Banks and Bankers
 

Luckily for us in the UK we still have building societies which are mutuals run for the benefit of members and some offer bank type accounts with smaller or no fees for services banks charge a lot for, long may they continue and be a pain in the derriere of banks.

Anti Banker Rants ... You dont know what youre talking about.
 

OK this is totally off topic, but I'm getting tired of hearing all this ill-informed populist ranting.

The problem with that rant is you owe your quality of life to banks.

If you want to know what makes some countries rich and others poor, its not doctors, its not engineers, its not levels of education.

Its bankers.

Thats why countries that want to get rich fast, like Dubai or Singapore, have as their number one strategic objective to build a major financial centre. Nothing else matters as much in raising the living standards of ordinary people.

The reason bus drivers in Bangladesh have a lower standard of living than bus drivers in Switzerland, is that Switzerland has a functional financial system (lots of bankers). After all both bus drivers have the same skills and same experience. The reason doctors in Sweden make more money than doctors in Cuba ... is because Sweden (like all wealthy countries) has a functional banking system. Cuban doctors are just as highly educated and experienced.

So you are biting the hand that feeds you when you go on about hating bankers. Your standard of living would be a fraction of what it is now without them.

All wealthy countries have advanced financial systems - run by bankers - its what makes those countries wealthy.

Countries with high levels of education, and loads of doctors or engineers per capita are not necessarily wealthy. Cuba, Ukraine etc. ... because they dont have enough bankers !

Countries with loads of mineral wealth (such as most of Africa) will also not be wealthy, unless they have a good banking / financial sector.

It might really suck to learn it, but the reality is, banks and bankers are not only essential to a functional society, but they are the single biggest reason your standard of life is as high as it is compared to other people in the world doing exactly the same job as you.

Bitching about them is laughable and shows a total lack of understanding about what their role is in the world, and how effective the financial system is in raising the living standards of the entire country.

If anything, you should be grateful ! Its thanks to banks and bankers that you have a high standard of living relative to the rest of the world.

Why do you think governments talk tough against the banks but actually in reality protect the sector?

Its because talking tough appeases the ignorants who hate the banks but have no idea how important they are, while protecting the banks is actually protecting the golden goose.

Saying you hate whole sections of the community because of what they do for a living is insane and rednecky enough ... but when its the sector that is the most important in delivering your living standards, I just shake my head and despair.

Cole, you have some good points; some that are inarguably true, but you let your post deterioration into a rant of its own.

Stating that banks are are responsible for much of the wealth we enjoy while also saying that "bitching about them is laughable" is a dubious position. While banks and strong financial sectors generate absurd amounts of wealth for a country and its citizens, the citizens most certainly have the right (obligation?) to demand better, more ethical banks and banking practices. ("or one with [more?] morals" ~ Drwnite).

Also, there are lots "utter scum" in the world, in all manner of industry. Sucks for them. However, cab drivers that are "utter scum" will rip you off for a few dollars. High level bankers that are "utter scum" will rip people off for several million (or vastly more). Though rare, they garner slightly more vitriol.

If I had to guess, you don't see things as black and white as you let on in your post. I doubt drwinite does either. You may have been irritated by what you perceived as blind reactionary rhetoric against an institution that is not wholly, or even mostly, bad.

Both your and drwinite's post emanate from a "we vs. they" mentality. Immoral bankers vs the people; educated opinion vs redneck rhetoric etc. As a world traveler, I've discovered that "they" don't exist. They're always in the next town over, yet I never see them.

There is only us, we humans, and in this global society, we're all on the same team. Why else would your two diametrically opposed rants both be so accurate?

Motorcycles.

Absolutely not ... you have no right to demand anything from banks or bankers.

Just like I have no right to demand anything from you. Nor do I have the right to demand plumbers in the UK work cheaper.

You have the right to move money from a financial institution whose policies you dont like to one you do like.

If you think you can operate a superior model of financial institution, you have every right to try and make one and profit from the fact that your model appeals to the consumer better than existing banks! If you think there is that much demand for it, then you will be very successful. You absolutely have the right to try.

But you have no right to demand other banks or bankers behave in a way that you personally or even the majority of the population see fit.

Well spotted.

At the end of the day its completely off topic. This is a forum about motorcycles. This is a thread about carnets. To launch into a vitriolic intolerant rant about one sector of the community that you dont personally like deserves to get slapped down. Its inaccurate, ill informed, and most of all its not appropriate to the forum or the thread.

Since I am not a moderator with the power to delete such off topic comments, I often choose to counter them instead.

You consider it it wrong for me to show intolerance of others being intolerant? Thats the Paradox of Tolerance .... (see the works of one of my favourite philosophers, Karl Popper)

The only way to ensure tolerance is to be intolerant of intolerance.

And I assume you are promoting tolerance?

As much as I want to agree with what Cole said earlier, perhaps the lesson first needs to be adopted by governments to let other jurisdictions run themselves as they see fit or not be allowed to play ball. The OECD TIEA and FATCA are designed to prevent the "competition" of places which have built themselves on banking.
But before this digresses to debate on "tax havens" at least I don't need a carnet to visit them..........!
So is there any cheaper way to get a carnet if the RAC are digging their heels in?
Richard (stashing his money under the mattress)

Just a few of things.

-I thought the anti banking post was unnecessary, but choose not to say anything, there is always that thing about arguing with fools.
-Walter you could have asked a Mod to remove it that would have been simpler than an economics lesson.

On topic, what really is the difference between leaving the RAC with a bond and paying the charges on a bank guarantee? I can't see it would be a whole lot different.

Also there have been some various threads suggesting that Africa is now possible with Temp Imports, including Egypt.

See here and here.

That just leaves the Middle East, Pakistan, India, Nepal, Japan, New Zealand and that other big over regulated place next to New Zealand.

Center justifying your text annoys me something chronic :frown:. What's wrong with the default left-margin-justify?

Hi Craig
Could you copy the bits from this post relevant to the Carnet thread back into it?

:thumbup1:

The trouble with banks
 

What is actually wrong with this thread??
 

What is actually wrong with this thread?? .... and how did carnets get in here from "trip paperwork"? :innocent:

I think that this is as suitable a thread as any other that has arisen in the bar.
While it is traditional in many societies not to discuss politics and religion in public company, surely taking a view about the current state of the world and its' players is a fair topic?


+ there are credit unions and this also:-
Your Savings | Burnley Savings and Loans
as examples of ethical use of cash deposits for the greater good of the customers, ethical business practice and working for the greater good of countries and their populations.
The guy in the link above has already met resistance from the banking "industry" (which, of course, it is not an industry since it actually produces nothing - Sir John Harvey Jones' (RIP) definition of "wealth" refers)

Micro-financing also comes to mind as another example of "good" investment.

In contrast, the defence given in earlier posts of banks and bankers is how it is supposed to work; clearly this has been malfunctioning for quite some time and the banks have become akin to gambling houses/casinos, with more than a wiff of corruption to boot (LIBOR any one?).
If Hollywood is to be believed, the individual personnel involved (the bankers) have acted in a manner akin to drug-addled "rollers of the dice" at the gambling tables. The evidence for this broad point of view continues to mount, as the various investigations of the main players have progressed; of course, this is far from over, and there is every possibility that the ramifications will continue for some years yet.
The law courts may not be too busy with associated litigation yet, but I rest my case, my Lud. :innocent:

Don't understand why you ask the question. There's nothing wrong with this thread.

Post #1 was a reply in a thread about carnets at http://www.horizonsunlimited.com/hub...e-uk-rac-68191 . Posts #2 to 8 were responses to post #1. Hence I felt it appropriate to move these "off-carnet-topic" posts into their own thread uder the title "Banks and Bankers".

A little bit of an exaggerated blanket statement there, from the Hubb's favourite banker...

Although that tosh was written a couple of weeks ago, I think it's fair to respond late, seeing as how nobody else has.


I think Mr Colebatch obviously spent too much time at school (Harrow? Eton?) studying economics, and not enough time studying history. I suspect the wealth of rich western states might in fact have something to do with the last 1000 years or so of history, and in particular from the industrial revolution onwards. That industrial development wouldn't have been possible without banking and stock markets, but that hardly equates to bankers being the creators of our wealth, rather than facilitators.

We need a banking system without a doubt, but I don't see why that system couldn't work perfectly well without an old boys club at the helm ensuring that they and all their toffee-nosed chums stuff their pockets to bursting point. That's what this recession is about, they've reached the bursting point, too much 'wealth' is in the hands of too few and they can't spend it fast enough to keep the economy as a whole ticking.


The 'average man on the street' isn't interested in politics really, as long as he can go down the pub on friday night and shag his missus once a week. That's why the system will continue as it does, not because it 'should' or because it works so perfectly as Mr Colebatch seems to think. The bankers aren't interested in reasons or consequences, only how much money they're stuffing into their already bulging pockets, and I don't think that's about to change any time soon. Trebles all round for Giles, Tarquin, and of course Walter!

Its not an industry, its a sector of the economy. No one said it was an industry. No one said its superior to be part of an industry? Unless you are?

Doctors and nurses also produce nothing ... neither do firefighters. Neither do hairdressers, shop assistants, and adventure motorcycle websites for that matter ... So what exactly are you intimating? Whats your point there?

You seem to be suggesting that if your job doesnt including making something physical then you are a lesser part of society? Is that how you also view firefighters and nurses?



Hows that? Its completely unregulated finance. So are you proposing less regulation or more? It seems you want it both ways. That doesnt make sense. the Micro Finance model is one of wholesale borrowing and unregulated lending. Most people say thats kinda what led to the sub prime loans problem which is why we are where we are today. i.e banks being too generous with their lending. Lending too much money to people who could not prove they could pay it back. Are you saying you want more of that?

What happened, is that the banks got burned by lending money to people with poor or no credit histories (not disimmilar to your micro finance example, remarkably). Now the banks are scared to lend money and the public complains about that too. Lend more money the public and governments cry ... well hang on, arent you simultaneously crucifying the banks for lending too much money in the first place???

And lets not forget ... that commercial banks are conduits for the central bank. When the central bank wants more lending in the economy, they lower interest rates. Thats kinda how it all works. They lower rates. The Central Banks, led by Alan Greenspan, wanted more and more lending. So they threw money at the commercial banks and told them to distribute it ... get it out there in the economy. When a central bank lowers rates, the implicit instruction from the central bank (part of the state) to the commercial banks is to lend more to the public and to businesses (industrial or not...).

So if there is anyone to blame for the excessive lending that led to the financial crisis, its the central banks (The state). The central bankers are appointed by the elected government. YOU elected the government. Stand up and take a bow !

So schools have been malfunctioning for quite some time too with more than a whiff of pornography about it ... with all the revealed student teacher sex relationships that have been uncovered in the last few years.? Just goes to show ... teachers are scum

The medical profession has been malfunctioning for some time with more than a whiff of psycho death about it? Harold Shipman anyone? Just goes to show ... Doctors and Nurses are scum.

Maybe we can list every single profession out there and why it malfunctions. After all, there's a new one every day in The Sun !

Using this method, we will soon be able to clearly justify why every business and industry and job in the UK should be closed down.

Whats your profession btw?

What makes you think I am a banker. I have been on a motorcycle for the last 4 years. :funmeteryes:bier You?

Oh ... just missed. Government run fee free state schools in Australia.. ... but hey, thats close Nath! Only 10,000 miles away and totally opposite philosophy ... but good guess .... really close. :clap::clap:

History? Try me. My favourite subject. ::funmeteryes: :welcome:

Do say hi to Eva from me.

When did I say it works perfectly.? Show me that quote?

Your not making this up as you go are you Nath? :D

Thanks.
Now some of those earlier posts make sense - 'til now they were out of the context of the "new" OP concerning banks.

Woops, I made a little mistake there. I described Colebatch as a banker, but it seems I the word I was actually looking for was... Wanker?

Go back to drinking champagne with Giles and Tarquin and stop being a troll :thumbdown:

ok so now you are really are making it up as you go ...

False quotes? Really? doh Is that really your response? Tell me you are kidding ...

You didnt expect a free shot did you Nath? You didnt expect to waltz in, throw a molotov cocktail at me and not expect to get some stick back, right? You can take it as well as give it ??

Or not?


OK I give up mate.

Besides ... Austin, Chas and Millie want some more caviar. Someone has to call the bloody butler you know.

Nath,

Are you high, posting this drivel?

Colebatch can be a knob sometimes - like we all can - but I think his discussion on this topic has been pretty informed (ex-banker, perhaps, Walter?) and accurate about the way things are - not necessarily the way we think things ought to be.....

I don't like banks as I don't like the way they do business and I don't like bankers, of the ones that I have met, as they were snide, arrogant and generally thoroughly disingenuous people. But I haven't met all of them and some might be OK. Being able to keep an open mind is one of the biggest lessons I've learned from traveling over the years - you should try it.

Nath has been throwing the W word around for a while now, mainly directed toward those who ride BMWs, so there's a double hit! :innocent:

I apologise for tonight; I just lost about a half hour of fat finger typing and it is way too late to start again tonight.
But there is good discussion herein, with a spirited argument in the bar. bier

I will return to quote, or mis-quote, Arnie.

Ah, I see you've met Colebatch as well then? To be honest I didn't know what disingenuous meant and had to check, (no Harrow schooling for me), but that sounds about right.

I haven't time to write a trolling response as before I go to bed I should give thanks to the bankers for to whom I owe my high standard of living.

Bloody hell didn't this thread degenerate.

I'm going to stick up for Walter here as I have actually met the man, seems like a good guy, helped me out a lot with heaps of info when I decided to ride across central asia and Russia. Provides lots of advice to others trying to the same thing, including many informed posts in the North Asia section of the HUBB and I know he happily will sit down with someone to assist with route planning.

Is he self-assured and confident - I would say yes, some may describe that as arrogant, in that context I would take that as complement.

As for banks and bankers generally, they have an important role to play in the economy, in recent times they may have made some foolish decisions and in some parts behaved corruptly show me any group of organisations that this hasn't happened to from time to time.

I used to work in the banking industry (support roles) I have seen guys who behaved like punters at a racetrack in the tech boom, I have also seen people so risk adverse that they wouldn't jay walk. Classifying all bankers is at the best foolish, in society there is no us and them, just us.

Factually, Walter's got it right
 

I've nothing to add regarding Colebatch's assistance, patience, indulgence of the curious re: all things North Asia.

But the attacks on bankers or his points are . . . hilarious.

Bankers only facilitate the "creators of wealth" ? Really. Tell that to a smart kid/entrepreneur in Pakistan or Russia. They're effectively locked out of "the game" because they can't access capital and when they can . . . it's often from abroad. Somebody in northern California's Silicon Valley - it's pretty easy. At some point "the idea" and "the money to fund it" are rather "chicken and egg" debates.

The "old boys network" ? If one's watched alot of 30's movies, say, 'It's a Wonderful Life" so such - sure. But the days of JP Morgan strutting down or being called down to the White House or 10 Downing are LONG OVER. Today, a man sits inside of an organization because he could deliver numbers (revenue & profit). The "old boys network" was blown up in the US in the early 80's by deregulation and mergers.

Now . . . on the other hand, the percentage of global output due to financial services in the past decade has tripled from 4% to 12%. That seems rather unlikely without a bit of "gaming".

The capital markets USED to be about raising cash for new investments or expanding product lines or productivity. Clearly, with any view into them . . . that's no longer the focus.

Where do bankers fall into it ? Well, there's "bankers" and there's bankers. Retail bankers ? Commercial bankers ? Investment bankers ? There's a trajectory there, mathematically, from arithmetic to . . . stochastic calculus.

A historical view of (retail) bank profits neatly tracks GDP. That tends not to make retail bankers look too clever but also serves to clear them of all the ranting charges. As Walter says . . . central bankers set monetary policy (interest rates) and the outflows of lending start there. (Another reason that banks are currently reluctant to lend is that they're holding lots of "assets", like mortgages on homes which are NOT worth the valuation of the mortgages . . . as that problem has worsened it endangers a banks capitol reserve ratios - welcome to a nasty deflationary spiral - all a result of an asset bubble a la Japan of the 80's.)

In the last 30 years the game has been a bit more complicated by China's rise and the prolific US T-bill buying of south, southeast and north Asia. Holding ALOT of someone else's debt doesn't have much value, per se. That purchased debt permitted the west to have large current account deficits by exporting jobs and importing finished goods.

This led to the classic investment bubble under whose "pop" we now live. The "cash" flowed to the East, the debt west. Those currency accumulations in the east came back to the west looking for better returns than US T-bills. THAT is the crux of the bubble - relatively fixed numbers of assets and a large increase in the amount of cash chasing them - asset bubble. (We've seen one of these, in one form or another about every 75 years since the Tulip Craze. 75 years must be enough time for the old men to die out and not be around to warn the "kids" that . . . we've seen this movie before.)

What did retail bankers have to do with this ? Almost NOTHING. They were well downstream and simply responding to regulatory and macro-economic forces.

Commercial bankers ? Similarly free of direct implication.

Investment bankers . . . that's more interesting. Small in size (Goldman Sachs makes a large fraction of the profit of HSBC but has 1/10th the number of employees) but very large in impact and reach. Investment bankers were smart enough to react to the changing conditions very fast. If some prefer the word "manipulate", so be it.

It's clear since the de-regulation of banks in the US which started with Reagan the old rules and perspectives changed. The monetization of everything (at least in the US, but coming to a country near you, soon) makes a profit the key goal (consider US health care - not the wellness of it's clients but the profit of it's service providers . . .). The idea, nay holy grail, of "shareholder value" has subsumed all else.

Does that need reform ? Depends if you think the current system creates wealth or manipulates it and whether that matters. In the 21st century 40% of Ivy League graduates moved on to Wall St jobs. Is that the fault of bankers or is it a deeper societal issue ?

But you can't overlook the rise of Asia's cash infusions (too much savings) or the West's profligate spending. You can't blame a banker for either.

Never met the guy and would certainly not apply those or any other demeaning words to him unless I had and knew him and I thought they applied, which they might not, as I don't know him - get the idea? The only things I can about him is he writes a damn good ride report, can't spell very well and occasionally suffers SOH failure after a long day in the saddle.:)

Never went to Harrow - I'm a grammar school boy if you must know.

Trolling is for puerile tossers - why don't you look those two up?

The other thing I don't get with bank bashing, is some how it okay for every other person and business to make money, but not banks?

Why not?

Want not for profit banking? Join a credit union.

More food for the discussion
 

It is precisely because banking is a fundamental and important service sector that there is so much outrage at the actions of those in positions of responsibility within it.
Apparently investigations here in the UK are ongoing but lots of evidence given so far to the Commons select committees, for example, point to either,
1. Incompetence on a monumental scale, for which individuals should have been sacked years ago.
Or,
2. Corruption, greed and criminality. (e.g, the libor scandal).
Yes, this applies to the investment banking "arm" which is why the UK, at least, is aiming to separate that gambling activity from the "high street" banks that serve the interests of the people of a country.

To quote employees of other service sectors who clearly acted without integrity, including committing acts of murder, does not add value to the argument regarding banking.

And, yes, politicians have been complicit in this over many years; such as a certain chancellor of the exchequer who stated that there will be no further boom and bust, at more or less the height of a boom.
The UK has been living beyond its' means for many years, punching above its' weight, call it what you will. Individuals have done this, organisations also, but the state has also indulged itself and those who should have known better did nothing, said nothing.

My profession is irrelevant; I am aged nearly 3 score year and 10, and my comments are based on a life-time of coming across people who have a lack of integrity; I have left employments because I couldn't stomach the lack of integrity of systems or individuals placed in places of authority within those systems; when did you last see a politician, or a banker for that matter, resign as a matter of principle? That used to happen in the UK but it was quite a long time ago and such integrity no longer lies within the experience of a lot of folks here in the UK.
Integrity has been replaced with weasel words of apology and reliance on the short memories of the majority of the voting population. None of this has been helped by the specialisation of the professions which themselves have been self-serving; arguably, the worst example lies, again, in politics which used to be occupied by people who had some background experience outside of politics. Lots of scope herein for reform.

And, it ain't easy to see a way out of this: the holy grail of "growth" isn't happening. And anyway, what is so great about growth? Why is that such an essential to the human condition? Scope here for another thread.

Some more input has continued to explore the issue of wealth; banks do not generate wealth as I understand it (check back with Sir John Harvey Jones RIP for this). As mentioned above, they have generated profits and not even for many of their share holders; quite a few banks have destroyed the profits of their share holders, such as the Northern Rock which was beget from a building society of all things!
Refer back to this guy who in his own small way is trying to carry out the functions of a domestic bank in his own area of the UK.
Your Savings | Burnley Savings and Loans

That is probably enough for now; none of us are squeaky clean in this, and there is a long, long road ahead including actions through the courts, if there is any justice to be had in this world.

I read an excellent book a few years ago by the Australian political theorist Clive Hamilton, it's called 'Growth Fetish' and he tackles the questions that you ask. He doesn't concentrate so much on the political economy of growth but instead explores the reasons behind our fascination with materialism and consumerism. It's well worth a read if your interested in such matters.

I thought about deleting your post, quoted above, because of it's offensive nature. I haven't because Walter is able to counter your (chemically induced?) rantings in an appropriate way. Your post also helps to show how measured and mature your utterances are(n't).

I've met Walter. I think he's a good bloke. Have you? Please also read all the good and current information he submits here and on ADVrider. I sent him a couple of PMs the other day regarding a Siberian question I had. He replied virtually by return. Excellent, in my book.

How are you helping to make the (HUBB) world a better place?




Please don't EVER misquote people. :thumbdown: Thanks.

The responsibility may lie with King Henry VIII
 

For those who are still hanging in there and considering the morality and ethics of banking, the problem may go back as far as 1545:-
Usury - Wikipedia, the free encyclopedia

Within the UK it has been reported that Islamic banks are growing in number.
I don't see any Christian banks on the high streets, to date.

Incidentally, there is a brief reference at the end of that wiki article to micro-financing.

Sharia(h) lending
 

. . . is reasonably large and growing.

HSBC's Amanah has been around for some time.

"Christian" lending is somewhat meaningless as there are no prohibitions on lending in the New Testament.

However, if you take Shakespeare seriously . . . "neither a borrower nor a lender be" carry on before credit and sophisticated finance and . . . enjoy the 15th century. "More gruel, Master."

Banks and bankers will follow the money . . .

Now as for the potential pitfalls and perils of fiat money, or the possible built-in instabilities of capitalism . . . economists continue to debate those and have for at least 150 years.

Thanks for the book suggestion: I am familiar with some of the ideas, judging by the review below, without having read this particular book.
John (The United States)'s review of Growth Fetish

From that review, I am also pretty familiar with this statement:-
"The greatest danger for consumer capitalism", writes Hamilton, "is the possibility that people in wealthy countries will decide that they have more or less everything that they need"
But, how to achieve such a potential utopia is outside my knowledge.

There was a whole glut of such theories in earlier decades and it is interesting that this one dates from the last decade; within another thread concerning "where is a good place to retire/live on this planet" there is little sign that Australia has adopted the principles and practices of non-growth.
http://www.horizonsunlimited.com/hub...9-3#post408945

Well, again relating to the UK, it is pretty much a non-Christian, secular society nowadays and I was merely pointing out one important origin of western methods of finance, which included Christian banning of the payment of interest.
It is very likely that such Usury principles relate to the old testament which contains the foundations of Islam, Judism and Christianity, hence their common approach to their historic principles of lending.
Lets see what the new Archbishop of Canterbury has to say about this when he is in place later this year (he is an ex-business man).

"Banks and bankers will follow the money" . . . and, therefore, require a lot of regulation in order to bend them to the greater good rather than their own selfish, short term interests.

Through history, no fiat currency has survived; the latest example to test us is the Euro which now demands the full political integration of those countries which are members of that currency. We shall see how that pans out, but I suspect it will all end in tears.
Interestingly, to me anyway, some towns and cities in the UK have introduced local currencies for use in local commerce; arguably a return to the middle ages.
Bristol Pound - Our City. Our Money

And ................
 

................. Max Keiser has just appeared on UK TV to say that this country is heading into a financial crisis (yep, another one).
His basic premise today is that the bond markets have driven out all productive activity and interest rates have nowhere to go but up, and up.
We can still devalue our currency, unlike those countries who signed up for the Euro; in fact, such devaluing is happening now on the markets - just look at the Euro/£ exchange rate over the last week or so.
He also made mention of the gold standard and how European governments so distrust each other that they are buying up gold and silver to stock their own vaults; all this against the day that the Euro splits asunder.

If you are interested in what he has to say about global finance he runs a show on Russia Today and he is all over youtube.

We are all pawns on this particular chessboard.

A joke . . .
 

there's a reasonably popular joke in investment banking circles over the past 5+ years.

"What's the world's largest hedge fund ?"

The UK.

"What's the difference between a pigeon and an investment banker ?"

The pigeon can still leave a deposit on a Ferrari.

The bond markets have, ahem, brought discipline to govts for a long time. Napoleon felt their wrath, too.

Marc Faber, aka 'Dr Doom' lives here in Chiang Mai. His prognostications have been VERY negative for some time and especially so recently.

Somehow I've overlooked this thread until now, how fun! I have to say that the OP's prejudices are ill-informed and offensive...how would his rant have gone over if he had replaced "banker" with "[pick your least favorite race/nationality/religion]"? How is it any different? One of my favorite sayings applies here: "I hate intolerant people!!".

And for once I'll have to disagree with Colebatch: everyone knows that the key to a high quality of life is not bankers, but lawyers!

That's fine chris, it is an insulting post, if you think it's past the line of acceptability for the hubb then delete it. It was specifically a response to colebatch after his previous post. I think it was an appropriate reply, and whilst the reasons being might be lost on everyone else, colebatch might have an idea.


I respond to questions and discussions throughout the hubb when I see that I can add a viewpoint to the discussion or share an experience. I wasn't really trying to make the hubb a 'better place' in this thread, but I didn't think I needed to either as the the description for the bar is 'no useful content required'. But I do strongly disagree with colebatch's assertion that we owe our high quality of living to bankers and should be grateful to them for it, and think it's right to challenge such views.

I don't understand what you mean about misquoting? I thought someone's post was a load of rubbish, and a neat way of expressing that appeared to be to use the quote tool but replace the text with 'a load of rubbish'. I don't see how that counts as 'misquoting' at all, since I was obviously not attempting to confuse anybody into thinking that was what was actually written, particularly since the 'quote' and response would then cease to make any sense...

Nath,
For what it is worth I think you have done a pretty good job in this regard, over there in Honda tech for instance regarding the NC700 bike.
I have read your blog, cover to cover, and it is a good read IMO.
I would suggest that you leave the W word out of the writing style though; it doesn't add value to any particular argument or discussion.

It's easy to blame the Banks and Bankers for the misfortune of the last few years, but lets be totally honest...

The fraudulent, the badly managed and arrogant bankers who created the issues that led to the economic woes of so many are a small minority of those who work in the financial sector that was responsible for the stupid and dangerous practices that were allowed to go ignored, despite rumblings of discontent and warnings for many years.

The real responsibility for these failings hangs on the shoulders of the Regulators, who are universally corrupt, the Politicians, who are indolent, ignorant and corrupt, and the general public who fail to hold those in public office to proper account...remember, in a democracy the Politicians are elected/employed to run the country on our behalf, and they work for us...

Ultimately everyone has a hand in what went on, the greed of all sectors of society had a hand in it all, we all benefited in some small way from the excesses until it went wrong because the wheels fell of the cart and someone shot the horse. Government spent recklessly for decades, Greece was the worst, but they were not alone, Socialist Government have spent, spent, spent public money and religiously failed to keep some in the kitty for rainy days, and the public has failed to make them responsible for this criminal negligence.

Don't take my comments wrong, I am no lover of the bankers who operated so recklessly, I lost more than £580K from my pension as a result of their actions, and over £400K I had personally paid in over a more than 20 year period, most of my overtime, money paid for my time in the Army reserves on active service and money made from wise investments...I was to retire at 54...now it'll be more like 154, but there is no point finger waving when the responsibility goes beyond just those who acted criminally, recklessly and negligently...

Look in the mirror, you will see someone looking back who has a small level of blame...

That has been the direction of my most recent input on this subject; the pawns on the chessboard must still take some interest in, and responsibility for, the game in play.
Nevertheless, I have high expectations that the UK courts will be the place of last resort for those who are criminally culpable, just as has been occurring in the USA.

Broadly, I totally agree with the gist of your post and I am very sorry to learn of your massive losses.
You do remind me of the old saying "nations get the politicians they deserve".
Right now they are all mixing with the great and good in Davos to have yet another meeting to share ideas about what to do next; watching Tony Bliar give a sound bite was a joy - he had nothing new to say, and handed down a few old platitudes concerning the future of the EU (did he really preside over 13 years of waste and profligate spending).

Yes, and the population of this country let him, and many would have him back in a heartbeat because they are failed communist muppets who ignore reality, history and the fact that he and his cronies did so much harm to this country and it's reputation it should be considered treason...especially with the Milliblands and Ed "Talks" Balls joining Tony against the wall...

:oops2:

"Challenge such views"--is that how you refer to calling someone (who I presume you have never met) a wanker? I think that is a very--extremely--charitable description of your conduct in this thread.

WTF? I understand at this point that you didn't go to Harrow, but what don't you understand about the word "quote"?? The words "quote" and "replace the text" are not compatible, get it?

Well then you dont understand why I included that example. Your attempt to criticise the financial sector implied the LIBOR scandal tainted the sector with corruption (see above).

My point is thats no more valid that saying the priesthood is malfunctioning because of the child sex scandals, the academic university research world is malfunctioning because of corruption in academic research, the high school world is malfunctioning because to student -teacher relationship scandals, the medical world is malfunctioning because of doctors taking improper sexual advantage of their patients or in the case of Shipman, just killing them. The police are malfunctioning because of corruption scandals, because of the de Menezes scandal etc. According to your logic, society as a whole, without exception, is malfunctioning.

My point is that its not valid to conclude because of a scandal or number of scandals that a sector of society is malfunctioning, because all segments of the economy and society are subject to scandals and cases of abusing their position. Including Doctors, nurses, priests, teachers, police, engineers, academics, etc etc etc etc etc .... ad infinitum

Do you think there are some industries or professions that are immune from wrongdoing?


If Hollywood is to be believed?? Thats kinda destroys any credibility behind an argument right there.

"The bankers?" ... who are the bankers? Genghis tried to point this out but conveniently you Nath Drwnite et al dont seem to bothered to have read (or maybe not bothered to understand) his post. Where does a banker begin or end? The old lady who works behind till number 3 in the local Natwest is a banker. Has she acted in a manner akin to drug addicted rollers of the dice?

The officer who sits in the loan processing centre and tells you yes or no to your mortgage ... he is a banker. Has he acted in a manner akin to drug-addled "rollers of the dice".

The guy who sits in a dealing room in the City, in a sharp suit, who the big corporate clients call up and ask at what price they can buy 20 million EUR. He is a banker. How has he acted in a manner akin to drug-addled "rollers of the dice". He just tells British Airways and companies like them at what price they can buy 20 million EUR against sterling.

The investment banker who has worked for the last 2 years on a potential deal to merge British Aerospace with EADS, making sure the terms of the deal are clear with both parties and the pricing is agreed and transparent ... How has he acted in a manner akin to drug-addled "rollers of the dice".

What about the team of investment bankers who worked for years on a deal to raise money for Tube expansion and improvement ... How have they acted in a manner akin to drug-addled "rollers of the dice".

You dont even know what bankers do.

Of the million or so people in the UK who are bankers ... how can you claim to have any understanding of the matter when you blanket pronounce ... (the bankers) have acted in a manner akin to drug-addled "rollers of the dice" ..... Its a ridiculous oversimplification and generalisation that has absolutely zero truth in it in 99.9% of cases.

If one biker in 100 is a drug dealer and a anti society gangster, should we all be labelled like that? Would you accept that labelling from someone who know nothing about bikers in general? Let say your local conservative party politician just showed you a newspaper clipping showing a biker gang robbing an old peoples home as blanket evidence that Bikers are scum? ... and he is going to propose outlawing them. I assume you would look at the guy, shake your head, and say you have no clue what you are talking about.

Well, thats how it is trying to explain banking to you. I mean lets never never let the truth get in the way of propaganda and ignorant hatred. Its the cornerstone of populism.

It just demonstrates you not only dont understand the topic, but in order to hide your lack of understanding you throw a black blanket over a million people.

That is about as sensible and logical as saying the medical profession are murderers - Harold Shipman anyone?

In that case, I wonder how many 'bankers' it took to miss-sell PPI to 12 million customers? Some of which were elderley and were lied to outright about 'what is best for them' in order to fleece their cash. I think those f*ckers have acted worse then your drug-addled roller of the dice!

Oh Dear
 

Just for the record, nothing posted in here so far has come as a surprise to me concerning the nature of banking; I'm sorry to say that it is all too familiar.

If you choose to go into the depths of collateral debt obligations and/or credit default swaps then we may get to a position that needs some further explanation, but, so far, so good.

And certainly this thread has more or less agreed that malpractice occurs in each and every walk of life; but the thread is about banks and banking.

It did seem from recent posts that we were on the way to agreeing that the problems within that activity are the fault of all of us, via ignorance, apathy and the fact that we get the politicians we deserve (who ultimately are responsible for everything that is wrong in the world).

But, oh dear, best not to choose British Aerospace for an example of best practice!
Below is an extract from Wikipedia and I remember this case all too well, including the very active intervention of a certain politician who has already been named in earlier posts (if you get my drift).

Corruption investigations
[edit]
Serious Fraud Office

BAE Systems has been under investigation by the Serious Fraud Office, into the use of political corruption to help sell arms to Chile, Czech Republic, Romania, Saudi Arabia, South Africa, Tanzania and Qatar.[131][132][133] In response, BAE Systems' 2006 Corporate Responsibility Report states "We continue to reject these allegations...We take our obligations under the law extremely seriously and will continue to comply with all legal requirements around the world.[134] In June 2007 Lord Woolf was selected to lead what the BBC described as an "independent review.... [an] ethics committee to look into how the defence giant conducts its arms deals."[135] The report, Ethical business conduct in BAE Systems plc – the way forward, made 23 recommendations, measures which BAE has committed to implement. The finding stated that "in the past BAE did not pay sufficient attention to ethical standards in the way it conducted business," and was described by the BBC as "an embarrassing admission."[136]

In September 2009, the Serious Fraud Office announced that it intended to prosecute BAE Systems for offences relating to overseas corruption. The Guardian claimed that a penalty "possibly of more than £500m" might be an acceptable settlement package.[137] On 5 February 2010, BAE Systems agreed to pay £257m criminal fines to the US and £30m to the UK. The UK already massively benefited from £43 billion contract in tax receipts and jobs in the UK, and had dropped an anti-corruption investigation into the Al Yamamah contracts later taken up by US authorities.[138][139] Crucially, under a plea bargain with the US Department of Justice, BAE was convicted of felony conspiracy to defraud the United States government and sentenced in March 2010 by U.S. District Court Judge John D. Bates to pay a $400 million fine, one of the largest fines in the history of the DOJ. U.S. District Judge John Bates said the company's conduct involved "deception, duplicity and knowing violations of law, I think it's fair to say, on an enormous scale".[140][141] BAE did not directly admit to bribery, and is thus not internationally blacklisted from future contracts. Some of the £30m penalty BAE will pay in fines to the UK will be paid ex gratia for the benefit of the people of Tanzania.[142] On 2 March 2010 Campaign Against Arms Trade and The Corner House were successful in gaining a High Court injunction on the Serious Fraud Office's settlement with BAE. The High Court may order a full review of the settlement.[143]
[edit]
Saudi Arabia

One of 24 Panavia Tornado ADVs delivered to the Royal Saudi Air Force as part of the Al Yamamah arms sales.
Main article: Al-Yamamah arms deal

BAE (and British Aerospace previously) has long been the subject of allegations of bribery in relation to its business in Saudi Arabia. The UK National Audit Office (NAO) investigated the Al Yamamah contracts and has so far not published its conclusions, the only NAO report ever to be withheld.[144] The MOD has stated "The report remains sensitive. Disclosure would harm both international relations and the UK's commercial interests."[145] The company has been accused of maintaining a £60 million Saudi slush fund and was the subject of an investigation by the Serious Fraud Office (SFO). However, on 14 December 2006 it was announced that the SFO was "discontinuing" its investigation into BAE. It stated that representations to its Director and the Attorney General Lord Goldsmith had led to the conclusion that the wider public interest "to safeguard national and international security" outweighed any potential benefits of further investigation.[146] The termination of the investigation has been controversial.[147] In June 2007, the BBC's Panorama alleged BAE "paid hundreds of millions of pounds to the ex-Saudi ambassador to the US, Prince Bandar bin Sultan" in return for his role in the Al Yamamah deals.[148] In late June 2007 the United States Department of Justice (DOJ) began a formal investigation into BAE's compliance with anti-corruption laws.[149] On 19 May 2008 BAE confirmed that its CEO Mike Turner and non-executive director Nigel Rudd had been detained "for about 20 minutes" at two US airports the previous week and that the DOJ had issued "a number of additional subpoenas in the US to employees of BAE Systems plc and BAE Systems Inc as part of its ongoing investigation".[150] The Times suggested that such "humiliating behaviour by the DOJ" is unusual toward a company that is co-operating fully.[150]

A judicial review of the decision by the SFO to drop the investigation was granted on 9 November 2007.[151] On 10 April 2008 the High Court ruled that the SFO "acted unlawfully" by dropping its investigation.[152] The Times described the ruling as "one of the most strongly worded judicial attacks on government action" which condemned how "ministers 'buckled' to 'blatant threats' that Saudi cooperation in the fight against terror would end unless the ...investigation was dropped."[153] On 24 April the SFO was granted leave to appeal to the House of Lords against the ruling.[154] There was a two-day hearing before the Lords on 7 and 8 July 2008.[155] On 30 July the House of Lords unanimously overturned the High Court ruling, stating that the decision to discontinue the investigation was lawful.[156]
[edit]
Others

HMS Coventry was one of two frigates sold to Romania.

In September 2005 The Guardian reported that banking records showed that BAE paid £1 million to Augusto Pinochet, the former Chilean dictator.[157] The Guardian has also reported that "clandestine arms deals" have been under investigation in Chile and the UK since 2003 and that British Aerospace and BAE made a number of payments to Pinochet advisers.[158] In 2003, HMS Sheffield was sold to the Chilean Navy for £27 million, however the government's profit from the sale was £3 million, after contracts worth £24 million were placed with BAE for upgrade and refurbishment of the ship.[159]

BAE is alleged to have paid "secret offshore commissions" of over £7 million to secure the sale of HMS London and HMS Coventry to the Romanian Navy. BAE received a £116 million contract for the refurbishment of the ships prior to delivery;[160] however the British taxpayer only received the scrap value of £100,000 each from the sale.[161]

BAE ran into controversy in 2002 over the abnormally high cost of a radar system sold to Tanzania.[162][163] The sale was criticised by several opposition MPs and the World Bank;[164] Secretary of State for International Development Clare Short declared that BAE had "ripped off" developing nations.[165][166] In December 2010, leaked US diplomatic communications revealed that Edward Hoseah, the Tanzanian prosecutor investigating misconduct by BAE, had confided in US diplomats that "his life may be in danger" and was being routinely threatened.[163]

In January 2007, details of an investigation by the Serious Fraud Office into BAE's sales tactics in regard to South Africa were reported, highlighting the £2.3 billion deal to supply Hawk trainers and Gripen fighters as suspect.[167] In May 2011, as allegations of bribery behind South Africa's Gripen procurement continued, BAE partner Saab AB issued strong denials of any illicit payments being made; however in June 2011 Saab announced that BAE had made unaccounted payments of roughly $3.5 million to a consultant, this revelation prompted South Afric

It's a bit long, but you get the idea: http://en.wikipedia.org/wiki/BAE_Systems

+ anyone for a spot of money laundering? I do recall there have been one or two cases that have come to light.

I think there are examples of bad people in every walk of life and profession.

But more so in banking and finance than possibly any other.

Probably to do with the type of people who go into the industry, the opportunity and the culture of greed, bonuses and lack of moral, ethical leadership at the top. This still does not mean everyone in the field is a wrong 'un. But a lot are.

I make no judgement about Colebatch or any other individual when I say this, unless they have been dishonest or unethical - some will have been prosecuted, some not - and only they will know.

Just sayin', that's all.

You can pick selective events that occur in any set of organisations and then use that to extrapolate that they and everyone who works in those industries is defined by those events. Doesn't make it so.

Take another set of organisations that have garner much negative press of late, churches, judging by the press you would think everyone who works in churches are either pedophiles or covering for pedophiles. This ignores the extensive not for profit work they do in the welfare sector. In my country (Australia) the welfare sector would collapse under the weight of demand if weren't for churches the money and volunteer workers that they deliver.

The crash in the housing market wasn't caused by bankers, it was created by everyday people overpaying for houses. The lending practices that encouraged this were an initiative of the US government to get people into their own houses.

BTW the person who I heard predicting that it would all go pear shaped (and actually gave a specific date) was - wait for it - a banker!

Thats just an incredible statement.

How can you possibly justify that?

I'd counter that the continuing sexual abuse scandals within the Catholic church worldwide indicates certain fundamental flaws in that institution, as well as in an unacceptably large proportion of individuals among its hierarchy. This goes beyond the actions of just a few.

I'm all in favor of taking personal responsibility. When I took a mortgage at one of the now-defunct giant banks at the heart of the mortgage implosion (chosen because I had a previous mortgage with them prior to their decision to concentrate on re-selling packaged sub-prime loans by deceit), they insisted that I accept highly-deceptive, potentially very destructive loan terms. In other words, they tried their best to deceive me. They then packaged this loan with other of a substantially lesser quality, assigned an inaccurate risk rating to the package, and sold them under even more deceptive terms to investors. There is no mystery about any of this--it's a matter of public record.

In other words, they engaged in fraud at multiple levels--from the executives who adopted that strategy all the way down to the mortgage writer in the local office who tried his best to hide the truth about his product, then admitted that this was all he was now permitted to offer to me. The scale of the fraud at that specific bank ran to many billions of dollars. I don't tar all "bankers" with the same brush, but it seems to me that much of the US banking system has been run similarly, to the detriment of most of the world.

Now, why do you suppose people might be peeved at "bankers?" Why would they be irritated by actions and attitudes within much of the church hierarchy? Do these responses seem unreasonable, in light of recent events (which continue to unfold and most of which presumably remain hidden)?

Railing about the fact that life as we know it would be impossible were it not for "bankers" misses the point. Life as we know it would probably be impossible were it not for scientists, engineers, mathematicians, teachers, farmers, heavy equipment operators, politicians, lawyers and (yes) soldiers as well. That doesn't mean we should maintain a grateful silence in response to institutionalized misbehavior by any of them.

IMHO, of course.

Mark

Far be it from me to cast aspersions about someone I don't know a thing about, then again it just goes to show the infinite depth of your obvious inability to ........ get the big picture! Ever been told to relax your sphincter from the blindingly obvious choke hold it has around your neck ? I wont hold my breath but ........ try decipher some of the following!

The Many Ways Banks Commit Criminal Fraud | Zero Hedge

The Many Ways Banks Commit Criminal Fraud


http://www.zerohedge.com/sites/defau...cture-7813.jpg
Submitted by George Washington on 07/03/2012 20:57 -0400




The Libor scandal seems to be waking people up to manipulation and fraud by the big banks. There are many other types of fraud they've engaged in as well ... Here is a partial list:

• Committing massive and pervasive fraud both when they initiated mortgage loans and when they foreclosed on them (and see this)

• Pledging the same mortgage multiple times to different buyers. See this, this, this, this and this

• Cheating homeowners - especially veterans - from laws meant to protect people from unfair foreclosure

• Engaging in mafia-style big-rigging fraud against local governments. See this, this and this

• Cooking their books

• Bribing and bullying ratings agencies to inflate ratings on their risky investments

• Pushing investments which they knew were terrible, and then betting against the same investments to make money for themselves. See this, this, this and this

• Engaging in unlawful "frontrunning" to manipulate markets. See this, this, this, this, this and this

• Engaging in unlawful "Wash Trades" to manipulate asset prices. See this, this and this

• Otherwise manipulating markets. And see this

• Shaving money off of virtually every pension transaction they handled over the course of decades, stealing collectively billions of dollars from pensions worldwide. Details here, here, here, here, here, here, here, here, here, here, here andhere

• Participating in various Ponzi schemes. See this, this and this

• Laundering money for drug cartels. See this, this and this (indeed, drug dealers kept the banking system afloat during the depths of the 2008 financial crisis)

• Owning and largely running the Federal Reserve ... which is itself arguably a Ponzi scheme

But at least the big banks do good things for society, like loaning money to Main Street, right? Actually:

• The big banks no longer do very much traditional banking. Most of their business is from financial speculation. For example, less than 10% of Bank of America’s assets come from traditional banking deposits. Instead, they are mainly engaged in financial speculation and derivatives. (and see this)

• The big banks have slashed lending since they were bailed out by taxpayers ... while smaller banks have increased lending. See this, this and this

• A huge portion of the banks' profits comes from taxpayer bailouts. For example, 77% of JP Morgan’s net income comes from taxpayer subsidies

• The big banks are literally killing the economy ... and waging war on the people of the world

• And our democracy and republican form of government as well

See Drwnite's comprehensive answer & try not to take this discussion personally because it is certainly not meant as a personal slight on you. I have heard of some heart warming stories of bankers such as the one that spent his money on opening an orphanage in India - there just seem to be a lot more about that are blaggards and rotters.

Mark, this is not meant as a criticism--your post is a good addition to this thread--your post brought raised a couple of interesting points (to me): First, what do you mean by your bank "insisted" that you accept disadvantageous loan terms? Why didn't you simply go to another bank, there is no shortage? Second, from your very brief explanation above, it sounds like you chose the bank that you dealt with because it was convenient for you (you had a previous mortgage with them). Once you realized that they were trying to deceive you, did you continue doing business with them, and if so, why? It seems to me that consumers are responsible for determining what is in their best interest, and for not dealing with mortgage lenders, or anyone else, once they've demonstrated that they are trying to hide the ball.

DocSherlock, drwnite, I don't think anyone is denying that there are some bad apples among the banking lot (as in all walks of life) and that the financial system as a whole is far from perfect.

But that doesn't even come close to meaning that there are more bad people in banking and finance than other walks of life. Take your pick--used car salesmen, building contractors, taxi drivers, lawyers, car mechanics, clergy, government officials, etc etc. Don't know about you, but I've encountered plenty of people in these fields that were hardly paragons of virtue, as well as many that were. Bankers just generate more headlines, and indeed bad bankers probably have more impact on the national (international) economy than your average bad plumber, but that by no means demonstrates that there are more bad people among banking than other spheres.

I have worked in Banking, Construction and Technology Industries.

The biggest fraud I witnessed in my time was in the construction industry, should I therefore draw the conclusion that construction industry workers has more bad eggs than any other? Of course not.

Saying bankers have more bad eggs based on Libor thing or Bernie Madoff is the same thing. Remember the LIBOR thing involved a handful of individuals as did Bernie Madoff. I haven't gone through everything Drwnite posted but most of it is rubbish or acts of individuals. Millons of people word wide work in this sector.

Saying CDOs were some sort gross corporate fraud is wrong - I would say it was a too smart by half way of minimising risk, like many things that are too smart by half it didn't quite work out, bit like traction control on dirt bikes, sounds great, until you have to power up a loose hill and the traction control cuts the power.

I just don't buy that these were created to expressly rip investors off, guess what big companies do dumb things.
You can either choose to believe:
- that CDOs were created as part of vast conspiracy, involving boards, CEOs, securities dealers etc all working together to create financial instruments that were designed to fail and sold to investor on this basis.
- or that CDOs were created to repackage debt to better manage default risks, but actually when combined with lax lending practices had the reverse effect.

The first an act of maliciousness on a grand scale, the second carelessness.

To me the second is much easier to believe.

Bank bashing is just lazy.

Want to see a world without banks, look at the former Soviet Union, they had "scientists, engineers, mathematicians, teachers, farmers, heavy equipment operators, politicians, lawyers and (yes) soldiers", in some cases the best in the world, hardly led world living standards (or mostly innovation). Banks and the things the facilitate is the difference.


Anyway, Walter rather than arguing about banking, I believe you have a ride report to complete. :)

Good Lord !

"A foolish consistency is the hobgoblin of a small mind."

It's difficult to grasp ANY picture when citing or supporting so many arguments that are so FACTUALLY wrong . . . that's it's nearly embarrassing to point it out.

When this sort of thing happened in my graduate classes or in my own training sessions I remember the phrase - "I'm sorry, you've apparently registered for the wrong class. You don't belong here . . . "

Customer deposits are NOT assets ! The only banks which hold a majority of liabilities in customer deposits are either in non-capitalist societies, narco-democracies, or . . . otherwise unsophisticated financial systems . . . which I'm sure we can agree have fewer PUBLIC scandals (about anything). And therefore, if a bank-basher, must be a better place to live, work be educated and seek health care.

Or not.

I was involved in a very time-sensitive purchase at the time, and needed to close quickly. I didn't want to mess around lining up another loan. However, I did rearrange my financial affairs to allow me to get out from under that mortgage quickly, and I stopped working with that bank completely.

I'm a fairly sophisticated consumer of mortgages, and I read the fine print carefully. Had I been otherwise--or had I fewer options--I might have been taken in. Make no mistake about it: that bank was taking advantage of anyone not able to understand, and they were doing it on purpose. They were then colluding with rating companies to defraud the buyers of mortgage-backed securities. Further, a great many banks were doing the same or worse, all across the USA.

Mark

I have little doubt that this is true, although part of the problem (and I'm not referring to you here) was that many of the borrowers either had no idea what they were signing, or were themselves guilty of overstating their incomes or choosing mortgages (interest only, etc.) that they should not have expected to be able to pay. In the big picture, many of the problems only achieved the scale that they did because of this behavior by consumers, so "they" also bear some responsibility.

And of course it is not only mortgages and house buyers; I have a friend, a finance professional BTW, that recently invested a considerable sum into a complex life insurance product. When he tried to withdraw some funds, he found out that if he did so he would lose 80% of his investment due to pre-paid admin fees or something, which apparently the agent did not disclose.

Caveat Emptor ..............
 

.............. let the buyer beware.

I would like to think that this thread will be of some use to the youthful individuals among us - including those who come to view this in the future (when I am long dead and buried) in order to better understand what they are not taught in their main stream education.

I believe that it is still too early to say if the collaterised debt obligations (CDO) have been as you prefer to view it; to give the benefit of the doubt to that system.
For me, the jury is still out.

Maybe you could elaborate on the "second half" of the circumstances that Markharf suffered under - the credit default swaps that underpinned the risk taking of the CDOs?

Partially true. You can demand something bank owes you something (ie the money you deposited), or you can demand something from banks if they broke the law. Best to stay away from absolutes in my opinion as it forces you to really consider what is being said.

However, answering to the spirit of your statement: citizens most certainly have the right to demand better banks/ banking practices. They do so all the time, albeit indirectly, at the legislative level. People even organize to 'demand', directly or indirectly, that the workers of particular industries get paid less or more. Happens all the time in various societies. Dunno if it'll get your toilet fixed any cheaper. I guess what I'm saying is don't give up hope.

Also, as you pointed out, banks are highly important to society. Hence, I think most citizens are obliged to demand ever better banks. How to prevent the populace from shooting themselves in the foot via over-regulation is another issue altogether.

Stating that I am entitled to 'start a better bank' is a non-sequitur. I'm not saying that I could do better, or that new banks should be started. There are better ways of fixing the problems using existing banks. Additionally, profitable is not the same as ethical, beneficial to society, or the conforming to the desires of the people. There is loads to be said about this.

To what extent does the developed world benefit from more capital/ capitalism? For example, inflation adjusted GDP per-capita in the US has tripled in the past 50 years, but results from life satisfaction surveys remain flat over the same time period. Think about that. Fifty years of material and capitol development for no significant increase in subjective well being.


How much regulation should there be?
What aspects of banking should be subject to regulation and by whom?
Should the HUBB be demanding a seat at the next G20 conference?

all good questions. beer

To take a loan or not, that is the question
 

Naturally, Shakespeare had a lot of points to make about society, the condition of mankind and the like, back in those days which I can only assume were based on the principles of Usury.

I imagine (not being around at that time) that he highlighted a couple of extremes within "neither a borrower nor a lender be" in order to generate thought among his audience.
In this day and age I would expect people to live within their means; in simple terms, certainly take out a loan but only on the basis that you can afford the terms and conditions and can repay the loan (+ the interest of course, if you have not used an Islamic bank).

A good idea? - Domestic issue
 

There is another "live now, pay later" scheme here in the UK which is related to the provision and use of household energy.
This has come into being because people are not investing their hard earned income into capital expenditure on insulating their property (and other similar energy saving schemes but I am no expert in what they are).

So, what the Government want to encourage is that householders install the energy saving systems and pay for it via their future energy bills; in theory the bill for energy usage is reduced by the installation so the customer does not "notice" the portion of their bill which is contracted to repay the capital expenditure - i.e. there is no up-front payment.
Paying off the scheme will probably be over 20-25 years.

A "catch" in this, is that when a property is sold, the repayments "stay with the electricity meter". In other words a future purchaser of such a property inherits the liability to continue to pay for the installation; that's neat.

No one has explained in this news item if the banks are involved in the financing/administration of this scheme, or if it is executed via some government agency/quango.

?c?

Insider trading
 

There are a lot of people here in the UK who would not agree that the old boys network in the UK was eliminated by the de-regulation of the markets, including the stock market.
Old boy networks don't have to be based on the "traditional toffy-nosed posh boy", to mis-quote one of our members of Parliament.
Surely, insider trading relies on a network, old boys or not?

I can accept that the USA may be different but it does seem to be the centre (center!) of the world for conspiracy theories.

These sectors of banking activity were far from separate from each other in the UK, witness all the effort now being made here to separate the retail and investment operations of the various brands of bank; firewalls (not the computer version) etc have been proposed but we are sorting out legislation to stop the investment bankers from bank-rolling their bets with the deposits of retail customers.
The pity is that the banks have convinced the government to take a lot of time over this.

?c?

Haaa!
 

The UK Chancellor of the Exchequer during a TV interview has just referred to "the gamble on the city of London over the past 15 years", or words to that effect.
This was in the context of future capital investment in transport for the UK (HS2 if anyone cares enough).

Someone up above says "I would like to think that this thread will be of some use to the youthful individuals among us - including those who come to view this in the future....."
Well, by the time I've read this far, I've lost track of who said what to whom about what in response to which posting.
But it's certainly entertaining, what the bar's for, so here goes....
Mine's a pint of sarsaparilla bier

While agreeing that there are good and bad in all professions, it seems to me that the de-regulation of the finance industry in the 70s/80s allowed those bankers with greed as their main motivation to completely swamp the honest professionalism of the rest. The UK government at the time were warned of exactly this possibility, but warning Maggie Thatcher of 'unintended consequences' was not fashionable in any part of society and was rumoured to be a hanging offence. It's not for nothing that the moniker "SWMBO" entered just about every language on earth.
(Yes, I'll be at Trafalgar Square the first Saturday).

It became so bad that a whole country's complete banking system collapsed, a timely reminder on today's BBC news:
BBC News - Icesave: Icelandic government wins compensation ruling
"Icesave, run by the Icelandic Landsbanki, collapsed in 2008 along with all of Iceland's banking system."
I don't think any western country has ever had a complete collapse of, say, health care, energy distribution, education, police etc.

As far as I know, no other profession was stripped of so much basic regulation, checks and balances, as the finance industry. And human nature being what it is, we see the results today.
Yes, 'regulators' were appointed and put in place, by the government. Expensive and useless, it's taken a few years for the FSA to lie down and die at last. Will anything else do a better job?
Probably not. Governments these days are controlled by a huge lobby industry, one of the fastest-growing industries I think. And who has the cash to pour into that industry? The bailed-out banking industry.
Like a daisy-chain?

I would ask, if the banking industry is so fundamental to the well-being of humankind within our current system of capitalism and eternal consumer growth (and I think it is), why isn't it one of the most tightly regulated industries?
Like, say, the nuclear industry, civil engineering (or any other engineering), medicine, and air transport?
It seems that no other chain-reaction misdemeanour (committed by however few people) in any other major profession has touched the lives of so many people worldwide. Perhaps the tobacco industry, and the foreign policies of large countries, get close.

Don't get me started on this new pile of corruption... Oh, you already did!

"Approved Green Deal installers, such as energy companies or DIY chains, will then advise [the householders] on potential improvements, such as double-glazing, insulation or new heating systems."
So, those advisors, "energy companies" and "DIY chains" will really operate in the interests of the householders, won't they.....?

"Consumers will pay for the improvements by taking out a loan with the Green Deal Finance Company, a non-profit making organisation backed by the government."
"There is no guarantee that the eventual savings made by consumers will match the cost of the loans they take out to make the improvements."

Ladies and Gents, I give you the "Green Deal Finance Company" :clap:
Performing with the "Advisors to the Company"
Clifford Chance
Goldman Sachs International
Linklaters
Lloyds TSB
PwC
RBC

Yes Ladies and Gents, there are indeed banks of differing skills on the stage, ready to sell their advice.

This is a company making loans to householders in energy-inefficient homes, having difficulty paying their gas bills.
It's non-profit making. Why does it need such a glittering array of 'advisors'?
The advisors above?
Oh, I forgot. This has been set up by the government. So a good sprinkling of MPs, Special Advisors and senior civil servants with plenty of interests in those 6 companies, then.

Another disaster waiting to happen. No one in the whole operation is regulated to operate solely in the householder's interest.

A4E anyone? http://www.guardian.co.uk/politics/2012/feb/21/emma-harrison-a4e-nice-work
and https://en.wikipedia.org/wiki/Emma_Harrison_(entrepreneur)

Another sarsaparilla please bier

"Some see private enterprise as a predatory target to be shot, others as a cow to be milked, but few are those who see it as a sturdy horse pulling the wagon." - Churchill

It would be silly to suggest that there haven't been abuses. But those simply do not rest SOLELY on the shoulders of bankers.

Regulators, (Home/Propety) Appraisers, and borrowers are surely complicit. In fact, in the run-up in the mortgage debacles there clearly was a symbiotic relationship. Fools were flipping houses to make a quick profit and it was all good until the music stopped.

Have a read of Michael Lewis' wonderful books - 'The Big Short' and 'Boomerang: Travels in the New Third World'.

In the first he bares witness to the fact that almost NO ONE understood the CDO/CDS and a particular Deutsche Bank trader went from full bull to full bear on the whole game, much to the incredulity of his peers, his employers, and two other parties who'd figured out that the emperor had no clothes. In essenece, when everyone was making money, no one could stop or at least didn't believe the music would stop without them having a chair (musical chairs).

If an Art History major, even one from Princeton, can figure this out . . . it's not rocket science. (Granted, some sections of 'The Big Short' are a bit mathematical.)

In the second, he examines, with pithy irony, "beware of Greeks bearing bonds" and how various populations (Greece, Ireland, Germany, etc) behaved when the money was there for the taking.

As for the whole CDO/CDS . . . go back to '98 when an intrepid Brooksley Born raised in investigation into the entire market of CDSs. She was effectively shot down by Alan Greenspan, Larry (Lawrence) Summers, and Arthur Levitt (head of the SEC). At that time the market was in the mid-100 $Billions. By 2008 it had increased to an estimated 56 $Trillion, one year of TOTAL global economic output.

That enormous leverage, and it's lack or regulation, gave forth to ENORMOUS counter-party risk.

So . . . back to "bankers". AIG, an enormously successful company of over 100,000 employees was brought to it's knees by about 1,000 folks in London of whom perhaps 40 were directly responsible.

Too much money chasing too few assets - asset bubble. The "chasers" - borrowers, appraisers, credit rating agencies, regulators . . . and some bankers.

Banking in, and on, Iceland
 

There are a lot of well made points in the post, and one of the most interesting is the reference to what has occurred in Iceland.
As I understand this (from news coverage and the occasional documentary) the Icelandic nation decided to "get into" international investment banking - a case of chasing the asset bubble referenced elsewhere in here?
So Iceland jumped in with both feet with a lack of background in this activity/service sector, call it what you will.
I well remember at that time the full page advertisements in the UK newspapers for 2-3 Iceland based banks which offered depositors an interest rate of 12% or more; I was tempted, as I am sure many others were, to deposit some cash but this just smelt too good to be true (and we all know the ending of that motto).
But, here's the interesting bit: I believe the Icelandic case is unique (in the way explained in the news article in the link) in that their Government decided to allow the banks to fail. Contrast this with the bail-out by every (to be confirmed by someone) other nation.
On the face of it, this sounds good news but the people of Iceland may not agree: at present they are paying interest rates way above those low rates that exist at present in the UK and elsewhere; in other words, their internal banking system (now they have withdrawn from the international experiment) is not trusted and cannot borrow money on the international markets at cheap rates - the net result is that families are having to pass on their debts to their children in dealing with mortgages that extend way past the lifespan of any single individual.
Perhaps a native of Iceland can add value to this understanding of what is happening with their country at present?

The comment within the linked article by a journalist says:-
A ruling from the little known EFTA court has put a fundamental objective of European idealists in doubt; that banks should be able to offer savings accounts to customers across Europe and that customers, in turn, should be confident that their deposits will be protected......................
In other words, it will take some time for the Iceland banks to be trusted again by anyone outside Iceland; how long though? Memories are short.

The question begs ........
 

Where is the safest place to put your cash where the best interest can be earnt ? ?c?

Well, therein lies the rub; how much risk do you really want to take?
Could you open an account in Iceland while visiting there to earn their higher rate of interest?
A Swiss numbered bank account (which have a very small rate of interest I understand, but are considered to be very "safe").

This guy came up with an answer, if you read into why he has done what he has done so far (as a multi-millionaire business man who got very frustrated with the UK retail/commercial banks):-
Your Savings | Burnley Savings and Loans

In the meantime, interest rates here in the UK are falling for no obvious reason; so, they are going from small to very small - of course, the government wants us all to spend so that they get increased tax revenue, but we are all waiting for prices to fall further.
Actually for "no obvious reason" = it is likely that interest rates fall because there is a "cash bubble", like an asset bubble; lots of companies in the UK are sitting on cash deposits but they don't have enough confidence in the economy to want to invest it.

Japan was mentioned earlier: they have been in a state of stagflation (stagnation of the economy coupled with deflation) for more than two decades.

As a follow up to how banking is progressing in democratic Iceland (multiple referenda) here is another case study which is ongoing (non stable and non democratic).
New Kabul Bank - Wikipedia, the free encyclopedia

Afghan elite ransacked $900m from Kabul Bank, inquiry finds | World news | guardian.co.uk

Consider who is ripping off who.

Incidentally, a news item stated today that Honduras is in financial meltdown.

However when a bank customer screws up there is a fee, when a bank screws up there is none (well not really anyway). And when most/all financial institutions act in a similar/identical way, do we really have a choice? (note: I cannot comment on local/regional small banks, you may have a good one? I don't know)

The fees are where the banks are now making big money. However due to low interest rates, depositors (mostly responsible Middle/working Class people)are loosing money everyday their money is in a bank. (albeit low risk mind you) Wages are not going up, prices are. Inflation is based on cost of living and wages. The way to mask inflation over the short term is to depress wages. Wages for the lower 95% are being depressed worldwide.

The easy blame is on the China/Asia region, when in fact it is the multinational banks. No, many smaller banks do not fit this mold. Contrary, many USA banks (my country) are the queen of this, and London is the King(due to slightly less regulations, same corporations though).



Should we keep money in our mattresses? Technology is getting cheaper by the day, but it is not the type of technology that lowers the costs of the necessities to live. This post is getting too long, and conviluded... Ask me about price vs value when I am truly drunk, it's fun beer

"But you have no right to demand other banks or bankers behave in a way that you personally or even the majority of the population see fit."

I find this statement quite bizarre. People demand all sorts of behaviors out of me all day long: that I do certain things and not others at traffic lights, that I refrain from killing or seriously maiming my blameless fellow citizens, that I act in certain ways when dealing with contracts, money, possessions, manner of dress, etc. etc. etc.

For example, I'm forbidden, under penalty of law, to defraud other people, institutions, or the government. "Fraud" is defined in various ways for various situations--in my professional work I'm actually required to conform to a fairly strict definition of acceptable behaviors. So are auto mechanics. So are lawyers. And like it or not, so are bankers.

To claim otherwise--that no one can impose rules restricting the behaviors of bankers--just doesn't make sense...unless, of course, you're a pure anarchist, who believes that no one has any right to limit any behavior but their own under any circumstances. If that's the case, I respectfully decline to engage any further.

Mark

In fact, some banks are better than others, and if you can't be bothered to find the good ones and move your money to them, then you are just being lazy. I currently have money in a handful of banks, and if their service fails to impress, I transfer my money to another one and close the account. While I can't say that I have found the perfect bank yet, I at least try to reward good banks with more deposits and penalize bad ones by closing accounts. If you act like all banks all the same and do business with bad banks, you are part of the problem...

Not sure where to start here, because it is not clear what you are saying--you are blaming banks for paying low interest rates? Or for depressing wages? Or both? How do you mask inflation by depressing wages?

I think the convoluted nature and size of this thread shows clearly the universal nature of banking and the wide impact that it has on everyone.

Perhaps the moderators for the bar conversation would make this a sticky; otherwise when this thread does come to an end (but probably not any firm conclusions) it will disappear; as I said earlier, there is some serious education in here for us.
"If you think education is expensive, try ignorance".

i can't quite face reading back through all the previous history , but I do know one thing
They (a bank) pay my wages and have let me take a year out to do my planned world trip.. - And no I don't get big bonuses and they pay me the going rate for my job.

High ranking big cheeses in any company are the one's who get the big buks £million pay offs, and such like - Industry is full of them. Football is full of them .

Every company out there wants to make big profits for their shareholders, with customer satisfaction coming secondary to that primary goal.

Banks are no worse than any other industry you are to mention.

Maybe you should take the time to read the rest of the thread....

The general perception, true or not, is that banks and bankers are worse than most other industries.

I think the rip off factor is just more overt in finance related industries as that is their only raison d'etre - to take money off people. I suppose the reductionist could say that that is all any business is about, though. Which is probably true.

But there are many sectors that are not about that - public service, police, medicine in some countries, nursing, most professions allied to health, teaching etc etc. It probably stands to reason that there are less cads in those fields than in banking or other business, as the motivation for entering the field in the first place is not the same.

However, there are good and bad in every walk of life and that's a fact. I'm sure it would be possible to do a study of sorts to look at conviction rates in various industries for various offenses - it would be interesting to see the results of that particular study....

Well, as it's The Bar, I'll put a sixpence in the jukebox. http://www.smileys4me.com/getsmiley.php?show=2738



Maybe Pride Germination from Zimbabwe can help - they know all about inflation over there.
(The video is snowflakes on a cobweb - completely irrelevant!)

Inflation - too much money chasing too few goods, so increase the prices. Or, reduce the wages - same effect.
The difference between the two, as I understand, are the different effects on the value of a country's currency, decided by the 'government' and the finance sector lobbying it.

Yes, dead right to say that.
I think throughout here (my posting anyway) 'bank' and 'banking profession' always means 'those board directors responsible for how a bank behaves within the community in which it operates'.

Thanks for the book recommendations; there seem to be a few Boomerang editions, so at least this author is making a decent living.

Would you credit it! Top of the news today in the UK is the latest scandal for which there is a report from the UK FSA.
Yep, this refers to the "infamous" credit debt swops (CDS) which apparently hardly anyone understood when they were mis-sold by banks, to businesses.
It is reported that this one will be much bigger than that of PPI, mentioned here earlier, in monetary terms alone.
And it will keep the lawyers and courts busy for a while. :innocent:

Some of the pundits on the news are calling the financial products "interest rate swops" but the way they are discussed indicates that they are one and the same thing as CDSs.
It is alledged that up to 90% of those sold to businesses were "mis-sold" but I haven't heard any clear definition of what that is - maybe in this day and age, if you don't understand what you are doing but you go ahead and do it anyway then you are a victim??
?c?

Incidentally, I had similar thoughts about musical chair games and "the emperor has no clothes" fables, but also the game of pass the parcel = someone ends up holding the parcel when the music stops.
The latter seems to be the essence of the whole CDO/CDS saga.
It was also a process of passing the risk contained in bad debts back to those who originally borrowed from the banks, thus closing the loop of "passing the parcel".

Inflation, is by definition, an increase in the cost of goods and services, which are determined only partially by wages, and mainly by other factors (competition, raw materials, duties, regulations, etc.). If you freeze, or even reduce wages, it would therefore have only very limited effect on inflation, and such effect would not be "masking" inflation, but reducing it to some degree.

Those parties directly affected by this mis-selling are organised it transpires:-
Bully-Banks Supports Businesses Who Were Mis-Sold IRSAs - Interest Rate Swap Agreements by Rogue Banks
The bullet points in the highlights on the main page of this web link summarise the way these financial products were foisted onto businesses.

And for anyone who has read this far there is plenty of further explanation within the press, such as:-
http://www.telegraph.co.uk/finance/r...and-banks.html
Interestingly, the posts at the end of that article cover just about every range of opinion that has been expressed in here to date.

Talk tough or act tough?
 

Well, I, for one, am following every word that it is uttered by the UK government about banking, and the latest is:-
BBC News - Osborne backs break-up of banks that fail to reform

Tonight, the representative (chief exec I think he is) of the British Bankers' Association (BBA) was quite agitated about "the electrification of the ring fence" (see the link for the context).
I surmise that the government is not protecting this sector in the way that the banks would prefer, but time will tell.

During interview, the BBA guy openly accepted their responsibility and complicity for fiddling the LIBOR and the government intention is that the British taxpayer does not pay the fines that are on the way for those involved on both sides of the Atlantic - in a separate media item this was summarised as some 20 banks located in 3 countries which conspired to commit criminal fraud.
Along the way, it is reported that Lloyds' bank has broken ranks from the BBA.

We live in interesting times.

I was going to write a long winded post on this however this video sums it all up!!!


The BEST speech by ANY protester EVER - at occupy wall st (End The Fed) - YouTube

I recently read a suggestion for investment:

Precious metals
Agriculture
Commodities
Energy

and related stocks.

To that I would add property - should hold some.
Dividend paying stocks.

Some advisers recommend the Troy Trojan fund to preserve your capital which holds divi stocks, gold and some hedged positions.

That's if anyone has any spare money, that is....

Well, put simply, they don't have to provide anyone with financial advice. In the UK it is a highly controlled function to do so (and I guess it is the same anywhere else in the world).
The question, earlier, was where to place savings for the highest return at minimum (or even nil??) risk.
That is a wide open question because it depends on your attitude to risk which itself is a topic that comes up in the HUBB quite regularly.
For a better return on investment you could search/google for "peer to peer" lending which is something akin to the link I posted earlier -- one more time:-
Your Savings | Burnley Savings and Loans
Basically a classic case of taking more risk for higher reward because this is an unregulated market.

Another view of what is going on regarding savings here in the UK can be found here for anyone who is interested.
UK Campaign to Protect Savings and Pensions » Save Our Savers

Personally, I haven't felt insulted by any of the posts in here; there have been some good explanations of how the banking system works, mixed in with some very zealous defence of the system; the latter I don't agree with, but we can all differ.
Today, I am pretty despondent about the news here! It has been one long litergy of placing blame on "the system" and, therefore (incredibly) no one can be held accountable/responsible - in this case I am referring to the UK health care system (the NHS), but the banking saga continues at the same time.
e.g. so far 3 individuals have been arrested in connection with the London Inter Bank Offer Rate (Libor) scandal but the police investigations continue and more arrests are almost certain.

footnote:
This current "thing" of blaming the system is like blaming the Titanic ship for hitting the iceberg - it's all the fault of the lump of metal called the Titanic and nothing to do with those who were operating the ship at the time, or those who designed it, or the ship owners who commissioned the design, or those bankers who financed it for that matter (!!!)

The system exists as it is so that individuals can avoid being blamed. That is why everything is done by committees and boards.

The incompetent and crazy management of the NHS is THE major reason why I no longer work in the UK; they made it next to impossible for me to do even a half decent job and I couldn't live with that. Whilst things are not perfect in my current environment, I can at least get stuff done for people with minimal hassle.

It's all the fault of the system
 

Then you'll understand the essence of this report:-
Mid Staffs sketch: How do you strike off a system? - Telegraph

The punchline is in the final sentence.

I guess this principle applies in all service sectors nowadays - banking, police, health, etc etc but now we have the food supply issue and, suddenly, those involved in the system can be held to blame for what we end up eating.

I think it was said earlier in this thread; the buck never stops with the present day politicians.

The issue continues (let's face it, this is not going away for many many years, if ever in the case of the UK) and now Gods' representative in England has spoken:-
Banks - ITV News
He hasn't said too much in fact, but the new Archbish is an ex-oil industry exec so he has a background of commercial activity to temper his new role:-
""The new Archbishop of Canterbury criticised Mr Osborne's banking approach Credit: Owen Humphreys/PA Wire/Press
The former oil industry executive said evidence made it clear that large, complex banks were not only "too big to fail, they are too big to manage".

However, the Chancellor defended a system based on "a small group of absolutely colossal banks" - including the mainly state-owned Royal Bank of Scotland.""

While I'm here (travelling a bit now that the daylight is returning to the northern hemis) I like this contribution and I've added a few comments, in red, since I can't remember how to do multiple quotes. :innocent:
[QUOTE=McCrankpin;409605]Someone up above says "I would like to think that this thread will be of some use to the youthful individuals among us - including those who come to view this in the future....."
Well, by the time I've read this far, I've lost track of who said what to whom about what in response to which posting.
But it's certainly entertaining, what the bar's for, so here goes....
Mine's a pint of sarsaparilla bier
Yep, that was me and I still consider that the lessons in this thread, for all of us, are immense.
While agreeing that there are good and bad in all professions, it seems to me that the de-regulation of the finance industry in the 70s/80s allowed those bankers with greed as their main motivation to completely swamp the honest professionalism of the rest. The UK government at the time were warned of exactly this possibility, but warning Maggie Thatcher of 'unintended consequences' was not fashionable in any part of society and was rumoured to be a hanging offence. It's not for nothing that the moniker "SWMBO" entered just about every language on earth.
(Yes, I'll be at Trafalgar Square the first Saturday).

It became so bad that a whole country's complete banking system collapsed, a timely reminder on today's BBC news:
BBC News - Icesave: Icelandic government wins compensation ruling
"Icesave, run by the Icelandic Landsbanki, collapsed in 2008 along with all of Iceland's banking system."
I don't think any western country has ever had a complete collapse of, say, health care, energy distribution, education, police etc.
Precisely so, the whole sector is too central to a country's well being which is not the same thing as creating "wealth". We don't all come into contact with the police, nor even the education system for the whole of our lives and even the health system is not needed for individuals for most of their time, but banking, well it's universal in any society.

As far as I know, no other profession was stripped of so much basic regulation, checks and balances, as the finance industry. And human nature being what it is, we see the results today.
Yes, 'regulators' were appointed and put in place, by the government. Expensive and useless, it's taken a few years for the FSA to lie down and die at last. Will anything else do a better job?
Probably not. Governments these days are controlled by a huge lobby industry, one of the fastest-growing industries I think. And who has the cash to pour into that industry? The bailed-out banking industry.
Like a daisy-chain?

I would ask, if the banking industry is so fundamental to the well-being of humankind within our current system of capitalism and eternal consumer growth (and I think it is), why isn't it one of the most tightly regulated industries?
Like, say, the nuclear industry, civil engineering (or any other engineering), medicine, and air transport?
A good question and I don't have a good answer to this one; how much regulation is required and BY WHOM??
It seems that no other chain-reaction misdemeanour (committed by however few people) in any other major profession has touched the lives of so many people worldwide. Perhaps the tobacco industry, and the foreign policies of large countries, get close.
As above, it is universal. We don't all smoke and need the medics to sort us out, we don't all consume alcohol and need the medics to sort us out, nor do we all exist in a state of warfare brought about by foreign policy, but banking .....



Don't get me started on this new pile of corruption... Oh, you already did!

Yep, the UK news continues to drag the skeletons out of lots of cupboards, but that is the best reason I know not to let the bankers off the hook.

Oh forgive me I missed this . . .

Insults ? Here's a request - I'm waiting for my apology. I insulted no one.

Advice - "Wise men don't need it. Fools don't heed it."

That said - cash is King. A few currencies look particularly vulnerable to reduced valuations. Do YOUR homework. Or consult a banker.

Here's a suggested way to find an honest banker.
It was told to a German friend of mine who was thinking of buying a home in the south of Spain, a few years ago, right when it was discovered that most recently-built homes were illegal and had to be bulldozed.
She was looking for a real-estate lawyer she could trust to do an honest transaction with a seller who really owned the home and the land.

Local Spanish friends told her:
"Go and live in the area you're interested in. Visit the local church. Go to mass on Sundays. Chat to the priest. Get to know the congregation for a couple of months. When you've become accepted as a member of the congregation, ask if any lawyers are members. That way you may find an honest one.... maybe - quizás."

Yep, do LOTS of homework. Maybe this approach will get you good advice, from a banker as well as a lawyer....

10 pm tonight
 

Boring I know, now that the daylight is returning to the north and the snow has all but melted (unless you are in the Scottish mountains).

Tonight on UK TV is a documentary about the guy Dave Fishwick who tried to set up his own bank, got caught in all the rules and regs to the point that he can't have a "bank", and he now does what amounts to peer-to-peer lending.

Bank of Dave - Channel 4

About Us | Burnley Savings and Loans

According to the pre-programme blurb/publicity, the UK banking vested interests are trying to close him down while it is also said that his model for such commercial investment/banking is very similar to that used in Germany.

In the meantime, back in the "real" world of UK banks, the latest suggested initiative (from a BoE official I believe) is negative interest rates - apparently this has been tried in some Scandanavian countries, but no one I have heard has commented on how successful this was.
As far as I can tell, what it amounts to for the high street customer is that you would pay charges for storing your money in a bank account; the whole idea, as ever, is to get you to spend cash rather than save it.

Too true!!
 

I suspect you are old enough to know, and remember, that this is how banking used to operate, back in the days before computer technology made it possible to do the things that have been highlighted in here, in earlier postings.
I have never forgotten how I was grilled by a local building society manager (a building society equates to a bank in the UK for anyone who doesn't know the term); he personally interviewed me for what seemed like for ever in order to ensure that I could repay the loan.

From the Bank of Dave website FAQs:-
"Do you credit score?
No, we manually underwrite every application. You obtain a decision from a person, not a computer."

Says it all really.

Great documentary tonight by the way; it confirmed for me the suspicion I have that the UK can't rely on what goes on within the capital; this guy Dave Fishwick (DF) took his fight to the authorities (financial services authority in this instance) who were sat on their hands and, initially, just said no to his initiative, guts and determination to succeed.
Amazingly, the FSA thinking was that Dave's bank would be more acceptable to the authorities if the loans on offer were to provide greater risk for the customer. DF underwrites all loans from his own resources with insurance cover for the small number that default - but, the main point is that the local community trust each other in assessing what risk does exist.
Go figure.

That's right, my first mortgage, early 70s, interview with the Building Society manager.
But it was starting to go rotten even then. Huge pressure had built up to persuade borrowers to opt for those strange things called 'endowment mortgages'.
A device that had no risk for the Building Society, nor the insurance co. All the risk was on the borrower, if his/her circumstances demanded a move of home before the maturity of the insurance. Or a while later, when insurance yields were failing to pay off the mortgages during a time of falling stock markets. A huge scam that caught so many people in its trap.

Each time (over about 4 mortgages as I moved house over the years) I just did a simple set of sums for the B.S. manager - what my repayments would be on a straight re-payment mortgage. Then I'd ask the manager to do the same for the endowment set-up.
It was always the same: "Oh, what a surprise, the repayment mortgage is cheaper, your circumstances must be unusual, well done on spotting that, we'll sign you up for a straight repayment mortgage then!"
The adverts were unregulated and stressed how 'secure' the endowment mortgages were - even convinced my wife at the time - "Isn't it risky having a repayment mortgage? - they say the endowments are much more secure."
Until, that is, friends who had to move house well before the insurance term - found all their premiums swallowed up in charges while they had paid zero off of the capital borrowed over however many years the mortgage had run for.

The promised "with profits" payouts only materialised if you kept the mortgage for almost the whole 25 years. It was well known to anyone who did the research that the average length of a morgage in those days was 7 years.
If you did continue for the whole 25 years from those days, you were then at the start of the stock market depression when insurance yields, even with profits, were starting to drop below the sum owed.

Enough of that, someone's just directed me to this website.
Analysis-News

What a laugh! Have a look at the bottom of the page, commencing "Some Quotes from People Who Understood ....."
One stands out, from Sir Josiah Stamp, director of the Bank of England, 1928 onwards - "The bankers own the earth. .... if you wish to remain the slaves of bankers and pay the costs of your own salary, let them continue to create deposits."

Plus ça change ....! There'll be growth in the spring!

Yep, Spring is fast approaching and the governments of Europe, in particular, continue to peddle the notion that they can wave a wand and generate growth.

I've now read that link and it makes a lot of sense; however, I have read some of the other bits of the main website and there are some "kooky" views in there - definitely a conspiracy theory repeats itself. Nevertheless, it's an interesting link.

We've had a few views expressed in this thread about what has been going wrong, especially since around 2007-08, but here is a forecast of "the next big thing":-
Private equity crash could trigger next wave of financial crisis, Bank warns | Business | The Guardian

And that article led me to:-
Home - Positive Money
Which, for once, offers some solutions to the current impasse; or so I believe - I have yet to dig into this particular webpage in any depth, but one of the links therein points to a published book that has some ideas about money supply (naturally, those who equate money with national wealth will have little interest in such alternatives).

If banks were so good why did we have to bail them out? here the Irish economy is absolutely in tatters thanks to the actions of the bankers and their friend in Government who forced us to bail them out and keep hitting us every day for taxes. any of you ride on Irish roads lately? they would be in the same standard as Albania or Kosovo, no services no repair and huge increases in road taxes.

It's been quite a while since anyone posted in here in support of bankers/the banks, so I assume your question is rhetorical.
One potential, simplistic, answer is that they were too big to fail - recent news in the UK points towards making this a thing of the past; the UK govn aim to bring in more competition within banking including making it easier to start up new banks on the high street + all the earlier policy about splitting the "casino" aspects (or at least firewalling it) from the real world of the countries' population and its needs in banking. Also, the financial services agency (FSA) is being more or less scrapped (I'm not up to date on this but that is how it comes over to me), with the Bank of England taking a much closer regulatory role, after earlier governments cut away and adopted the laisser-faire approach of other decades.

Of course, in the meantime, we have yet another case study of bad banking practice in Cyprus where they seemed to learn nothing from the case of Iceland.
?c??c?

It's too early to say.
The recrimination continues:-
BBC News - HBOS collapse: Ex-bosses face calls for City bans
Possibly the most significant aspect of this latest news item is that the 3 guys in the spotlight:-
a. Are not qualified bankers, but "managers".
b. Have gone on to work in other high level posts - who is it who takes on such talent??

I sincerely hope that the lessons of the last 5-6 years are being learnt, and applied
 

Well well well!
One of the miscreants has resigned (and is currently making all kinds of "apologetic statements and moves" that I won't go into detail here), but -
As a poacher he was also a gamekeeper.

While running the HBOS bank that collapsed it seems that he was also on the board of the regulator:-
http://en.wikipedia.org/wiki/Financi...ices_Authority

Adair Turner - Executive Chairman
Deputy Chairman - vacant, following resignation of Sir James Crosby
Andrew Bailey - Managing Director, Prudential Business Unit
Martin Wheatley - Managing Director, Conduct Business Unit
Lesley Titcomb - Acting Chief Operating Officer, the FSA
Carolyn Fairbairn - Non-executive FSA Board member, Director of Strategy and Development at ITV plc
Peter Fisher - Non-executive FSA Board member, Managing Director of BlackRock
Brian Flanagan - Non-executive FSA Board member, formerly a Vice President of Mars Inc
Karin Forseke - Non-executive FSA Board, formerly CEO of Carnegie Investment Bank AB
Sir John Gieve - Non-executive FSA Board member, Deputy Governor, Financial Stability of the Bank of England
Professor David Miles - Non-executive FSA Board member, Managing Director and Chief UK Economist at Morgan Stanley
Michael Slack - Non-executive FSA Board, Director of the British Insurance Brokers' Association
Hugh Stevenson - Non-executive FSA Board member, Chairman of the FSA Pension Plan Trustee Ltd
Mick McAteer - Non-executive FSA Board member, Director, Financial Inclusion Centre

Almost as a side issue, there are lots of indicators that the "old boys club", mentioned earlier in this thread, still exists.

But, the knifes are out at present and they are stabbing for the bankers; those who were part of the regulation system are lined up to be next for judgement by the Parliamentary committee.

Rothchilds continues to be named as being at the heart of the issues.


Meanwhile the discussion continues, not least on BBC which is running a 3 part series on channel 2 about the history of the past few years - the first past, tonight, covered the LIBOR scandal which was known to governments and financial regulators back in 2008 even though it blew up in the public perception only last year.
Those with access to the BBC programming can see more about this at BBC Two - Bankers and there is more discussion about the issues at:-

DEBATE: Can we trust bankers to help the national recovery? - OpenLearn - Open University

3 banks identified at the heart of the LIBOR fiddling have been Barclays, RBS and UBS. The latter of these 3 is yet to be dealt with by the regulatory authorities.
It is somewhat encouraging that criminal investigations are under way in both the US and the UK.