Do Rich People do the Lottery ?
26 September 2010, 06:36 PM
#91
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It was the development of bonds that enabled Governments, including ours, to fund services such as the Royal Navy. It was not the development of fractional reserve banking.
Fractional reserve banking was not 'invented' to support the Royal Navy.
The implication of it being linked to the Royal Navy implies that this was an English development. Whilst there were certainly Brits at the early stages of the development of banking they were operating in Italy and France on their early experiments. I am sure the Medici might contend that they made a significant contribution to modern banking constructs.
As for allowing the banks to fail - are you joking when you ask that?
Just for one moment imagine our two key hospital pass banks, HBoS and RBS. HBoS covers the mortgages for one in four houses in the UK, HBoS finances countless small businesses, RBS finances many corporations and ventures such as sports clubs.
Also over 20million people have deposits there.
So on the one hand all the debt is called in and on the other everyone wants their deposits out - which in a fractional system is effectively impossible.
Not to count the massive commitments, that whilst technical, covered literally trillions of pounds of intruments in the financial markets. On a mark to market basis these would have zero value if the banks had gone under. So countless other institutions would have taken big hits in their balance sheets and also be under threat.
And so the dominoes would fall across the market.
By comparison the actual financial support provided was a drop in the ocean compared to the financial impact.
Fractional reserve banking was not 'invented' to support the Royal Navy.
The implication of it being linked to the Royal Navy implies that this was an English development. Whilst there were certainly Brits at the early stages of the development of banking they were operating in Italy and France on their early experiments. I am sure the Medici might contend that they made a significant contribution to modern banking constructs.
As for allowing the banks to fail - are you joking when you ask that?
Just for one moment imagine our two key hospital pass banks, HBoS and RBS. HBoS covers the mortgages for one in four houses in the UK, HBoS finances countless small businesses, RBS finances many corporations and ventures such as sports clubs.
Also over 20million people have deposits there.
So on the one hand all the debt is called in and on the other everyone wants their deposits out - which in a fractional system is effectively impossible.
Not to count the massive commitments, that whilst technical, covered literally trillions of pounds of intruments in the financial markets. On a mark to market basis these would have zero value if the banks had gone under. So countless other institutions would have taken big hits in their balance sheets and also be under threat.
And so the dominoes would fall across the market.
By comparison the actual financial support provided was a drop in the ocean compared to the financial impact.
Once everything has collapsed better banks will be formed on proper foundations. Personal resposibility is the foundation of any prudent lender. You lose money you don't eat.
26 September 2010, 07:01 PM
#92
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Are you being serious?
First of all let's clear up one point - why is it brainwashing? I don't work in banking and I am not a banker. I have had banking clients for the last three years and have observed the crisis from day one. I find it intriguing.
At the start of the crisis the combined UK retail deposit balance at RBS and HBoS was around £379,000,000,000 - £379bn. The average size of deposit at RBS was £23,500 and I imagine it was around the same at HBoS. HBoS also held the throat of the UK domestic mortgage market.
Imagine a run on these banks. The tier 1 capital would have been a drop on the ocean. Liabilities would have been called in but people would not be able to pay off their mortgages and they would have been screwed - the property market would be awash with dead property with no value. Depositors would then have to call on the FSCS.
The Financial Services Compensation Scheme would have kicked in and HM Gov (i.e. you and me) would have been liable to compensate all and sundry. Even assuming a conservation 50% payout it would have been £190,000,000,000 with nothing to be returned.
At least with UKFI we hold stock in these banks that may return some value.
This does not allow for the knock on effect in the commercial businesses that would have created mass redundancies, and the knock on effect on other banks, taking them down with the same effect.
Whilst your comments are well intended the system we are in - rightly or wrongly - is a house of cards and if you remove two of the biggest cards from the bottom of the stack then the whole stack falls.
The resulting financial abyss would have lasted decades.
First of all let's clear up one point - why is it brainwashing? I don't work in banking and I am not a banker. I have had banking clients for the last three years and have observed the crisis from day one. I find it intriguing.
At the start of the crisis the combined UK retail deposit balance at RBS and HBoS was around £379,000,000,000 - £379bn. The average size of deposit at RBS was £23,500 and I imagine it was around the same at HBoS. HBoS also held the throat of the UK domestic mortgage market.
Imagine a run on these banks. The tier 1 capital would have been a drop on the ocean. Liabilities would have been called in but people would not be able to pay off their mortgages and they would have been screwed - the property market would be awash with dead property with no value. Depositors would then have to call on the FSCS.
The Financial Services Compensation Scheme would have kicked in and HM Gov (i.e. you and me) would have been liable to compensate all and sundry. Even assuming a conservation 50% payout it would have been £190,000,000,000 with nothing to be returned.
At least with UKFI we hold stock in these banks that may return some value.
This does not allow for the knock on effect in the commercial businesses that would have created mass redundancies, and the knock on effect on other banks, taking them down with the same effect.
Whilst your comments are well intended the system we are in - rightly or wrongly - is a house of cards and if you remove two of the biggest cards from the bottom of the stack then the whole stack falls.
The resulting financial abyss would have lasted decades.
26 September 2010, 07:07 PM
#94
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you only pose that question because you have a lot to lose from the collapse of the status quo -- you have property, cash, and other assets.
So are intrinsically linked to the current financial system and do very well out of it.
but imagine if you do not do so well out of this modern form of capitalism (for whatever reason), or indeed opt out altogether like a traveller/gypsy – no bank account, no reliance on banking or any financial product, used to dealing in cash etc etc --- what’s the real problem with letting it all collapse --- isn’t that the very crux of capitalism – the moral hazard of speculation – the idea that crap business’s go to the wall – the best survive, thus moving things on and improving things
step outside your box Trout
So are intrinsically linked to the current financial system and do very well out of it.
but imagine if you do not do so well out of this modern form of capitalism (for whatever reason), or indeed opt out altogether like a traveller/gypsy – no bank account, no reliance on banking or any financial product, used to dealing in cash etc etc --- what’s the real problem with letting it all collapse --- isn’t that the very crux of capitalism – the moral hazard of speculation – the idea that crap business’s go to the wall – the best survive, thus moving things on and improving things
step outside your box Trout
When I asked my question I was asking it from an intellectual perspective but you do raise an interesting personal dimension to it.
Of course had the banks been allowed to fail - those who flourished without cash would do very well.
The nature of the world would be very radically shaken up and power returned to the very small number of us with land and were able producers (I have land with sheep and some potatoes in my garden
).Barter would be the order of the day.
Yes - very good question
26 September 2010, 07:24 PM
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On a lighter note........
If I win the Euromillions i will hire 6 naked woman to carry me around at all times to save me walking. I would also buy Scoobynet and fix the double post bug and change PSLewis' name to PissyPants
If I win the Euromillions i will hire 6 naked woman to carry me around at all times to save me walking. I would also buy Scoobynet and fix the double post bug and change PSLewis' name to PissyPants
26 September 2010, 07:27 PM
#97
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26 September 2010, 07:47 PM
#98
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Are you being serious?
First of all let's clear up one point - why is it brainwashing? I don't work in banking and I am not a banker. I have had banking clients for the last three years and have observed the crisis from day one. I find it intriguing.
At the start of the crisis the combined UK retail deposit balance at RBS and HBoS was around £379,000,000,000 - £379bn. The average size of deposit at RBS was £23,500 and I imagine it was around the same at HBoS. HBoS also held the throat of the UK domestic mortgage market.
Imagine a run on these banks. The tier 1 capital would have been a drop on the ocean. Liabilities would have been called in but people would not be able to pay off their mortgages and they would have been screwed - the property market would be awash with dead property with no value. Depositors would then have to call on the FSCS.
The Financial Services Compensation Scheme would have kicked in and HM Gov (i.e. you and me) would have been liable to compensate all and sundry. Even assuming a conservation 50% payout it would have been £190,000,000,000 with nothing to be returned.
At least with UKFI we hold stock in these banks that may return some value.
This does not allow for the knock on effect in the commercial businesses that would have created mass redundancies, and the knock on effect on other banks, taking them down with the same effect.
Whilst your comments are well intended the system we are in - rightly or wrongly - is a house of cards and if you remove two of the biggest cards from the bottom of the stack then the whole stack falls.
The resulting financial abyss would have lasted decades.
First of all let's clear up one point - why is it brainwashing? I don't work in banking and I am not a banker. I have had banking clients for the last three years and have observed the crisis from day one. I find it intriguing.
At the start of the crisis the combined UK retail deposit balance at RBS and HBoS was around £379,000,000,000 - £379bn. The average size of deposit at RBS was £23,500 and I imagine it was around the same at HBoS. HBoS also held the throat of the UK domestic mortgage market.
Imagine a run on these banks. The tier 1 capital would have been a drop on the ocean. Liabilities would have been called in but people would not be able to pay off their mortgages and they would have been screwed - the property market would be awash with dead property with no value. Depositors would then have to call on the FSCS.
The Financial Services Compensation Scheme would have kicked in and HM Gov (i.e. you and me) would have been liable to compensate all and sundry. Even assuming a conservation 50% payout it would have been £190,000,000,000 with nothing to be returned.
At least with UKFI we hold stock in these banks that may return some value.
This does not allow for the knock on effect in the commercial businesses that would have created mass redundancies, and the knock on effect on other banks, taking them down with the same effect.
Whilst your comments are well intended the system we are in - rightly or wrongly - is a house of cards and if you remove two of the biggest cards from the bottom of the stack then the whole stack falls.
The resulting financial abyss would have lasted decades.
There were losers in the bailouts as well you know. As I said, no personal responsibility whatsoever in society. Why would you want to keep a house of cards up? That's exactly what the Fed are trying to do in America now. Everyones jobs rely on borrowing and spending. Take away the ability to borrow and it collapses - and goes into the abyss you talk about. The U.K. is the same. So yes, I am serious. As for the existence of the FSCS... that's yet another moral hazard.
26 September 2010, 07:57 PM
#99
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Of course I'm being serious. It would never last decades. All that would happen is that some other people would come in and reform where the others failed. What could last decades is the prolonging of this ridiculous consumer economy and the running of it by the government for political gain. When that ends, which it will when the buck finally stops, the mess will be much worse than had we let things fail now.
There were losers in the bailouts as well you know. As I said, no personal responsibility whatsoever in society. Why would you want to keep a house of cards up? That's exactly what the Fed are trying to do in America now. Everyones jobs rely on borrowing and spending. Take away the ability to borrow and it collapses - and goes into the abyss you talk about. The U.K. is the same. So yes, I am serious. As for the existence of the FSCS... that's yet another moral hazard.
There were losers in the bailouts as well you know. As I said, no personal responsibility whatsoever in society. Why would you want to keep a house of cards up? That's exactly what the Fed are trying to do in America now. Everyones jobs rely on borrowing and spending. Take away the ability to borrow and it collapses - and goes into the abyss you talk about. The U.K. is the same. So yes, I am serious. As for the existence of the FSCS... that's yet another moral hazard.
on balance, it keeps rich people rich and poor people poor
Last edited by hodgy0_2; 26 September 2010 at 08:00 PM.
26 September 2010, 10:09 PM
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I do love the out of the box thinking here but I also ask you both to seriously question what you are saying.
The interpretation I see of status quo here is not as simple as consumer borrowing. That is the biggest single ailment of modern society and much can be done to change that.
There is a much deeper issue here. The banking system was created to increase money supply. Without banks there is less money, not a bit less, not a lot less, an awful lot less. It may be a daft system but it is one we are stuck with at the moment.
If that mechanism of money supply (fractional reserving) is halted abruptly the economy would shrink radically. That will lead to a very deep recession. Outside the box if the economy collapsed then those actually making things like food and things would get the power back. In itself not an issue - but the UK economy being what it is there are not as many of them now. And the densely populated towns would be full to bursting with civil unrest as they were hungry and had no fuel for their cars, or gas and oil for heating.
But to do this so abruptly and imagining it would some nice civilised reform I think is not just barking up the wrong tree but completely barking.
I do not think I am alone Glesga - but letting the two key banks fail would have led to a catastrophic collapse of the UK banking system. That is at an economic level.
On an operational level, overnight all the loans would be called in, millions of people would lose access to £400bn plus - these things alone would lead to major panic and unrest.
In addition hundreds of millions of pounds of daily scheduled payments e.g. Direct Debits etc, card transactions would stop, salaries would stop being paid.
So in amongst all this do you think this is a simple approach of a little political/banking/regulatory reform and all is good.
There are many things that should change and can be changed to improve an imperfect system.
Limiting or abolishing the securitisation of debt (again to challenge TDW - securitisation of debt is almost certainly a much more important factor in the crash than fractional reserving).
Much tighter controls on consumer borrowing ratios.
Incentive for saving
Personal responsibility
And these things alone will stifle growth for a while to come - but will give a soft landing.
And before you throw back the 'status quo' or rich v. poor argument or inability to be outside the box please calculate how much less money would be available if the current system fails - 5%, 10% 90%?
The interpretation I see of status quo here is not as simple as consumer borrowing. That is the biggest single ailment of modern society and much can be done to change that.
There is a much deeper issue here. The banking system was created to increase money supply. Without banks there is less money, not a bit less, not a lot less, an awful lot less. It may be a daft system but it is one we are stuck with at the moment.
If that mechanism of money supply (fractional reserving) is halted abruptly the economy would shrink radically. That will lead to a very deep recession. Outside the box if the economy collapsed then those actually making things like food and things would get the power back. In itself not an issue - but the UK economy being what it is there are not as many of them now. And the densely populated towns would be full to bursting with civil unrest as they were hungry and had no fuel for their cars, or gas and oil for heating.
But to do this so abruptly and imagining it would some nice civilised reform I think is not just barking up the wrong tree but completely barking.
I do not think I am alone Glesga - but letting the two key banks fail would have led to a catastrophic collapse of the UK banking system. That is at an economic level.
On an operational level, overnight all the loans would be called in, millions of people would lose access to £400bn plus - these things alone would lead to major panic and unrest.
In addition hundreds of millions of pounds of daily scheduled payments e.g. Direct Debits etc, card transactions would stop, salaries would stop being paid.
So in amongst all this do you think this is a simple approach of a little political/banking/regulatory reform and all is good.
There are many things that should change and can be changed to improve an imperfect system.
Limiting or abolishing the securitisation of debt (again to challenge TDW - securitisation of debt is almost certainly a much more important factor in the crash than fractional reserving).
Much tighter controls on consumer borrowing ratios.
Incentive for saving
Personal responsibility
And these things alone will stifle growth for a while to come - but will give a soft landing.
And before you throw back the 'status quo' or rich v. poor argument or inability to be outside the box please calculate how much less money would be available if the current system fails - 5%, 10% 90%?
Last edited by Trout; 26 September 2010 at 10:18 PM.
26 September 2010, 10:15 PM
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26 September 2010, 10:52 PM
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The money they gave the banks should have been used to pay of everyones credit & mortgage debt.Leave the banks to get their own new customers.
This would leave plenty of disposable income to kick-start the economy.
(provided anyone gets to work after the party)
Now that's a vote winner!
This would leave plenty of disposable income to kick-start the economy.
(provided anyone gets to work after the party)
Now that's a vote winner!
26 September 2010, 11:02 PM
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Hodgy and Greg - here are some comments from Peston on the newly appointed leadership at Barclays, Lloyds, HSBC and RBS. Not much optimism here for the move away from the status quo
"the ideology and instincts of this new financial ruling class were conditioned by having lived and breathed the recent years of financial globalisation, the erosion of barriers between investment banking and retail banking, massive financial innovation, the pervasive spread of the use of complex derivatives, and the rise of securitisation.
That implies they regard complex global universal banking as the natural order of things - which they may defend against radical change and reform, because it is their world.
On the whole, they take the view that the notion of the banking industry being reconstructed so that it became simpler to understand, more transparent and easier to manage, well they see that as naïve, futile nonsense (they've told me as much).
It also means, if there were any doubt, that the government's new banking commission will probably be fighting the banking industry every inch of the way, in trying to take the risks for taxpayers out of banking."
So more of the same then
"the ideology and instincts of this new financial ruling class were conditioned by having lived and breathed the recent years of financial globalisation, the erosion of barriers between investment banking and retail banking, massive financial innovation, the pervasive spread of the use of complex derivatives, and the rise of securitisation.
That implies they regard complex global universal banking as the natural order of things - which they may defend against radical change and reform, because it is their world.
On the whole, they take the view that the notion of the banking industry being reconstructed so that it became simpler to understand, more transparent and easier to manage, well they see that as naïve, futile nonsense (they've told me as much).
It also means, if there were any doubt, that the government's new banking commission will probably be fighting the banking industry every inch of the way, in trying to take the risks for taxpayers out of banking."
So more of the same then
26 September 2010, 11:15 PM
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The money they gave the banks should have been used to pay of everyones credit & mortgage debt.Leave the banks to get their own new customers.
This would leave plenty of disposable income to kick-start the economy.
(provided anyone gets to work after the party)
Now that's a vote winner!
This would leave plenty of disposable income to kick-start the economy.
(provided anyone gets to work after the party)
Now that's a vote winner!
Total support given by the Taxpayer is...
£135bn in direct support in loans and share purchases involving RBS, HBoS, B&BBS, NR, etc
£715bn in various credit lines, insurance policies and guarantees. Much of this money is promised but will never be used.
Total consumer debt is £1,456bn - so even if all the guarantees and monies actually loaned out were applied it would only deal with half of consumer debt.
Of this £1,456bn around £217bn is unsecured personal debt - e.g. car loans, personal loans etc. So again of the money actually paid out directly to support banks in the UK it is still only about half of personal debt.
As for the political dimension it would not win my vote. Why should my taxes be used to pay off someone else's loans? Am I to be penalised because I do not use unsecured credit?
26 September 2010, 11:24 PM
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27 September 2010, 12:36 AM
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Of course I'm being serious. It would never last decades. All that would happen is that some other people would come in and reform where the others failed. What could last decades is the prolonging of this ridiculous consumer economy and the running of it by the government for political gain. When that ends, which it will when the buck finally stops, the mess will be much worse than had we let things fail now.
There were losers in the bailouts as well you know. As I said, no personal responsibility whatsoever in society. Why would you want to keep a house of cards up? That's exactly what the Fed are trying to do in America now. Everyones jobs rely on borrowing and spending. Take away the ability to borrow and it collapses - and goes into the abyss you talk about. The U.K. is the same. So yes, I am serious. As for the existence of the FSCS... that's yet another moral hazard.
There were losers in the bailouts as well you know. As I said, no personal responsibility whatsoever in society. Why would you want to keep a house of cards up? That's exactly what the Fed are trying to do in America now. Everyones jobs rely on borrowing and spending. Take away the ability to borrow and it collapses - and goes into the abyss you talk about. The U.K. is the same. So yes, I am serious. As for the existence of the FSCS... that's yet another moral hazard.
OK - You are correct. Everyone's job relies on the ability to borrow and spend. If we allow a banking collapse as you suggest, the ability to borrow and spend disappears, so after a few months/years, no-one has a job. No-one pays taxes, so there is no money to pay benefits. Everyone needs to eat, so you would think the farmers would make a massive killing, but they can't harvest crops, as they can't buy diesel to run their harvesters. To reform the current system, you have to make people self sufficient in food production, but using your method, you can't spend any money doing this, as there would be no money. So it is fairly obvious, allowing the banking system to collapse would lead to millions in the UK starving to death. If this were a national debate, then it might not be a bad idea. The scroungers would be first to go, but this is global. Now, billions of people would die from starvation. We would be in a lawless Mad Max scenario. So the main question is, after we allow the banks to collapse and you become leader of the world, what reforms would you suggest to stop people from dying of starvation, and how would you implement those reforms and police them given that you as world leader would have to carry this out without the ability to offer financial incentive to anyone?
27 September 2010, 08:16 AM
#110
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Hodgy and Greg - here are some comments from Peston on the newly appointed leadership at Barclays, Lloyds, HSBC and RBS. Not much optimism here for the move away from the status quo
"the ideology and instincts of this new financial ruling class were conditioned by having lived and breathed the recent years of financial globalisation, the erosion of barriers between investment banking and retail banking, massive financial innovation, the pervasive spread of the use of complex derivatives, and the rise of securitisation.
That implies they regard complex global universal banking as the natural order of things - which they may defend against radical change and reform, because it is their world.
On the whole, they take the view that the notion of the banking industry being reconstructed so that it became simpler to understand, more transparent and easier to manage, well they see that as naïve, futile nonsense (they've told me as much).
It also means, if there were any doubt, that the government's new banking commission will probably be fighting the banking industry every inch of the way, in trying to take the risks for taxpayers out of banking."
So more of the same then
"the ideology and instincts of this new financial ruling class were conditioned by having lived and breathed the recent years of financial globalisation, the erosion of barriers between investment banking and retail banking, massive financial innovation, the pervasive spread of the use of complex derivatives, and the rise of securitisation.
That implies they regard complex global universal banking as the natural order of things - which they may defend against radical change and reform, because it is their world.
On the whole, they take the view that the notion of the banking industry being reconstructed so that it became simpler to understand, more transparent and easier to manage, well they see that as naïve, futile nonsense (they've told me as much).
It also means, if there were any doubt, that the government's new banking commission will probably be fighting the banking industry every inch of the way, in trying to take the risks for taxpayers out of banking."
So more of the same then
i visualise it like this
A boxing ring, and in it is a boxer representing the financial industry --- built like Mike Tyson in his prime, shadow boxing and dancing – the Boxer embodies all the desire , ability, ingenuity, and will to make money and lots of it – in comes the Boxer representing the politicians desire, ability, and will to make, via regulation, the financial industry serve a wider remit than just making themselves very rich, and in comes Timmy Mallet – there is only going to be one winner.
As I have said on previous threads – the Bankers have won the argument. That’s the reality
On a very personal level, I will do very well out of bankers getting back to what they do best,
Last edited by hodgy0_2; 27 September 2010 at 08:21 AM.
27 September 2010, 09:58 AM
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The dark ages lacked security and a government to provide it, hence the economic and culture retardation.
Just because the banks croak or the currency reaches the end of its life does not necessarily equal the death of civilisation.
I'm not sure what would have happened had the western banking system been left to fail but maybe something better would have emerged?
Necessity is the mother of invention as they say...
27 September 2010, 10:11 AM
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The Romans did have money lenders but that is not really banking it was money lending. Banking as we know is fractional reserve banking as you describe. Without it there would be no capitalism.
The origin of fractional reserve banking occurs in a number of places in Europe, with a number of false starts.
The ability of fractional reserve banking to expand money supply was crucial to fund the industrial revolution - although as you say it was developed to fund wars. The Medici were testing these ideas far earlier than we were to fund the Royal Navy.
The best example of the inability for a fully reserved currency to support economic growth is in Spain where they were entirely dependent on gold being dug out of the ground in South America. This led to constant devaluation of the currency whilst at the same time had an ironically limited supply of money due to it being tied to physical gold.
The other great development to support capitalism was the creation of stock markets and tradeable instruments. Again a number of false starts and bubbles but over time the ability to free money supply and the ability to get investment return through growth in stock values created the markets we have today.
The most recent blip was taking these two capabilities to the nth degree. Fraction reserve without enough underlying real assets and leveraged tradeable instruments in CDOs and CDSs.
But all of these were created by an uncontrolled and swelling need for consumers to borrow money that was poorly regulated. There are very few in this who did not get their hands dirty!
The origin of fractional reserve banking occurs in a number of places in Europe, with a number of false starts.
The ability of fractional reserve banking to expand money supply was crucial to fund the industrial revolution - although as you say it was developed to fund wars. The Medici were testing these ideas far earlier than we were to fund the Royal Navy.
The best example of the inability for a fully reserved currency to support economic growth is in Spain where they were entirely dependent on gold being dug out of the ground in South America. This led to constant devaluation of the currency whilst at the same time had an ironically limited supply of money due to it being tied to physical gold.
The other great development to support capitalism was the creation of stock markets and tradeable instruments. Again a number of false starts and bubbles but over time the ability to free money supply and the ability to get investment return through growth in stock values created the markets we have today.
The most recent blip was taking these two capabilities to the nth degree. Fraction reserve without enough underlying real assets and leveraged tradeable instruments in CDOs and CDSs.
But all of these were created by an uncontrolled and swelling need for consumers to borrow money that was poorly regulated. There are very few in this who did not get their hands dirty!
The thing about a fiat currency and fractional reserve banking is the instability, run away growth of the banking class, and the way governments can easily run deficits and otherwise abuse monetary policy.
...and it failed in spectacular fashion in 2008 and had to be resurrected by the state.
Maybe this system can lead to turbo growth more than a hard currency, but personally I value freedom more than economic growth and I value stability as wel. I'd like to see the government have less power, and a hard currency protect citizens from poor or nefarious monetary policy, it also retards the growth of banking elites who make people into debt slaves and whose power can eclipse the state at times.
Thomas Jefferson - "I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around [the banks] will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs."
27 September 2010, 12:10 PM
#114
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I remember Mrs Leslie being conned into investing some cash with them and after 2 years she was still out of pocket. The impression is that you cannot trust them to act in you best interests as they used to in previous times.
I get the feeling that working with money seems to be a corrupting influence.
Les
27 September 2010, 01:49 PM
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Hodgy and Greg - here are some comments from Peston on the newly appointed leadership at Barclays, Lloyds, HSBC and RBS. Not much optimism here for the move away from the status quo
"the ideology and instincts of this new financial ruling class were conditioned by having lived and breathed the recent years of financial globalisation, the erosion of barriers between investment banking and retail banking, massive financial innovation, the pervasive spread of the use of complex derivatives, and the rise of securitisation.
That implies they regard complex global universal banking as the natural order of things - which they may defend against radical change and reform, because it is their world.
On the whole, they take the view that the notion of the banking industry being reconstructed so that it became simpler to understand, more transparent and easier to manage, well they see that as naïve, futile nonsense (they've told me as much).
It also means, if there were any doubt, that the government's new banking commission will probably be fighting the banking industry every inch of the way, in trying to take the risks for taxpayers out of banking."
So more of the same then
"the ideology and instincts of this new financial ruling class were conditioned by having lived and breathed the recent years of financial globalisation, the erosion of barriers between investment banking and retail banking, massive financial innovation, the pervasive spread of the use of complex derivatives, and the rise of securitisation.
That implies they regard complex global universal banking as the natural order of things - which they may defend against radical change and reform, because it is their world.
On the whole, they take the view that the notion of the banking industry being reconstructed so that it became simpler to understand, more transparent and easier to manage, well they see that as naïve, futile nonsense (they've told me as much).
It also means, if there were any doubt, that the government's new banking commission will probably be fighting the banking industry every inch of the way, in trying to take the risks for taxpayers out of banking."
So more of the same then
But we have to be careful not to slip into producerist demagoguery.
27 September 2010, 07:49 PM
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Some good points on this thread and I just want to be completely clear.
I am not defending banking as it stands, I am not saying it should not change. What I am saying is that allowing the banks to fail has consequences far beyond suggesting that this will be a short term tweak, an adjustment that we quickly move on from.
I am clear that I do not think that allowing any of the large banks to fail was even possible without catastrophic impact and so am a staunch defender of the rescue.
The problem we may have is that the capitalist world is so far down the path of this model of banking that to change it even using evolution not revolution would still be a complete upheaval of politic, soclal and economic norms. The status quo as hodgy says is a powerful thing.
I am not defending banking as it stands, I am not saying it should not change. What I am saying is that allowing the banks to fail has consequences far beyond suggesting that this will be a short term tweak, an adjustment that we quickly move on from.
I am clear that I do not think that allowing any of the large banks to fail was even possible without catastrophic impact and so am a staunch defender of the rescue.
The problem we may have is that the capitalist world is so far down the path of this model of banking that to change it even using evolution not revolution would still be a complete upheaval of politic, soclal and economic norms. The status quo as hodgy says is a powerful thing.