Bankers

[Metroland]

The government is to cover Britain's banks to the tune of £300bn in insurance policies in an attempt to will provide £200bn to cover the possibility that money owed to financial institutions, for example mortgages, is not repaid.

There will also be a £100bn mortgage-backed securities scheme which will last for two years.

The securities are assets that the banks may not be able to sell to get them lending again.

http://news.sky.com/skynews/Home/UK...Scheme_For_UK_Banks_To_Get_Them_Lending_Again

Anyone else looking forward to a lifetime of tax rises with nothing to show for it, with the money going to rich *ankers? I just wondered if the government would like to spend it on anything decent? And here's silly old me thinking that lending with people not paying in back caused the problem in the first place?

 

[Pumbaa]

Yum yum - banking discussion! My favourite.

Obviously we have every right to be annoyed that banks are being given billions of pounds to sort them out, when they were partly to blame in the first place. However, we really don't have the right to moan, as it's thanks to the banking system systematically investing and staching money away in overseas assets (some of which are now the toxic liabilities) that ensured we had sustained economic prosperity.

Credit is the most commonly blamed factor here, but really the culture of credit is to blame ie most people living above their means. Loopholes were exploited, money kept constantly going out without watching the inflows. Was a mess waiting to happen, we just never realised how big this mess would be.

Clever government spending? Not possible! Government is now throwing money away - chucking billions on infrastructure, trying to rejuvenate an already broken system and oiling the mechanism that has kept the money flow up these years (the banks). They need to throw this money at the banks, or we will have a complete financial freeze. Slate them as much as you like, but bankers are essential in keeping Britain poised on the edge of financial doom. Better bankers (ie not so fat ones) are needed to bring the iceberg back up a little, but let's admit - we're screwed one way or another. Besides parity mit dem Euro draws nearer, it won't be long before it starts rolling out and we are welcomed into the EZ with open arms. For us, it should be more stable for a while at least.

The EZ is a model of things to come. Following this crisis, which will bring about a huge redistribution of wealth and power, three or hopefully one new currencies will emerge. Sad, but that's the future. Get used to it.

Here's a new thought though. I'm worried about the simplicity of this crisis. Things are happening too smoothly. Papers are talking about stagflation, hyperinflation and the dangers of any recession. It all looks too common sense. The fact that most ordinary people can now appreciate the gravity of the situation sets alarm bells ringing in my head. Be forewarned, something has got to give.

Something is going to go head over heels soon. A black swan possibly, a huge attempted coup by a very powerful group of people more remote but almost certain is the instantaneous death of all commodities, all stock and all everything bar one very important resource. More importantly, it will see the end of Keynesian economics, and a new outlook on the world of money.

 

[Metroland]

A black swan? More like a flock? For once I'm hoping for silent spring.

Not sure most people are going to notice, too busy watching Big Brother. Anyone noticed sales of safes have gone up?

 

[Pumbaa]

Aye - a flock would describe it better. Interestingly though, whilst there will be many unfortunate events, I am hedging my bets on that it only takes one to slam the world against a table and violently pound it until it collapses.

I got a bit excited - Steorn showed some movement last week, but it's all gone quiet again. That really would be good wouldn't it? Just how long before America nicked the technology and confined it to the record books?

I am regretting not exchanging the vast majority of my wealth into Euros; I considered it, but looking back was the wrong choice. Somebody close to me is counting down the days before they become 40% richer or so than me - and we have identical incomes...

 

[Dennis]

Anyone else looking forward to a lifetime of tax rises with nothing to show for it, with the money going to rich *ankers? I just wondered if the government would like to spend it on anything decent? And here's silly old me thinking that lending with people not paying in back caused the problem in the first place?

Like myself, you're obviously missing the point of the government's actions which are to......do what exactly???

One statistic which seems to have been overlooked in the current crisis is our record balance of trade deficit - as a nation were still getting deeper and deeper into debt regardless of all the banking related issues. Another area where Mr Broon in his infinite wisdom has presided over inaction, storing up problems for the future.

A little help for the manufacturing sector wouldn't go amiss; imagine what a £200 000 000 000+ cash injection could do for British industry.

 

[Metroland]

Like myself, you're obviously missing the point of the government's actions which are to......do what exactly???

One statistic which seems to have been overlooked in the current crisis is our record balance of trade deficit - as a nation were still getting deeper and deeper into debt regardless of all the banking related issues. Another area where Mr Broon in his infinite wisdom has presided over inaction, storing up problems for the future..

Well its to get the banks lending to people, that if they have any sense wouldn't borrow anyway and if they don't have any sense shouldn't be lent to in any case.

They reckon they are conservatively going to lose at least £40 billion. Which, if they feel like blowing should at least be spending it on things we need: Schools, Crime prevention, kit for the armed forces, green energy tech, transport, health. Or at least give it to industry instead of bankers with their private jets and offshore accounts.

If they feel like giving away money, I'll gladly accept £1 million, I promise I'll improve the economy with it

In America they actually did give away money. The middle class mostly banked it, but at least it cut out the middle man

I got a bit excited - Steorn showed some movement last week, but it's all gone quiet again. That really would be good wouldn't it? Just how long before America nicked the technology and confined it to the record books?

Free energy technology. I'm just thinking of the missiles and congestion. Not sure the second law of thermodynamics allows such things..Probably just as well, It never fails to amaze me how good geeks are inventing things and how brilliant chavs are at misusing things - or the military. You'll have to wait for that software upgrade on the Mk1 human brain.

See you need negative buggers like me to think of these things:

The optimist invented the aeroplane and the pessimist invented the parachute.

 

[90019]

In America they actually did give away money. The middle class mostly banked it, but at least it cut out the middle man

I thought that was Australia

The optimist invented the aeroplane and the pessimist invented the parachute.

A pessimist is what an optimist calls a realist.

 

[Metroland]

http://thescotsman.scotsman.com/latestnews/Cash-bonanza-for-US-taxpayers.3761315.jp

anyway, UK banks have actually been promised £1 trillion. That's 10 times the annual NHS bill or social security bil, 20 times the eduction bill, 25 the forces bill and over 50 times the entire transport budget. Its also not far from the entire UK economic output for 1 year.

They have already lost £15bn, which could have paid for 3 channel tunnels, A N-S High speed line, 300 miles or motorway, Paid for 15 new power stations, 60 new hospitals or 200 new schools or buy 833,333 family cars.

1 trillion would pay for 55.5 million cars, enough for everyone in Britain nearly, or 5 million family homes costing £200,000 each - which is the same number as all the homes in London and Birmingham combined. It would pay for crossrail 63 times over, or build 50,000 miles of High speed line @ CTRL prices, 5 times the current size of the UK network, or give free public transport for life to every man, woman and child in the country.

http://www.dailymail.co.uk/news/art...BS-shares-plunge-70-fresh-City-bloodbath.html

 

[Dennis]

Those number make Network Rail's £29 billion debt look insignificant.

I hope the Bank of England are regularly writing to HBOS, RBS etc to remind them they have overdrawn and that they are charging them fifty quid a shot!

OOI - if the banks took up all this money being offered to them, what would the national debt rise to?

 

[Metroland]

After watching the slide in bank shares on Friday, one cabinet minister did not altogether joke when he said: "The banks are ****ed, we're ****ed, the country's ****ed.

http://www.guardian.co.uk/politics/2009/jan/19/economy-banking