So what is more important democracy or making the "Markets" happy?
10 February 2012, 09:50 PM
#61
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What is my ethical POV - I am usually accused of not having one 
Must be spending too much time with bankers!!
Medium term I am sure no-one really knows what the consequences would have been either way. But there are is enough history of bank runs to know that when 20-25% of your retail banking disappears overnight there will be a major discontinuity.
People cannot get cash from their banks to pay their food/bills/mortgages. Not just one or two, probably in the region of 8-12m. This rapidly leads to civil disobedience as queues outside banks from customers seeking to encash their savings (impossible at the banks that have gone bust and within 24 hours also impossible at all banks)
Business of all sizes cannot pay their staff - whether their staff are with the affected banks or not. This will also suffer contagion as sound banks also suffer a run.
And that is without considering the much larger impact in the wholesale, commercial and investment banking sector.
Foreign exchange is squeezed, import and export severly impacted due to contagion.
The primary driver of decisions may well have been fear - without hindsight and faced with this scenario what is a sensible decision?
Must be spending too much time with bankers!!
Medium term I am sure no-one really knows what the consequences would have been either way. But there are is enough history of bank runs to know that when 20-25% of your retail banking disappears overnight there will be a major discontinuity.
People cannot get cash from their banks to pay their food/bills/mortgages. Not just one or two, probably in the region of 8-12m. This rapidly leads to civil disobedience as queues outside banks from customers seeking to encash their savings (impossible at the banks that have gone bust and within 24 hours also impossible at all banks)
Business of all sizes cannot pay their staff - whether their staff are with the affected banks or not. This will also suffer contagion as sound banks also suffer a run.
And that is without considering the much larger impact in the wholesale, commercial and investment banking sector.
Foreign exchange is squeezed, import and export severly impacted due to contagion.
The primary driver of decisions may well have been fear - without hindsight and faced with this scenario what is a sensible decision?
10 February 2012, 09:53 PM
#62
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That is half the problem, you have a merger of economic and political forces. If the state is able to exploit the banks economic force, the banks are able to exploit the states political force (well force itself), and hey presto we have the state taking peoples money and giving it to the banks.
It's a huge conflict of interests potentially.
It's a huge conflict of interests potentially.
10 February 2012, 10:01 PM
#64
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with motor execs earning billions and billions at the same time
and adding insult to injury, flying to washington in private jets to ask for a bailout
and then bailed out by the US tax payer lock stock and barrel
no wonder people in the US seem confused
Last edited by hodgy0_2; 10 February 2012 at 10:06 PM.
10 February 2012, 10:05 PM
#65
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What is my ethical POV - I am usually accused of not having one
Must be spending too much time with bankers!!
Medium term I am sure no-one really knows what the consequences would have been either way. But there are is enough history of bank runs to know that when 20-25% of your retail banking disappears overnight there will be a major discontinuity.
People cannot get cash from their banks to pay their food/bills/mortgages. Not just one or two, probably in the region of 8-12m. This rapidly leads to civil disobedience as queues outside banks from customers seeking to encash their savings (impossible at the banks that have gone bust and within 24 hours also impossible at all banks)
Business of all sizes cannot pay their staff - whether their staff are with the affected banks or not. This will also suffer contagion as sound banks also suffer a run.
And that is without considering the much larger impact in the wholesale, commercial and investment banking sector.
Foreign exchange is squeezed, import and export severly impacted due to contagion.
The primary driver of decisions may well have been fear - without hindsight and faced with this scenario what is a sensible decision?
Must be spending too much time with bankers!!
Medium term I am sure no-one really knows what the consequences would have been either way. But there are is enough history of bank runs to know that when 20-25% of your retail banking disappears overnight there will be a major discontinuity.
People cannot get cash from their banks to pay their food/bills/mortgages. Not just one or two, probably in the region of 8-12m. This rapidly leads to civil disobedience as queues outside banks from customers seeking to encash their savings (impossible at the banks that have gone bust and within 24 hours also impossible at all banks)
Business of all sizes cannot pay their staff - whether their staff are with the affected banks or not. This will also suffer contagion as sound banks also suffer a run.
And that is without considering the much larger impact in the wholesale, commercial and investment banking sector.
Foreign exchange is squeezed, import and export severly impacted due to contagion.
The primary driver of decisions may well have been fear - without hindsight and faced with this scenario what is a sensible decision?
10 February 2012, 10:13 PM
#66
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brilliant, just walked into the TV room to say goodnight to my daughter
and Trading Places is on -- how prescient
roll on the status quo
and I'm off skiing, with my familly in Italy tomorrow, happy days
and Trading Places is on -- how prescient
roll on the status quo
and I'm off skiing, with my familly in Italy tomorrow, happy days
12 February 2012, 06:35 PM
#67
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Thanks for that, Allan. With regards to your opinion that central banking institutions should be gradually removed from state control and placed in to private hands, how would you ensure that the Competition Commission and the Law and the regulators remain uncorrupted. In other words, even with central banks, private banks managed to became a law unto themselves (they even managed to slot an objectivist in at the top of the pyramid just to make doubly sure there were no obstacles). So, who's to watch the watchmen?
Then you have to think about how central banks and subsequent changes to the system (for the worse - by corrupting capitalism) came about. It wasn't some sinister plot by banks to take control and get their way (even though they may have lobbied for less regulation); it was politicians trying to please without considering all the consequences of their actions. The banks' current influence was not the result of a conspiracy, it's just a fortunate (for them) byproduct of something else.
If we're to be realistic about it, there's very little chance of any system remaining uncorrupted and people not doing stupid things; that's obviously human nature. My main point was just that capitalism and the market wasn't the problem and that it's a good idea to defend it from the misguided champions of collectivism, which I'll do till the cows come home. As far as I'm concerned they have no understanding of cause and effect, and because of that, ignorantly lead us into chains. When the sources of the problem are clear, one doesn't want to give them more power. I'd much rather, from the point of view of philosophy as much as anything else, that the people making up the market were in charge of their own destiny. They are given the right to look after each others' affairs by merit rather than the state arbitrarily choosing one person or a group to plan for all. Apart from the latter being morally unacceptable when reason deduces we are all similar human beings with no natural right to authority, it's also much more prudent and less likely to result in one grand mistake/crisis. All in my opinion.
Of course there will be the Rockefellers of the world, but at least they'd be there by some kind of merit; although dealing with one off problems like that as they come along would hardly do any real damage to the grounding of capitalism. Oops... there we go: corrupt already.
Last edited by GlesgaKiss; 12 February 2012 at 06:36 PM.
12 February 2012, 08:45 PM
#68
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I see things from a different angle when it comes to that question. Private banks might have become a law unto themselves, but going back to my earlier point, is that because of the situation set up by the state: the removal of the chance of failure? It's easy to imagine how a banking system could run out of control with the knowledge that Mr Greenspan or the treasury will come to the rescue when things go wrong. Why bother properly considering risk? There is no risk, at least not in the ultimate sense.
Then you have to think about how central banks and subsequent changes to the system (for the worse - by corrupting capitalism) came about. It wasn't some sinister plot by banks to take control and get their way (even though they may have lobbied for less regulation); it was politicians trying to please without considering all the consequences of their actions. The banks' current influence was not the result of a conspiracy, it's just a fortunate (for them) byproduct of something else.
If we're to be realistic about it, there's very little chance of any system remaining uncorrupted and people not doing stupid things; that's obviously human nature. My main point was just that capitalism and the market wasn't the problem and that it's a good idea to defend it from the misguided champions of collectivism, which I'll do till the cows come home. As far as I'm concerned they have no understanding of cause and effect, and because of that, ignorantly lead us into chains. When the sources of the problem are clear, one doesn't want to give them more power. I'd much rather, from the point of view of philosophy as much as anything else, that the people making up the market were in charge of their own destiny. They are given the right to look after each others' affairs by merit rather than the state arbitrarily choosing one person or a group to plan for all. Apart from the latter being morally unacceptable when reason deduces we are all similar human beings with no natural right to authority, it's also much more prudent and less likely to result in one grand mistake/crisis. All in my opinion.
Of course there will be the Rockefellers of the world, but at least they'd be there by some kind of merit; although dealing with one off problems like that as they come along would hardly do any real damage to the grounding of capitalism. Oops... there we go: corrupt already.
Then you have to think about how central banks and subsequent changes to the system (for the worse - by corrupting capitalism) came about. It wasn't some sinister plot by banks to take control and get their way (even though they may have lobbied for less regulation); it was politicians trying to please without considering all the consequences of their actions. The banks' current influence was not the result of a conspiracy, it's just a fortunate (for them) byproduct of something else.
If we're to be realistic about it, there's very little chance of any system remaining uncorrupted and people not doing stupid things; that's obviously human nature. My main point was just that capitalism and the market wasn't the problem and that it's a good idea to defend it from the misguided champions of collectivism, which I'll do till the cows come home. As far as I'm concerned they have no understanding of cause and effect, and because of that, ignorantly lead us into chains. When the sources of the problem are clear, one doesn't want to give them more power. I'd much rather, from the point of view of philosophy as much as anything else, that the people making up the market were in charge of their own destiny. They are given the right to look after each others' affairs by merit rather than the state arbitrarily choosing one person or a group to plan for all. Apart from the latter being morally unacceptable when reason deduces we are all similar human beings with no natural right to authority, it's also much more prudent and less likely to result in one grand mistake/crisis. All in my opinion.
Of course there will be the Rockefellers of the world, but at least they'd be there by some kind of merit; although dealing with one off problems like that as they come along would hardly do any real damage to the grounding of capitalism. Oops... there we go: corrupt already.
12 February 2012, 09:48 PM
#69
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In the style of James Bond villain world domination? I don't think I would be cool with that, no. That's something to think on.
Last edited by GlesgaKiss; 12 February 2012 at 09:50 PM.
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