Friday, Mar 21, 2008
This man should be running the world
Timesonline: UN's poverty chief turns on greedy 'super-bankers'
"He added that herd-minded financiers profit hugely from the inflation of asset bubbles, “but pay very little personal penalty when the bubble bursts”. Instead, ordinary people bear the costs through government bailouts and higher inflation stoked by aggressive cuts to interest rates."
I know this has little to do with HPC, but the causes of the problems we, the public, face are clear and Kemal Dervis seems to understand the root cause, and isn't afraid to speak out....there should be more like him.
Posted by bystander @ 10:17 AM (471 views) Add Comment
8 Comments
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1. alan said...
I think this is a useful post for the HPC website.
If the bubble had not been created by greed, it wouldn't have had such bad effects.
2. Renting2 said...
What sticks in my craw is that it is probably now too late to stop our taxes going up to line the pockets of the undeserving. In fact a lot of people may end up jobless in order to line up for the next bubble.
What can we do now to stop the next cycle starting?
3. Icarus said...
Financiers 'pay very little personal penalty when the bubble bursts'. That's why there's no 'moral hazard'. Unfettered lending is bad for the bank in the long term but it's good for the people running that bank because they make big salaries/bonuses/commissions in the short-term and then move on with their wealth intact. Their actions are not 'unwise' (Mervyn King's word) but rational from the perspective of self-interest.
4. Bobsto said...
The banks create money, lend it to 30 times leveraged hedge funds, who use it to drive up the cost of food
through the futures market.
Eventually the funds go pop because they've ignored the full distribution of risks.
So the bank shareholders and hedge fund investors get shafted, some poor people can't afford enough to eat, but at least the bankers and fund managers
have been paid some hefty bonuses which is what really matters after all.
Aren't free markets great?
5. Icarus said...
How successful is the confiscation of assets that were gained through crime? Could we apply the same principle and methods to the confiscation of the bonuses etc. of bankers etc.who have made easy money on the upswing and left the banks and other institutions to take the hit on the downswing?
6. Crashwatcher said...
The only way to prevent a future HPC (not this one) and prevent bankers being paid obscene bonuses is for the banks to have real pain this time - and have a few more of them collapse. That way next time round the remaining banks will be a lot more cautious.
7. bystander said...
Good question - Renting2.............perhaps we could start by boycotting the BBC - I have just watched their totally impartial review of the state of housing in Birmingham - Declan, the unbiased, was interviewing - A landlord/developer, an estate agent and a planning and regeneration officer from the council. "Hard hitting" questions answered with VI bravado, but if this is all the public hear, then prepare for a continuation of the same. Where were the first time buyers/ young professionals, who are supposed to buy these flats??? Why are they not interviewed and given a voice?.............because they would probably tell the truth, that a two bed in Birmingham should still cost 72,000GBP, as it did in 2002, not 130,000GBP as it does now. The BBC is just a mouthpiece for Crash and his merry men/ women etc. It just annoys me that we are fed lies constantly
8. Fed Up said...
With the collapse of the housing bubble we now have speculative bubbles in commodities, particularly food (rice and wheat). This is something the UN poverty chief should have addressed. The speculation all derives from the same mentality.
http://business.timesonline.co.uk/tol/business/industry_sectors/consumer_goods/article3533252.ece
The MD of Gregg's bakery was acting out of self-interest with regard to wheat prices, but he has a valid point.