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Glass Box for Tuesday

Sequin | 16:42 UK time, Tuesday, 29 April 2008

Be your own radio critic! Tell us here, frankly, what you thought of tonight's programme. In the PM office we meet every night at 1800 in this Glass Box:


We talk about the content of the programme and try to give an honest assessment of what worked and what didn't...the things we missed and the places where our ambitions were not met. THIS virtual glass box you are looking at is where you are invited - indeed encouraged - to be your own critic. Comment on our hour by clicking on the comment link. Members of the production team will read the comments, and the editor should comment too. Click on The Glass Box link on the right of the page to read previous entries.


  • 1. At 5:17pm on 29 Apr 2008, mygloriousleader wrote:

    Well done Sequin with 'the banks' speaker'.
    (Wiggle wiggle wiggle'....)

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  • 2. At 5:27pm on 29 Apr 2008, Ringarosi wrote:

    The whole tone of the imperious Angela Knight's(?) piece was "How dare Mervyn King criticise what we do". She even pretended she didn't hear part of the interview! If she actually is the spokesman for the Banks then I would fire her immediately not only on the strength of this piece of awesome obfuscation but enunciated in a tone of voice that I thought fell out of favour in the 1930's - hopeless!

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  • 3. At 6:03pm on 29 Apr 2008, NurseJosey wrote:

    I got in the car this evening to hear Nadine Dorris (sp?) talking about her proposed amendment to limit abortions to 20 weeks. Now admittedly this subject always makes me incredibly hot under the collar but her comments *really* enraged me. I would like to know which planet Ms Dorris inhabits where it is the case that babies born at 20 weeks are 'viable', or even better what she means by 'viable'. We simply do not have the long term medical data to know what happens to babies born so early who actually survive, and I would suspect that the vast majority do not. To use such an emotive and ridiculous claim to try and limit women's reproductive rights to me is quite simply outrageous. I expect that this post will infuriate and perhaps offend others as much as her comments infuriated and offended me, but I will say that I am NOT pro-abortion: I am simply pro a woman's right to choose, as well as being pro decent sex education and freely available contraception.

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  • 4. At 6:23pm on 29 Apr 2008, phwoaar wrote:

    Dear Ms. Carolyn,
    Punch & Judy 'fans' are NOT "very rare",as you commented...
    The show is more popular now than it has EVER been!
    And I'm not talking about politics.Yawn.Bor-RING.
    'Professor Poppycock'-Cambridge.(The King of Punch'n'n Judy).
    Punchinello(Yes and that's Mister to you.)
    p.s. That's the way to do it! He's BEHIND you! Oh no I didn't! Ooh-er Mrs.! etc. etc.

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  • 5. At 6:30pm on 29 Apr 2008, phwoaar wrote:

    Dear Ms. Carolyn,
    Punch & Judy fans are NOT "very rare",as you commented.
    The show is more popular now than it has EVER been...
    And I'm not talking about politics.Yawn.Bor-RING.
    Kissy Kissy,
    'Professor Poppycock'-The King Of Punch 'n' Judy.
    Punchinello(Yes and that's Mister to you)_
    p.s. Oh no I didn't! He's BEHIND you! That's the way to di it!
    Ooh-er Mrs.!

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  • 6. At 6:33pm on 29 Apr 2008, Oxtedgardener wrote:

    Angela Knight. I have heard a number of your interviewers succumb to this woman's overbearing tone of voice. I grant you she is good with her use of the 'Maggie' voice but even your Today interviewers don't push this Banking spokesperson to answer the questions posed. She mentions a 'Global problem'. The banks she is being questioned about are British companies with incompetent British Boards of Directors who have followed each other like sheep and brought the British banking industry to its knees. Regarding the huge bonus payouts to banking managers who have obviously got it wrong - she refers to these payouts as 'compensation'. As if these 'nose in the trough piggy wiggies' deserve a payout for their great business achievements. Why don't your interviewers have the courage to put her under the cosh? Even Mervyn King states these banking professionals did not fully understand the investments which led to all the trouble the British banking customers are now paying for.
    I challenge John and Jim of the Today team to call her to account.

    The Oxtedgardener

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  • 7. At 7:27pm on 29 Apr 2008, Colin McAuley wrote:

    I too could not understand what this spokesperson for the banks was on about, for it was clear as mud! Typical "new-speak", to quote Orwell. Banks, in all nations, are all about confusing people with their illegible "rules" for personal accounts and their legendary charges for "looking after" OUR money! Their actions in all this "sub-prime" mortgage fiasco amounts to a dereliction of their duty in the highest degree! Their answer is to do nothing more than obfuscate.

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  • 8. At 7:30pm on 29 Apr 2008, al_opecia wrote:

    Punch and Judy - Oh why couldn't we hear William Hague's wonderful skit on the PM receiving Tony Blair as the newly elected President of Europe? It was eye wateringly funny.

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  • 9. At 11:53pm on 29 Apr 2008, revolutionaryleftie wrote:

    Can we compare notes: can anyone less mesmerised than me help me through to clarity on this?

    May I take it step by step?

    The American banks etc lend some mortgage money to sub prime borrowers. The interest rates are at the beginning very low and only climb to average levels after two or three years. So the average rate of return is low.

    So the banks ect., with this debt on their books sell it to other agencies who aggregate it, slice it, make assets based on assets based on.... it etc etc.

    But each time there is a movement by these assets through a financial institution this already low rate of reurn asset has its profitabilty shaved a little. Till eventually these assets are offering very low rates of return. And at very high risk 'cos the fundamental borrowers, the subprimers, might default.

    So who in their right mind would buy such debt?

    (As an aside (but see below) may I ask why the Governor of the Bank of England didn't say all the above (if it is right) 7 or so years ago. It can't be a case of 'Not my job to do so, gov', can it?)

    So what possible advantage can there be in the creation, buying and selling of such assets to anybody?

    The answer must be that they are trusted (or were, rather). Like money they have a low rate of return (money of course has zero rate) and are inherently of little value. But their possession inspires (inspired) such confidence that other banks will lend huge amounts to the holders. They become if you like a reserve asset in effect.

    With the huge borrowings the banks should then acquire genuinely productive assets, except that the ones here won't buy stocks in industrial companies etc and so they acquire another bunch of useless paper.

    Why should the banks use these sub prime backed assets as reserves? Well, you tell me! Why should they use gold or promises to pay or anything at all except real estate and capital?
    The one thing the banks don't like much is government being the recognised source of assets (but they have to tolerate it) because that government borrowing and spending is so socialist!

    As we know full well banking systems depend on belief, so that the whole thing could have proceeded quite smoothly with the reserve assets losing their capacity to be redeemed but maintaining their exchange value. (In return for a five pound note, the BoE offers you a... .a five pound note as its redemption, after all. Subprimers simply offer you another of their promises to pay!)

    But that banking revolution was not to be for two reasons.
    1. The bankers all thought the other bankers dishonest because they knew the assets they were buying, backed by subprime debt, were not increasing in value as promised - and so niehter could any other other bankers' assets - despite their claims (ie bookkeeping entries)
    2. The only real assets in all the world on a stable increasingly valuable path are/were oil reserves, Indian and Chinese industrial set - ups and land. All of these assets are regarded by the bankers in these ethereal money and paper markets as far too real world for them to soil their hands with.

    If all of the above is right why has it taken YEARS for the Governor of the BoE to tell us the banks are inflating assets and using worthless paper as collateral in acquiring such assets?

    After all, as soon as the planes hit the Twin Towers many of us demanded to know what Al Qieda and the Islamicists had against the American financial system. (We could guess in respect of the White House and the Pentagon) The answer that came back was broadly along the lines of the above.

    Two good reasons for bankers to have come clean there and then, then. One, it would have started a dialogue with Al Qieda and obviated the need for wars in Iraq and Afghanistan. Two, it would have stopped the mad stop-go of the housing market which we are all about to suffer from, from the points of view of emmployment, income and wealth.

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  • 10. At 09:54am on 30 Apr 2008, 2bodacious wrote:

    Regarding the piece on the 1967 Abortion Act, I was deeply saddened, yet again, by the casual way in which this was discussed especially by Lord Steele. I had no idea that even at that time the cut off was 28 weeks for goodness sake. Just a year before that the cut off was 12 weeks and Steele was wrong, there were NHS terminations prior to 1967- to my shame I had one in July 1966. They had to be approved by three consultants, one a psychiatrist. It is an episode of my life that haunts me to this day, but my situation was such that having and keeping my baby was a non starter especially after being pushed down two flights of stairs by her then famous father who went ballistic when I refused to consider a back street abortion. I was made homeless and was unable to get a job because of my "illigitimate pregnancy", despite having no money for food I got nothing from the benefit system and wasn't even made aware of what was available. My Christian family were not prepared to support me to have and keep my much wanted baby, but despite all that in the cold light of day I should have tried harder to find a way. Even back then, according to the nurses, most women showed no remorse, I wound up trying to take my life and having a breakdown. It's all very well talking about 'a woman's choice' , but we do have a choice not to take risks. In the sixties reliable contraception was only just becoming available, but now it is totally accessible and much more reliable so there is little excuse for the majority to become pregnant. Let us also not forget HIV and other infections. It devastates me to hear that people have abortions for the sake of convenience or because the gender is unwanted. Nobody speaks of the feelings of guilt, the trauma, the regrets. I am 69, but my regrets have increased over the years as I never got another chance- God's punishment ? While in Dupont Circle, Washington DC a couple of years ago the anti abortion people had a display and there were photos of foetus's from 12 weeks up and I burst into tears because I never knew just how formed my baby would have been. How anyone can justify aborting, other than for serious medical reasons, beyond 16 weeks appals me. There are thousands of people who want to adopt babies in this country, so instead of going abroad they should be encouraged to do it here and perhaps less women would feel the need to end the lives of their unborn babies.

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  • 11. At 11:47am on 30 Apr 2008, H wrote:

    So, immigrant children learn English very fast.
    The same would be true of British children, were they given the chance.
    It is a quality of humankind that, between the ages of (for our purposes) 5 and 10, children will most readily acquire (spoken) natural language.
    What an opportunity is lost for British children to do the same thing!
    There are three crucial changes that would benefit the primary school system.
    1) Small is beautiful.
    2) Pupil testing is ridiculous [that does not mean that schools are not monitored].
    3) Above all [including the detailed acquisition of maths, science, history, geography - AT THIS LEVEL] the acquisition of natural languages (plural) is paramount. Firstly spoken, then written.

    Because it happens so readily.
    Because through the processes of being read to, and then reading, much of the other information can be acquired.

    And because its wider benefits are incalculable [think about it!]

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  • 12. At 12:02pm on 30 Apr 2008, Simon wrote:

    RLeftie (9);
    It's not the job of the BoE to regulate the financial sector, that's the Financial Services Authority (or if you read Private Eye, the Fundamentally Supine Authority).

    The various financial instruments which were bought around the world by financial institutions contained some proportion of this toxic subprime lending, sliced and diced, as you say. The rating agencies should have given them a risk rating to match the risk of default, but that very slicing made the risk of the various components of the content opaque to proper scrutiny. So they granted them top investment grade status, AAA.

    That this was a misrating is plain to see. Because the subprime lending has been repackaged no institution now knows how to quantify the true level of exposure, the value of the exposure or who is holding it. hence their reluctance to lend to their competitors, who may be holding a big stash of bad debt on thir books.

    IMHO you confound the /11 attacks and the motivation behand them. Al Q'aeda attacked them because they wished to attack the economic life of the world. They hate those who do not have their belief.

    That hatred justifies any action they wish to take against us and our way of life. Since that way of life depends on (amongst other things) free trade, capital, value in real estate, stocks and shares, the free flow of money, etc. that made the WTC the most obvious target for any attack upon the lifestyle and values of the world.

    I can't see what action by banks around the world would have had in persuading them to cease their murderous activities. They kill because they regard us as infidels and heathens on an extremist religious basis, not because we have cashpoint cards and mortgages.

    The stop-go of the housing market is because we are all obsessed with owning our own place to live in. Common sense is abandoned, especially by those who can't read the history of a stock market index and realise there is a crunch coming. When common snse is abandoned property prices soar. When it reasserts itself they come crashing down again.

    We were told that there was a new politics which would cure boom and bust in Britain forever. That was vainglorious braggadocio from a man trained as an economist who ought to have kown better. We are part of a global economic system and susceptible to shocks from any part of that system. The larger the component the bigger the shock it can introduce, and the USA is the biggest component of all. When it suffers we all suffer with it.


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  • 13. At 1:26pm on 30 Apr 2008, thenicecatlady wrote:

    Angela Knight was doing what she always does - talk drivel. The banks have caused this problem with their greed & incompetence. We are now going to pay for that while the banks whinge & whine & grab the money we are supplying through the Bank of England. How many senior bank officials will have their homes repossessed? How many will take a paycut? We pay their wages by being their customers & they rub their sticky hands with glee & run off with our money. They are dispicable & every single one of them should have their salaries & bonuses for the last 12 months taken back & have to live on minimum wage for at least the next 12 months. This wouldn't solve the problem but at least it might make them realise that their behaviour is not acceptable.....oops I forgot they don't care & they don't have a moral compass anyway!!

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  • 14. At 1:46pm on 30 Apr 2008, thenicecatlady wrote:

    I think I've been moderated. What ever happened to free speech ah it obviously doesn't apply when critiscising the banks

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  • 15. At 2:00pm on 30 Apr 2008, mygloriousleader wrote:

    Ratty (12) you make some good points, however the problem of sub prime lending was that it was a case of the kings new clothes. Everyone said ooh ahh and unfortunately there was not anyone honourable enough in the banking system in the UK to say (as the little boy said) "you're all being conned."

    Unfortunately our antiquated banking system failed as they were all asleep at the wheel. What is needed is a fundamental shake up of the banking system. There is no political will to achieve this as Lordy Gordy will be retiring to his nice non exec bank job as do most ex chancers of the ex cheque book. If you have any doubt as to how lacking in control those at 10 dunces street have over the banks just compare the recently published new business banking code to the 2005 version and see how much further it has been watered down.
    2 Our key commitments to you
    We promise that we will act fairly and reasonably in all
    our dealings with you by meeting all the commitments
    and standards in this Code.

    2 Fairness commitment
    We promise we will treat you fairly and reasonably when
    providing you with products and services covered in
    this Code.

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  • 16. At 2:31pm on 30 Apr 2008, Simon wrote:

    It could be, of course, that bin Loafin' had his people fly into the WTC because he'd lost a big pile of invested money in the dot.com crash the year before and wanted to punish Wall Street for his losses.

    But somehow I doubt it.

    "Antiquated banking system". Hmmm, not sure that's it. At High Street level it's much the same as it always was. Deposits, withdrawals, overdrafts, loans, etc.

    The real problem lies not in antiquation but in novelty. The new derivative instruments which were used to package and repackage debt into extraordinarily complex means of raising more money, whilst disguising their true nature from the person taking them as security is partly to blame. Add in the willingness of the lender to take that unknown (but AAA-rated) security. Top it off with an over-generous frothy dollop of insane lending to people who never had a hope of affording their repayments on their subprime mortgages and Bingo, you have the recipe for a disaster.

    I'm not sure what shake-up would be required to sort the mess out. Banning derivatives, so that what was being offered is transparent to all? That would be a start.

    Right now you may have a mortgage with the Northern Crock. But they packaged up your property as security to go and borrow even more money to lend out to someone else. And the process went around many times over, with each mortgaged property being parcelled up and used as security for the next round of borrowing-to-lend. So you actually have no idea who owns your house, but you can be certain that it isn't the Wreck any more. They've securitised your house to a third party, who repackaged it to a fourth party against *their* borrowing. And so on down the line.

    How can a Government in a free trading nation legislate to limit the pay and perks of company bosses and bank traders? That's another conundrum. We're told that no interference in pay and bonuses is possible, lest it scare off the best of the best from working in Britain. If this meltdown is the result of the best in the business then I'd shudder to think what the alternative might be.


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  • 17. At 4:01pm on 30 Apr 2008, mygloriousleader wrote:

    Oh yes it is an antiquated banking system. Tell me how easy is it for a uk business to packup their lending and move to another bank because their current one is over charging them? It is almost impossible.

    As regards the deirivatives;
    The uk traders did not understand the associated risks with what they were buying...In which case they should be sacked
    They did know the risks with what they were buying and chose to ignore them...In which case they should be sacked.

    The ramifications of what they have done will rock the uk business world for many years as the high street business banking fraternity claw back their lending by fair means or foul to achieve liquidity.

    We are seeing this with a glut of businesses being sent to the wall. I have personal experience of the foul methods so I have no time for the banking system as it stands at the moment.

    Revolution is required....

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  • 18. At 4:35pm on 30 Apr 2008, David_McNickle wrote:

    thenicecatlady 14,
    Maybe you misspelled banks. (No messages missing here.)

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  • 19. At 6:28pm on 01 May 2008, revolutionaryleftie wrote:

    Is this correspondence 'now closed'?

    Does that mean I get the last word? I hope not.

    I thank those trying to unravel all this banking mess for me.

    I have problems with White Rat's explanations. The whole sounds like an account of totally dishonest processes - without actually calling them that.

    In detail: So the BoE not calling 'Foul!' earlier, WAS because it 'was not my job, gov' - exactly as I feared. The BoE issued a Financial Stability statement today, commenting on bank practices, y'know.

    As for Al Qieda, dialogue has to begin somewhere and disagreement about Western financial practices runs deep. We ourselves agreeing that our set ups are wholly dishonest MIGHT have helped.

    White Rat writes to my mind as if this mess were an aberation, a one off mistake. But these booms and busts seem to me to be the constant refrain of the system. He mentions the dotcom boom bust. Yeah, that WAS the last one. It was the way we recovered from that one that caused this one, on White Rat's account! For me now both sound like the usual dishonesty and irresponsibility of markets.

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