Matteeboy

What I hate is the way bankers attempt to blind us with jargon is a vain attempt at looking clever.

Bankers - through pure greed and stupidity, you f**ked up the economy. Through pure greed and cowardice, you bleated to the government and they saved your ***** using MY money and every other tax payers money. Through pure greed and a crushingly smug attitude you are now patting yourselves on the back as if nothing happened.

I can't ever see bankers reputations being restored.

TelBoy

Yep i totally accept that, Tim, i'm not trying to make anyone feel pity for me or anyone else who does a similar job. It's a fact that the compensation culture HAS been built up on individual returns, and even though the bank i work for has made some effort to try and get its staff to accept a more "holistic" view of compensation, we all know in our hearts that the guys who make more money will still get paid more, end of story. Until that correlation has been seen to be broken, banks WILL pursue revenue aggressively. Very few people would do anything differently, nobody successful in banking at least. It remains to be seen whther things will change significantly, at present there don't seem to be too many signs of that happening, but we haven't really felt the full force of new restrictions from the Government yet, so it's very hard to say.

TelBoy

Too simplistic, surely. If mortgages hadn't been sold to people who couldn't afford them in the first place, NOTHING the bankers subsequently did would have caused anyone any problem whatsoever.

Do you understand and accept that fundamental fact?

Matteeboy

How about banks put some of the effort they give to relentlessly pursuing revenue into showing the general public that maybe they do some positive things then? Because at the moment they appear to have got off scott free and are now sniggering at those that bailed them out because they got away with it.

The bankers packaged up mortgage backed loans as SIVs - no one else did this. They came up with the idea - it was a cr4p one. No way they could work. It was a case of make as much money as possible then hope it all goes away before the defaults in payment come back to bite everyone on the **** - which they did.
It's a bit like selling a car with a cam belt that's about to go - hope the new owner doesn't notice and feel no guilt when his new pride and joy dies on him. Okay so the bankers didn't actually sell the "car" but they ran the "dealerships" that encouraged such practices. They also took massive short term risks, pocketed the cash then moved onto the next ridiculous investment.

A huge house of cards was built up and oddly enough, it tumbled. Except usually the perpetrators get punished - oh no not this time. They are BANKERS, the untouchables. Society's geniuses. So it's back to business as usual while millions are now unemployed, on reduced wages and/or bankrupt; a word that rightfully is composed of the word "bank."

Am I being too naive and simplistic? Am I yet another dumb member of the public, too stupid to have any idea how this "complex" system works? Is it way above my dull little brain to have accumulated a mass of information from which I have formed an opinion? Is it wrong of me to ignore the media on this one and go by facts? The banks aren't half as clever as they think. They have a simple model - lend money, charge interest on it. Hold savings and pay interest - less than the lending rate to make money. They should stick to that and stop trying to pull the wool over everyone's eyes.

What shocks me is the amount of people who swallow all the "too complicated, too difficult to understand" waffle. Many of them have no jobs because of this banking BS.

jonc

Everybody wants more money and when you don't have enough, you get credit. People wanted more and more credit and started to live beyond their means. Consumerism was rising which drove up inflation and interest rates were raised to kerb the rising inflation. As repayments increased, people start to find it increasingly difficult to keep on top of their loans and started to default on them. If people didn't live beyond their means and default on payments, the crisis may not have happened at all. So whilst the bankers aren't completely blameless, people should take responsibility for their own action. If you buy car and you ran out of petrol, you don't blame the dealership.

TelBoy

I've never for one minute pretended that what happened was too complicated for the average punter to understand.

You have a lot of anger about this, and i'm not entirely sure you know why. Especially if you're making assertions that "it could never work". Why's that then? In uncomplicated terms. Tell me. WHY was it so blindingly obvious that the mortgage backed investments (and remember, this was just one of a myriad of income streams that was packaged, not the only one as some people seem to think) were doomed to failure?

Yes as i've said, the attitude of some bankers is still in need of some "correction", but you have no justification for taking such an aggressive line with the industry as a whole.

Gear Head

iTrader: (2)

Totally agree. It is far to easy to say, 'well, they shouldn't have loaned me the money'.

However, a person is smart but 'people' are stupid. If the banks were offering all this cash, the stupid people that had very little common sense or an understanding of the economy, grab this cash with both hands.

Everyone is to blame.

Matteeboy

Seen that tactic many times - divert attention to the fools that took out mortgages/loans. Do you know how much pressure they were under to buy? Do you know how much effort went into fooling millions of Americans that they could afford a house? Do you know how much of a blind eye was turned at the proliferation of this mis-selling? The bankers/mortgage companies played on people's naivety and in many cases, stupidity. Yes the people that took them out didn't do their sums but when Randy Mansionman tells you that at last you can have your dream home for only 100 bucks a month, a lot of people jump at the chance.

Meanwhile these "clever" bankers sell on these appallingly daft loans and make a fortune. They crank interest paid on savings to almost zero thanks to pressure on the government to ensure pathetic interest rates then charge way over the odds for loans. The gap between saving rates and loan rates is now enormous.

Sorry but I'm deeply deeply unimpressed. But then I'm just another thick member of the public who doesn't understand those clever men and women in those big banks in the shiny City.

Why the anger? It hasn't even affected me or our business. The anger is because of the sense of injustice. The patronisation. The greed. The fact that so many have got away with what I consider to be criminal activity. The fact that the UK courted so many private equity firms (charging them little or no corporation tax), so many investment banks, so many hedge fund managers all fleecing millions off investments with no solid grounding. The fact that we became so proud of our financial powerhouses and ignored farming and manufacturing - which are now on their knees.

This annoys me very much.

TelBoy

Not sure anything's going to change your mind, Matt, not if you're going to be that dogmatic. I'm not using diversionary "tactics", i'm just pointing out hard truths. This is the one that went wrong because the property market collapsed. You only have to look on Scoobynet to see how divided opinions are as to whether prices are going up, down, sideways or whatever but no, all of a sudden YOU'RE the expert and it was all so obvious. That's just a crap way of looking at it. If men didn't take risks we'd get nowhere. If i believed for one nano-second that the mortgage backed products were created with the knowledge that they couldn't be financed, then i'd concede in a heartbeat. Clearly though, that assertion is absurd. It's easy to cast aspertions with hindsight, but not particularly clever to do so.

Matteeboy

Yes Telboy it all went wrong based on flawed investments - yes with hindsight it shouldn't have happened. But what about the mistakes being payed for by us, the taxpayer? What about the banks "recovering" so quickly with little or no punishment? What about Goldman Sachs bleating on about how clever they are while millions are deeply in the mire partly thanks to them?

I'm no expert but then I don't think anyone is - what I do object to is being told how stupid "we" are by yet another "expert" who failed to see any of this coming, who keeps failing to see the depth of the recession the banks have caused, who hasn't actually got a clue.

Oh and it's "aspersions..."

TelBoy

Heeded

Personally i don't see the same onslaught of experts telling us we're too stupid or that the situation is too complex. It isn't. But all risks essentially can go up or down, what nobody's little black box predicted was how far this one could come down, by which time it's too late and trousers are round the ankles.

It's not easy to see Goldmans, JPM and others reporting record profits now, i do understand that. But what should they do? Just shut up shop and stand in the corner looking suitably chastised for an amount of time that the public deem acceptable?

Gear Head

iTrader: (2)

Yes, but just how has it turned around so quickly? They went from a 3 month record loss to a 3 month record profit. I understand that the bail out had something to do this but it is still a very difficult pill to swallow.

As we usually lag behind the American economy, do you think the our banks will start to see these kind of results in the next 6-12 months? At least this would help put some money back into our pockets. Or at least, I'd like to think so.

TelBoy

Banking margins have changed out of all recognition, Chris. The money they're now making isn't on the back of some dud mortgage somewhere across the world, it's on good old fashioned borrow low, lend high. The timing couldn't be more unfortunate, but as i said earlier, unless they're forced to sit on their hands, these sorts of returns are almost unavoidable. The resultant problem though, is that the arrogance of some sectors of the industry still remains, and that's what's driving the ire of people like Matteeboy.

The British banks ARE reaping the same rewards, right now - the lag between us and America is only about six weeks at the moment i'd estimate, historically very low. Yes hopefully this will filter back into the economy in the near future, but banks will be reluctant to give up the margins they're now enjoying, not without a hefty kick in the ***** from Darling. It will come, but frustratingly slowly for many.

Leslie

Without in any way being an expert in high finance, it just seems to me that whatever the appearance is with regard to houses, cars sales etc. we really have to look at the underlying situation.

Flash wasted our economy while he was chancellor and apart from not putting anything away for the bad times he just basically pissed our cash against the wall, and continued borrowing to make the economy look artificially good. Why did he flog off half our gold reserves before there was a sign of the future recession arriving?

He has now borrowed God knows how much money and not only that sanctioned the effective printing of more money for which the country has no backing. That of course is Mugabe's way to eventual hyper inflation!

The national debt is so enormous that our grandchildren wiil be paying it off and not only that, we also have to find the interest on what he has and still is borrowing!

When you borrow of course, it eventually has to be paid back, as well as the interest. All this money he is feeding into our economy won't last for ever and the IMF will likely refuse to lend him any more as they did to Callaghan years ago.

What will he do when the borrowing has to stop? The country is not earning anything worth while in comparison!

They are already casting around trying to squeeze money out of the people. What will it be like when the supply runs dry?

Now I said I am no expert, that is just what it looks like to me. If I am well off beam I would be grateful if one of the financial whizzkids could put me right and explain it all in simple terms.

Les

hodgy0_2

the problem is we don't make things anymore, which then we can the sell abroad

our money goes around and around in some magic roundabout eventually disappearing up a banker **** - and exiting in a yacht moored off Nice

if you drive through France or Germany (something I have done quite a bit of recently) every other car is, in France a French car and in Germany a German car (and in the UK a French or German car)

Also they seem to have industrial zones, presumably making things, all over both countries; we just have little pockets here and there

I think I am right in saying Germany is the biggest exporter of "stuff" in the whole world --- amazing

Deep Singh

Back to where the economy is then....

In my line of work I see about 10 different new people everyday. Anyone from life long work shy unemployed to the CEO of major company, self made millionaires, footballers etc.
I often ask their line of work, and to develop rapport ask how things are given the current economic climate. It seems split, with quite a few saying business has never been better!

So like most recessions it doesn't affect everybody, some suffer and lots don't.

Local estate agent told me a property around here was subject to gazumping, something he hasn't seen in ages.

A big auction of commercial property that I was following last week showed some frenzied buying. With yields for prime back down to 4.5% from 6ish% late last year.

A friend who was put on a 3 day week at Fords earlier this year is now being offered overtime.

I read all the economic spiel all day with interest, and started off as a mega bear, but sometimes its important just to see what's going on around you.

Putting all of the little personal experiences I've mentioned above together I'm scratching my head and wondering whether the worst is over?

I'm not saying back to boom, and unemployment will rise yet, but perhaps not much further downwards?

hodgy0_2

we are moving to a two tiered economy/society imo as I suggested in an earlier post

the American model -- an economic and social underclass that’s primary function is to support those at the top by offering cheap untenured labour

coupled with the move, as in the States to gated communities complete with gated shopping malls etc

this will be an attempt to insulate themselves from the inevitable increase in crime due to the logical extension of the winner takes all society

but we know, coz Mrs T told us that there is no society, just winners and loosers

SunnySideUp

Unemployment always lags behind other indicators .... the worst is well behind us - that was Q4 2008.

By the time we hit the next election in Q2 2010 we will all be feeling rather pleased with ourselves - those who live through the SwineFlu winter, that is!

njkmrs

Is that a little attempt to say in a round about type of way NJ was correct .!!!!

Glad your back on board Son .Its all good from here .!!!

Deep Singh

Hodgy, firstly a two tiered society would be great, I would not have to pay for (except for more prisons) or mix with *******.
But for some reason you put the potential for this to happen at Mrs Ts feet. But gordon has been in charge for the last decade and spending billions of our tax money to ensure a fairer society. So if it hasn't happened then it proves that despite those who have the political will to engineer it using other peoples money to impose it, it still doesn't work.

In fact we are nowhere near the scenario you put forward, due to our nhs and generous benefit culture.There maybe an elite in this country that produces wealth and advancement in this country but then they are punished by being robbed of their money so it can be given to people who are to busy to work because they are smking ****, eating McDonalds and then ****ting out another generation that will do the same

Nj, no I'm not finally saying you were right LOL. You called too early. Its like those who predicted a recession 10 years ago, no good because they lost out on 8 years of gains.
In the same way, calling the recovery too early is no use. Stick with me son, and I'll ring the bell at the exact time, LOL

I wonder if interest rates hold the key, one hint of them going up and we'll start our 'double dip' me thinks

hodgy0_2

deep


it seems to me with the need to repay back the massive gov borrowings both sides of the political debate are setting us up for massive cuts in NHS etc

pushing forward a private top up scheme, with the bottom just getting an "NHS light"

And Mrs T broke the relationship between the state and the people it contained -- into one of individual responsibity that we have today

Leslie

I forgot to mention the very inefficient and extremely expensive PFI contracts which we will also be paying back for many years to come!

Les

hodgy0_2

as JFK said -- ask not what your country can do for you, but what can you do for your country

njkmrs

Deep , I fully agree ,that its down to interest rates .

As they are now, people are slowly but surely spending again .

BUT ,if they start increasing the rates too soon ,then this will send the country into freefall .

You start ringing the bell ,and I will send Esmerelda up with some water .!!!!