BBC Blog Network

User Profile

Reaper_of_Souls

Listed below are comments made by Reaper_of_Souls between Sunday, 1st November 2009 and Wednesday, 9th December 2009.

«Newer
Older»

How the bonus tax will work 12:40pm on 09 Dec 2009 So we can expect a lot of bonuses to be deferred, and paid as soon as the 1 off measure has come to an end.

This could have done significant harm to the economy if taken as goverment hostility to our main "industry" the financial sector (even after tha bail outs), but with a governement (hopefully) on the way out such sentiment is unlikely to have much impact.

No doubt it will just be tokenism to try to score a few populist political points, amount to very little revenue and be easily avoided by the banks and bankers (or closing the loopholes will cost more than the revenue generated).
Flattening, not falling? 2:36pm on 06 Dec 2009 # 64 Leftie

Interesting that the slowing of the decline is "politically charged" and yet the rest of the world seems to be coping better than the UK, whereas the downturn was due to "global factors".

The expand the money supply through cheap credit and channel inflation into asset price speculation (especially housing) to create the illusion of wealth economic model, has been proven to be the sham it was and in the meantime our underlying economy has been crippled and burdened by excessive regulation and an overblown and unaffordable public sector to enforce it.

Excessive expenditure on vanity projects and giveaways to try to keep interest groups sweet is not investment in the economy, but could be considered as investment in trying to buy political capital.
How HBOS escaped closure 03:44am on 06 Dec 2009 Of course ordinary shareholders were only told part of the real story, after all you need to be a major investor and part of the club to get the real inside story... not that insider trading to some degree, whether legally provable or not is anything to do with the city and how major investors tend to get higher returns...

but then if the banking system would have collapsed without support, why did the government decide to pay so much for a stake in them and still leave a considerable amount of the ownership in the hands of existing shareholders?
At least contracts would have been null and void and remuneration packages subject to renegotiation if the banking institutions as they were had been wound up and worthwhile activities split off as a new entity.

And to say that some banks didn't get support is naive, whilst the likes of Barclays got funding from elsewhere and as such didn't get direct support, if as has been stated the entire banking system was on the verge of collapse (and yet charges of trading while insolvent haven't appeared and assets weren't liquidated), all banks benefited from state support of the sector... and many continue to profit from the crisis due to QE and the sale of government bonds to finance the ever increasing public debt.

Of course it shouldn't be for Lloyds or the state to compensate those who may have lost due to deception (and proving loss when shares could have been worthless without state intervention may be difficult) it should be any directors and possibly politicians who deliberately mislead people who foot the bill personally, including their pension pots and future earnings..
Flattening, not falling? 11:26pm on 05 Dec 2009 As many have said.. just statistics on movements and an official definition that is in itself flawed...
While we may not be on the down slope and (currently) not "recessing" further; to say that things are good and back to normal would be typical spin, we're still in the first trough of this downturn, whether or not that trough is deepening... and that's with the vast some of debt being built up on our behalf with debatable positive impact on the economy as a whole.

"L" shaped and the sacrifice of future growth have been mentioned, perhaps some analysis of our actual economy rather than headline stats would give an idea of the real position and potential future. At the end of the day its just a sum of the parts.

How can the current economic model for the UK be sustainable long term with massive trade deficits, even when propped up by financial services inflows, assets being sold off to foreign investors (thus sacrificing future profitability) and the additional cost to come due to demographic trends?

We've been living beyond our means for years, thinking we deserve more than we earn, with expectations raised beyond what is achievable by politicians encouraging an feel good factor.

Britain still has assets and historical wealth, but it needs to start using them much better before they're completely frittered and our position in the global economy is as nothing more than a cautionary tail and historical footnote.
Public servants on $20m a year 12:44pm on 03 Dec 2009 Hopefully the boards of several banks will resign and moves will be made to ensure they don't receive exhorbitant pay offs when they go.

Members of the same "club" within the supreme court have already decided to interpret the law and the role of the FSA in favour of "their own", and of course with the lawyers providing the "resignation" advice being employed by the bank, there would be no way that their legal adivce could be biased toward ssupporting the agenda the banks executives want to pursue would there?

Unfortunately, the upper echelons of society (whether they be political, legal, etc.) are closely tied to the banking sector and consider the banks to be part of the fabric odf society and the bankers to be amongst "their own", as such expecting a real stand against the banks and their operations is probably a false hope.

btw: I note that RP mentioned that banks would be unlikely to collude when mentioning the meeting of their elite "club", was this said with a degree irony?
After all such meetings (and organisations such as the BBA) are designed to benefit the members, and as they continue, no doubt provide some benefit, there is a fine line between "agreeing common goals" and collusion amounting to cartel operations, and the banks mange to conduct such activities in a way that is either legal or at least provides insufficient evidence for proceedings.
Although of course it would be naive to think that such meetings are designed to profit anyone but the banks and bankers themselves, anyone thinking they are intended to be in the interests of consumers and taxpayers is sadly deluded.
Public servants on $20m a year 12:32pm on 03 Dec 2009 As several people have pointed out, there can only be so many "top jobs".

Also, I seem to recall RP's analysis of banking returns a month or two ago where he demonstrated that profit rates on banking investments had been pretty much consistent over time, it was primarily due to a vast increase in capital ratios that overall profitability had increased, but as we are now well aware, that comes with an inherent risk.

The question then is how much value do these high flying individual bankers actually add, especially as economic circumstances and governemt action seem to be amongst the most important factors for profitability.

Should the US be the only country refusing to agree on limiting bonuses, there would appear to be a case for levelling the subsequent playing field by making dealing with such US institutions less desirable to the rest of the world, although of course some could call such moves protectionism, if the rest of the world were united, the US with its fragile economy may eventually find it in its interests to tow the line.
Shouldn't banks work for us? 1:11pm on 01 Dec 2009 # 21 pawns_or_players

Re your comments on retail banking...

And yet its ironic that these banks quote the high cost of funds from wholesale markets in comparison to base rates as an excuse for charging high interest rates, and yet pay next to nothing for funds from another source, i.e. retail deposits.

As you say, the actual underlying value of a share and its specualte market price are considerably disengagaed.
The shareholding is in many ways wealth rather than wealth creation, the only forms of shareholding really potentially generating wealth being the purchase of additional stock, should the funds acquired then be utilised by the organisation to further increase production (i.e. real weralth generation).

Most other forms of trade, are zero sum gain, merely trade and redistribution Although trade itself can add to total value, by having things produced in the most comparatively efficient places and ways e.g. enabling econmies of scale, accessing local resources, etc.; it does not directly "create" wealth.

In many ways the wealth of the developed world is based on it using its historical wealth (including developed infrastructure) and influence to use much of the rest of the planet.
Shouldn't banks work for us? 12:59pm on 01 Dec 2009 Perhaps investment managers should have a responsibility to take the views of the investors they supposedly represent into account when using the voting rights acquired through the finds of those investors.

Rather than just supporting the insiders club...

Hopefully the 1 year contract proposal will be accompanied by severe limits on exit payments, where directors can make more through failure than success.
Perhaps the success of part of Warren Buffet's approach of long term investment in fundamentally sound businesses should represent more of a model for the future than a constant chase for speculative short-term gains and the inherent instability that follows.
Shouldn't banks work for us? 12:53pm on 01 Dec 2009 #6 WotW - good post..

The only thing the financial system should do that actually creates wealth is to help to distribute resources to the parts of the economy where they are most required to facilitate real production.
Nutt gets the sack 12:15pm on 01 Nov 2009 What's new?
Politics is based on lies and telling people what they want to hear.
If enough people tell the same lies often enough, they can be accepted as the truth and become the perceived wisdom.

As such facts always risk conflicting with the deception.

Just another case of shooting the messenger.

Unfortunately until enough people are prepared to look at the facts and make up their own minds, rather than just deciding to believe the most convenient thing their told and then vote accordingly, politicians will continue to attempt to sell us what they think will earn votes rather than telling us the truth, and will seek to marginalise those that challenge their version of the "truth".
Perhaps when we punish politicians for lying to us, they'll consider stopping; after all if you're found to lie in other job applications you can often be summarily dismissed.

«Newer
Older»

^ Back to top

BBC MMVI

The BBC is not responsible for the content of external internet sites

BBC.co.uk

BBC Blog Network

Find and talk to the BBC's bloggers.

User Profile

Reaper_of_Souls