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spareusthelies

Listed below are comments made by spareusthelies between Wednesday, 25th November 2009 and Monday, 30th November 2009 (14 Hours Ago) .

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Appetite for fat cat taxes? 3:46pm on 30 Nov 2009 I live, not that far, from a stately home, well actually it's a palace, in Oxfordshire - Blenheim. The land owned by the Duke extends far beyond it's high perimeter (4 mile long!) stone walls, much of it rented to farmers.

If it came up for sale on the open market it's value, I have no doubt, could well exceed £150million. He does have to pay council tax on this pile though - band H. Seems a bit on the low side to me, though. Especially as he has pea-sized pale gravel from Normandy laid to the front courtyard, (which you're not actually allowed to walk on, if you could take the trouble to read the sign, please!)

The Tories introduced the council tax banding system. I wonder why they didn't think that really large houses should have to pay a really large share of council tax? Or why Labour did nothing to change it either???
Dubai: Just a sideshow? 3:25pm on 30 Nov 2009 @ 143 kitGreen

"Surely there must be something positive...."

Well rather than ask us what this might be, maybe you would like to share your thoughts about what, economically, there will to be positive about in the next 3-5 years?

Will all people have a fairer share of the little wealth that remains. (The so-called poverty gap has only ever widened in the last 25 years.)

Will the OFT ever be able to succeed in making life for consumers fairer, particularly in relation to banking?

Will the non-domiciled tax dodgers ever have to pay tax, which they can avoid today, just because they are so rich?

Will bankers themselves earn less than they do today? More importantly will they have to be responsible for their own moral hazard in future?

Never mind the view that if bank's can't fail then they're too big. There's an increasing sense that ALL business is too big, (work life balance etc.)

I suppose there will be some lottery winners, maybe even a very small minority of tax gainers? If the Lib Dems win the next election people who earn less than £10k per annum will not pay any tax, apparently. But in all likelihood most voters won't want that because, perhaps pessimistically, most voters prefer to be taxed to death?

Even if we do not have total economic collapse, Zimbabwe style, the likelihood is it will be a long drawn out deflation which we all have to suffer because of the debt-fuelled asset bubbles, QE and now massive government debt.

A few countries are starting to wobble under the sheer weight of their own Government bonds (Greece and Dubai for example.) If Greece toppled I wonder if it would take the rest of the EU with it? Now that could be exciting! So exciting in fact the sudden thought of it has raised my spirits, a little. (Writing, it really is good for the soul.)
Dubai: Just a sideshow? 09:52am on 30 Nov 2009 The smart money knew there was a world full of fools eager to part with their money (and their over-extended personal borrowings,) because the smart money knew how a few glossy pictures (that made a really hot dump look like paradise) would be enough to do the trick!

At least Dubai has a neighbour sat on a massive pile of oil to bail out their government debt?

As comments have been made elsewhere (Radio 4) what assets do Europe's individual Governments have that they can sell off? Or which of their neighbours are so mineral resource rich that they could hope to receive a bail-out from if they fail to meet their own bond interest payments?

(Luckily?) the UK and other European states have a sea of gullible taxpayers happy to shrug their shoulders and obligingly accept the fate that their Politicians deal out to them! They have to suffer the pain for the failures of the market, ("we're all in this together," reckons one major party! Oh all right that's fair enough then, say the taxpayers?)

The phrase, "The meek shall inherit the earth," now needs changing to, "The meek won't have to wait to inherit anything, they shall be forced to buy the earth to save the rich, long before anyone falls off their perch!"

Or how about, "We gave our today for your tomorrow?" to "Those that are poor gave up what little they had today, so that the rich could go on swindling (the poor) tomorrow!!"

Although a small place, like Dubai, may, just may, finally remove the veneer on how it is possible for the (capitalist) monetary system to collapse?

OOPS!
Winners and losers 01:30am on 29 Nov 2009 I resent the accusation that I misunderstood you. It is you that failed to communicate adequately or clearly.

In terms of the rest we shall probably have to agree to disagree about the validity of bank current account charges. Customers have precious little choice, are poorly informed, 33% (according to the OFT) find transferring their account a nightmare (because of errors) which is an effective barrier to switching and competition. Even Lord Faulkener, on Question Time (Thursday 26/11/09) labelled the Banks as a Cartel. This means the banks are effectively rigging the market and are engaged in wholesale anti-competitive behaviour and it will have to be stopped. The banks are generally very poorly perceived by a majority of the population and the longer they go on ignoring this the sorrier the outcome will be for them, (which they will fully deserve.) Bonuses are one area in the firing line because of their behaviour. Bankers would not have expected this to be happening to themselves 2 years ago.
Winners and losers 12:20pm on 28 Nov 2009 @139
"the size of penalty fees are stated at the time of application for the account. if the customer is either too lazy or not bothered to read the small print then any charges incurred should stand if they're the customers fault."

So whenever a customer opens an account he will be informed by all bank staff of the fees he may be charged without that customer having to prompt the bank to tell him what these are? This is not actual experience. Often the information has to be dragged out of such staff, because the bank does not require such staff to have an in-depth knowledge of every fee or charge, because it cannot. The reason for this is every type of charge that a bank made, if recorded in one place, would result in the production of something that was encyclopaedic! I fully accept you would be happy to argue that being written in there somewhere would mean it was valid. However, most right-minded people would see this as being nothing short of deliberately trying to make charges opaque, at best and just obscure them at worst, obviously to make it impossible for customers to establish who is the most competitive on charges. (The OFT will get the banks for this, in the end.)

"no one complains about the size of fines given by the police for speeding yet these are much higher than the cost to the police for enforcing and issuing the fines."

The idea that bank charges do not cover the bank's costs is just total rubbish, (leaving aside Bad debt provision because of incompetent trading and lending!) The size of bank profits in the past proves this beyond any doubt. The OFT also discovered the size of the charges being levied outweighed the costs by miles. The most that it would cost a bank was no more than £4.00 to bounce a cheque, yet all banks charge way above this.

"the same goes for bank charges. they're large because they're meant to act as a deterrant against people wrecking their credit rating and making it difficult to apply for such life essentials as a mortgage."

The charges are large because shareholders want/expect a bigger dividend than the one they had last year! If customers were genuinely informed of what the charge would be, then yes the deterrent argument would have some validity. But they're just not informed, because to do so would shed a big light on bank's ugly business practices.
Dubai not too big to fail? 12:24pm on 27 Nov 2009 @ 140

As I understand it the "proven" level at which the percentage of tax take begins to be damaging to the whole economy, is 40% of GDP.

In "better times" we usually run at about 35% of GDP. But Labour's grand spending schemes over the years have seen us getting ever closer to the 40% "threshold." In fact if I recall correctly at around budget time, earlier in the year, some economists believed the criteria for 40% was about to be breached. But it came down to definitions and semantics as to whether or not we had. In the end those economists seemed to have accepted that we are at 39.7% today!

I know the Tories tried to shine a light on Labour's tax raising ambitions at the last election by (trying) to raise awareness of the situation through what they called "TAX-FREE" day. Namely the day of the year beyond which all the money you earn is yours to keep. This was something like June 4th, i.e back in 2005, at the time of the last election, only from June 5th onwards were you working for yourself and not the Government any more. I think Michael Howard tried to say he'd get this back to May 27th or something. But in doing so it would probably have meant ending state-funded education! So that's why it wasn't popular.
Winners and losers 11:24am on 27 Nov 2009 #136 Fat_Chris

In 127 & 130 I don't think they are suggesting a lack of knowledge of products. They ARE suggesting a lack of knowledge of the legality.

For the sake of clarity bank's are aware, (at the top, not in the branch network,) that bouncing a cheque can open them up to claims of "defamation of character" and "breach of contract" - but they don't like to advertise this as it could be a nuiscance for them! If the bank bounced the item, when you HAD an available balance, that would be a clear error on their part and would be a horrendous Breach of Contract. But cases against banks have failed in these circumstances because of the incompetence of lawyers - who wrongly chose to claim for Negligence, (rather than Breach of Contract!)

However, defamation of character is less clear. Even if they did NOT have available funds at the time, customers could still mount a claim for defamation, especially if the bank had been in the habit of allowing its customer to take unauthorised overdrawn positions and then suddenly withdrew that facility! Successful claims for defamation can result in huge payouts against the defendant! That is why the bank would rather pay the item, (and at the same time turn this into an outrageous opportunity to make an extortionate profit at the customer's expense!)

Do the Bank's Director's KNOW what they're doing? Of course they darned well do!!!

So #136 it is too simplistic to see the issue as one of, "check your balance before spending, results in no charges." That's just stating the bleedin' obvious.

THE issue is about the £SIZE of those charges and the number of different excuses for a plethora of different charges that they can come up with to plunder accounts. It seems banks can and will charge up to 3 different charges for exceeding an overdaft, a) Interest (usually insignificant in comparison to the others, b)bounced direct debit charge, c) an account unauthorised balance charge. These can add up to £60 or £70! This way of doing business is defined by the bank as "professional." When in fact it is blatant abuse! I do feel sorry for you guys at branch level, where you take the flack whilst your weasel directors hide behind their monolithic Head Office in London.
Winners and losers 10:35am on 26 Nov 2009 Banks are hiding behind their "Terms and Conditions." Currently they have every right to do that. In fact bank's have found having Terms and Conditions that only your average barrister stands any chance of interpreting, means cashing in big-time, (to the tune of £8.3billion in 2006.)

At the moment then, if wanting to open an account, you would be best advised to demand a copy of the Terms and Conditions first!

Then open your account with the bank whose conditions are a) the shortest and b) written in the biggest letters! I'd bet you a million quid the bank with the shortest T&C's is the best bank to have an account with.

My question is anyone know who this is?
Winners and losers 11:42pm on 25 Nov 2009 The OFT research states they believe the Personal Current Account market is NOT working well for consumers. The key reasons for this are a combination of...complexity, (ever read those terms and conditions in full? Thought not,) AND a lack of transparency, meaning in competition terms that consumers can only realistically focus on the more "visible" fees and not the less visible ones, such as overdraft charges and forgone interest, (the near zero percent interest on current accounts.)

In 2006 the OFT estimated (and the banks have not denied it,) that they earned £8.3billion in income by way of current account fees and charges. The banks have clearly taken the view that constantly moving the goalposts, wrong-footing customers and keeping them in the dark, is THE only way to make money!!!

In addition to this (and IMHO the most irritating issue,) as the OFT comments, is the invisibility and deliberate complexity of their fee structures, provides banks with little incentive to compete!! So yes, there are all sorts of bank branches everywhere and you can walk into a dozen different ones tomorrow if you want to - but just having loads of bank branches is NOT competition! Many may find this idea one that they struggle to accept. Because in the past research has suggested that the personal finance market, by being saturated with branches, postal and internet banking accounts etc, meant there was plenty of competition, right?

In fact what true competition actually is, is not branches and the internet, it's the terms and conditions and whether these are markedly different from one bank to the next. In other words are Barclays, Lloyds, HSBC, Royal Bank of Scotland etc ANY different from each other if their terms and conditions are almost identical? Where basically if your one-off financial infringement means you were charged £55 by Barclays, but had you been with a "competitor" you would still have been charged something very similar? Been looking to fix your mortgage recently? Noticed how most banks wanted to charge fees of around £499 for a 2 year fixed rate? Doesn't look like competition to me.

So how can the market be "fair" and the charges be "fair" if, a)the work involved does not cost the banks more than £2.40 to bounce a cheque - yet they charge £35 and b) you cannot move to a cheaper operation, because all the banks are lazy and have no incentive to compete and can increase prices on a whim knowing their customers won't have a clue what's happening?

The banks are operating a Cartel. Up to now it is the FSA that has supported, even guided the banks into behaving like this! The FSA would check proposed terms and conditions over, but then allow all banks to use the same ones. Because having consented to a set of conditions for one bank they could hardly prevent another using the very same conditions that they had already approved!

"Without competition in current accounts the banks have little incentive to create new and innovative services," says the OFT. But with a present system generating £8.3billion a year in income for the banks, why change such a lucrative situation unless you are forced to?

Time for the Government to step up and do something!
GDP estimates becoming more accurate? 4:31pm on 25 Nov 2009 Estimates, becoming more accurate? Not if you're the ECB. They can't believe we're in recession it seems because everywhere, save for Britain and Spain, are back into positive growth. Economists generally are saying they have got it right, so the good old ONS "must" be wrong.

Are Economists being pressured to come up with positive growth numbers?

Mind you, the ONS has been wrong before and had to go through a root and branch re-jig because they had to admit to providing erroneous inflation figures in the early 1990's.

But, as others have commented whether it's negative 0.4 or positive 0.15, out in the real world these figures are broadly irrelevant to ordinary people. Current economic conditions are largely phoney. When QE ends, we begin to repay public sector debt and the expectation arises that the Fed will start to support the Dollar, THEN the figures used to calculate economic growth might be more credible.

However, in the graph above there have been instances of EU and UK growth trends going in opposite directions before, Aug '96, May '98, Jan '03? So maybe the EUVOX lot need to look back a bit?

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