Davos and trust
The blanket of snow covering Davos, the Alpine resort that hosts the World Economic Forum, is normally a comforting blanket.
This year it's almost sinister.
Because for the bankers, financiers and business leaders who feel able to leave the day-to-day crisis of managing their businesses through this painful recession for a few days of jaw-jaw and endless canapes, the big question is "what horrors still lurk beneath the surface".
They are sombre and anxious - such a contrast with their confidence of previous years that globalisation and financial innovation were enriching the world (and, as luck would have it, making them particularly prosperous). . .
What really cast a pall in the preceding weeks was the fall from a state of banking grace of Bank of America and its chairman Ken Lewis.
The biggest US lender seemed to have done most things right, till its takeover of Merrill Lynch in the autumn that now looks the very epitome of hubris.
On the top of this mountain, all bankers and traders have wanted to talk to me about is the colossal losses at Merrill, the spat between Lewis and John Thain (Merrill's now departed boss), and BofA's humiliating government rescue.
"What happened to Ken Lewis killed all of us", said a banker. "Investors rightly took the view that if you can't trust BofA, who can you trust?"
This is not an ideal backdrop for the formal business of Davos, which is to come up with proposals to pull the global economy through the painful downturn and make global capitalism safe for the future.
Many of those here see themselves (still perhaps a touch hubristically?) as helping to shape the agenda for April's meeting in London of the G20 group of leading nations.
That will be when the politicians of the rich developed nations, in which the economic mess was cooked up, come together with Brazil, India, China and Russia to save the world.
I have to say that bankers are rather less optimistic about what the politicians can achieve than the politicians themselves.
There's a fatalism among the uber-capitalist class: that the economy won't turn till 2010 at the earliest; and that they've been cast into the unglamorous underworld of bonus-less toil for as long as the mind can contemplate.
If business leaders needed telling that they're less loved than ever (they didn't), the annual poll of how much they're trusted by citizens around the world was a bad start to the day.
Edelman has been polling what we think of business for a decade. This year's result, if translated into a well-known colloquial phrase, would be unprintable Anglo-Saxon.
But here's what really shocked me: Bob Diamond, the de facto creator and head of Barclays' investment bank, isn't here. That's almost the equivalent of the Queen not showing up for Royal Ascot (well not quite - but you know what I mean).
Diamond, understandably, feels he needs to stay in London, where his troops are battling away in the war against financial pessimism. And there are plenty of other Davos banking regulars who've stayed away.
But even in the absence of Diamond - and of John Varley, the bank's chief executive - Barclays is pressing ahead with its lavish annual dinner for corporate clients.
They'll be treated to a rollicking address from Boris Johnson, the Mayor of London. Let's hope he cheers them up.
UPDATE, 12:13PM: The gloom here from business leaders, private-equity specialists, hedgies, bankers, management consultants and economists is deep and unrelenting.
They are immensely pessimistic about the economic outlook and about the ability of governments to lessen the pain.
I'd be tempted to come home immediately and climb under the duvet, except for one thing: when the herd is charging in a particular direction, the herd is normally wrong.
So on the basis that the best time to buy (metaphorically speaking) is when everyone else is selling, just maybe we're near the darkest hour for the global economy.
I'm 
© MMIX~RS~q~RS~~RS~z~RS~27~RS~)
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Hmm, so are any of them going to ask what is to be done about a shrinking Consumer economy?
I know its dull to say the same thing again and again, but if peoples pay rises do not keep up with their actual cost of living then they spend less in the shops.
We've seen this and watched many many shops going out of business this year.
Just count the boarded up shop fronts.
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Still no talk about cutting back on bankers' salaries...Things therefore can't be that bad yet.
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Who cares about Davos anymore? It's become the private sector equivalent of G8 summits: endless "networking" opportunities, but nothing of any substance coming out from it. These things don't work from the moment they attract wide media coverage, and "being there and being seen" takes precedence over content.
Bob Diamond, John Varley, and the many others who haven't gone this year, will achieve far more sitting behind their desks this week than would have been the case if they'd gone to Davos. I think it says it all that Barclays is still holding a big corporate party. Like I say, it's all about being there and being seen. No content.
There are far better things you could be reporting on, Robert. I'm assuming you're actually in Davos. Maybe the Beeb thinks you deserve a few days off after your efforts over recent months. Fair enough if they do.
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Of course some firms are laying off staff with the plan to recruit later at a lower rate of pay.
Very nice for them but they put families into poverty, and reduce the spending power of the consumers.
House prices rely on the Salaries of those in work to provide the underpinning of the market.
With falling or static wages, and fear of job losses, the price of Housing will fall.
This means a continuing tough time for the construction industry unless they do some work for the much maligned Public Sector.
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I suppose Mr Diamond is walking a tightrope of confidence for his Middleeastern bank.
Will his Bank have to pay compensation for the SIV's etc it has sold on to other Banks ?
Hmmm, one for the corporate lawyers !
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Bob Diamond is a Bilderberger and therefore knows already what is planned for the world.
That's why he's not going: there's no point for him.
Of course, there will still be many Bilderbergers, as well as CFR members, attending, as those organisations still have to represented to enjoy the party and slap each other on their backs once the doors close to the press.
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Why 'name and shame' Barclays in particular? From what I read last night, there are no big guns at Davos. They all pulled out last minute.
The 'official' line is they are all trying to present a low key, sombre image, and are not having those famous glittering champagne receptions.
I would venture to suggest these bigwigs are not attending so they don't have to deal with what is bound to be a very uncomfortable time as they are all to blame for bringing the global economy to it's knees! Cowardice of the highest order!
And US bankers are avoiding this just as much as UK ones, preferring instead to send junior executives to cop the flack!
Who are these CEO's trying to kid?
Pathetic.
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The useless bankers and even more useless politicians should feel quite at home up in the clouds ! They have lived in them for the last eleven years.
Lets hope they get cut off whilst we all get on with the job of sorting out their mess
Had Enough
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Time out at Davos. Let’s recap.
The banks borrow huge sums, on short term loans promising good returns and low risk. They lent this money to us as long term mortgages. All this money fuels house price inflation; and, the security underpinning the loans is ever-rising house prices.
Meanwhile, companies’ business model is geared up on cheap credit (borrowing to invest rather than accumulating capital) in part because this is tax efficient.
Meanwhile consumers, given the opportunity to consume, consumed as if there were no tomorrow.
The bubble bursts (as is the way with bubbles). The point was reached when people could simply not afford to service the increasing debt burden out income. (The fact that sub-prime lending went to people with no reliable income brought things to a head that much sooner but it was coming anyway.)
The cheap money from abroad dried up. People who lent to the banks want their money back, and the banks cannot afford to pay. Enter the Government as guarantor and lender of last resort. We, as taxpayers, lend the money to the banks to cover the money which they had previously lent to us as mortgages.
Meanwhile companies find their credit stream drying up at the same time as their sales.
The real economy, kept afloat by the demand created by the continual influx of ‘new money’ (mostly from abroad), sinks. Government borrowing does not reverse this because much of the money is borrowed from domestic investors looking for a safe haven; and because it is being spent to pay of the banks (foreign) debts.
The Government starts to lend, or act as guarantor, to companies in the real economy.
The pound continues to fall and we can no longer buy cheaply from places like China with money borrowed cheaply (from places like China).
The downward spiral in the real economy continues, while the Government, banks etc invest all their energies in propping up the debt mountain in the hope that something (preferably the economy) will turn up.
.....
You can write your own end to this story. For my part, I can only believe in an upturn that comes after all the over-extended credit has been work out of the system and consumption (including debt) is back in balance with earnings. This will be at a substantially lower level than before – and consumption will be lower still because as things stand we will still be carrying past debts (plus, on current form an increased tax burden).
Please tell me if I’m wrong. But if I’m right then current policies are designed to preserve a defunct economic that is past saving. They can only make matters worse.
Time for a change – but no real change is on offer. Who would lead the revolution? And a thought stirs in the back of my mind. “The debtors control the means of repayment.” Quickly followed by another, “debtors of the World unite! You have nothing to lose but your chains.”
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I just looked at the FTSE, over optimism ruling the day !
Question : if peoples salaries remain static or fall, that means they will inevitably spend less in the Supermarkets, and everywhere else.
So at some future point, one or more of the Supermarkets will see falling Sales.
SO are the Hedgefunds going long ? And when will they all go short again ?
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If the place wasn't inhabited by regular citizens too, the best we could hope for would be an avalanche.
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You know, I forgot to mention Public Sector pay.
I nice big thirty percent rise to kick start the economy.
(Three months ago it was twenty percent, now it would need to be more!)
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Hmmm.
And just who are these corporate clients I wonder?
Lavish slap up dinner? Why? What's the occasion? Early or late Christmas entertaining?
Should have spent the money on not foreclosing overdrafts!
Arrogance is still alive and kicking then?!
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Bearing in mind how badly the Ratings agencies did with the subprime debt, who would care less about any report they might make ?
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If I was a banker of any discription I would be very reticent to show my face at Davos. Looking back at some of the proclamations made over the last couple of years God help us all if we again have to rely on this particular gathering of free-loaders to come up with the right path ahead. That the event is taking place at all suggests that the attendees still live on a diffrent planet to the one us stupid stupid pension holders live on. The business elite have mugged us lesser mortals and now they want us to pay attention and listen to their next cunning plan? LOL. Remember Frank Spencer. "Betty Betty I think I've done it again" springs to mind. I wonder why. I am sure some worthy topics such as peace in the ME are worth discussing but please lets not have any good ideas about how we should fight our way out of a paper bag - we have been there and done that and are now paying the price.
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House prices will continue to fall if peoples salaries do not rise.
It is inevitable, moderating my post won't make it less true.
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The annual meeting of bankrupt's and insolvents!
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Housebuilders will continue to struggle whilst salaries fall or remain static.
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Skiing holidays are nice. Charge it to the Game.
Are Professional Ladies providing entertainment a valid legal company expense. I wish I could go on some such working holiday or business trip to put on my CV too. Rest assured our future is in very capable hands, at least everyone is above board and no bribes are ever taken.
I obtained a Job at Pan Am because my Agent played Golf at the same club as the managing Director. It's not what you know it's who you know when playing the Big Money Business Boys. The Wheels of industry keep turning, rolling rolling on the river.
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Will Davos actually bring out any cooperation over sending messages to root out the "bad apples", and emphasise that trust and honesty must return to banking?
Must be a quiet day for you to be out there though Robert.
PMQ's coming up later
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I suspect that the jaundiced view most people have of bankers is not actually something new at all (though it is obviously now more acute).
It's probably just that the bankers never cared what anyone else thought so long as the bonuses kept spiralling upwards and they could still regard themselves as 'masters of the universe'.
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Post 62 from yesterday....in its entirety...
"I left school at 16 and have worked extremely hard and paid my taxes ever since. I'm 37 now. On a fairly good wage at 31k per annum. However I?m on the breadline. I got married in 2003 and had my first child in 2005. Everything was great. My wife decided she wanted to be with someone else and left me. She now lives with a very rich man and drives a Merc. I have to pay 15 % of my net salary to her for the upkeep of our son which she never spends on him per se. I have to drive 50 miles every weekend to pick him up because she completely refuses to help out. I have just had another child and am now really with the right person and in that respect life is good. However, my old banger (car) just failed it's MOT and I cannot afford to get it back on the road. Why? Firstly, the mechanics charge of 60 pounds an hour is a joke. Once all of my bills are paid to put a roof over my head, pay maintenance (why I should be paying this I don't know as I?ve done nothing wrong and it's nothing short of criminal) pay the bills and travel to work which costs me ?4800 a year!!!! (I have to commute to London) brought food etc I have absolutely nothing left. I've never earned a huge wage and have not even been able to save, which as it turns out with interest rates doesn't disappoint me too much, apart from a pension which won't be worth anything because of these cowboys in charge.
So, not only am I being priced off the railways (I'm trying to be green you know), totally knackered from doing 60 hours a week, unable to save, unable to get my car on the road and being robbed by my ex wife who left me and I have to pay, why the hell would I want a car loan from a sleazeball government to buy another car when I can't afford to put petrol in it because the gas bill is so high and the cahoot flexible loan that I got at 6% is now charging me 21% interest (more daylight robbery) meaning it will take me 15 years to pay back the 3k loan on it? I?ve simply run out of money. What comes in goes out. Labour got it wrong. Britain isn't working. Britain is broke and is being run by a bunch of arrogant, power hungry individuals that do nothing but lie and cheat the people. I know many many other people in this same situation. This government are so out of touch with reality it's not funny anymore. I've watched and read everything about our economic mess and now I am actually getting ill over the stress of living here under this government. Can I sue them? Really! Can I? Every time I read these blogs or watch the politicians on the BBC or wherever I get a rush of blood to my head. They never answer questions truthfully. They always avoid them and we're paying for these jokers to buy their second homes and fill them up with quality goods!! How the hell can it happen???
Now the lords are corrupt and cannot be prosecuted. To quote Terry Wogan..'Is it me'? What the hell is going on? Why aren't people taking to the streets? The dark one is announcing saving the car industry and jobs and creating money for more loans. Are they for real? Who the hell can afford more credit? Haven't they learned from their own mistakes about credit? They keep talking about the need to get banks lending again to business and individuals. Well most individuals are like me. They can't take any more on - don't they get it? There's nothing left to be able to afford it. Things are too expensive and people have had their fill. No amount of cars being manufactured is going to solve this crisis. Man there must be about 10 million cars standing unpurchased on this land anyway. Why don't they get rid of them first or give em away? It?s not our fault they over manufactured and made them too expensive to buy. It's a freaking joke this country and I urge anyone who doesn?t' have any real reason to stay here get out while you can.
Jeeeezus this is making me mad!!!!!"
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Wasn't Davos a baddie from Doctor Who?
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I know why Diamond and Varley are not there as they are finishing their latest book of non-fiction. The title is "Barclays Accounts".
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I enjoy your blog Robert, but if this is the most blog-worthy thing to write about today, then I'm calling the bottom of the recession. Is the fact that world bankers are having a more sombre party really the most interesting news of the day?
Personally, I would very much welcome an article clearly detailing the potential problems associated with the moral hazard created by the taxpayer taking on so much risk for little or no return.
Also some quantification of the problem (more than just "we're mullered") if the government initiatives fail. How much will taxes have to rise? How much less spending on public projects and welfare will there have to be? etc.
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20:
Trust and honesty won't return until the Banks adopt the old Uk way of Banking.
IE the Bank that originates the loan keeps the loan.
Whilst the American idea of repackaging debt and selling it on to rubes remains in place, trust won't exist.
They need to cut out the salesmen, and bring back Branch Managers !
The Americans have no idea how to run a bank, if you don't believe me just look at history.
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Mondays Picks - Lloyds to Convert
"As for Lloyds, I'm hearing that it may yet follow the lead of Royal Bank of Scotland by converting £4bn of preference shares held by the government into ordinary shares."
Update on this story needed please Robert. Lets not lose sight of your scoop........
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19:
Are we talking about Lady accountants and corporate lawyers performing karaoke ?
Not very PC otherwise !
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No. 9 chriss-w
pretty much spot on with your recap.
the ending to the story - we reduce our standard of living through a combination of the following:
1) a much lower currency making imports prohibitive
2) lower domestic demand due to higher saving
3) lower domestic demand due to falling asset prices and the ceasing of 'equity' 'release'
4) structural changes where engineering, r&d and good old fashioned manual labour gradually replaces retail/media/property/banking
5) a decade of stagflation like Japan
but let's look at the BRIGHT side: yes there is one
1) For twenty years, we lived WAY beyond our means by conning the rest of the world into lending us cheap money and polluting their rivers and fields sending us cheap goods
2) In return we simply gave them bits of paper called pounds sterling that the treated as wealth, at least until now
3) The empire has been declining for a century, through depressions, wars, oil crises and the like. But for the first time, it appears we may have to live within our means. Even in 1980 when that moment might have come, the oil saved us.
4) Through that decline we have largely achieved what I believe will be IMPOSSIBLE for the developing world to achieve, i.e. good governance stemming from democratic representation of a fundamentally decent and tolerant socierty. It takes WEALTH to achieve this.
5) I loathe Brown as much as anyone, but he is a SAINT compared to 3rd world politicians whose route to parliament is no longer civil issues like theft/embezzlement/bribery but criminal ones such as abductions, murders, rioting, etc.
6) We therefore have clean drnking water on tap for example, or an NHS free at the point of use, HUGE achievements that encompasses the best of society and governance, and which daresay would be a lot harder to achieve were we scratching around for our next meal. Some of the spanking new NHS hospitals paid for by unearned taxes on phantom profits are just superb.
We are surely the luckiest land in the world, having got so far whilst actually lacking the productivity / natural resources that it might normally entail. No doubt we have the colonialists to thank and lately the bankers. We have ruled / conned the world for centuries and now that the whole hosue of cards has crashed, we can sit back and enjoy a pleasant if dull-ish life on our blessed island.
I, for one, am thankful.
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Robert
Why on earth has there been no mention of help and support for the very first fatality of the Credit Crunch........the Construction Industry?
As a business owner suppling into that industry, I saw the carnage being wreaked more than 9 months ago.
........and when the upturn comes, if it comes, it won't be a matter of just turning that tap on!
Rob Lund
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ASDA are creating another 7,500 jobs, GKN are making 2,800 people redundant.
Strikes me that's a very good snapshop of the state of the UK economy.
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why all the gloom here...I thought the tide had been turned as far as the banks were concerned.
Mr Peston cheer up, you can always hav a break and go skiing - something that has been off my agenda for a while now...
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After all what's life without a lavish annual banquet?
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Davos - waste of time jolly for a lot of massively overpaid people IMO.
If you want to find out everything that is wrong and has gone wrong in our country then read the Mortgage Muddle article.
Sums up
1) The whole 'its not my fault' culture.
2) The whole 'heads I win, tails you lose' culture.
3) The whole 'banks giving bad advice' scenario.
4) The legal feeding frenzy on the basis of 1,2 & 3.
Makes my blood boil - if people are not accountable for what they sign then what's the point!
BUT ON OTHER HAND there is a quote from the banks in the article somewhere that says something like ' noone could have predicted the unprecedented rise in house prices over the last ten years'!!!!!
Surely that WAS predictable as a POSSIBLE scenario SURELY??
Large parts of the general public have the wrong attitude to get us out of this mess.
The bankers have the wrong attitude and I'm not sure they can get us out of this mess.
The politicians......................
Noone left to offend its time to go!
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With regard to number 9 (actually better than the blog) the question you don't address is how hard the landing should be. A hard landing destroys a lot of the business community and creates a situation where the economy spirals downwards too fast and too far. The trick is to soften the landing and glide down to the right level of consumption with affordable debt ratios.
I think that is being done; and it will take a long time to return to whatever we call normal.
We can say that this is gross mismanagement by Brown; but who else is there - a set of Tory ex-Etonians with no idea what to do? Vince Cable seems to know something about economics.
Reality is that nobody knows what the answer is; the current set of activities seem as good as any other - I have yet to hear a better proposal.
All we have to fear is fear itself
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If John Varley and Bob Diamond feel they can't abandon their sinking ships (and employees) in such trouble times, why on earth has Boris Johnson abandoned his job and millions of Londoners to go talk to a bunch of Barclays' corporate clients? I promise you 'Red Ken' would never have taken taxpayers money to do such nonsense!
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Dear Robert
There is no shortage of money as the peers are getting IT all, so are the
MPs
bosses payoffs
bankers
hedge funds short selling
BBC
civil servant pensions
Council pension funds
Bank bonus's
Motor industry
Utility Companies
top council officials
petrol companies
Railways
PFI Contracts
TAX MAN
Councils and council tax
All are recieving increases iin monetory contributions from the tax payer, and its the General public who Suffering
yet NO ONE inthese groups are cutting back.
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That chap who was killed in the Blitz, ex-BoE Governor Josiah Stamp, warned all those years ago, that this would happen if bankers were allowed too much free rein.
It has come to pass.
So it must be time to return to 'sound' money.
If it is not too late.
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I thought the whole point of Davos, like most conferences, was for the staff of the banks to have a massive jolly at the shareholders' expense.
No doubt this costs thousands per delegate, paid for in part now by the British tax-payer.
Nothing they predict or decide will have the slightest bit of value for the rest of us. It should have been cancelled in deference to the public who have been so royally shafted.
I bet they are all crying like babies into their champagne right now about how their bonuses have been reduced. Pathetic bunch of bankers.
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Depression in Davos. As Reggie Perrin would say, "I can see the headline now, Worlds' bankers buried under avalanche of debt".
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OK so no one is asking the simple question: Where did all the money go. When you have people in massive debt, someone has to have the credit. Obviously it's not that simple but there's one thing that we can be sure of; alot of the credit went into Ferraris, riverside flats and bankers' bank accounts. With the Merryl Lynch bonus debacle and many others surely something has to be done about it. Very few people are getting ANY bonus outside of banking, yet they did despite destroying the economy. It sounds radical but surely there should be some way to claw back ill gained profits from private individuals to put back into the system. You could start with that guy from Lehmans who made half a billion alone over the last few years. So where did all the money go?? Robert Preston please answer this one!
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Hello Mr Peston
Hope you are enjoying the bracing Swiss air. An A(lpine) level question for you today Sir.
"Davos 2006 and 2007 = Hubris
Davos 2009 = Uncertainty
Davos 2010 and 2011 = Nemisis ?"
Explain and discuss.
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Here we go again save the car ,what about
a Housing Programe for rent
How daft are Mr Brown and his Gang
Housing Programe put much more back into this Country and would get us moving.
Come on Brown stop being a fool.
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If only there were someone who could save us. But wait, look. Is it a bird? Is it a plane? No, it's Super Gordon protector of the global - no, the galactic - economy!
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Just found an amazing photo on Travelpod.com
Titled "Dr Who anyone? Tunnel, on the way down. Davos Switzerland". One picture worth
a thousand words. Enjoy the ride.
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It would seem to be like any other night on the town: a load of bull being talked at length by silly people because they cannot find anything more meaningful to do with their time.
This is all what Davos ever was anyway. We were always told this was where the great and good met but then they would say that wouldn't they.
Even the money they were supposed to be once making actually belonged to the Leprechaun King at the End of the Rainbow.
I just fail to see why the little people are to be forced to pay for all this institutionalised mendacity. I think it is time the taxpayer was heard but all we can afford is Bognor.
I have had enough; it is time for change.
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Ladies and gentlemen
As you may not have read my earlier posting, Rahere has decided to withdraw from this blog because of the impossibility of posting anything serious thanks to the abusive moderation.
This Davos summit is an exemplar of why. If the bankers know their credibility is shot, why the hell did they go on the thing? It's not as if it isn't the world's biggest freebie at the expense of their customers, a freebie which flips a bird at the 2 million unemployed and thousands of businesses on the verge of bankruptcy they are directly responsible for.
And yet RP decides to emulate them, and doesn't have the knowse to criticise. So much for the son of a socialist, as big a snout as any in that trough.
I've troughed in my time a bit, but I've kept a sense of context. This puts the hypocrisy of this site's management beyond acceptability.
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29. At 10:42am on 28 Jan 2009, supercalmdown wrote:
19:
Are we talking about Lady accountants and corporate lawyers performing karaoke ?
Not very PC otherwise !
+
ask harriet harmon who is concerned that the numbers for female employees are going down due to the recession when she hasn't got a clue about the smaller details of other factors in the breakdown of numbers such as contractors, temps, part-timers, black, white, rich, poor etc losing their jobs too.
there is no shame in the game for respectable professionals and top quality glamour models
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Post 23. I think it was Davros.
However a room full of bankers that really would scare the Doctor.
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I'm sure many would love to find out what Barclays Bob Diamond and John Varley are up to.
Many still think that there is political dynamite inside the Bank's books and records. How far back do they need to keep records? 6 years? Hmm.. what happened 6 years ago....Tony B's government.
As for Davos, what is the point?
Busted bankers congratulating themselves no doubt, a quick jolly to the Alps maybe.
Now that we've skipped straight to Global Stagnation, what's needed is a way out.
Another War perhaps? Generates a lot of work, jobs and income for Weapons systems manufacturers and associated industries, Armies, Navies and Air Forces.
Sadly history seems to prove this - 1930's Europe/Japan, 1980's Falklands, 1990's Gulf War.
So Robert, where do the bankers go next?
Down to the Davos pubs or off the Davos 'cliffs'?
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30. courteousnewcitizen
9 chriss-w
36 Andywr
I'm with you guys on this.
Maybe we will never really know just how effective or ineffective GB's government is being, because this, our current reality, is the only one we will ever know.
Sounds obvious really but it does mean that all this endlesss moaning and hypothesising by us armchair economists/philosophers as to how we got here and where we are going is just hot but nonetheless very interesting air.
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Things must be tough for those little darlings at Citigroup
http://news.bbc.co.uk/1/hi/business/7855554.stm
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I hope that when the UK political contingent makes it contribution to the discussions at Davos, they don't get too carried away with Gordon Brown's hubristic conviction that he's doing all of us UK citizens a great favour by gracing us with his supreme leadership skills (albeit with his customary lack of grace).
My worst fears were confirmed today when I read the Institute for Fiscal Studies Report informing me and my fellow taxpayers that we're going to be paying for Brown's economic genius for the next 20 years:
http://tinyurl.com/blloj4
How does Brown continue to get away with this? What's happened to democracy in this country and/or the spines of Brown's close cabinet colleagues who should have by now revolted and allowed the good people of this country to express their views on the Government's handling of Gordon Brown's carefully crafted recession?
The man who dispensed with boom and bust appears to have been the architect of the UK's most spectacular bust in living memory. Amazing how Brown fails pathalogically to acknowledge in any way this slight error on his part.
Anyway, time now for me to pop out and buy, er, a new car to assist with Lord Mandelson's brilliant plan for keeping the economic wheels on. Yeah, right.
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#42:
"OK so no one is asking the simple question: Where did all the money go"
Simple answer - it's vanished, noone has it!
To expand a little an example:
1. I put $100 in bank A
2. Bank A is allowed to lend out 90% ($90) of this money keeping $10 in reserve in case I want my money back so it lends $90 to my Mum
3. My Mum spends the $90 on a new bike and the bike shop puts the $90 into it's account with bank A. Suddenly there's $190 in the bank but on $100 existed to start with - $90 has appeared out of nowhere
4. Bank A lends $81 to my cousin who spends it etc
This assumes the "fractional reserve" that the bank retains is 10% and after 30 cycles you've got $950 in the bank - 9 times the original amount of money created out of thin air.
Now, if the bank has to increase it's fractional reserve to 15% 30 cycles produces on $650 so in effect $300 has vanished - it never actually existed but that's the effect.
Here endeth the (rubbish) lesson!
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Anyone want a really good job?
Salary excellent i.e. over GBP 125K a year plus healthcare.
Only problem must appy by Monday 2nd Feb.
It is at
http://www.hm-treasury.gov.uk/mpcmember
After all you couldn't do a worse job than the current lot!
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The only way to be trusted is to be trustworthy and the major investment banks and brokerages, at least, were not trustworthy. They were joined in this behavior by many real economy firms who engaged in questionable accounting practices.
Naturally, it should not be a surprise if they have lost our trust. The firms who engaged in these practices have brought down the level of trust in all firms. How is the investor supposed to distinguish between the trustworthy and the untrustworthy in the corporate environment.
"Cheat me once, shame on you. Cheat meet twice, shame on me. "
That trust will be a long time in returning, if it ever does. It is unfortunate that this will indeed make the task of restoring economic growth that more difficult.
The penalties for a breach of trust must be very severe indeed, both to deter this behavior and to punish those responsible for the economic and social devastation that resulted from it.
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#9 spot on.
Any amount of economic theory cannot hide the fact that bankers made deals to hit bonus targets, not to achieve the bank's best interest. Nor can it turn attention from our Govt being dominated by people who lack the intellectual rigor, honesty and honour to make objective assessments and act on them.
This crisis is the result having a managing and governing elite who are without honour and are dishonest.
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44. mac1946:
"Housing Programe put much more back into this Country and would get us moving".
You are absolutely right, and it is something that I have been calling for for a long time now.
The motor industry is important, but it is dwarfed in economic terms by the housing and related industries.
Builders and building workers are available, and at reasonable rates. Land for building social rented accommodation can surely be made available at low cost through the planning system.
People need the houses, builders need the work, and the knock-on effects would be huge (electricians, plumbers, suppliers and so on). A social building programme would not damage house prices as the new houses would not be sold, they would be rented at affordable rents. Government could treat the investment as capital spending, so it would not damage the financing position in terms of reported current spending.
If anyone talks to GB about this, please tell him that this policy would also be hugely popular!
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9. At 09:59am on 28 Jan 2009, chriss-w wrote:
"Time out at Davos. Let?s recap."
You have managed to cover everything i have been trying to say for months., only in a more concise way.
I agree wholeheartedly with your message ( for what its worth).
This is the whole point about the current financial crisis, if the housing price boom was born from insecure lending policies, how on earth can HMG expect to protect Britains economy from the effects by trying to keep the economy at the same level of consumerism?
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For those wih a little time on theit hands try this
http://taxmangordon.com/
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Robert
Just checking.......but do you read any of these comments.........?
Rob
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Why no mention of the attendance intentions Citigroup executives.
Perhaps they could fly out on their brand new $50 million French built corporate jet.
Maybe you could write an article on the interior soft furnishings. Obviously you have been properly brought up and would never be so crass as to contrast this vital expenditure with their receipt of some $45 billion of US taxpayers money.
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I remember in the late 1990's the smug people in my office who were riding the dot com bubble, who had created funds for their retirement and childrens' education, by doing no more than buying a few shares.
I remember the TV programs a couple of years ago showing people with almost no skills or education buying properties, painting the walls beige, and selling them a few months later at enough profit to put money on the next one, and after 2 years having a multi-million pound property empire.
Unfortunately we live in a real world. We all know that if money is being obtained too easily, by too many, that there is a substantial bubble that will burst. Some delude themselves, others hope to get out before the bust.
We desperately need a new government because the current one will not, and cannot, admit that so much of our wealth was a bubble. And they are killing our future's by pursuing policies to maintain it.
The only way for a nation to have real wealth is by adding value, either by digging up stuff that didn't exist before, making things that didn't exist, improving things, etc etc.
Lunch time over.... back to making real wealth...
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@ #44. mac1946
A huge programme of building quality social housing for rent would be a a big help to the economy. It would employ tens of thousands, help contruction-based SMEs, alleviate the huge waiting lists and help stabilise house prices in the buyers market.
It should be built with massive grants as opposed to loans and the outstanding loans from earlier programmes written-off (most councils don't even pay the full interets cos they can't afford it so central government/taxpayer is never going to get it back anyway).
Unfortunately we are run by a bunch of clowns and with the exception of the likes of Vince Cable or Ken Clarke, they are only opposed by fools.
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"managing their businesses"
Translation - We give orders and feed our egos.
"jaw-jaw"
Translation - Making money is always about who you know ... you know what I mean .. wink, wink.
"They are sombre and anxious"
Translation - We shed crocodile tears.
"unglamorous underworld of bonus-less toil"
Translation - We are addicted to ever larger dosages of bonus-drugs.
"They are immensely pessimistic about the economic outlook and about the ability of governments to lessen the pain"
Translation - There are no more golden eggs left. We know, because our faithful servants took them all for us.
"Investors rightly took the view that if you can't trust BofA, who can you trust?"
Translation - Trust is our most effective cloak. We are naked without it!
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# So now that the BBC no longer occupies yout time, perhaps you can get a few hospitals built!!
Why do you sound so surprised/affronted - the BBC will never let anything "serious" through - If serious is defined as any intgelligent observations regarding the bizarre cabal who are busy marching everyone off the edge of the cliff.
The whole media deal is about atomising the population - have everyone sitting at home on their own freezing, just so long as each person feels it is only them, and they are a unique failure, then everyone is happy.
Censorship and suppression never works in the long term. In due course the sound of the streets will be heard.
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"That will be when the politicians of the rich developed nations, in which the economic mess was cooked up..."
Are you sure there isn't a spelling mistake in there somewhere?
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No 30 courteousnewcitizen wrote 'I for one am thankful' Well how do newly born children look forward to the next 20 years after you have never had it so good? The generation born today have firstly got to fund your excesses with great sacrifice to themselves, and then to really spoil their future, you will expect the 20 somethings to top up pension funds so that you can enjoy another decade or so of comfort and a blessed retirement.I for one am actually worried about our children's future. Finally while you raised some good points in your argument 'Brown and SAINT' do not go together!!!
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I find this whole thing rather sick.
Financiers who have been leeching millions of the back of the real economy for a decade are suddenly all depressed because their bonuses are gone, and the governments of the world are getting together in a top-class ski resort to figure out how best to take money from MY pocket to start the good times rolling for the city boys again?
It's offensive.
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Yep, the West's luck has run out; I could have written this article myself: http://tinyurl.com/bxzfj5
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Why Davos? Perhaps Daventry would be better for these bankers.
Robert ending on a positive note, zut alors! It must be the end of the world or are green shoots appearing?
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Bankers are on the piste again.
It's a city tradition to visit all the historical pubs in the vicinity that were established in them good old slavery trade days.
(but in canary wharf it is generally frowned upon to spend the whole afternoon in such pub type meetings because it is not part of their culture unfortunately, but they do have girlie wine bars and pole dancers for managers)
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This blog portrays that this lot of quasi elite BANKERS actually care about what is and what will happen.
The reality is they will all be comparing yachts and mistress' and luaghing at the debt slave mass' who have recently become even bigger debt slaves.
YEAH LIKE THEY REALLY CARE FOR THE DEBT SLAVES THAT THEY FEED OFF!
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More Doom and Gloom Robert. When will you try to put a positive spin on anything.
Lloyds Shares up 40% due to an up grade to Buy from one of the brokers. This would not seem to indicate sale conversion of the preference shares to ordinary stock which you implied a or so ago!!
Perhaps mystric Meg should have a word with you.
On a more serious note it does concern me that the general impression from the business leaders from Davos is so negative, did nione of them realise that the present financial situation was on the horizon. Even I was able to see that mortgage offers of 125% to value was likely to end in tears.
Also what benefit is to be gained allowing politicians to speak At Davos. The thought of Gordon Brown addressing me about anything would be enough to tip me over the edge.
All he has proved during the present crisis, which is his normal reaction to anything, is to act in haste (be regretably he never seems to repent!!).
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23 -
Davros was the leader of the Darleks - what better place for the (self-styled) Masters of the Universe to meet.
On a serious note why all the coverage? It doesn't look like anything significant is happening at what is supposed to be the World Economic Forum
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Anybody who thinks, or ever thought, that Davos is any more than the modern day equivalent of a workers' outing, deserves to have their opinions shunned for the rest of time.
Where has all of the money gone? Like the Madoff investments, it has been spent on bonuses, dividends, absurd property pricing, and taxes which in turn have been profligately spent. Nothing of any real consequence has been salted away. The lost money is gone, never to return.
When will things return to "normal"? Silly question because "normal" is indefinable. If we rephrase the question to read "when will economic growth return?" then my considered opinion is, not before 2015 and probably somewhat later than that.
Have a good look at the delegates at Davos, Robert. Some of those people you may well see again queuing at a local soup kitchen before this mess is over and done.
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Let's set a scenario... Imagine the world is in the grips of a financial meltdown, that unemployment is rising, that govts are throwing money around in an attempt to put things on an even keel, that banks are teetering on the edge of the abyss. Against this backdrop the World Economic Forum is called for sober reflection......Who ya gonna call?..... Boris Johnson???????
....or has Mr Peston been on the Gluvhwein?
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BBC
7,000 new asda jobs gets the headline. This is pitched as good news despite the fact that ASDA predicting a big increase in 'bottom end' supermarket sales is actually bad news for the economy as a whole. Does that sound like spin to anyone else out there? Or is it just me.
Robert in his update is calling the bottom of the market.
The ruling elite of this nation and their media mouthpiece are really getting worried arn't they!
Good job we still have Paul Mason on Newsnight who tells it how it is in his blog.
Jericoa
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Acordind to the latest economic forecast, Britain will paying for the colapsing credit bubble for the next 20 years ,which will give the pessimists something to look forward to after a decade of "no return to boom and bust "missery caused by charlattans on sterroids
Another 20 years to be able to say "i told you so "and and wallow in untaxable shadenfreude
Westearnerrs may be witnessing the end of dramatic external changes in their external world leaving future generations to inhabit the same environment as us and ponder why we built "mountains "in city centres that only seemed a lasting and fitting memmorial to the gods of "debt and delusion" that supported ,in their day ,the greatest cargo cult the world has ever seen. before it sank .
Pollynesan cargo cult sounds so like Pollytitian car go cult with the chief priests meating in Davos to discuss the disintegration of their control over the millstones arround their necks before they get their tounges arround the subject of AAA's holes and how to sell them to themasses
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Anyone else wish they'd bought some bank shares on Friday.........
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".....the best time to buy (metaphorically speaking) is when everyone else is selling...."
I have reservations about going anywhere near shares again until the short-selling nonsense becomes more transparent to the small investor.
Whats the point of buying shares in an apparently 'sound' business when I dont know if that business has offered a chunk of shares to the shorters to play with?
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Property prices must and will continue to fall. Banks will not make the mistake again and will insist on at least a 10% deposit.
If property prices are still on average £150,000 then a minimum £15,000 deposit will be required. Not many people have anywhere near this amount and more likely have this as a credit card debt.
With unemployment increasing and most of the private sector worrying about job prospects people will quite rightly be concentrating on paying off debts and saving. People like Peter Jones (Dragon) may be critical that the recession is being made worse by a lack of spending but why will anyone buy anything at present which is not an essential?
Having 6 months savings in case of unemployment/sickness etc is the first essential.
Lets get rid of debt, both government and personal, and never again allow a situation where debt can spiral out of control, especially in the alleged good times! Of course these were never good times in reality as the boom was caused by debt.
House prices will be at more manageable levels if a large depsit is required.
Gordon Brown promised he would not let house prices escalate as part of the 1997 manifesto. Yet another broken promise. Another case where regulation in this area could easily have been implemented to stop ridiculous mortgages being offered when the ability to repay was dodgy to say the least.
Prudence first and then the recovery can begin.
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"1219 A Conservative MP asks why the UK is heading for a deeper recession than its competitors. The PM says the Institute of Fiscal Studies has found otherwise and that the Conservatives are "living in a dream world".
"
I think it is he who is in the dream world. Or at the very least he is behind the times. Unless the IFS to whom he refers is a different one to the one that the rest of the world refer
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Robert,
Did you really need to go to Davos in order to deliver the devastating insight that is your 12.13 update? In case it's escaped your notice, the current economic difficulties are firmly centred on the financial services industry. So hardly surprising that these guys are mired in a pit of doom. And in the brave new world of "boring banks" does it matter that they are?
So, is Davos giving you a representative view of the world? What are you going to report back to GB and Ally D? You might be better served sticking the now-infamous "post 62" from your previous blog in front of them instead of regurgitating a load of guff from the Davos jolly. "Post 62" was a heartfelt plea from a guy who clearly just felt badly let down by a variety of agencies. It speaks volumes about Brown's total failure to do what he claims is his raison d'etre: namely to "support hard working families".
If you were here and not sharing the pain of failed Hedge Fund managers etc in Davos, you might actually be able to quote some stats to back up your "just maybe we're near the darkest hour for the global economy". Stats such as the better than expected housing numbers from the US yesterday, or the better than expected consumer confidence numbers from France today, or Asda planning to create 7,000 more jobs, or the fact that at least one broker is now calling the main UK banks as a Buy.
Many of the numbers are still horrible, but they're less horrible than they were, and less horrible than expected. When two or three of these get reported in quick succession, it usually means we've hit bottom. You're not going to get that kind of message from people who know their industry isn't simply in a bit of a downturn, but is being fundamentally and systematically taken apart and rebuilt in a more sustainable but, for them personally, a far less lucrative manner.
Updates like that of 12.13 simply suggest you're trip to Davos is a waste of licence payers money.
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Post 54. See the link attached to my post 54.
They have had to cancel it after Obama kicked up a fuss.
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Dear Robert
I have read Hundred of blogs, public ones and your Correspondants , hundred's of the public have asked hwere has all the money gone AND THERE HAS NEVER BEEN AN ANSWER,
"WHERE HAS ALL THE MONEY GONE"?
Robert, Nick, Stepanie, Mark, and Andrew, come on lets have an answer.?
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Another one for you RP. Not sure if this came out at Davos or elsewhere, but George Soros has publicly stated that he's stopped shorting GBP. He thinks the currency is going to strengthen.
Just making sure your Davos friends' depression doesn't cause you to do anything silly, RP.
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Has anyone read the new IMF report this afternoon -
Quote --
"The IMF believes that Britain's output will contract by another 2.8% over the next 12 months, with a stuttering growth of 0.2% projected for 2010.
This is in contrast to predictions from the Treasury.
Chancellor Alistair Darling, in the pre-budget report, set out that forecasts that the UK economy would shrink between 0.75% and 1.25% this year."
Is our great leader still going to tell us all that "The UK is better placed then most"???
Maybe he means Zimbabwe!!
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Re: #9. 09:59am. chriss-w: "Time out at Davos. Let's recap".
Of course. I'm sure few would seriously dispute. I doubt not that Mr. Brown agrees with you. I need no convincing that wise heads all across the country are even now nodding their sagacious approval. the very birds of the air sing the same song.
But how we are all trapped by our own human nature. Brown can't change direction. He's thrown his spear at the beast and now' he's charging it with his stone axe. He'd rather be trampled by the Mammoth than ask for his spear back to cast again - and see his manhood despised.
Little of the current hoo ha has much to do with economics or wisdom. What silly creatures we are.
Just have to wait for the next election for a change of course. It doesn't really matter who wins as long as the current mighty hunter and his close kin have been despatched.
How about Roger the Squirrel for PM?
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#56, scouseflyer:
Your example is nonsense. You forget that the $190 in the bank is offset in the books by the $90 that has been lent out, resulting in an overall balance of $100, or exactly the same as you started with. No money has been "created out of thin air".
If you're going to bang on endlessly about fractional reserve banking then at least make an effort to understand it.
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So the bankers are more pessimistic than politicians?
Well as it was the views and ideas of the bankers who got us into this mess, with their reckless *ideas*, why should we trust a thing what they say. And why should we believe them??
*Roll on the bankers massive annual bonuses*
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No. 70 Badboysaver
All your anger / frustration are no doubt justified, I too am a young saver renting all my life (in case you got the wrong impression). However, with the flexibility to move investments around between assets and currencies, one need now go down with the house of cards as those in debt are finding out.
Its all relative really, and I can assure you that you are amongst the 3% of humanity that is privileged enough to live in a social democracy where politicians ARE held to SOME standards. Its just that you haven't seen worse and there is far worse believe me.
I doubt it would have been too different under anyone other than 'saint' Brown. Blair ran most of the last decade. As did our elite bankers, corporate chiefains and regulators.
I would however now tend to disagree (thankkfully) on the 'young paying for old' argument, because this downturn is rather refreshingly hitting the rich JUST as hard as the poor. From russian Oligarchs to smug 50-60-something middle-englanders with no mortgage who planned to retire in style by unlocking their 'savings' in their bricks n mortar pension, it is pretty clear that if you are a hardworking young person, things are finally moving your way with property prices crashing, and labour making up ground on capital as a source of wealth/earnings.
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72. moraymint:
Thanks for the link. It is a very good article, with profound implications.
If I may paraphrase, the era in which we in the West over-consume on the basis of borrowing, at the expense of underpaid, industrious workers in Asia, is coming to an end because the process has shifted assets to Asia and created liabilities in the West, creating a fundamental change in the balance of economic power.
In my opinion, we are in the last days of this process, with the creditworthiness of Western government paper now the only remaining factor holding off the structural shift.
This means that we, as societies, are going to get a lot poorer, because we will have to live within our means, where "our means" translates as "our productive output". This productive output is not high, and is certainly less than that of the emerging Asian economies. Logically, therefore, their future living standards will be higher than ours.
This in turn raises huge questions about how we allocate much-diminished economic resources between the private and the public sectors.
This is not a zero-sum game. If too much of our economic resources are taken away from the private sector, that sector will decline. This process would in turn set up a vicious downward circle. We therefore need to rethink the entire structure of our society.
Compared to structural issues like this, Davos is a bit of a side-show at best.
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57
When you see the skill set etc it is clearly
jobs for the boys
I wonder what the annualised rate is, it cannot be a full time job judging by the members outside activities.
5 million PA equivalent plus or minus?
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Chriss at #9, Sadly I can only agree with you. There are a couple of 'good' things to come out of this mess. Global carbon emissions will downturn sharply without any extra legislation or technical effort. A correction in the house market, especially in the UK, was long overdue. I can only hope that if the situation improves the opportunities for prosperity will be in the real economy and not from betting on the value of other people's currency.
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80. Jericoa wrote:
"7,000 new asda jobs gets the headline. This is pitched as good news despite the fact that ASDA predicting a big increase in 'bottom end' supermarket sales is actually bad news for the economy as a whole"
Careful not to confuse short-term and long-term. You're right that the current trend towards lower end food shopping is indicative of the economy being in trouble. However, the Asda jobs will be there when the recession is long gone, and Asda is again pushing its higher margin products.
I think it would be a lot more worrying if Asda was so pessimistic that it was closing stores rather than opening them, cutting jobs etc. I don't think anyone doubts that the next 6-12 months are going to be tough. But the fact that Asda (and others - you just have to do a bit of digging) have longer term expansion plans shows that what we're experiencing is a recession, and not the end of the world.
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81
Actuarily speaking.
I wonder how many of the people who have contributed to this discussion today will still be alive in 20 years.
Sobering thought eh! what!
Eat drink and be merry for tomorrow we are bankrupt
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Rahere - it is important that you keep posting.
AlexanderCurzon - WHERE ARE YOU
The regular contributers to this blog (you know who you are) are what make it such an informative and addictive read, without you it will dissolve into 10 or 20 posts of mundane comments.
Anyway, Davos, what is the point, don't they have teleconferencing at the top tables these days, why the need to abandon such important posts to have a jolly in the snow (perhaps they aren't so important after all)
They produce a report (actually, it has already been produced Global_Risks_2009.pdf) so why don't they stay at their desks and read it there.
Davros, at least we know that his agenda was world domination and the abolition of stairs, what's this lots agenda.
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Not to get too far back to this, but those of you STILL upset about short selling -
If you think it's such an influential, can't-ever-fail, sure-fire way of making money from the small or unwary investor, then why not get into it yourself?
It's neither a bad thing (you are turning market knowledge into money), nor a surety. Only if the rest of the market agrees with you and the prices do go down, will the short sellers make money.
I don't understand this conception that shares going down is necessarily a bad thing, and shares going up is necessarily good. If your investments suffered then sorry, that's the price of playing the game. If you want security then deal in cash. You won't get the same returns, but you're risk free.
You can't have it both ways.
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82. scouseflyer wrote:
"Anyone else wish they'd bought some bank shares on Friday"
Past evidence shows that private investors delay making investment decisions until they have strong evidence of economic recovery. The stock market, however, is a leading indicator. It tends to pick up 6-9 months before the real economy.
Past bear markets also show a tendency to "snap back" once economic signals show signs of improvement. I think the numbers are that 30% of bear market reversals occur within six months of the bottom of the market. It then takes years to get back the other 70%. So, if you wait until you see the dawn, you've already left 30% of your upside on the table for someone else. Take a look at the level of FTSE at end-November. It was below 3,800 versus today's near-4,300, so you've already missed 15% of the (general) bounce.
There have been several pieces of relative good news over the last few days. By this I mean that, while the absolute stats remain very bad, they are either better than previous readings, or better than forecast, or both.
Having said all that, the answer to your question remains "No", I'm not bothered I didn't buy bank shares on Friday. There's still the potential for bad news; we don't know what new regulation they will be subject to but we know when it comes it will reduce their ability to make profits. There's not a lot of reason to see bank stocks as good investments longer term, though they will be good sources of dividends once they've cleaned out their non-performing assets. Basically, they will be more like utilities. There are plenty of better stocks/sectors to buy at the moment.
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The whole lot of them are nothing but a bunch of greedy conmen junketing at our expense.
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I George Soros says the pound will strengthen it is only due to other currencies (euro/dollar) weakening.
I would only buy sterling if I could get out quickly, as he is a renowned short seller he might just be talking up the market in the hope of huge profits shortly (pun intended)
Or I might be wrong.
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The people meeting at Davos are the ones most responsible for the crisis.
They knew what bankers do, they knew specifically what the bankers were doing, but they failed to regulate or curb them in any way.
Why? Because they too were reaping the benefits of the illegal and immoral profits that were being made.
A well targeted Alpine avalanche would work wonders for the world.
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Dear Robert
*******90,
This being so then Britain will be wiped out economically.
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read Paul Mason my virtual Davos
amusing
http://www.bbc.co.uk/blogs/newsnight/paulmason/
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The IMF is forecasting that the UK economy will shrink by 2.8% and will be the hardest hit in the developed work.
http://www.guardian.co.uk/business/2009/jan/28/ilo-global-unemployment-to-soar
How much longer can Hubris stay in power and deny that he has anything to do with our plight?
Any comment from Davos Robert, or is the champagne flowing well so well than nobody notices what is happening in the real world?
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it is a pity the IMF report was not available in time for PMQ's when GB brushed aside the charge that the UK would suffer a deeper longer recession than other countries.......
.....The IMF...." now projects the UK, which recently entered recession, will see its economy shrink by 2.8% next year, the WORST contraction among advanced nations.".........(my caps)
When is AD going to revise his forecasts yet again!
I have said it before but it is worth repeating...stop treating the symptoms and treat the illness..... create a "bad" bank, i dont know why GB is dithering it will have to be done within the next month so do it now!
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At least Gordon Brown is still helping the hard pressed bankers, sorry families :-0
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What really worries me is that David Cameron really doesn't seem to have grasped the nettle and understood the situation.
he seems too busy trying to score political points than really getting to grips with the fact that we are being told the growth in the World economy is at its worst level for 60 years, that countries around the world are propping up their banks, trying to stimulate their own economies etc and all he seems to manage is a rather pathetic dig at Gordon Brown.
We seriously need the country to pull together, this is not a time for petty politics. We need people who will help pull us out of this mess not dig a bigger hole, which he seems to be trying to do for his own political gratification!
OK its so easy to sit on the other side of the fence and make snide comments what we really need is a true statesman not a light weight who can only see as far as his political nose will allow.
We need someone to stand up and say Ok we are all responsible for this mess because the source of capitalisim started with the Tories under Mrs Thatcher and in the US under Regan and successive governments have just perpetuated the problems. They are all equally guilty and should be man enough to say so.
Maybe they were all duped by the ability of the financial sector to run rings around them and convince them capitalism had all the answers. Naive or just plain stupid, what ever it is its pretty scary.
Of course capitalism was dreamt up by those who stood to gain most, a complete conn.
trickle down was complete and utter rubbish.
Those of us who can only stand and observe know that if money goes round in a smaller and smaller circle the whole thing stagnates and that is what capitalism is all about.
Its a war, a commercial war where the winners defeat all their competitors by buying them out and shutting them down. Once they have achieved their goal we are all at their mercy because they can dictate the price.
I don't want to hear politicians jumping on the bandwagon for their own political gains, they don't even offer alternative credible solutions. I want to see them united, I don't care for politics left right or whatever because they only seem to be in it for what they can get out of it but I do expect them to act in the best interests of the country not their party.
Maybe we should call them servants of the people (which is what they are) and not leaders and maybe a different kind of politician would emerge?
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I suggest these people contextualise their pessimism by holding their meetings in less convivial surroundings - come to Winson Green (B'ham) or Highfields (Leicester).
I am certain more people would be prepared to show some degree of empathy if they thought these 'leaders?' came down from their ivory towers, and showed a bit of the Obama transformational leadership style.
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84. thok1969:
"Property prices must and will continue to fall".
Yes. I don't think the deposit is necessarily the killer for everyone, because some buyers will continue to use the equity (if any remains) in their existing house as the deposit for the next one. But the deposit IS the issue for first time buyers.
So how low will house prices go? In the recent boom, the ratio between house prices and average earnings climbed to well over 5x. The historic norm is about 3.1x. On this basis, the average house price needs to fall to about 110,000.
This process is going to create huge negative equity. One way out of this could be printing money - incomes rise in nominal terms, whilst the real value of historic debt falls. But printing money is by no means a cost-free exercise.
I wonder whether, instead, mortgage debt could be marked down pro-rata to house prices? The government could pay part of the difference. Lenders would still face losses, but then they face these losses anyway, through the repo process as things stand.
I know this raises issues of moral hazard, because it would confer the greatest benefit on the most imprudent; but I cannot see any way out of the debt crisis which does not help the imprudent.
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Davos summiteers ought to be striving for a more steady-state world economy. They should make use of this period of correction to growth, over-exploitation of finite resources and increasing despoliation of the environment.
All booms end in tears, it seems. Who benefits from increased GDP? Cui bono?
Mechanisms should be in place to slow down the chase for profit. CEOs of PLCs may love their children and philanthropic when they have amassed fortunes (Bill Gates) but at work their raison d'etre is the bottom line. They are in the thrall of their shareholders. For an increase in dividend they will sacrifice jobs.
This is improbable, I know, but if companies and corporations were to take loans and issue fixed rate bonds repayable after six months, three years, whatever, retaining ownership or remaining as mutuals (or like the Bader Commonwealth)... rather than yield ownership to shareholders, speculation would cease to be so wild and irrational. The economy would be more predictable, more secure... and much less exciting!
Mycoblastus
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#72 moraymint
Me too!!!
We have lost the plot in the west...... we've become fat and lazy... and so has our economy.
The world is about trade - I know it alsways has been.... but now in stead of stealing the resources from the 3rd world and bringing the profits home, we are having to buy them.... and god are we going to pay.....
And like idiots we add to the issues by (you guessed it Banks are the leaders again) offshoring jobs !!
If we are to survive we have to have an element of self preservation in the future - it may cost slightly more but at least it gives us a future....
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As one beholds the glorious spectacle of global business leaders gathering once again in Davos the words of the late Mr. Joe Strummer come to mind:
"I don´t want to hear what the rich are doing,
I don´t want to go where the rich are going,
They think they´re so clever, they think they´re so smart,
But the truth is only known by guttersnipes"
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For those who feel Davos is a waste of time, take yourselves over to Paul Mason's blog on Newsnight.
He shares our view, but is a lot wittier.
I'm betting he and Pesto aren't best buddies.
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I got to around post 44 before the usual suspects started blaming Brown and Labour.
I'd like to congratulate the first 43 posters.
The others need to realise that this is truly a GLOBAL crisis.
If any single government - past or present - is to blame, it is those of the USA over the last 20 years.
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59 says
"This crisis is the result having a managing and governing elite who are without honour and are dishonest".
yes you are certainly right. if this same elite can go and kill hundreds of thousands of iraqi's on a lie. why do we not believe that these very same people can lie to us over a bit if money.
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Anyone seen the banks shares today?
Top five risers in the footsie are 3 banks and aviva and Prudential!
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It would be useful if the world's politicians looked at why many business leaders arent attending. It would also be pertinant for many to examine the reasons for the crash and biggest economic crisis for 60 years.
In the 40s after the Bretton-Woods agreement an alternative group of economists met to influence thinking. Their chance came in 1975 with the election of Margaret Thatcher as Conservative leader in Britain and then PM in 1979 followed by Reagans election in the USA in 1980.
This was their moment in the sun and the world has been counting the cost eversince. The reason for this crisis is a deregulated financial market in Britain and the USA. The sooner that the politicians take back control of the economic levers of the country they are governing the better.
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#92
Actually, #56 is correct. Look it up, it is a standard result in economics textbooks.
If the fractional reserve ratio is R, then the total amount of "money" in the system (defined wide-sense as M5) will tend to 1/R as the limit of a geometric series (assuming infinite liquidity...)
Current central bank rules therefore imply that the total amount of "de-leveraged" capital available (i.e. if everyone pays off their debts to call it quits) is only ~8% of the current money-supply.
Depressions are the process that ends with everyone having capital, in the only value in which it can be definitively valued (i.e. cash), but zero capital deployed (in the limit, zero employment). This (incorrectly) values the means of production only as the capital used to produce themselves, with zero allowance for their ability to make new value.
This is the fundamental PURPOSE behind the fractional reserve system. Otherwise, you have the feudal system, where there is no NET way of deploying capital to generate new value. The aristocrats stay exactly as rich as they were, century after century, employing rat-catchers.
So it is actually NECESSARY that we have some value system that values assets as much greater than their intrinsic value.
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There are 86 jobs on the BBC careers pages.
None for comment moderators.
IF HR read this, get some more moderators.
Give us a job I can do that
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If the first bank bail out was £37bn and the VAT cut £12.4bn and it has made little difference, why didn't the Government just give everyone in the UK £800 in vouchers with expiry dates on them, exchangeable for UK products, food, entertainment etc?
Surely everyone would then be obliged to go out and purchase goods and services.
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Perhaps some of these Bankers are negotiating to stay in Switzerland to escape possible criminal proceedings about their lamentable handling of financial matters?
Or are they there to open secret bank accounts to stash away the loot which they plundered over the years?
Is "Fred the Shred" there - if so, he will be in good company as the "world's worst banker"?
Hopefully, Switzerland does have extradition treaties so that we can get some of these incompetents back to "face the music"
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What would happen if the Bank of England set interest rates back to the level it was so fond of in the 18th century (5% - which seems reasonable enough to me) and then the Government stopped trying to control inflation?
Would everything go even more insane than it is at the moment, or would knowing that interest rates would always be at a specific level have a stabilising effect?
BTW, I don`t think I have a personal agenda here - I`m just curious!
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Gordon Brown is the new Nick Leeson and the UK is the new Barings Bank
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BIG BOTTOM (OF THE MARKET)
#80 jericoa and others
economic indicators:
extra 7000 jobs at ASDA means lots more unhealthy food sales
couple with yesterday's news that McDonalds in massive expansion
and BSkyB also expanding
so the clear indication is that the smart money is on the growth (litterally) of junk-food eating, unemployed couch potatoes
ITS ALL GOING PEAR-SHAPED
I did take a punt and bought RBS shares on Friday at 12p just for a laff but am now thinking of trading them for shares in Walkers Crisps which I think are part of PepsiCo
from the Manufacturer:
The two factories on the Leicester site make up the biggest plant in PepsiCo’s FritoLay Group and is probably the largest crisp factory in the world,” said plant manager John Needham. “Our Leycroft Road factory is exclusively a crisp production plant. Our primary product is the core Walkers ‘flat crisps’ – the ones you’re most familiar with. The Bursom site also makes Sensations, Nobby’s Crisps and Max deep ridged crisps as well as Chipsticks and Frazzles which are extruded products.”
CREDIT CRUNCH
sounds good; think I might have a bag of extruded products right now!
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#88
"Where has all the money gone?
How about city bonuses over the last ten years...That is exactly where the money has gone and it is still there. People in the city should be forced to pay back their bonuses. The money, YOURS and MY money, was paid by banks to their staff to keep themselves fat. It is only right that they should pay the money back to you and me via the government.
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In today's PMQ Brown refused to acknowledge the clear and disturbing contents of the IMF report and its conclusions about the UK, preferring to spin in the generalisations of the OECD conclusions instead. His evasiveness and denial would not be tolerated in a junior executive of any professional organisation let alone by the (unelected) PM of a supposedly top rank democracy. This lunatic really has taken over the asylum.
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I have a question related to “Where has all the money gone?” (Which has launched another debate as to how bank credit creates money -- as debt -- but I don’t want to go there.)
Most of us feel that the people attending the Davos meeting (RP excepted, of course), are among those largely responsible for the current world financial crisis. We assume that many of them have received huge bonuses during the bubble expansion. Both things are probably true, or so it seems to me.
But my question is: are those attending Davos (and those like the Barclay executives, who I assume would normally have attended) the real “movers and shakers” of the banking and finance industry? Or are they simply the field generals who fight the annual battles for profit in good times and bad? This doesn’t excuse them from being held responsible for their actions, but are they really the ones who have profited most from the credit bubble? Surely bonuses are not the only way private wealth has been augmented! How much has been created by trading in each other's shares and moved to offshore accounts?
I really don’t mean to launch a debate about conspiracies, but I can’t help thinking that there may be some sort of “inner circle” of the truly super-rich, who have profited even more than the bank (and other finance) executives, from the bubble, and who will suffer very little from its collapse. I personally doubt that this (I assume relatively tiny) group has “engineered” the crisis -- the world financial system seems too big and complex for any one group to really control it. And I have no basis in fact for thinking that this same “group” is bent on creating a “new world order” with one government and/or currency system as their objective.
But having tried to qualify my suspicion to exclude conspiracy theories, would anyone care to comment?
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#22
You have my sympathy...
There are thousands like you out there, slaving away too busy to read and contribute to these blogs. It's great to be able to vent your anger in the open, however, as things get worse, words will not be enough....
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So many cows in Switzerland but the Great and the Good go on milking Joe Public..
GC
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#48
Sorry you're leaving.
This slightly off piste - but if Jack Straw gets the envisaged Data Bill through it could well be the end to free discussions like this for all of us....
Slightly paranoid perhaps, but we are looking a shade Orwellian, with this 'modern technology' misuse pretty worrying. The government is woefully ignorant on most things 'IT' wrong, but might be all too efficient in surveillance - though it will lose our personal records of course.
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Greed and a lack of social responsibility is the current problem ...
For example, Microsoft make $4.17 billion in 3 months to Dec ... despite that enormous profit they announce they're going to hit 5000+ families with redundancy ... thats going to do the local economies no good is it ?
With that kind of whealth and power there should be some responsibility .. not to their shareholders but to their stakeholders, their employees ... preserve employment, keep the money flowing around the economy, because storing it up in MS bank accounts wont benefit anyone other than MS shareholders.
Greed is alive and well, despite all we have seen so far. Until all the bad news is out, and all the debts written off, then there will be no recovery.
The Bankers have proved themselves nothing more than short term, greedy idiots.
Thank goodness Gordon Brown got rid of boom and bust in the economy ... just think where we'd be if he hadn't ?
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So many politicians stating that there is a need for tighter regulation with respect to the dealings of the banks and yet unless I'm mistaken no regulation to be seen. A cynic may think that they're waiting for all the fuss to die down so they can go on collecting those big fat cheques! No wonder there is no confidence....
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This comment was removed because the moderators found it broke the House Rules.
#44
Never mind nationalising the banks why not builders. There must be loads of projects with planning permission ready to go that have been put on hold plus all the stuff in the pipeline that could be rushed through.
Get the houses built, hand them to the councils.
Then every house that goes up for repossession the government buys at current value less 30% for the coming years deflation. Again pass them to the council who can rent it back to the previous owner.
Once we are through this and there is enough housing for everyone the you can privatise the builders again.
Of course this policy would only help the poor voters it would do nothing for Flash Gordons rich mates, the ones that will give him high paid directorships when he finally gets kicked out.
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118,
Thanks for the Tip Gordon :-)
Global, America, sub prime yada yada yada
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Have the moderators gone to Davos too?
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Acording to the latest IFS report taxipayerrs will be paying for the credit crunch for the next 20 years
Is that optimism conditional on their being no return to Brown and bust economics ?
ha!
As for the 40% golden rule ...
It seems destined to become the 60% MidAAA's touch in reverse ,which it was before becoming disguised with the credit bubble fig leaves that , allowed governments to consume taxes on consumer spent unearned income[extra Grosse DP]], that now[surprise surprise] has to be payed back leaving those same consumerrs less disposable income for governments to extract taxes from.
GB has described it as a "global "problem, how true ,every debt junkie Spendaholic that got drunk on r e cycled snake oil agreed [insured]that when they fell it would be together into the same toxic swamp ,which would allow their decade of uninterupted balls to be accurately described as "a global problem "
Those Davos
"me taaarzaaan "lordy types who's "globaaals" swung together in the "good times"should now swing together in the bad times [without eachothers "globals" to fall bck on ]
On second thoughts
Swinging is to good for them ,they should be castigated until it brings waaater to their aaayes
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118. The Midland 20 wrote:
"I got to around post 44 before the usual suspects started blaming Brown and Labour.
The others need to realise that this is truly a GLOBAL crisis"
Get off! If Plodder was as white as snow it wouldn't mitigate. He is either medacious or crassly irresponsible for not seeing this coming and whatever - double double crassly irresponsible for allowing the wreckage to spill over into the lives of so many people, a massively growing number - and doing NOTHING to save for them what little they ever had in this hard and unforgiving little island. A guy killed his whole family today and himself to because he's lost his job. Plodder always stands up and announce the latest soldiers' deaths in the Commons, where are the condolencies for him?
Naah. When you're PM you're responsible for everything, good or bad. Buck stops here, heard that before?
Sorry, perils of being the 'leader' old boy. When he deserves ANY credit for being any use at all as PM or 'leader' I'll be the first to tell you.
GC
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The unglamorous underworld of bonusless toil?
Tough.
Does anyone really think any of these people deserve any kind of bonus, ever again?
They were as greedy as it's possible to be. Businesses are going now going bust as a result. People are losing their jobs. Families are being destroyed. In many parts of the world (the parts we usually find it convenient to ignore) people are probably already dying.
All because of their blood-sucking bonuses.
There's a real world out there; and there are the people who have climbed the greasy pole, all the while claiming it had something to do with 'talent' when it was mostly predicated by arrogance. At the very least, they should have all possibility of bonuses taken away. For life.
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Robert , the problem we all have is that Bankers are ignorant sheep, all over clubbing it on the way up and down. All salaried employees screwing their employers for unrealistic bonuses which are not earned just based on hustle.
It worked but the illusion of how smart they all were evaporated when Northern Rock imploded.
They are as geared up proportionately as much as the average guy on the street.
Their veil of invisibility has been totally removed and they are now looking more like scared rabbits frozen in front of oncoming headlights than mere sheep.
They have no answers, nor do our politicians, and as for the Regulators if ever there was an over paid useless group who appear to only pick on the small companies whilst being too scared to really have a go at large ones they are it.
Need I remind you about Endowments, Critical Illness Payments, Pensions miss selling, Bank charges and the list can go on and on.
We need strength here and no part of this triumverate has it and the sooner they look in the mirror and realise they actually know nothing the faster we will move on.
For years it has been clear that the public are way smarter than all the advisers TV can produce and for once I will agree with you in that by taking the contrarian view success will follow.
January through March are always terrible months for trade but what we need now is to establish clearly by April what the banks will be allowed to do in future.
Each banking representative at Davos is not there for the economy or their clients they are there to either secure another job or establish what the new bonus rate looks like being.
Davos is the 'jolly' that has run its course, the real work and mnore importantly success will come from those who get things done and no one at Davos can.
We need to stop these subsidies and look much more closely at low tax economies. In todays age no country can afford any longer a nanny state mindset.
Let the electorate see they haev more in their pockets and they will choose what they buy and not be kidded by gimmicks of a nominal and temporary reduction of VAT.
Low taxes will get the economy moving far faster than anything else. That topped with Banks who can no longer speculate using depositors money for their not the depositors gain has to stop.
The endless permutations of useless inexplicable derivitave products must be ended as they have been shown as merely to be traded but deliver no benefit what so ever.
We either start to get real or sink into a bottomless pit of endless faigue and depression.
I am with you one million percent, ignore Davos, ignore what the 'Bankers' are saying and do the opposite.
Soon the UK will be rid of a Government in absolute denial of its role in all this, and a new broom will sweep clean.
No right minded person can really expect anyone with the level of denial we have seen to date to haVE the faintest clue what to do so why are we still trying to believe they DO have a clue.
We have seen the economic mnodel of big is beautiful, knows better maximises economies of scale decimated.
Now we are relying on our own judgement more than ever because all the spin is just that ...spin!.
For good management and safety we need the advice of those we can trust and as night follows day we cant trust our banks, or regulators anymore.
So lets start to think positive and tell the banks where to go. There are some great Building Societies out there. Let the Post office revert into a bank taking in RSB and start real time competition removing clubby system that nearly wiped us out.
It can happen, it should and must happen if we are ever to get back on track albeit at a lower but more sustainable level.
The biggest con about Davbos is that ity is hosting the great and the good. That is singularly wrong it is hosting the creeps and no goods, the good guys are in their offices working their guts out.
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difficult to read some of the comments from
BANKSLICKERMINUSTHER without sighing.
Similar economic situation to mine.
Here is the only option open to you
1 Speak to csa and get a' form of variation'. This will enable you to deduct the cost of travel from your 15%. 100 mile round trip will cost you approx £35 X2 each month.
2 Explain to ex spouse you cannot afford new car and arrange to meet half way on train or bus.
Even if she is travelling in merc, with new boyfriend in tow she will still love her child enough to realise that he/she needs to see daddy! If she does not love her child that much she will enjoy the free time and will not want to lose 2 free weekends per month!
Either way, your child gets to see you. Dont compromise on this. Children NEED their dads. You are not an optional extra.
Many solicitors advise their female clients to financially destroy their ex husbands. They start from the point that all men are violent perverts........... and all women are abandoned helpless victims.
The csa also work from this understanding.
Keep all admin recorded to the csa. Only send rec delivery letters and TAPE every call to them, as they do to you.
If csa drag their feet, get your MP involved with the paperchain.
Best of luck.
Your car credit, garage maintainance etc are not the issue. Bear in mind many of the guys at the garage are probably being harassed by the system too.
You need to sort out the deal with your ex wife otherwise you, your new partner and your new child will have a life of misery.
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Robert. 'sombre and anxious'. Difficult to dig up any sympathy for them.
At least they don't have to worry about being kicked out of their houses or living on the breadline like many of the people they profited from.
I hope that they choke on the fondue.
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The herd is only just breaking into a trot, Robert. It is early days yet. When people give up trying to call the market bottom, that is usually when it takes place. When investors give up trying to hold assets to maturity...
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#131
Try researching the Bilderberg Group, Bretton Woods and the Illuminati follow all the links then make up your own mind.
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#118 midland it isn't just Brown/Labour's fault but they certainly have to take a lot of the blame, along with the previous British govts going back to the beginning of the 'soft touch' regulation approach of the mid 80s - Reagan and Thatcher
the UK and US approach for the last 20 years has been reckless, high risk
not prudent in any way
so #120 horsham is right
the big players in the deregulated world's of finance and Anglo-American govt now know that the party's over and that it's their fault
that's why a lot of these guys aren't showing their faces at Davos; they are lying low, licking their wounds; staying in their gated compounds and luxury apartments
quite understandably they don't want to draw attention to themselves; hoping that we'll forget about them and that they won't end up being investigated and charged with fraud etc
but then we should all be living within our means anyway, so the current 'adjustment' is necessary
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For those interested in quality reporting Paul Mason is reporting from Davos for Newnight tonight.
Afterwards watch an illuminating programme on the 1929 crash.
From 9PM you have Evan Davies's two penny worth on the current crisis too.
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Robert,
It must be nice to go to somewhere like Davos, at someone elses expense, simply to spread the gospal about what a real mess the world economy is in and how a population the size of the UK will soon be out of work. It must be even nicer for the top bankers or financiers to drown their sorrows in wine costing up to £1,000 a bottle, also on expense's. How galling that is for the rest of us less fortunate to have to watch and listen to such goings on.
As you yourself pointed out the problem with the Davos meeting is that all the wrong people are attending. The only people there are the banker's, the hedgies, the private-equity specialists, management consultants, economists and of course the usual entourage of reporters and correspodents. None of the above can be considered as genuine wealth creators, these people are only good at circulating money and robbing each other to amass even greater personal wealth. Now that the great banking boom has been proven to be no more than a myth created by many of the super hedonists attending this meeting it is no wonder they are all so full of gloom and doom. Hopefully for most of them their hedonistic lifestyle is now over.
The big problem with bankers and finaciers is that too may of them are ruthless short term opportunists whose primary aim is to quicly generate vast ammounts of money so they can accumulte vast personal wealth, beyond their needs.
Whenever and wherever they see an opportuntity, such as promoting a prolonged housing boom to the point where it can no longer be sustained and is bound to collapse or, stripping (some might say raping) a company of most of its assets to the point where it is no longer viable, that is perfectly acceptable to them. They are remorseless in their pursuit of personal wealth and the power that goes with it. If as we are seeing now, millions of ordinary innocent people lose their jobs because of their actions then that matters little to these ruthless and finacially obsessed people.
With little or no genuine entrepreneurial business flair of the kind that creates wealth and adds value they will always follow the herd instinct until the next opportunity (or sucker) comes along. Right now opportunities and suckers are becoming increasingly scarce.
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#122 bearmarket2_0
(replying to # 56 and #92)
"Actually, #56 is correct. Look it up, it is a standard result in economics textbooks.
. . .
This is the fundamental PURPOSE behind the fractional reserve system. Otherwise, you have the feudal system, where there is no NET way of deploying capital to generate new value. The aristocrats stay exactly as rich as they were, century after century, employing rat-catchers.
So it is actually NECESSARY that we have some value system that values assets as much greater than their intrinsic value."
Thanks for further clarifying -- I found your comment helpful.
But is feudalism the only alternative to fractional reserve banking? People have posted links to other interesting possibilities, for example:
http://www.wfhummel.net/reformplan.html
(It's a very dry article, but worth plowing through I think.)
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#48 rahere wrote:
'...Rahere has decided to withdraw from this blog because of the impossibility of posting anything serious thanks to the abusive moderation.'
#100 BobRocket wrote:
'Rahere - it is important that you keep posting.
AlexanderCurzon - WHERE ARE YOU'
Agree with BobRocket! I don't always understand or agree with your posts, but please don't give up! Has AC withdrawn too, without notice?
I've never understood the BBC's moderation policy, and think too much is left up to individual moderators, but keep trying to get through! Without voices like yours RPs blog would be much diminished!
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... near the bottom...?
Bobby, this is just the first compression on the super-black ski-run that we have been led onto by the Dear Leader.
We have an awful long way to go (mostly out of control) before we find the bottom *, with a helluva lot of casualties on the way.
* and it will take all our ingenuity and effort to pull ourselves up the other side.
Most of the people still don't know we are going downhill at speed.........
Regards,
Rahere -where is your voice going to be heard?
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after sitting reading the blog and replies for a while, I've come to the following conclusions and thoughts. However its a bit like nasty medicene - you won't like.
1) So many posters appear to be hidden economic geniuses, having predicted everything from the house price crash to the fall of sterling. If people are that clever, how come they weren't getting jobs at the banks to save us all. Have you failed us :-)
2) Everyone here has gone on about the evils of borrowing money, and the perils this presents. Yet, no one seems to want to admit that they borrowed money they couldn't afford. Maybe they disappeared along with the money :-)
3) So many people are harping along about bonuses, bankers & how undeserved they are. I challenge everyone of you to state you would never take a bonus, or not work to get one if you had the chance. Hmm no takers?
4) All of you are bashing bankers. I'd point out that not everyone who works for a bank is a 'city boy' banker. Most will be everyday people, working in call centres, IT and so forth. They are just as likely to get affected as eveyone else.
5) Politicians. My favourite. Everyone and their dog has a view on this, how bad and corrupt they are, and what a need for change there is. Ok, PROVE IT. We have a wonderful democracy where anyone can decide to stand for Parliament. IF you don't like the candidates, stand in your local election, put forward your views and we will see if anyone is listening.
Otherwise, you can't complain. And if you didn't vote, you can't complain either as deciding not to vote means you are happy to go with someone elses decision.
6) Jealousy. At the end of it, I really think that this is a really important one. I've read comment after comment where people are complaining about people making undeserved profits from houses, getting bonuses, whatever. Yes, I freely admit some people get lots of money for things I do not agree with. However I don't begrudge them - it simply shows we have a society where people can go from nothing to something if they want. If you want to change it, stand up and get it changed (see point 5)
7) Can do attitude. This is what British people lack in my opinion, and thats why everything is moving east. So many complaints about what wrong, so many 'someone should fix it'. Lets face it, the only one who can change your life is you.
Some might not like the US, but at least they all are prepared to take a chance, improve themselves and go for it. Nearly all I read on here is people blaming someone else for their problems, and wanting it fixed for them
I stand back and await the torrents of abuse/complaints. But before you do, look at them and see what ones could apply to yourself.
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How glamorous - I never realised that I had spent my working life in the underworld:
"and that they've been cast into the unglamorous underworld of bonus-less toil for as long as the mind can contemplate."
Bonus-less toil? Diddums. Just like the rest of us in the underworld who've been saddled and whose children have been saddled with paying for these merchant bankers' greed and incompetence for the next two decades.
Canapes? Coulons.
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The big question is "what horrors still lurk beneath the surface?".
The monster lurking beneath the surface, Robert, is trust, and it's now dead.
The bankers must be waking up to the fact that there is no-one in banking that they or anyone else can ever trust again.
I'm sure they know some of the juicier details that we still don't know, so the fact they're depressed and have no confidence in any politicians doing anything effective says it all.
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145. At 5:51pm on 28 Jan 2009, anewworld wrote:
difficult to read some of the comments from
BANKSLICKERMINUSTHER without sighing.
+
+++
mr BANKSLICKERMINUSTHER was reprinting mr kinhell's infamous post 62
re csa
they suck and are biased and racist and do not take anything into account properly like living expenses, financial difficulties like bankruptcy
they also deliberately overcharge you
and kill your career
and say you've lost the right to appeal
and fraudulently lie to cover themselves
and are totally incompetent
and sit on change of circumstances
and ignore complaints
and act misrepresent facts in tribunals
sigh what doesn't kill you
makes you stronger
if you could only put the money in a children's trust so the money could be spent on the kids or college fund etc
they should be closed like guantanamo bay
breach of human rights (article 8 EcoHR) but you have to go to a court in brussels
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Writing to your MP and then the Parliamentary Ombudsman is also a waste of time because the Parliamentary Ombudsmancan ignore it if they feel like it.
If ICE (Independent Case Examiner) determines the csa/cmec/dwp are guilty of maladministration you can get 50 pounds from them, (ask for a giro)
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# 48 rahere
I'm with you on this one. I've just had another post bumped on a different topic. I have no idea why.
Well I do have an idea why, but if I write it, this post will get moderated too.
I'm going to stick to Bloomberg from now on. They're not so hung up about how they're perceived by the people we tend to criticise.
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#155
Your points:
1. Your comment presupposes that banks had, or have, any interest in hiring people that are out of step with conventional thinking. They did not, and have not, such interest.
2. You take no account of the fact that it has been macro economic policy to virtually compel people to acquire debt regardless of whether they could afford it. Govt. policy is that 50% of young people should enter university and that this be funded by way of student loan. The Govt. has set up student loan bodies to administer and enforce this policy. Government policy has been to increase the rate of owner occupation, and (until recently) to fuel a housing asset price boom. Government policy has also been to depress the share of real wages as a percentage of GDP. Consequently the assumption of debt is a less than voluntary experience for many.
3. This point is nonsensical. It has been specific government policy to promote the concept of "performance related pay" or bonuses. In 2008 a New York hedge fund manager obtained a $2.6 billion remuneration package. If you are talking about remuneration measured in the $10´s millions through to low $ billions then there is little doubt that a vast number of people would reject such riches on the grounds of moral revulsion.
4. This is not a point it is merely a statement of the position.
5. The onus is not on others to prove anything. Rather the onus is on you to explain how in the face of an overwhelming body of evidence you can hold the view that you expound. Who, for example, voted for Peter Mandelson? Do you believe that the invasion of Iraq and the destruction of that country was a manifestation of the will of the majority of the British electorate? Where are the weapons of mass destruction that were promised? The list of lies, deceit and spin would fill a book.
6. Jealousy is part of the human condition, and so it is obvious that it will have its manifestations. Again this is a mere statement of fact - although interestingly you offer no actual evidence of jealousy attatching to any specific person, action or comment, and content yourself with a general implied smear against unidentified persons (presumably people that have the temerity to disagree with you).
7. As you yourself concede this is a mere statement of personal opinion, although once again the implied smear is apparent. To return to facts; "everything" does not move east for no reason. The reason why things move east is because workers in the east can be persuaded or forced to work for a wage which, if it applied to you, would ensure your rapid starvation.
That disposes of your entire argument.
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Evening all-just spotted Alex C on the newer Pestin Pick! I've missed his words!
I'm going to apply for that Treasury post-we'll see what happens!
I rang Barclays today and left a message for John Varley. I love a good dinner (usually cook myself) and wanted to know where my invitation was. After all, I'm a corporate customer! I did wonder if my lack of invite is cos I don't have an overdraft and just put all our corporate money abroad because of the poor savings rates.
Haven't heard any words of wisdom from Ally D lately? Has he got a sore throat, or is he in Davos too? Don't watch TV much (prefer the entertainment here-much more fun) so I may have missed him.
As for our newly contrite banking CEO's-a song may suffice-
'Shredders on the starboard bow, starboard bow, starboard bow'!
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Where has all the money gone?
Davos, corporate dinners, Cayman Islands, Iceland-
Anywhere but here!
I read recently that if GB had given every person in this country a share of what he has given banks etc, we'd all have 20,000 to spend.
Think he made a bit of a mistake there!
Now, from the same song as my previous post it's a case of-
It's worse than that it's red, Gordy, red, Gordy,
Our country's in the red, Gordy...
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RP: So on the basis that the best time to buy (metaphorically speaking) is when everyone else is selling, just maybe we're near the darkest hour for the global economy.
Robert, you increasingly remind me of these British estate agents who - referring to UK's beloved house price bubble - said "there will never be a crash" at the beginning of 2007. Who then said "there will only be a tiny bit of crash" at the beginning of 2008 and who now say they can almost see the end of the crash (that they predicted would never happen). I feel that you run the risk of becoming a propagandist. Leave that job to Gordon Brown, he's great at it. What this country needs more than ever is realism, not propaganda and lies. In fact it was the lack of realism that has caused all this mess.
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Oh, I had to laugh this morning!....on CNN Live news earlier, the show's presenter said "...and now we go over live to Davos to find out how the delegates are coping".
You just couldn't make this stuff up!
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BankslickerminustheR
Coping with their hangovers of course!
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155. brownloadofrubbish
Sorry but your name was a dead giveaway.
You are Gordon Brown and I claim my £50
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Perhaps the Government should have left the banks to fail - a capitalist free trade environment should let market forces determine what is a successful business model and what is not - rather than a return to Keynsian economic theory with no guarantee of success.
With the money used to bail out failed businesses (do not kid yourself that these banks have not failed) perhaps the Bank of England could have extended it's role as lender of last resort to make business loans to successful businesses in the real economy, financial services firms who have the evidence to show an ability to repay and to financially secure individuals for mortgage lending. I suspect this would have been much more effective.
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to sum it up check out
[Unsuitable/Broken URL removed by Moderator]
wondering if this will get through the 'moderators'
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If this were not reality, I would have tuned in to watch this drama on TV... I can think of several historical references to ego maniacs attending high places, these days it would appear DAVOS is the current venue. DAVOS is obviously scruffy in comparison to the average CEO Office these days...
Still, how many corporate jets got there I wonder? with the average CEO on a salary 4 thousand times that of the normal salaried Joe Six Pack, I mean where to you hide a Jet when you want to play broke to the tax payer?..
I wonder if any will be discussing the next wave of courtesy bonuses and golden parachutes as the corporate banking bed hopping continues....
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#169
GOES TO SHOW
I did not hink that link would be allowed somehow!
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It basically having been one huge party, here's some light entertainment.
It runs along the lines of a 'Times' puzzle - Enjoy! Stick 'wif it. Worth a skim and giggle.
http://www.sysopt.com/forum/showthread.php?t=202774
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when G Brown met with and gave over £37bn to RBS this should have been covered by an agreement whereby RBS undertook to lend out / invest £30,000 to each of their 200,000 customers.ie £6bn. RBS should have been required to send GB a list of these customers within 7 days, with the receiving person and telephone no at each company. Thereafter RBS would start the programme, undertaking to start transferring funds within a further 2 weeks and to have completed the excercise within 6 weeks.
A further £1bn should be used to fund loans to take over credit card borrowing by offering customers 5 -6% loans. The remaining £30 bn would be used to prop up the bank but could be used for another lend out scheme which would be decided by HMG and RBS would be instructed accordingly.
Finally no bonuses at all would be paid to any member of the RBS group from today onwards and all salaries would be frozen at lower level to be agreed. As major shareholders (HMG) the above requirement should be taken as an instruction and if any RBS board member fails to agree then they should resign, paying RBS compensation for their part in the financial mismanagement which brought about the bank problems in the first place.
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