Joe Public have always been happy to accept the 'reward' of cheap credit for their 'failure' to be patient and save up for something

If Banks sold credit too cheap it's their fault.

Would you stay at your current place of employment if your perks and benefits of your job were taken away knowing that you would get better perks and benefits doing a similar role for another employer down the road?

That statement is so dumb I'm not going even answer that one!

Granted that some used risk models that were completely and so far removed from reality.

If that were the case our country, our economy, our standard of living/lifestyle would still be in the 1950's, whist the rest of the world continues to advance. The UK would not be the world financial and commercial hub that it is today.

Would there be though? Markets are never perfect. Is there room in the rest of the worlds banks for all UK 'talent'?


Sounds like you don't have an answer.


That is quite an understatement.

That is without foundation.

At best it has promoted a consumption and asset boom. The result is we are taking on more and more public and private debt and running a perpetual deficit. It's unsustainable.

Britain was an economic superpower with much tighter bank lending practices.

I think you look you will find lots of scientists at investment banks. Lot of their quants were nuclear physicists and maths doctors and professors.

Also, one of the most successful investors through the credit crunch, and one of the most highly revered blogging value investor is a surgeon by training ;)

Sounds like a massive misallocation of brains.

They could be curing cancer instad of doing what exactly?

What is it they actually do that is so important?

Well the surgeon made lots of his friends and colleagues millions of dollars. Real money that they spent on real goods.

Money is just money though. It's not wealth.

It's just people grabbing ownership, permission to consume etc.

Anyone can spend money and 'create' demand. It's easy. It doesn't require Scientists and Surgeons to spend. A printing press can 'make money'.

Why is it a good thing that a banking/financial elite is able to get people in the real economy to work for them?

Maybe workers in the real economy could do a 6 hour day w/out that overhead?

You are funny.

Sigh! Most of the time your contributions in other subjects encourages/forces debate and that I respect. But everything you've stated so far in this thread at best just exposes what little you know of the finance/banking industry and how things work in the city. I'm afraid not even Wikipedia is going to help you on this front.

Oh dear, oh dear. This is similar to blaming MacDonalds for being too fat! it's always someone else's fault.

People need to take responsibility for their actions and stop blaming other people. The whole culture has now become that everyone deserves everything. What ever happened to living within your means?

Geezer

Typical of today's society. What happened to being responsible for your own actions?

If there is one thing that bankers are good at its convincing people about how important they are and how they drive they economy and clearly according to bankers, hard working people who start and run business' have sweet FA to do woth success is all down to the banks letting it happen. By the time the average banker has finished justifying their existance we will be asked to build shrines to them.
Its a fact that the banking industry supports a free and globalised market around the world but then came running to the tax payer when it all went wrong which is a pretty anti free market thing to do but clearly hypocracy and dishonesty go hand in hand. It is also clear that banks rewarded people for the wrong things. Doing a trade or lending money gets you a comisssion not wether the trade was sucessful or the money lent was paid back. THis system of reward was plain wrong, has proven to be wrong and yet still exists. Bankers seem to want to blame the regulators for the massive errors inherrant in their own systems of operation ?????? justify that please.
I am also interested in how those who got paid large bonuses in the good years can expect to keep them, making money in good times is easy but paying people on yearly or 2 yearly figures is stupidy short sighted. The banking system has been designed to help seperate the middle and working class from money and filter it to the more fortuante higher echelons of the bakers and fund managers. I would love to know how fund managers who fail to beat the market can justify taking a comission of someones pension ir investment.
I don't understand how bankers can blame the public for taking advantage of what the banks offered them the banks created the system and offered too many people cheao loans but its now the publics fault for taking them ?

Give over! You're making them sound like politicians.:D

Not really I have known at least 2 honest politicians and can't say the same for bankers.

Quite right. Why should I pay more for everything and take a hit to my pension then reward the sector that caused it? I've also worked hard and lived within my means, only debt is a mortgage taken out post-crunch. So I've lost out, but accept thats life and in the grand scheme been fairly fortunate. Would be nice if others could do likewise.

Whats irritating is that the banking industry throws its weight around like a spoilt child, apparently blind to its long-suffering siblings' annoyance. Yes we've needed the Finance sector as other industries have been made largely uncompetitive, but is the price too high? Its up to Joe Public to decide.

I think the banks are blameless in all this I truly do.

I mean, surely they're doing a public service in lending an Irish Lawyer and his teacher wife over £100,000,000 to buy property all over the world.

http://www.guardian.co.uk/world/2011...-debt-odonnell

Of course, it's now all gone tits up, and the couple owe £670,000,000 to various banks. Silly them.

THE WORLD HAS GONE ****ING MAD, AND THE FACT THAT A MARS BAR IS NOW 65P CONFIRMS IT!!

:D

I can't help feeling that working with money as they do creates a feeling of greed which transcends everything else such that fair play to those who deal with them and the public in general is of no consequence whatsoever and all that matters is that they make as much cash as possible regardless of how they do it.

The previous government is seriously at fault in that its so called regulation was worth peanuts and the banks were generally allowed to do just what they liked since NL appeared to worship them because that is where the big money was.

It turns out that the bankers were as trustworthy as the MP's were when it came to claiming parliamentary expenses.

Nothing very much seems to have changed, this present lot are only making token statements about the obscene bonuses which the bankers want to pay themselves and in fact doing very little about it.

We are in the situation where both the government and the banks are in such strong positions of power and their agendas are suspect to say the least, that the people are likely to continue to lose out heavily.

Les

How much!

65p that's a bloody disgrace!:D

I have a good friend who works for a Japanese Merchant bank.

He is 48 yrs old. Has a 1.2 £M house with no mortgage and for the previous 5 years has bought a property, cash, (out his annual bonus). I wont bother to advise you of his list of cars !.

I don't know the value of the incentive bonus he receives every year but I do know that he paid £ 205,000 for the property he bought last year as I knew the guy that sold the house to him.

I can understand companies / banks providing good incentive bonus's to employees who generate huge income for the company / bank but when considering his wage (not including his annual bonus) I hardly think such huge bonus's are necessary.

He has even admitted to me that his general salary is bordering stupid.

1.2 million that only got you a 3 bed semi befire that credit crunch.

Standard Peston supercilious nonsense, aimed at presenting a topic in the way that viewers want to hear it - he always seems like a human version of the Daily Mail to me :)

Seriously though, to blame only the banks and their employees is vrey dangerous, albeit that's what many in the country have been led to believe by our beloved politicians.

Many factors at play here:

- the financial services sector is one of the few things the UK is still a leading player at. Let's be careful not to over-regulate it to drive business (and not necessarily the staff) elsewhere. It is a key contributor to the UK economy. I, like everyone else, am very jealous of bankers bonuses - but I'd rather see Goldman's paying them here than overseas. Merely focusing on the very small number of people in a high profile sector getting these is a cop out IMO, and is a dangerous smoke screen over many other very real issues we face as a country. We in the UK hate success - we want it personally but don't like it when others achieve it (with the occasional exception like Branson).

- UK Plc's P&L was badly damaged before the downturn. How anyone could think it acceptable that a) the country was spending more than it received in taxes even at the height of the boom and b) that more than 50% of UK workers are employed by the state is beyond me. The cuts required now are exacerbated by the downturn (lower tax revenues) but they were badly needed anyway. Just a shame that we let politicians who've never had a proper job make short term economic decisions in a way that would embarrass most A-level students.

- Bubbles remain (housing, precious metal pricing etc). It's human nature to want to believe in easy profits. Brown's claim of ending boom and bust was an admirable aim but in reality neither achievable nor desirable in the way that he overspent to create the pretence it had happened.

- Everyone loves the idea of taxing the rich more (economic Nimbyism is everywhere at the minute - we all think there should be cuts as long as they don't affect us etc). However, it ultimately makes us all worse off if it's overdone as it makes people more risk averse (go / no go investment decisions are very sensitive to tax rates - which has a direct impact on job creation and the like). Cue the muttering about 'the rich don't pay tax etc etc' but in reality it's very difficult to avoid tax in this country without using tax planning - itself usually a risk-balance which drives further investment.

So where am I heading with this? Sure, the banks played their part in the problem, but it's much more complicated than pointing at a few investment bankers and ignoring all of the other contributory factors. The world runs on capital and human nature creates the cycles (chasing profits, wanting better deals, lack of confidence etc). Since records began there have been serious recessions and crashes and they'll happen again. Each has it's own unique set of drivers, but knowing them won't prevent the next ones. The key is trying to make sure that our economy is better placed than others to ride the storms - this time it wasn't because of the wall of debt and structural deficit that continues to increase the debt. The problem is that no government can solve most of it as the individuals are incentivised to ignore the long term planning requirements and chase short term (voting) gains.

I also fear it's going to get worse - inflation is starting to build and increased interest rates are going to create an even worse downward spiral for the national balance of payments. My view is that short term deeper pain in terms of cost cutting is required to strengthen our balance sheet and set us up better for the next phase.....but nobody's going to like it and whatever flavour of government that does it will be pilloried by those on the receiving end, forgetting the 'good' times they benefited from which led to it.

Have fun :)

Gordo

Best post on this thread. Absolutely 100% agree. Much deeper cuts are required if cuttng is the route we are taking. What has been announced so far doesn't really scratch the surface of the problems.

So right about those on the receiving end. I rememeber all the posts in here about we must make cuts in spending etc. etc. and as soon as the child benefit cut was announced there was a thread as long as your arm of complainers as it was actually going to affect them... LOL!

It's economics and power relationships Trout.

I'm not moralising just observing.

Making money out of the stock market is not creating wealth, it's just owning.

It's economics and power relationships Trout.

I'm not moralising just observing.

Making money out of the stock market is not creating wealth, it's just owning.

Maybe, but it should be pretty simple to explain what it is that the financial industry does that requires such talent and how it contributes to the overall economy.

No I agree that people were silly to take on debt they could little afford if they did a proper risk evaluation, but I'm talking about from the POV of the banks.

If the banks sold debt too cheap and as a consequence they failed as a business then it is their fault, just as if any business goes bust for selling goods/services too cheap.

If a Ferrari dealer was selling Ferraris for £100 quid each and then went bust would you blame the customers?

If it's so simple, please feel free to elaborate.

No I agree that people were silly to take on debt they could little afford if they did a proper risk evaluation, but I'm talking about from the POV of the banks.

If the banks sold debt too cheap and as a consequence they failed as a business then it is their fault, just as if any business goes bust for selling goods/services too cheap.

If a Ferrari dealer was selling Ferraris for £100 quid each and then went bust would you blame the customers?

There have always been economic elites though, from Druids, to Roman Landowners, to Soviet nomenclature.

People that get others to work for and serve them.

Sometimes these elites are useful though but at other times then are useless and should go down.

Western banking is bordering on corrupt IMHO and the bail-out was proof of that, otoh maybe banking is necessary for a civilised society and that is why bankers should be rewarded so. Who was it who said we are always only two hot meals away from anarchy?