became banks. Banks that then merged and took over other banks, until there were basically 4 or 5 massive banks or banking groups.

 

The public loved it, demutualisation was basically seen as free money and the members voted again and again for change. Doesn't look like free money now does it?

 

Being a member of one big Building Society (Nationwide) that didn't follow this route I can't help feeling that had The Halifax, The Alliance and Leicester, The Abbey National ect ect remained Building Societies, we may not be in quite the mess we are now. It's obviously a bit more complicated than that, but there would have been the competition you so desire.

[hypochondriac]

You still dont get it..... there is nothing between them.....no differences at all.

 

Little difference I agree but in my opinion, the Tories employ more common sense policies than Labour do and their stance on Europe as well as getting rid of a lot of red tape and removing much of the nanny state problem is a lot better. If there was no difference at all then the countries' policies and general feel would have remained the same during the labour years but they clearly didn't.

[Seaford Saint]

Little difference I agree but in my opinion, the Tories employ more common sense policies than Labour do and their stance on Europe as well as getting rid of a lot of red tape and removing much of the nanny state problem is a lot better. If there was no difference at all then the countries' policies and general feel would have remained the same during the labour years but they clearly didn't.

 

If the parties are so different regarding Europe why dont we have the euro as our currency? There is not a party I can vote for they are so similar with ideas and policies changing parties. For example, which party would you expect to have a handle on unepmloymeny and poverty? Ian Duncan Smith!!...He'll get shot down eventually though.

 

I just watched a program on BP and you have John Scarlett eventual head of MI6 pesuading a BP executive to spy for him.....sad but true, as for movement between BP and and govt and civil service.......the point being it does not matter who is elected, vested interests rule.

[Jonnyboy]

Not in the real world. Let's look at who we're calling stupid. The banks in the US designed sub-prime loans, and ridiculous short-term discounts, in order to move as much 'product' as possible. Now they knew perfectly well that they were lending to people who in no way could afford those loans, and that the loans themselves were fuelling a property bubble. In the inevitable defaults, The only safety net for the bankers and their loans was precisely that bubble. If someone couldn't pay, turf them out, make a fast buck on the price rise, and get some other poor schmuck in to pick up an even bigger sub-prime. But the bankers weren't stupid. They KNEW these loans were dangerous. So they shattered each loan into tiny pieces and re-parceled it up with the tiny pieces of other loans - good loans mixed with bad. They called these packages 'derivatives', traded them, and suddenly found they had a new market. Trading in derivatives shot up. So now you have a double bubble, in which the bankers are getting exceedingly, obscenely rich - profiting hugely from the poorest in American society.

 

Then you have the first set of victims - people near the breadline, on practically minimum wage, being sold the dream by these bankers and their brokers of infinite property price rises - and the nightmare of failing to be on board this life line to property ownership. I defy you or anyone to say that that nightmare hasn't had a powerful influence on their thoughts about buying a house. But for many people in the western US in particular, it drove them to make the simplest of calculations: can I make the mortgage payments this month. Sub-prime allowed them to say yes.

 

The second set of victims of course are all of us. The bankers have made their vast profits and retired to their mortgage-free mansions. We are the ones picking up the bill for one of the greatest banking scandals - if not THE greatest - ever. So when you call people stupid from the crow's nest of the banking industry, it sounds amazingly like: I'm alright Jack and thanks for the cheque - now **** off.

 

And it all went tits up in America and f*cked us over here as a result, nothing to do with Labour.

[View From The Top]

We did have competition to the banks but between Govt's of both colours and the public themselves, we conspired to change all that.

 

30 years ago, if you wanted a mortgage you went to a Building Society and if you wanted a loan you went to a bank.There needed to be some fluidity between the two otherwide the Societies couldn't compete in a modern market, but starting with Thatcher and carried on since, it went too far. In the 1980's Societies were suddenly allowed to borrow money from the money markets, rather than from investors, they were allowed to demutualise. The upshot of this was for all intense and purposes they became banks. Banks that then merged and took over other banks, until there were basically 4 or 5 massive banks or banking groups.

 

The public loved it, demutualisation was basically seen as free money and the members voted again and again for change. Doesn't look like free money now does it?

 

Being a member of one big Building Society (Nationwide) that didn't follow this route I can't help feeling that had The Halifax, The Alliance and Leicester, The Abbey National ect ect remained Building Societies, we may not be in quite the mess we are now. It's obviously a bit more complicated than that, but there would have been the competition you so desire.

 

I'd agree with that.

 

A large part of the problem was that everyone believed that "The Market" would always supply the best answer as that was what they were told, over and over again and carpetbaggers drove through countless demutualisations.

 

When the needs of the stock holders started to outweigh the needs of the clients (us) they started down a very slippery slope.

[Verbal]

We did have competition to the banks but between Govt's of both colours and the public themselves, we conspired to change all that.

 

30 years ago, if you wanted a mortgage you went to a Building Society and if you wanted a loan you went to a bank.There needed to be some fluidity between the two otherwide the Societies couldn't compete in a modern market, but starting with Thatcher and carried on since, it went too far. In the 1980's Societies were suddenly allowed to borrow money from the money markets, rather than from investors, they were allowed to demutualise. The upshot of this was for all intense and purposes they became banks. Banks that then merged and took over other banks, until there were basically 4 or 5 massive banks or banking groups.

 

The public loved it, demutualisation was basically seen as free money and the members voted again and again for change. Doesn't look like free money now does it?

 

Being a member of one big Building Society (Nationwide) that didn't follow this route I can't help feeling that had The Halifax, The Alliance and Leicester, The Abbey National ect ect remained Building Societies, we may not be in quite the mess we are now. It's obviously a bit more complicated than that, but there would have been the competition you so desire.

 

In the 80s we had de-regulation (and de-mutualisation) - quite a different kind of competition. As things stand after the credit crunch, there are fewer, consolidated banks occupying a virtual monopoly in parts of the banking sector (especially in merchant and investment banking.) The absence of real competition has driven costs of borrowing ever higher, and economies like Britain's ever lower. Regulated competition to drive down costs, and the obscene bonuses that are now financed by lack of competition, is an economic priority that the banks, of course, would rather ignore.