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Barclays v Cameron and Clegg

Robert Peston | 08:36 UK time, Friday, 30 April 2010

For banks that emerged in reasonable shape from the 2008 financial earthquake, 2010 looks set to be a return to a time of blissful profit.

Pre-tax profits for Barclays in the first three months of the year almost doubled on an underlying basis - and at £1.8bn may well be a record performance.

Believe it or not, Barclays says it can't be sure whether this is the best or second-best performance ever, because it hasn't been reporting on a quarterly all that long.

It's possible that in the boom or bubble year of 2007, it did a bit better - which some may say is a slightly ill augury, though I'm sure Barclays would insist that it isn't taking the kind of silly risks that all banks were taking in 2007.

There are two striking trends: like Lloyds, the rate at which loans and investments are going bad has been falling sharply. The charge for loans and investments going bad is down by almost a third to £1.5bn.

And the profits of its investment bank, Barcap, stand out, surging 47% to £1.5bn.

Later today, Barclays chairman Marcus Agius will tell the banks' annual meeting that Barclays is proof of the strength of the so-called universal banking model.

He'll in effect be saying that both David Cameron and Nick Clegg were wrong last night when in the prime-ministerial debate they called for banks that look after retail savings to be banned from engaging in so-called casino investment banking.

And by the way, Agius will also give succour to Gordon Brown - who defended big banks - in a second way, by saying that he fears the unilateral imposition of a new tax on banks would be damaging for the City and for the UK: the Lib Dems and the Tories, unlike Labour, would impose such a tax, irrespective of what other countries do.

Mr Brown hasn't had the best press in the past couple of days, and will doubtless embrace support from more-or-less any quarter. That said, and charming though Mr Agius is, "Big Banker backs Brown" is probably not a headline that would win many votes for Labour.

Which, in a way, is the nub of the matter.

Banks have been repairing their balance sheets and their profitability; but repairing their battered reputations is very much work in progress.

Central to that will be how Barclays and others manage the contentious element of bankers' pay and bonuses.

Big Barcap profits means big banker remuneration: on average, Barcap's 22,000 employees probably earned just under £70,000 for the past three months toil, which doesn't look too shabby (that's on the basis that Barcap again pays out 38% of its income in remuneration, including bonuses).

I would be staggered if Mr Agius doesn't again say that Barclays is committed to showing restraint in the way it rewards staff: he'll know of course that bankers' idea of restraint is not the same as everyone else's.

Comments

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  • Comment number 1.

    A profit figure like that is meaningless; there is no context with which to assess it.
    What was their turnover in that period?
    What was the split between divisions?

  • Comment number 2.

    I think that even i could repair my balance sheet if I was provide "money" at near 0% and made interest at +6%

    And of course bad debt is falling, most of it has been written off and banks are not lending to anyone other than AAA+ credit ratings.

    But guess what? Its all going togo bang again when the PIGS collapse or should I say PIGUK's?

  • Comment number 3.


    The profit that the big banks are enjoying has not reflected an improvement in loans to industry and mortgages

    for people looking for their first homes. Perhaps ..there is not enough PROFIT for the banks???

  • Comment number 4.

    Am I right in thinking that when the Bank of England was "easing quantitavely" this money was given to the main banks to redistribute? It doesn't seem like a great achievement to produce a profit when presented on a plate like that.

  • Comment number 5.

    Robert wrote:

    'And by the way, Agius will also give succour to Gordon Brown - who defended big banks - in a second way, by saying that he fears the unilateral imposition of a new tax on banks would be damaging for the City and for the UK: the Lib Dems and the Tories, unlike Labour, would impose such a tax, irrespective of what other countries do.'

    -----------------------------------

    That statement sounds like a subtle/coded threat to me!

    You hurt us...then we'll hurt the economy.

  • Comment number 6.

    ... and the other side of the double entry is...
    a) Government Debt Increase to fund this Profit - QE etc ?
    b) Non-Financial Corporate Profits down due to high Interest Charges paid to banks ?
    c) Household Wealth Down/ Consumer Debt up as we are hit by Higher Charges ?
    d) Foreign debt increase - they are not doing CDO's in Africa are they ?
    Given I can't see Barclay's funded new Factories being Built in the UK, "Investment Profits surging ahead" sounds like a pre-Credit Crunch headline, that really meant "Easy money from Florida Swamp deals available - Backed by UK Government Guarantees" - Their profits have to come from these 4 sources as we don't use NEFS - it's the law of Double entry Bookkeeping - what's the breakdown ?
    So a) we need to stop playing this silly game and start using NEFS - Net Export Financial Simulation
    b) Can you learn form what just happened and have your headline as :
    "Worrying figures from Barclays this morning as they reveal staggering profits from what they call Investments - Hold onto your wallet when these chickens come home to roost"

  • Comment number 7.

    The profits look like those of the bubble year 2007 because they *are* like those years. It is called asset price inflation, and unlike normal inflation, it brings extraordinary gains to those who speculate correctly on it. It is caused now - as then - by cheap money. The main difference is that then, money was cheap because low cost imports and the illusion of property wealth kept inflation in check. It is cheap now because the government is busy printing money, supposedly to stave off deflation (at -3% plus) - and to win an election.

  • Comment number 8.

    With all the bad debts being written off the balance sheets it looks why would the banks not make a profit? The money is now being lent at higher rates and less risk is being taken.
    Bonuses are more the politics of envy, it is just that they are so large to any one of a normal income. If you make your business so large profits, why no pay large bonuses?

    Overall when will the tax payers money or a bonus payment come in? Is this the little treat Gordon will have after the election to not have a tax rise?

  • Comment number 9.

    There will be strikes galore this summer as in Greece. We simply cannot have bankers paying themselves huge bonuses whilst joe public faces austerity packages the likes we have never seen before.
    If you were Irish and working for the govt would you be happy with your 15% pay cut whilst your country bailed out Greece. It is about to blow up. Hold onto your seats.

  • Comment number 10.

    "Pre-tax profits for Barclays in the first three months of the year almost doubled on an underlying basis - and at £1.8bn may well be a record performance"

    underlying basis? there is no consistant underlying basis to talk of, the world was nearly brought to its knees by the realisation that casino banking was based on a house of cards and as WOTW has made clear many times, the underlying basis is aactually manipulated environment of QE paid for by the taxpayer.

    It would be good though to have an open and full debate on why the "barclays model" guarantees no future bail out of banks, protects retail deposits and is best for the econony e.g in terms of lending protecting jobs.

  • Comment number 11.

    Golden ladders
    Golden troughs
    Golden tax evasion
    Golden peppa piggies
    Golden 'negative trading'
    Golden UK tax payer support

    Business as usual!

  • Comment number 12.

    Banks and 'Profit'

    Look, the accounting methods used by banks are complex and obscure even to the finance departments of banks - if a bank is big enough, does not have a cash flow crisis then they can report almost any figure they choose as a 'profit' or indeed a 'loss'.

    The Real Issue

    The real issue is the perversion of many nations economies for the sole benefit of the banks and the consequences for the other 99 percent of the nation concerned. This has got totally out of hand and is a demonstration of the absolute failure of capitalism and the market mechanism.

    Even bankers know that they pay (some of) their staff far too much, (see RBS today) but they are at a loss to see how to correct the situation. Just as politicians are at a loss as to how to properly regulate banks - for the same reason - The banks are outside the control of any nation state and there is not the slightest chance of a planet wide regulatory system that even slightly curbs the enormous monopoly power of the banks.

    This vicious circle has to be broken or the result will be complete economic collapse, but neither then banks nor the nation states can do it without (and I am very sorry to say this) 'exchange control' so that banks and nation states are once again aligned and then regulation can be made to work and the vicious circle broken. Perhaps the serious threat of exchange control will do the trick - but it has to be serious and the banks much be made to fear its imposition. (If anyone can suggest any other practical way I would like to hear it?)

  • Comment number 13.

    Yes....."Gordon Brown defends big banks"..... but goodness, how things have changed!

    What bizarre series of events have conspired to make him lose the plot in such a catastrophic way?

    If you took today's Gordon Brown back to his earlier years as a young Labour MP, setting out on his mission to 'represent ordinary hard working people', attacking the Conservatives at every turn for only representing the privileged in society, making his way as a committed socialist within the Labour party, and you told him that one day he would be the only party leader supporting some of the most brazen and anti-competitive cartels in the whole of UK big business history, who are responsible for such an enormous continuing transfer of wealth from the poor in society to the rich, and, not just this but, that the Conservatives and the Lib-Dems would be on the other side, he surely would be saying to himself.... no, no, no, that's completely impossible.

    How has it all gone so badly wrong?

    I think he's sold his soul.....

    He prefers to believe the few hundreds of his banker friends who tell him that they are absolutely critical to UK plc and we simply cannot do without them, rather than have confidence in the skills, the abilities and talents of the 50+ million people of the UK, whose interests he should be representing.

  • Comment number 14.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 15.

    We need to either hold on to ownership of the banks and make money for the tax payer OR get our money back and use it to setup a new government bank that gives people the option of a fairer system to use.

  • Comment number 16.

    No comments from WOTW today!

    Maybe he's out buying a new motorcycle crash helmet, body armour and a baseball bat in preparation for tomorrow!

    I don't suppose that arch socialist Gordon Brown will be seen with him at the demo though....hang on a minute...isn't May Day also known as International Workers' Day.
    https://en.wikipedia.org/wiki/May_Day

    Why then did 'socialist' Gordon rescue the whole capitalist system and saved the banks in the process? Why didn't he simply nationalise them all?

    It's all very strange indeed.

  • Comment number 17.

    The large profit made by Barclays is evidence that there is at the moment a severe shortage of money and credit, allowing banks to impose large margins on their lending. The persistent reports from businesses of the difficulty some have of getting credit and the high interest rates they are being charged is further evidence. This will cause the recovery to stall if the position does not change.

    Most commentators and politicians seem to assume that correction will be automatic as bad debts work themselves out of the system, but it is unlikely that banks will return to operating at the extremely low pre-crunch reserve ratios in the near future, if ever. Credit starvation is likely to persist.

    A full correction will probably only happen if there is a further substantial increase in the money supply to supplement credit and allow banks to build up the reserves they need. It alarming that because of the current hysteria over large public deficits, which are inevitable and necessary in a recession, governments are intent on cutting these as soon as possible. This of course will have entirely the wrong effect.

  • Comment number 18.

    In the leaders' debate last night, those of us watching saw Nick Clegg promise to ban bonuses for bankers in banks that make a loss. He promised to ban cash bonuses over £5000. He promised to ban bonuses for members of the banks' board. Why is this not being reported today? Why are you not talking about it, when you have been advocating an end to the culture of obscene rewards for taking crazy risks?

  • Comment number 19.

    Isnt it curious that poor old Barclays which has remained consistently profitable through the crisis thanks to its Lehmans purchase is valued more than 10% below ailing lloyds which has some way to go before it gets anywhere near barclays profitability or a return to dividends

  • Comment number 20.

    Yes Mr Peston? Please answer the question above by Christopher - Why have you chosen to ignore this as it is pretty crucial with a heading "Cameron Vs Clegg" dont you think?

  • Comment number 21.

    Hardly surprising. Even the fat, greedy incompetents running banks can make a profit when they have a licence to charge 6% above base rate for secured loans (when they deign to lend at all), apply rip-off charges, impose crippling arrangement fees and pay nothing to savers. Throughout the current economic crisis the Banks have closed businesses down, put UP the cost of borrowing, ignored the base rate except when it came to stealing from savers, blatantly profiteered and done precisely NOTHING to help the economy, despite massive taxpayer support. They're an absolute disgrace. Caledonian Comment

  • Comment number 22.

    Please can someone explain how the big Bonuses are paid and yet the dividends remain so low when Pension Funds are reliant on dividends and the Banks were always regarded as Income Stocks. Can this not be sorted at todays AGM?

  • Comment number 23.

    "Later today, Barclays chairman Marcus Agius will tell the banks' annual meeting that Barclays is proof of the strength of the so-called universal banking model."

    Let's remember this one folks - for these sorts of statements have a habit of coming back to haunt the owner.

    What Marcus doesn't realise (perhaps because he lives in a fantasy world) is that a few Sovereign defaults and Barclays will have it's begging bowl of for a Government bailout.

    This attitude of fantasy is backed up by Gordon Brown's revelation last night that a CEO of one of our banks came to him and told him "It's just a cashflow problem" - which it clearly wasn't.

    Are these the types of people who accept reality - or who place caution in front of Hubris? - Doesn't sound like it to me.

    All this guff spouted from people like Marcus really shows who is completely out of touch with reality and who won't face up to it until it's far too late.

    I mean it doesn't take a genius to work out that there is only one end game for Spain when their unemployment sits at 20% and their growth is not expected to rise above 1% for the next 5 years.

    ....but I'm sure markets, bankers and politicans will all be 'surprised' when it finally comes.

    Maybe it was my negativity which brought down Greece? - or is it more likely Greece was always doomed to fail and it was the inability of the markets, bankers and politicians to grasp reality......until of course it was too late.

  • Comment number 24.

    16. At 10:01am on 30 Apr 2010, DebtJuggler wrote:

    "No comments from WOTW today!"

    ...some of us had work to do...

    "Maybe he's out buying a new motorcycle crash helmet, body armour and a baseball bat in preparation for tomorrow!"

    Oh laugh it up - isn't this similar to the crew of the Titanic scoffing at detractors who dared suggest the ship was sinkable?

    "I don't suppose that arch socialist Gordon Brown will be seen with him at the demo though....hang on a minute...isn't May Day also known as International Workers' Day.
    https://en.wikipedia.org/wiki/May_Day

    Why then did 'socialist' Gordon rescue the whole capitalist system and saved the banks in the process? Why didn't he simply nationalise them all?
    It's all very strange indeed."

    It's such a shame that so many people use the word 'Socialist' without having a clue what it actually means - if they did they certainly wouldn't accuse Gordon Brown of being one.

    The demise of educational standards is shining through again.

  • Comment number 25.

    What proportion of this profit comes from changes to bad debt provision?
    Profits now for bonuses, but to be followed soon perhaps by sovereign debt provisions and further property asset problems from the ensuing "second" recession?

  • Comment number 26.

    14. At 09:43am on 30 Apr 2010, MarkConsultant wrote:

    "Robert,
    This is the third time I have asked you to disclose your bonus from the BBC.
    You work for a public organisation. Lets have some accountability and transparency.
    How much has your bonus & remuneration been for 1st Quarter over the last five years compared to this 'not too shaby £70,000' average per Barcap employee you mention?
    Lets see some honesty and itegrity."

    Well at least we can see what Robert 'produces' - whether you like it or not. However I can't see anything 'produced' by Barclays to warrant a £70k average bonus - in fact Barclays didn't produce a single thing - it merely exploited it from the production process - no better than a blackmailer or charlatan.

    Typical jealousy of Capitalism at work again.

    Maybe Robert deserves a better bonus than a BarCap employee - because I can't remember the BBC having the be bailed out by the middle east last year because of his inability to understand the world he works in (or did I miss that one?)

  • Comment number 27.

    Has anyone considered in the hive of brains they call the City - that the ease at which banks make profits and the deflating wages and rising unemployment might be the first signs of a hyperinflationry spiral?

    ....nah - they're too busy filling their pockets and slapping themselves on the back for their ability to make profit in a recession.

    Don't worry Capitalists, it won't be too long now......your worst fears will be realised.

  • Comment number 28.

    Yes, please answer my question. You have built your fame on talking about bankers' bulging, eye-watering bonuses, and yet ignore the one politician who has promised to do something about it.

    The public are angry about bankers bonuses. I am a scientist with 10 years experience, in medical research. I work on a salary of £30k (pre-tax), and am very thankful for that. If my research helps to discover a new medicine, I don't expect a bonus. I do my work because I love it, and because scientists are the one group who *truly* can make a positive different to the world. I am appalled by bonuses and bankers' high pay. I don't buy the argument that you need to pay this to attract the brightest and the best - it implies that we don't need the brightest and the best in any other profession. Also, I don't want to sound like I am not humble, but I feel that it is the scientists, engineers, mathematicians, inventors, etc. that are the brightest and the best - and we do what we do for the love of it - to make a difference - not because it pays well.

  • Comment number 29.

    > bankers' idea of restraint is not the same as everyone else's.

    They need their own country (Iceland?) where no-one but bankers live. And their own currency. There, they can pay each other what they like, but it'll cost them $1m to have a hair cut.

    It won't be a very good haircut, though, because another banker will have to do it.

  • Comment number 30.

    What is it that politicians (particularly Chancellors) do when they retire?

    And which of these three thinks they may be about to retire.

    Who would you be nice to?

  • Comment number 31.

    Only when the last tree has died, the last river has been poisoned and the last fish has been caught, will the white man realize that he cannot eat money.

  • Comment number 32.

    Well, it's good to know about any company, including banks, that contributes in tax and provides jobs in the UK, provides good service and makes a profit. Barclays and First Direct apparently do both and score highly.

    The biggest problems with certain banks/insurance companies, who purport to be British; take your premiums and your wages/salaries - yet all their call-centre and customer service operations are all abroad in countries who are exempt from UK Data Protection laws on your information?

    If you have insurance/or banking with a company WITH NO UK call centre - be very concerned for multiple reasons? In addition, if the CEOs and management of those banks/insurance can say THEY use non-UK call centres for their accounts we can assume the answer?

  • Comment number 33.

    29. At 11:33am on 30 Apr 2010, Jacques Cartier wrote:

    "They need their own country (Iceland?) where no-one but bankers live. And their own currency. There, they can pay each other what they like, but it'll cost them $1m to have a hair cut.

    It won't be a very good haircut, though, because another banker will have to do it. "

    Exxactly - lets put this 'wealth creation' argument to the test - if they are truly wealth creators then Iceland will quickly become the Economic centre of the universe.

    ....but strangely banks don't want to take us up on this offer.

  • Comment number 34.

    #24 writingsonthewall

    Calm down, calm down!...my #16 was all written with tongue firmly in cheek. I know they say sarcasm is the lowest form of wit.


    Another good article in the Telegraph today btw...

    Goldman Sachs: The real masters of the universe come crashing down to earth
    https://www.telegraph.co.uk/finance/newsbysector/banksandfinance/7655606/Goldman-Sachs-The-real-masters-of-the-universe-come-crashing-down-to-earth.html

  • Comment number 35.

    The whole argument for breaking up big banks is so flawed. Northern Rock, Alliance & Leicester and Bradford & Bingley were all small banks in the scheme of things. Northern Rock was nationalised, and the other two were absorbed by Santander. RBS began life as a small bank - remember how bizarre it was when they made their hostile bid for NatWest? RBS has always tried to bite off more than it can chew and looked what happened. To my mind, HSBC, Barclays and Santander are needed in this economy to provide jobs, credit and ultimately make profits. By all means bring in taxes on the bonuses and earnings etc., but breaking them up is not the way forward.

  • Comment number 36.

    The BBC have a full transcript of last night's debate here https://news.bbc.co.uk/1/hi/uk_politics/election_2010/8652884.stm

    Here is Nick Clegg's response to the question on bonuses;

    "Well, Ian, specifically on bonuses, I would say we need to do the following. Firstly, it sounds draconian, but I think it's now necessary, we should say no bonuses whatsoever for the directors of banks at board level. Why do I say that? Because I don't want people who are actually running those businesses, which they should be running for the long-term interests of the business and, indeed, for their clients, to be kind of susceptible to the temptations of the bonus incentive. By all means, pay them lots of money, give them a fancy membership of a golf club, but don't give them these bonuses. Then I would say absolutely no cash bonuses at all about 2,500. And finally, I don't think that banks which are making losses should be handing out multibillion pound bonuses at all, full stop. No bonuses in banks who make a loss. No bonuses for people at directly level, and no cash bonuses above 2,500. That's specific, it's tough, but it'll finally root out this outrageous abuse of bankers' bonuses."

  • Comment number 37.

    Sorry, Robert - casino banking is not 'so-called' at all?

    It's still happening - right now - and not just in Europe over the Euro?

    These casino banking traders travel in packs 24/7 - or hadn't you noticed?

    Most blogers certainly have and do still watch in horror and amazement at 'feral' gangs of currency speculators, in particular, who are wagging the dog of every government (across the planet) who won't stand up to traders' vapour and testosterone driven and over-powerful 'king of the world' mentality?

    Like any 'bully' in the global playground - call their bluff. Bullies will wither and die if governments, chancellors and the population who pay bribes in taxes, salaries, pensions to stop the bully hurting you? Enough is enough - people and governments own their life - back off speculators!!!

    Apparently

  • Comment number 38.

    So let me get this straight Barclays are doing great ???

    If so as of tomorrow we can remove all guarantees for depositors money, and for all other banks that are doing so supposedly well....

  • Comment number 39.

    My question about Robert Peston's bonus have been 'moderated', which means:

    "We reserve the right to fail messages which

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    Robert Peston continues to talk about the unjust way banker's get bonus.

    I have asked three times for his bonus deals/. Now it appears the BBC is deliberately removing these questions as he and they have something to hide.

  • Comment number 40.

    #28 Christopher

    Good post.

    I remember when Aberdeen University developed the world's first MRI machine and wanted to manufacture them in Scotland. The banks and others wouldn't help and it ended up being licenced to some Japanese outfit.

    We have to accept that financial institutions are visionless, run by people that don't understand markets and technologies and are completely unpatriotic.

    We should nationalise them all.

  • Comment number 41.

    It will be totally ironic that when the BBC shows highlights of the May Day demonstrations tomorrow that most people watching will probably believe/label the anti-capitalist demonstrators as just another bunch of anarchists.

    Whereas the real anarchists are more likely to be found in the boards of banks, finance houses and in government.

    If only they knew what was really going on.

    Free-market anarchy will impoverish us all.

  • Comment number 42.

    I am about as much interested in what bankers think as they seem to be interested in what I think. I have had enough of them blackmailing me and mine.

    The taxpaying public are not in a position to fund another bail out so the banks will just have to forget the vicarious lifestyle for something boring like counting real money and supporting value adding business rather than speculation and gambling.

    The separation between retail banking and the casinos is an essential element of public policy going forward. The taxpayer can guarantee the retail banks but not the casinos. This will satisfy both the taxpayers' need for a bank and the bankers need for living on the edge. If a banker or bankers then drop off the edge it will be their problem as opposed to our problem.

    I cannot understand how supposedly intelligent people like the bankers cannot understand this argument. It is so simple; so why does it have to be spelled out in large letters with dashes between the syllables?

  • Comment number 43.

    WOTW wrote
    "Maybe Robert deserves a better bonus than a BarCap employee - because I can't remember the BBC having the be bailed out by the middle east last year because of his inability to understand the world he works in (or did I miss that one?)"

    Hmm, perhaps that is because RP is paid by the BBC which is paid by the public? So in effect, he is bailed out constantly

    PS Barclays were not bailed out, they raised money from the middle east instead of going to the government - RBS could not raise the money aanywhere else, Barclays had a choice.

  • Comment number 44.

    # 35. At 12:21pm on 30 Apr 2010, supbilly wrote:

    > To my mind, HSBC, Barclays and Santander are needed in this economy
    > to provide jobs, credit and ultimately make profits. By all means bring
    > in taxes on the bonuses and earnings etc., but breaking them up is
    > not the way forward.

    Don't worry for a moment. When many small banks exist, instead of a few
    big ones, the many small banks will still provide more jobs, much credit and
    profits. But they won't afford big bonuses and they would have to exist
    outside London. We voters wouldn't worry, because they could go broke
    for all we care.

    So, no reason to allow them to coalesce like they have. Break them up. Now.

  • Comment number 45.

    Dear Mr Peston,

    Noticed today that Sunderland City Council are about to spend a disgraceful £133million on a bridge? Not just any bridge?

    No, in desperate times with high council tax; huge wages for CEOs running Councils across UK - and speculators shredding your pensions - Sunderland City Council want a work of art bridge?

    Design is crucial - just ask any innovative student on any design course?
    Structure is crucial - just ask any ex-military engineering personnel?

    But NO - City Councils live in a bubble, with an endless income stream, and it will never occur to them to think outside of their comfy 'planet'?

  • Comment number 46.

    34. At 12:14pm on 30 Apr 2010, DebtJuggler wrote:

    "#24 writingsonthewall

    Calm down, calm down!...my #16 was all written with tongue firmly in cheek. I know they say sarcasm is the lowest form of wit."


    I am so sorry - you know I can't detect sarcasm on this blog - I do apologise for mis-reading your comment.

    (p.s. that is only the 5th apology writingsonthewall has issued in his lifetime - you are honoured I'm sure!)

  • Comment number 47.

    I apologise if someone has got in before me but I just love this piece.

    https://news.bbc.co.uk/1/hi/business/8653169.stm

    You can see why he was put in his position.

    Breaking news: RBS Chairman later to comment on bears lavatorial habits and Pope's religious beliefs.

  • Comment number 48.

    What is most concerning about some paid financial commentators - is the huge difference between their blogs and what they say on screen?

    Is it remotely possible that financial correspondents actually stopped spreading doom and gloom - and actually acknowledged that the banks are not the only fruit available to all countries and economies that are being decimated by unelected gangs of speculators?

    Bullies take various forms - most readers may have experienced it growing up? Well, bankers/spot traders/hedge funds are no different? They are running your country's economy and your government? Why are your governments and chancellors not standing up to them and calling their bluff? Without your fear - bullies wither and die?



  • Comment number 49.

    # 42. At 1:25pm on 30 Apr 2010, stanilic wrote:

    > I cannot understand how supposedly intelligent people like the bankers
    > cannot understand this argument. It is so simple; so why does it have
    > to be spelled out in large letters with dashes between the syllables?

    Why be so kind? The Beatles summed up their intelligence thus:

    > On the corner is a banker with a motorcar
    > The little children laugh at him behind his back
    > And the banker never wears a mac
    > In the pouring rain... very strange

    They are still ridiculous, only vicious and greedy as well.
    It IS simple - they just have to safely handle our money (for a nominal fee)
    while we create the wealth. If they can't work the computers, hire some
    apprentices and replace them. Counting and button pushing should take
    about 5 minutes of training...

  • Comment number 50.

    All this user's posts have been removed.Why?

  • Comment number 51.

    #18 - it was a simple question, asked several hours ago now. Why aren't you reporting Nick Clegg's promise to ban bankers' bonuses? If David Cameron or Gordon Brown had made such a promise, then I believe that it would be all over the news, and that you would be discussing it in depth. Are you not reporting it because you don't think that the public care about bankers' bonuses? Or that you don't have enough time? Or is it because you think that banks that make losses should be allowed to pay bonuses? Do you think that banks should be able to pay their boards bonuses?

    More importantly, as the business editor, why are you not asking David Cameron or Gordon Brown if they agree with Nick Clegg's proposal? David Cameron and Gordon Brown talk tough on this issue, so will they also now follow Clegg's lead and propose a ban?

  • Comment number 52.

    43. At 1:30pm on 30 Apr 2010, yam yzf wrote:

    "Hmm, perhaps that is because RP is paid by the BBC which is paid by the public? So in effect, he is bailed out constantly"

    I don't think 'paid' is the same as 'bailed out' - and certainly Robert has 'use value' - can you show the 'use value' of your average BarCap employee?

    "PS Barclays were not bailed out, they raised money from the middle east instead of going to the government - RBS could not raise the money aanywhere else, Barclays had a choice."

    With spin that good you could play for Yorkshire. Let's save this argument for when Barclays come begging for a bailout - I have a good memory for these sorts of things...

  • Comment number 53.

    Retail banks and building societies income (your wages/savings and direct debits) and even the equity in your home have to be separated from:

    1) casino nutter investment/traders/currency traders.
    2) spot trading and profit of your wages before it reaches your account.
    3) governments and chancellors - who are elected by you and me, are being bullied, right now by the self-appointed kings of the world.
    4) how did this happen? By fraudulent and deliberate fake paper trading.
    5) you, me and your government has been shafted.
    6) traders are shafting OUR economies as we speak? Do you see a banker or currency trader homeless, poor or thrown out of their home (homes) NO!
    7) get real - certain banks are bullies - call their bluff and trade with what you have with each other and focus on your family?
    8) the so-called economic crisis is another fantasy created by bankers who created the wealth fantasy!!

  • Comment number 54.

    33. At 12:09pm on 30 Apr 2010, writingsonthewall wrote:
    29. At 11:33am on 30 Apr 2010, Jacques Cartier wrote:

    "They need their own country (Iceland?) where no-one but bankers live. And their own currency. There, they can pay each other what they like, but it'll cost them $1m to have a hair cut.

    It won't be a very good haircut, though, because another banker will have to do it. "

    Exxactly - lets put this 'wealth creation' argument to the test - if they are truly wealth creators then Iceland will quickly become the Economic centre of the universe.

    ....but strangely banks don't want to take us up on this offer.


    I can just imagine the scenes.
    The ship loaded with bankers docks.
    The Icelanders are there, waving and cheering as the bankers prepared to set foot on the land of their new country.

    Now is that flags the Icelanders are waving as the saviours arrive, or bags of flour, rotten vegetables, bags of volcanic ash as they prepare to defend their land, their homes, their remaining jobs, their battered economy....

  • Comment number 55.

    The profit will seem somewhat temporary if the governments who bailed out the banks have their own crisis. Look at the Greek bank shares, it looks much like October 08 in Athens.
    Barlcays profits are partially higher on the reduced right downs on bad debts, if the value of assets fall and insolvencies rise bang go the profits.

  • Comment number 56.

    16. At 10:01am on 30 Apr 2010, DebtJuggler
    'Why then did 'socialist' Gordon rescue the whole capitalist system and saved the banks in the process? Why didn't he simply nationalise them all?'

    We can leave that inevitable requirement to the next administration. Should the Conservatives get in it will provide a small degree of satisfaction. As Shameron has explicitly stated he would never enter the Euro they would likely end up having to do that to.

    If they get in that is. They won’t.

    We did George Osborne chicken out of question time? The more they start to look like they might win the more they will have to avoid the unanswerable question.

  • Comment number 57.

    There is not place on the sheets for the funds their depositors and retirement funds lost...not something they feel responsible for. Bailout made it all possible but that doesn't seem to factor in anywhere either. What a great business..loose other peoples money, government gives you more, charge interest on public funds given with no interest, make loans to countries that banks destroyed national economies. Not only are they too big to fail they are also to big to control. National economies should not be subject to extortion by bankers and regulations are subject to banks making governments loans...same as a gun to the head. In no other sector do the regulated exercise so much influence over the regulators.

  • Comment number 58.

    52. At 2:52pm on 30 Apr 2010, writingsonthewall
    'Let's save this argument for when Barclays come begging for a bailout'

    It is getting closer. An additional round of bailouts seems on the cards.

    The awesome prodigious talent at BarCap managed to significantly underperform expectations. How many companies that actually do something useful lose 5% of their value when profits go up 47%?

  • Comment number 59.

    50. At 2:45pm on 30 Apr 2010, Samanthav

    Yeah, but look on the brightside Samathav - these bankers are so dumb they're going to bring their own house down!

    They are getting cold, so the bankers decide to light a fire in the house - forgetting their house was made of straw.

  • Comment number 60.

    52. At 2:52pm on 30 Apr 2010, writingsonthewall wrote:
    "I don't think 'paid' is the same as 'bailed out' - and certainly Robert has 'use value' - can you show the 'use value' of your average BarCap employee?"

    Based on your own previous postings about what wealth is, RP produces nothing is therefore no different to a BarCap employee. Except that he is paid for by the public and they are not.

    So if the belief of many of the posters here is that a bailout is when the public pays, what is the difference?

  • Comment number 61.

    Barclays Chairman, Marcus Agius will tell the banks' annual meeting that Barclays is proof of the strength of the so-called universal banking model. And what does this mean: "Universal banking model”? Does it mean the incestuous marriage between investment banks and the other banks that look after our savings?
    Banks have been “repairing” their balance sheets and their “profitability”. So it becomes almost impossible for the average person to read a balance sheet and fathom the real loss or profitablity.
    Someone should ask Barclays: If it believes derivatives are proof of the strength of its "universal banking model".
    The world's largest market: derivatives dwarf the bond market AND THE REAL WORLD ECONOMY. The derivatives market is currently at around $600T. In contrast, the size of the worldwide bond market (total debt outstanding) as of June, 2009 was an estimated $83T.
    Interest rate derivatives, in turn, are by far the most popular type of derivative.
    The Bank for International Settlements estimates that the notional amount outstanding in June 2009 was $43T for OTC interest rate contracts (unregulated) and $342T for OTC interest rate swaps (also unregulated). According to the International Swaps and Derivatives Association, 80% of the world's top 500 companies as of April 2003 used interest rate derivatives to control their cash flows.
    If this doesn’t scare you, it scares me.
    The largest interest rate derivatives sellers are:
    - Barclays,
    - Deutsche Bank,
    - Goldman and
    - JP Morgan.
    Credit default swaps were largely responsible for bringing down Bear Stearns & AIG.
    Why am I scared?
    According to the Bank for International Settlements, the US interest rate swap market has nearly doubled in size in just 2 years. The reason this figure is so enormous is that there are several links in the chain from borrower to investor. A risky borrower may enter a swap with bank A, which then takes an offsetting swap position with bank B (earning a bit of the credit spread), and so on.
    Aside from the risk that any particular link in this chain might be weak, the US financial system has gone one step further: In order to hedge against the risk of defaults, banks frequently account for credit risk by entering “credit default swaps” with other banks or insurance companies. These swaps essentially act as insurance policies.
    The US financial system is precariously balanced. The mountain of debt in the US financial system - tied to short-term interest rates - is ultimately and perhaps somewhat inadvertently backed by the US government.
    Asian governments intent on holding their currencies down relative to the US dollar have purchased a great deal of US government debt. A reduction of demand for US short-term debt, either by foreign governments (particularly in the event that Asian governments decide to revalue their currencies) or by US investors, can (and will) cause a financial avalanche.
    The US is extremely dependent on short-term interest rates remaining LOW indefinitely. It cannot raise interest rates without…well…committing fiscal suicide.
    As interest rates begin to rise worldwide, losses in derivatives may end up bankrupting a wide range of institutions - including municipalities, state governments, major insurance companies, investment houses, commercial banks, universities…Defaults now beginning to occur in a number of European cities prefigure what may end up being the largest financial bubble ever to burst – a bubble that today amounts to more than $600T.
    Am I right to be scared about an interest rate derivatives?
    Well, the Wall Street Journal about the Federal Reserve: there are reasons to be concerned about the Fed’s paper-thin capital position. It has a more risky portfolio than it’s ever had before, including $1.25T in mortgage securities that could lose market value if
    - interest rates rise,
    - defaults climb or
    - if it has to sell them off quickly. (a little 4% loss would equal all of the Fed capital).
    Sooner or later, preferably MUCH sooner, someone has got to start questioning the existence of these deriviates. The situation cannot persist.
    David Cameron and Nick Clegg are absolutely right when they called for for banks that look after retail savings to be banned from engaging in so-called casino investment banking.
    As for Agius giving succour to Gordon Brown - who defended big banks - by saying that he fears the unilateral imposition of a new tax on banks would be damaging for the City and for the UK. Dear Gordon, whatever happened to your stance at the last G-20 re a Tobin Tax. Have you once again been misunderstood?

  • Comment number 62.

    Squarepeg wrote:
    "The awesome prodigious talent at BarCap managed to significantly underperform expectations. How many companies that actually do something useful lose 5% of their value when profits go up 47%?"

    Lots of them when they pay out rubbish dividends. Its the consequence of keeping all the money for big senior executive bonuses rather than thinking about the people who actually own the company.

  • Comment number 63.

    60. At 4:07pm on 30 Apr 2010, yam yzf wrote:

    "Based on your own previous postings about what wealth is, RP produces nothing is therefore no different to a BarCap employee. Except that he is paid for by the public and they are not.

    So if the belief of many of the posters here is that a bailout is when the public pays, what is the difference?"

    ok - I concede - Peston is currently as bad as the rest of them.....

    However he did provide some value at one point - he disclosed the Northern Rock situation to the public - preventing the 'usual situation' where the 'inside money' gets out first and leaves the little people to get burnt.

    In that case he 'protected wealth' - the wealth of the savers - who were able to get their money out - for which I am sure they are most grateful.

  • Comment number 64.

    It would appear the markets have 'spoken their mind' about the financial sector today.

    Welcome markets, nice of you to join us in the real world - got some catching up to do though don't you?

  • Comment number 65.

    Did I read this right ? There is a suggestion that this supports the argument that retail and commercial banking should not be split from Casino banking.

    Are you absolutely categorically, positively raving BONKERS ????????

  • Comment number 66.

    #35. supbilly wrote:
    "The whole argument for breaking up big banks is so flawed. Northern Rock, Alliance & Leicester and Bradford & Bingley were all small banks in the scheme of things."

    And you heard this from a certain Mr. Brown, don't you. Let's make it clear because they have the cheek to say it on TV in the hope that it might catch at some levels.

    Breaking up the banks means mainly separating the commercial side from the investment (I think I could rightly call it "casino") side (they have been allowed together relatively recently ('97?) and this crisis is largely a result of that action). This way the taxpayer could back the deposits (although it shouldn't be needed, given a reasonable fractional reserve system) while the speculators could go bust as they please.

    Actually I wouldn't mind knowing my deposit is with a reputable (big?) bank as long as they don't gamble with it. But as I said, they have to convince me that they hold a big enough fraction in tangible assets compare to what they loan.

  • Comment number 67.

    #61 BluesBerry - Excellent post, Excellent info - Thanks

  • Comment number 68.

    12. At 09:41am on 30 Apr 2010, John_from_Hendon wrote:
    Banks and 'Profit'

    Look, the accounting methods used by banks are complex and obscure even to the finance departments of banks - if a bank is big enough, does not have a cash flow crisis then they can report almost any figure they choose as a 'profit' or indeed a 'loss'.

    The Real Issue

    The real issue is the perversion of many nations economies for the sole benefit of the banks and the consequences for the other 99 percent of the nation concerned. This has got totally out of hand and is a demonstration of the absolute failure of capitalism and the market mechanism.

    This vicious circle has to be broken or the result will be complete economic collapse, but neither then banks nor the nation states can do it without (and I am very sorry to say this) 'exchange control' so that banks and nation states are once again aligned and then regulation can be made to work and the vicious circle broken. Perhaps the serious threat of exchange control will do the trick - but it has to be serious and the banks much be made to fear its imposition. (If anyone can suggest any other practical way I would like to hear it?)

    See www.legalforgery.com and a system of 100% registered money as a solution John. Government creates money, not private banks as a debt, as I have said many times on this blog, and others have too. Government created money has to be done carefully in line with economic growth, and this base money must not be allowed to be multiplied up further by the private banks through creating more loans, as they do at present, hence legal forgery. The 3 party leaders kept saying 'we need to get the banks to lend more' as if this is the only show in town. The banks cannot lend more now, because they over lent before, so there is a huge shortage of money, as there usually is with a debt based boom, bust, and fractional reserve banking system. If private business needs more money to expand, then why not have the government create the new money without interest.

  • Comment number 69.

    Brown, bankers, bonuses, bubbles... you name it. If it starts with a B, I think we do need to get rid of it as quickly as possible if there is to be a future!

  • Comment number 70.

    Am I appalled by the size of bonuses?
    Am I?
    Er, is this off the record?????

  • Comment number 71.

    Yes, yes, yes - separate the casino side of banking from the retail side of it. Let the poor know where they belong to, they got to pay a fee for a wise man to manage their money. Let the rich enjoy unfettered benefits of implementation of their superior wits! (If there is any banker reading this - a retail banker: here is my clandestine offer to elaborate some nice schemes to guarantee the funds of casino bank with a deposit pool of a retail one via insurance company - look at capital as a second integral of an insurance on a cash flow.)
    Suav

  • Comment number 72.

    robert, you know as well as i do that the banks are only profiting from yjr super-cheap money that is helping to reinflate the financial assets bubble. and as everyone's overleveraged balance sheet starts to look much more solvent again, of course economic activity is picking up again and borrow performance is on the mend.

    not that this is a bad thing. not at all. but in no way are the huge windfalls these banks are making on their fixed income divisions an argument against breaking up the universal banking model. these profits are just the flipside of the massive losses we all took previously when the last bubble burst.

    the real problem with universal banks is that when you combine the muscle of a large depositor-financed balance sheet with the profit opportunities of a successful capital markets business, you end up with a business model whose success is predicated on cranking up leverage across the entire economy.

    and while in the good times this does indeed generate massive profits for the handful of banks lucky enough to participate in the oligopoly of financial market knowledge, we all now know what it leads to in the bad times.

    watch these leading indicators for the current bubble to burst after the summer:
    - rising energy prices
    - fiscal tightening in usa and europe
    - monetary tightening in china
    - double-dip in us house prices (due to foreclosures backlog)

    if i was nick clegg, i wld be praying for labour to get annihilated, but for the tories to win enough seats not to need the lib dems to prop them up

  • Comment number 73.

    13. At 09:42am on 30 Apr 2010, Noideaatall wrote:

    "Yes....."Gordon Brown defends big banks"..... but goodness, how things have changed!"

    I'm inclined to agree - but what of the traditional alternative? Can anyone see the Tories even attempting to create the illusion that they are dealing with the banks?

    The Lib Dems seem to be prepared to have a go and Cable,seems to me, to be an infinitely safer pair of hands than young master Osborne.

  • Comment number 74.

    69. At 00:29am on 01 May 2010, markus_uk wrote:

    "Brown, bankers, bonuses, bubbles... you name it. If it starts with a B, I think we do need to get rid of it as quickly as possible if there is to be a future!"
    -----------------------------------------------------------------------

    A future that begins with a C? Yep that'll put the fear of God into the banking mafia (I can just see George chasing him mate Nat along the corridors of power with a tickling stick!)- no more boom and bust, course not, the markets can be relied upon to self regulate - who needs "nanny state" intervention?

    Typical simplistic Daily Mail post.

  • Comment number 75.

    #68. simondav wrote:

    On Money...

    The reason I opt for Exchange Control is that at least the market participants understand how to live with the system as they have done so before - changing the whole nature of money as you advocate would be a catastrophic shock to the system and I am not too keen on that. In short I can see how to get from where we are today to a system employing exchange control, but I have no idea at all on how to get to your advocated system starting from where we are today.

  • Comment number 76.

    Does anyone from the BBC or more importantly Robert Peston himself ever actually read all these posts and responses apart from the moderators? I have never once seen a reply or a reference to any comment on here made either in these have your say sections or in his blog from Robert Peston. Come on BBC lets see a more interactive service rather than here is what I think and oh look there is my pay check I am off home now...

    ================================================================

    To those of you clamouring for banks to lend more, yet in the same breath demanding that retail banking is removed from casino banking as now seems to be the favourite term on here. Where does this additional money come from that you want banks to lend to you and business? if they cannot generate significant profits from the markets? Are you suggesting they borrow 100% of the money to lend to you? hmm that business model worked so well for Northern Rock and Other American banks that business models collapsed as money markets dried up. So what does that leave? Oh yes YOUR deposits, savings, the money you earn. What happens then in a downturn and loans turn bad? who's money is lost.. yours! they can no longer trade there way out of those losses.

    The only answer is better regulation of the banks, forcing banks to keep an ever increasing amount of cash reserves against what they trade.

    Better regulation of the bond and derivative markets by regulators that understand what is being traded. This has to be done globally as well as unilaterally. Of course finance ministers are reluctant to meddle in the markets as they are reliant on the markets to finance government debt. Gordon Brown is as guilty of this as any of the others, possibly more so he has spent money as a country we DO NOT HAVE, to throw ever increasing amounts at an NHS we cannot afford, without checks and balances to make sure the money is spent prudently. The same with Education and then there is the military who are being pushed to punch far above the weight we are all, we are small island economy.

    To those that complain about manufacturing jobs going over sea's, well think back to British Leyland and the quality of there products and the great British workforce they had that would go on strike at the slightest excuse. Look at the bin men in Birmingham demanding HUGE pay for a menial task, now look at China and wages there.. Are you willing to pay £2500 for a TV made here, of mediocre quality or a TV from China for £250 of equal or possibly better quality.

    Yes we do need to realign our economy to some extent but lets not kid ourselves we can be a manufacturing superpower again like we were in the industrial revolution. We need to be leaders in innovation and technology, keeping ahead of other economies that can produce goods for a fraction of what it would cost us here to make it.

    We are in an Economic mess in the country there is no avoiding the reality of that, GB had years of economic stability and growth to prepare for the inevitable downturn that had to come, he did not, he carried on spending money we did not have, gambling on borrowing money from the markets to finance these huge public services we have in this country and assuming that the economy will grow at a rate way beyond what any economist believes is realistic. And Yet he says trust me? WHY! 13 years to prove we would no longer go down the road of boom and bust? and here we are again BUST!

    For years no one has believed liberal policies as they purely haven't added up, they still don't under closer inspection, liberal immigration policy is a farce and so is there economic policy yet they have had a 10% upswing popularity because of one good TV performance from there leader. Look at the Substance of there policies not the panto that was the leaders debate before you cast your vote.

  • Comment number 77.

    75. At 5:25pm on 01 May 2010, John_from_Hendon wrote:
    #68. simondav wrote:

    On Money...

    The reason I opt for Exchange Control is that at least the market participants understand how to live with the system as they have done so before - changing the whole nature of money as you advocate would be a catastrophic shock to the system and I am not too keen on that. In short I can see how to get from where we are today to a system employing exchange control, but I have no idea at all on how to get to your advocated system starting from where we are today.

    Thanks for reply John - The international dimension needs to be looked at. As far as the UK is concerned, all existing bank and building society deposits are registered at the Bank of England. Only the government can create new money, which is also registered at the Bank of England. Private banks can still lend this money, but it cannot be multiplied up throughout the banking system, as happens at present. Fractional reserve banking allows £100 to become more than £1000 as it is lent and deposited several times over throughout the banking system, this would not happen under this new system. It is similar for example to a £ 20 note which can only exist once, however many times it is lent out. Only 3% of money in existence now is cash, the rest is debt money created by banks. The aim is to stop the abuse where banks can create huge amounts of new money which is not matched by assets, production, real things, which is the main reason why a house which cost £ 4000 in 1979 costs £ 80,000 today. Have a good look at www.legalforgery.com or the money reform party website if you have not already done so.

  • Comment number 78.

    #77. simondav wrote:

    More on money..

    My main concern is that there is no way that banks can be subject to any form of control unless they are subject to enforceable legal conditions of trading. Now since they is no prospect within the next thousand years (I exaggerate!) of an earth-wide enforceable legislative framework it is the height of crass stupidity to propose such a system as a pre-requisite before creating banking legislation to do so is a craven piece of stupidity - with its only beneficiaries being the banks. The only actual way to control or regulate banks is to align control to Nation states (or perhaps federal or quasi federal groupings of such states) and impede and control trans-border money flows ensuring that all such money flows are aligned rigidity with trade.

    There is absolutely no value in first 'seeking' international agreement - it will not happen and even if it does the banks will circumvent it with trivial ease as it will never encompass all Nations. Hence there must be exchange control as without it the banks will continue to loot the people - the have already seen that Nations will not let Banks go bust so they are free to do anything the please and acquire as much wealth as they can count.

  • Comment number 79.

    If I may wedge into your chat JfH and simondav?
    There is another way of letting the money problem get solved. Instead of seeking reinforcement of National State (or regional, as you, JfH say) we might apply a "too soft to hit" trick. Let us allow banks to do even more. Let them be even more in control of all the power levers. They are highly intelligent people lacking maybe a bit in perspective. When faced with ultimate responsibility for own survival they will wake up to basic necessities. Defence will probably appear first on their mind. Then they will realise that defence is possible only in a society on some level of organization, culture and broadly understood health. Every regime that is holding power long enough gets more and more civilized. It just looses power otherwise. If they don't want to expose themselves as real proprietors of the Globe, don't push them too hard, but just let them see that there is no other force to fix the things for them. Eventually, just to survive they'd be forced to pick up the slack.

  • Comment number 80.

    #79. Suav wrote:

    "Let them (the Banks) be even more in control of all the power levers. They are highly intelligent people"

    In the real World they have been told that they are 'too big to fail' - they thought this before but now they have been told this. They must be disabused of this misapprehension. (Hence my threat of exchange control) They must be forced into an understanding that the are not above the people, but servants of the people.

    Secondly I really do question your statement that they are intelligent people - almost any fool can run a monopoly created by regulators to favour the incumbents - it does not require intelligence except in the way that gangsters have intelligence. If they were so intelligent we would not be in this mess!

  • Comment number 81.

    #79. Suav wrote:
    >>> "Let us allow banks to do even more. Let them be even more in control of all the power levers."

    You assume that if they are "intelligent" (questionable) they also have morals. What make you so sure they will not bring back Stone Age style slavery?

    OK, we don't expect business to be ethical but this is exactly why their power must be restricted and not increased.

    Having said that, I would accept a less restrictive system as long as they gamble their own money. This basically means separation of the commercial and investment activity.

  • Comment number 82.

    27./ WOTW

    YES - dooh..! why else do you think the gold price has been going up?
    Paulson has been buying gold and gold miners for ages, as have a number of others.

    The only logical conclusion of the fiscal mess is dedasement of fiat currencines, via a spot of ccompetitive currencies devaluation first.

    https://seekingalpha.com/article/138557-what-s-john-paulson-buying-now-hint-think-gold

    What makes my blood boil here is that the real mess in the UK is due to the continued fiscal deficits run byb G.Brown - the bank bailout is a sideshow, politically appropriated as a diversion from the real crime.

    At least we as a nation have a large gold holding..oh. hang on. yes he sold it at a third of its current price. The new incoming governement (whichever colour) should impeach those responsible and make them personally laible. I hear the former PM is worth a bob or two now??
















  • Comment number 83.

    #76: I don't know of any UK news/current affairs blog where the reporter responds to the comments. The whole experience reminds me of the cross-country runs we endured at school - a whole bunch of people sent off huffing and puffing and going round in circles, thus freeing those at the top (teachers then) for something more productive (drinking tea and smoking in the staff room). However, it must be said that the experience of submitting comments to these blogs (ie spending time and effort to make a well-argued case, to then see it disappear into a black hole) is pretty good training for trying to find a job in the UK.

  • Comment number 84.

    Cameron is just all talk. What the Tories started/implemented in 1986, (via Big Bang!) the Fabulous elite will NOT allow him to undo in 2011 or 2012 or ever!

    I presume Clegg is saying this, because Vince Cable is telling him to. And Gordon Brown simply "poured petrol on flames!"

    Agius, "He'll in effect be saying that both David Cameron and Nick Clegg were wrong last night when in the prime-ministerial debate they called for banks that look after retail savings to be banned from engaging in so-called casino investment banking." Agius Can say what he likes, but any politician who fails to place the responsibility back onto the banks for their own moral hazard is a fool and same could also be said for people who elect him!

    In addition as Barclays is so heavily involved in casino banking anyone saving more than £50K, with that bank, must be living on a different planet. And anyone saving less is placing an awful lot of trust in the Depositors Protection Scheme definitely coming to their aid. You might have it in writing that you're safe next time round, but it isn't going to be worth diddly if several banks have gone over the proverbial cliff again. Still it's your funeral!

  • Comment number 85.

    Suav 79

    `Let them be even more in control of all the power levers. They are highly intelligent people lacking maybe a bit in perspective. When faced with ultimate responsibility for own survival they will wake up to basic necessities.'

    I do hope you are being ironic.

    The one thing that puzzles me about this sort of argument is that it always involves the obviously incompetent learning on the job as they go along. I have seen this absurd argument made in business so that director's `learn from their mistakes'.

    This is a ludicrous point of view in that an individual deemed suitable of holding the top-most job should be sufficiently experienced to recognise a potential error and prevent it from happening. They are not there to learn but to lead.

    I am afraid that we have fallen into a culture in which certain supposedly gifted individuals are allowed to exercise their egos without any responsibility. For example, lets take this young chap Tourre at Goldman Sachs who at 31 is now up before the Senate for creating a win-win scenario for his bank out of the sub-prime mortgage crisis. I have no doubt that he is clever but I question his intelligence. I also question the intelligence of his employer who put what must have been a 28 year old at the time in charge of such a project. Is it any wonder that the whole thing has now gone seriously bad for the bank? This is not intelligence it is immaturity and stupidity.

    I have said before there is a clear difference between being clever and being intelligent. The intelligent see the broader picture whilst the clever just play the game.

    Bankers might be clever but as I point out above they seem unable to understand simple realities. I have time for the sick, the deficient, the insane, the uneducated and the incapable as they are all part of life's rich tapestry. However, I have nothing but contempt for those who refuse to understand the obvious.

  • Comment number 86.

    85 Stanilic
    Agree with your comments whole heartedly, we have developed a society were the young "qualified graduates" get dropped into jobs were they are completely out of there depth. The emphasis has been on qualifications and the university professors have fed this argument to the masses.
    What we have now is students who spend 3-4yrs at university.
    These young green horns are basically over confident and bordering on being dangerous to any business.The bottom line is they are messing the whole economy up with there bold over confident actions.
    They do not seem to see the bigger picture at all , e.g. the interactions between world economies, the fact a consumer needs to be a worker first!
    They just focus on there own business operation and how they can reduce costs, driven no doubt by a similar bonus culture to the banks.
    You cannot blame them the system created the culture of go to university and you will land a top job. Totally disregarding the fact that you may not have the maturity or the in depth experience to make the right calls on major business decisions.
    Your right to split being clever from being intelligent, may I also add market awareness and risk averse as the major qualities of a good leader. Ask yourself this , if you were hiring a senior manager would you go for the well qualified highly over confident individual or the more older less qualified but very risk aware individual to run your operation?
    Over confidence and down right arrogance nearly brought the world to its knees and the education system has played a part in this mess.
    Remember the economics professors that taught this leveraging theory and the students that blindly followed what they were taught.
    Nobody seems to think things through for themselves these days, its spoon fed and if its taught at university its got to work. Sorry but thats wrong!, theories are just that theories think things through for yourself.

  • Comment number 87.

    From the NYtimes:
    The first domino is Greece. It owes nearly $10 billion to Portuguese banks, and with Portugal already falling two notches in S. & P.’s ratings and facing higher borrowing costs, a default by Greece would be a staggering blow. Portugal, in turn, owes $86 billion to banks in Spain; Spain’s debt was downgraded one notch last week.

    Ireland is heavily indebted to Germany and Britain. The exposure of German banks to Spanish debt totals $238 billion, according to the Bank for International Settlements, while French banks hold another $220 billion. And Italy, whose finances are perennially shaky, is owed $31 billion by Spain and owes France $511 billion, or nearly 20 percent of the French gross domestic product.

    Bonuses all round then - the crisis is over.

  • Comment number 88.

    House of cards, house of cards.
    Banks created consumer debt period, the currency/debt swaps culture just pushed the debt into somebody else's court. The trading of currency swaps and mortgages packaged as investments has to stop. Its this that makes the toxic debt invisible, the endless transactions that push the hot potato round like a football.
    The knock on effect of just one country failing is horrendous, thats why they are all pouring cash into the system (by printing money).
    The Irish situation were you have thousands of homes built but standing empty is a financial and political scandal. Now their is talk of demolishing brand new houses!Over supply could drive house prices down so they demolish them even when we have thousands of people homeless!

  • Comment number 89.

    86 KeithRodgers

    But from where did this culture of go to university and you will land a good job come from? When did it start?

    I graduated in 1970 and landed a sequence of lousy jobs. However, I never forgot that my education taught me to be objective. This has brought me into countless conflicts with managers who proudly possess their own agendas. In turn it has also made me a rather frightening figure to senior management who fear my scorn.

    In many ways this is a microcosm of the prevailing culture that the collective has no value. I can recall my earliest experiences of The City which I particularly value as the men with whom I dealt were all survivors of the Great Depression and the destruction that came after. They were horrified at the behaviour of the asset strippers Slater-Walker who boosted their profits by selling off the assets of any business they had taken over. Such tut-tutting and shaking of heads you never saw so much. Yet the one thing they instilled in me was that you treated market sentiment with respect for fear of unbalancing the wider economy.

    At the time I saw such conservatism as boring old hat but had to accept that it was responsible. It recognised that there was a wider interest than your own priorities. Yet this caution was being subverted even then by clever people devoted to the short-term. The old way was never a case of write your own cheque, invent your own deal and screw everyone else for the sake of you own bottom line! Now it is, but when did it all change?

    Some point to the market reforms of Thatcher which are a factor but the vulgar values existed before then. One could also see them at work even in trade union actions of the day as the greater good was subordinated to alleviating the interests of smaller groups. My own direct experience of the unions was that they sought to prevent unemployment - as sound a value as those old boys in the City - but not all were that considerate.

    The Britain I see is one of a shrinking industrial landscape. It has steadily grown worse over many years and is the consequence of more than the current recession (slump). No government has done anything to try and reverse this trend since Jim Callaghan although Hesseltine, for all my dislike for the man, did at least attempt it in the early to mid-Nineties. I have for a long time been unable to equate the world with which I am familiar with the world I see in politics and the media. It is all quite alien.

    I hope this election and the economic circumstances in which we now find ourselves; an environment in which there is no money - a reality I have feared for the last thirty or more years - will lead to lasting economic change. However, first we have to get rid of the spivs in our society. They are not just in the banks but also the apparat of the state and in a not inconsiderable number of our industrial companies as well. Perhaps we should just ask who is doing well and on receipt of the affirmative, sack them on the spot.

    Before we can reform our economy we must first reform our culture!

  • Comment number 90.

    Well I for one am pleased that the dividend this quarter is a mighty 1p a share!

  • Comment number 91.

    Don't spend it all at once, my good man.

  • Comment number 92.



    The nub of the matter is simple: Glegg and Cameron want change for us.

    Yep, that's all I'll have left in my pocket if either of them get in.

  • Comment number 93.

    Think short-term, make a fast buck, don't care who gets hurt. Except now, it's UKgov and UK tax payer, and most of all, UK badly off who desperately want some cash fast.

    If it hurts the world of finance short term, too bad. If they run away and we suffer a little in the medium term, well the rest of us need help now.

    Long term, finance will leave these shores anyway to get closer to whatever it is that they actually finance. And, are we not better off with an economy dominated by something more productive.

    As for who wins the election, unless Clegg and Cable can pull the strings, it doesn't matter. The track records of the others are rubbish.

  • Comment number 94.

    The Goldman Sachs investigation may be the opening of a big can of worms. It is hard to believe that not a single bank could tell that the empty box financing scheme that they all bought into wouldn't work. Supposedly very smart people..at least they justify big bonuses by saying how smart they are. Don't be surprised if more comes out about a collusion of the banks....not sure that any governments have the guts to presue this. It really won't matter since no one is going to get their money back but maybe some regulations will be passed and fees made reasonable so nations and taxpayers aren't strapped paying interest to the banks that caused it all.

  • Comment number 95.

    I for one am not surprised,at the risk of sounding like a broken record,i had already stressed the fact that the panic at the crash was without foundation and unnecessary because the banks and the economy would recover(check my older posts)on this blog and yomi11 https://www.yomi11.com/blog.htm a blog about everything and anything

  • Comment number 96.

    #94 I agree completely

    I've heard the term "Cockroach Theory" used to describe said can of worms - where you see one Cockroach (in this case Goldman Sachs) there are probably at least another 100 underneath the floorboards.

  • Comment number 97.

    Agius says "...is proof of the strength of the so-called universal banking model".

    Using the same yardstick of obscene profit does that mean a good robbery would engender an equal "proof of the strength of the so-called universal criminal model"?

  • Comment number 98.

    So how did they justify allocating only £300m of profit to dividend payments this year but £2.3bn to bonus payments? Are the Instituitional Investors completely spineless?

    As a former active participant it's pretty clear to me that the LSE needs re-forming. Private Investors really should not be led to beleive that they are investing on equal terms with large II's. They have little influence in most companies and in one as large and arrogant as Barclays they have absolutely zero. Large shareholders should be somehow made to treat their investments as long term (perhaps by forcing large holdings to be held for a certain amount of time). Perhaps they will then be more inclined to hold the rogue boards of what are effectively goverment licensed money printers to account.

  • Comment number 99.

    #85 stanilic wrote:

    'For example, lets take this young chap Tourre at Goldman Sachs who at 31 is now up before the Senate for creating a win-win scenario for his bank out of the sub-prime mortgage crisis. I have no doubt that he is clever but I question his intelligence.'

    ----------------------

    I think you meant to say...

    I have no doubt that he is clever but I question his WISDOM.

    Wisdom usually tends to only be developed through age and life experiences.

    In fact, I read somewhere recently, that Goldman actively promotes you men to the most senior positions within the bank in order to maximise profit taking. The older men i.e. 40+ are actively encouraged to leave the bank to attain key positions within the US Treasury etc. and other key Govt places.

    Blankfein is the responsible one.

  • Comment number 100.

    O.K., someone has to open the can of worms so here it is: The main BBC HYS is remarkably silent on this morning's news about Messrs Balls and Hain plea to its supporters to vote tactically on Thursday.
    Knowing that your Party's ineptitude and cavalier stewardship of our banking system were the main causes of our present economic crisis would have probably driven many Labour robots to stay at home. But this crie de coeur from Mr. Brown's henchmen could easily reverse that trend - even though neither proponent spelled out that both the Conservative and LibDem manifesto's contain plans to bring UK banking back to heel under the control of the Bank of England and tax their profits heavily!
    Perhaps if they knew of this blatant attempt to support Barclays and others in the retention of limited lending to business, high charges and extotionate interest rates on personal banking they might still stay at home? Over to you, Robert.

 

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