The government and the banks.
05 November 2009, 04:59 PM
#1
The government and the banks.
Is it just me, or can anyone else see a difference of approach, even a completely different philosphy here?
On the one hand, we have Darling the Wrecker, and Sh*t Broon pumping BILLIONS into the banks in the hope that they will start lending again and kick start the economy.
On the other hand, we have the banks, who are holding on to every penny, lending at low rates to EACH OTHER, but at stupid rates to us, if at all, and advertising for people to "Save, save, save!!!", at every turn end.
They seem to be at entirely cross purposes, so WHY does Lying Labour keep giving them Billions with, apparently, no strings attached?
On the one hand, we have Darling the Wrecker, and Sh*t Broon pumping BILLIONS into the banks in the hope that they will start lending again and kick start the economy.
On the other hand, we have the banks, who are holding on to every penny, lending at low rates to EACH OTHER, but at stupid rates to us, if at all, and advertising for people to "Save, save, save!!!", at every turn end.
They seem to be at entirely cross purposes, so WHY does Lying Labour keep giving them Billions with, apparently, no strings attached?
05 November 2009, 06:00 PM
#2
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What are you talking about?
The banks are offering very good saving rates to generate capital. Fair enough they need to grow it but they are offering tremendous returns in the current ultra-low interest rate environment.
At present Wrecker and Broon are only pumping money into one bank to stop hundreds of billions of loans collapsing. If those loans collapsed then you would see a genuine ****storm compared to the events of the last year.
And finally, although it is not fashionable to report, the High Street banks in the UK are pretty much all lending more than they did a year ago.
The lending criteria are tougher (they were very lax), interest rates are higher because of more risk in the loan book, but they are lending.
The main economic issue is that other sources of capital have upsticks and gone home and our banks are not large enough to bridge that gap no matter how much money the Government pump in.
The real question is, why do the British people believe they can run their own finances, and therefore the economy of the nation on DEBT!!
If you have to borrow to buy it you can't afford it.
The banks are offering very good saving rates to generate capital. Fair enough they need to grow it but they are offering tremendous returns in the current ultra-low interest rate environment.
At present Wrecker and Broon are only pumping money into one bank to stop hundreds of billions of loans collapsing. If those loans collapsed then you would see a genuine ****storm compared to the events of the last year.
And finally, although it is not fashionable to report, the High Street banks in the UK are pretty much all lending more than they did a year ago.
The lending criteria are tougher (they were very lax), interest rates are higher because of more risk in the loan book, but they are lending.
The main economic issue is that other sources of capital have upsticks and gone home and our banks are not large enough to bridge that gap no matter how much money the Government pump in.
The real question is, why do the British people believe they can run their own finances, and therefore the economy of the nation on DEBT!!
If you have to borrow to buy it you can't afford it.
05 November 2009, 09:15 PM
#3
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I have a lot of sympathy for this view – but I would just like to point out that debt per se is not a bad thing
It is how it is used – debt is a very effective financial tool (ask the Glazer’s – the Manchester United buyout was a genius use of debt and I bet they used a fraction of their own cash)
Debt for investment is fine, debt to spunk on cars and shoes is car crash finances
That’s why I don’t drive a Porsche – I would only buy one with cash, but I am pretty highly geared at the moment so have no spare
It is how it is used – debt is a very effective financial tool (ask the Glazer’s – the Manchester United buyout was a genius use of debt and I bet they used a fraction of their own cash)
Debt for investment is fine, debt to spunk on cars and shoes is car crash finances
That’s why I don’t drive a Porsche – I would only buy one with cash, but I am pretty highly geared at the moment so have no spare
Last edited by hodgy0_2; 05 November 2009 at 09:19 PM.
05 November 2009, 09:44 PM
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The funny thing is - the richest investor in the world has never borrowed a penny and he totally believes that gearing for investment is the craziest thing in the world.
For every success story (e.g. Man U) there will be sorry tales of woe in abundance.
The simple reason is that servicing debt accelerates losses faster than anything else.
For every success story (e.g. Man U) there will be sorry tales of woe in abundance.
The simple reason is that servicing debt accelerates losses faster than anything else.
05 November 2009, 10:42 PM
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The only person I know who is seriously rich has the same philosophy as Buffet, so it must be true then 
I agree with what you say techically, but it was gearing through ever more complex securitisation that got us into this mess to start with.
I agree with what you say techically, but it was gearing through ever more complex securitisation that got us into this mess to start with.
06 November 2009, 02:47 AM
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Honestly, F**K Knows.
How is the average joe supposed to know in depth information like this without paying thousands a year for an Accountant/Risk Manager, I certainly don't have the time to keep on top of it all, if you do, then perhaps thats what separates the millionaires from the thousandaires, so to speak.
The only way I can see is to work for the man and pay into the two available ISA systems + my pension.
Hence, I am not a millionaire.
How is the average joe supposed to know in depth information like this without paying thousands a year for an Accountant/Risk Manager, I certainly don't have the time to keep on top of it all, if you do, then perhaps thats what separates the millionaires from the thousandaires, so to speak.
The only way I can see is to work for the man and pay into the two available ISA systems + my pension.
Hence, I am not a millionaire.
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