Sunday, Aug 02, 2009
Our savings and taxes are being used as a piggy-bank for the City
Telegraph: Bankers are getting away with murder
Despite the worst banking crisis in history, costing the taxpayer £1.3 trillion in public support, bankers are behaving as if nothing of any significance has changed at all.
Posted by devo @ 12:07 AM (904 views) Add Comment
33 Comments
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1. devo said...
I've been wondering how clever guys like 666, flashman etc.can read the same sites as me (Denninger, Zero Hedge, Mish etc.) and not 'get it'.
Then I was reminded of a quote that explains it...
It is difficult to get a man to understand something when his job depends on not understanding it.
Upton Sinclair
2. quiet guy said...
@devo
"It is difficult to get a man to understand something when his job depends on not understanding it."
I think my job is mostly a waste of time these days (indirectly subsidised by the taxpayer) but for some strange reason I don't feel ready to resign and possibly bankrupt myself. Perhaps I'm a coward.
I really hope that you are a truly financially independent person to have put a comment like that on this blog. I agree that the great banker's bailout stinks but your comment goes too far for me. Pracically speaking I suggest that the bloggers who have real experience in the world of finance and make the time to contribute here have demonstrated a greater awareness than normal compared to their peers.
3. devo said...
2. quiet guy said... "Practically speaking I suggest that the bloggers who have real experience in the world of finance and make the time to contribute here have demonstrated a greater awareness than normal compared to their peers."
Hmm, might I suggest you are damning them with faint praise?
4. quiet guy said...
@devo
"damning them with faint praise?"
Consider how many people are employed in the UK financial industry versus how many of those apparently contribute here - a select few I'd say. I don't see why their contributions can be called 'damning them with faint praise'. Revulsion in response to the bailout is natural but in the end, like it or not, we will need financial services if we want to raise our standard of living.
I honestly think that you're pointing you gun at the wrong target. The real villians have made their pile and retired. It seems unlikely to me that we will ever hear anything honest from the money mafia here.
5. flashman said...
Thanks for your kind words quiet guy. I knew when I started posting here that I'd have to expect some stick. I called myself 'flashman' as a perverse acknowledgement of this expectation. I really don't mind what devo is saying. He has passion and a bit of fire in his belly. I might not agree with everything he says, but on balance, I prefer a bit of tub thumping to the apathetic state of the general population.
6. stillthinking said...
I had thought you called yourself Flashman after the eponymous anti-hero of the George MacDonald Frasier books..
7. letthemfall said...
I think devo's quote is rather apposite. That's not to say it applies to all bankers, much less those who contribute here (and I know of no one who has said explicitly they are bankers). None the less, my impression is that the majority who are in the position of earning large salaries will do what they can to hang on to them and offer all kinds of specious justifcation for why they deserve every penny. Banks have failed abysmally, yet seem to being getting off lightly, which demonstrates that they do not in fact earn their money but are merely in a position where they can divert a proportion of large cash flows into their pockets. It appears weak govt is allowing this position to continue.
stillthinking: In which case he must be a literary man?
8. flashman said...
stillthinking: Yes several years ago, I read every one of the Flashman 'papers'. Perhaps the funniest books ever written. I even read Steel Bonnets and the McAuslan trilogy, in the hope of catching another glimpse of Flashman. Sadly George M F is now dead so there will be no more. That is, indeed, where I got the name from but like I say, I chose it as a perverse acknowledgement of how I was likely to be regarded by some on this site.
9. titaniccaptain said...
There is a culture of overpayment in this country/world.....
The banking industry is getting it in the neck at the moment because they are at the forefront of the news headlines....no one was hating them when we were in the "ILLUSION" of wealth 3 years ago....
But its not just bankers....its footballers, celebs, MPs, Hospital Managers, Doctors (Who should be payed well but not the levels they are) etc...the list goes on
All this is bound to create resentment but its something we need to look at as a society.....we need the incentive to succeed but the reward needs to be realistic....but who determines realistic?
I know how it feels to be the underdog when everyone around you is earning a fortune.....
This is me on bass in a gig in front of thousands of people.....The band main (Myself included) were payed £200 each.....the celebs (Elvis's backing singers the Sweet Inspirations and the Elvis impersonator) were payed tens of thousands....yet they would sound cr@p without the band and have to use backing tracks....
http://www.youtube.com/watch?v=VC-CbcECt34
The point I am making is just like in a hospital.....the doctors would be nothing without the nurses to do the hands on care and the nurses would be nothing without the auxiliarys to clean up.....the pay difference between all three positions is vast....that needs to be narrowed but incentive should remain.
And also I would like to mention finger pointing as a whole is unproductive.....I have also been suckered into finger pointing under peer pressure on blogs and am as guilty as the next man....i.e. the less prudent (Those who bought at the top and BTLers) are vilified for being greedy when we had a "CULTURE" of greed....in other words they tried and aspired to fit in where as the prudent like myself and many on here sit back and gloat at their losses....we need solutions not house of commons style jeering......
10. icarus said...
devo - I thought flashman was as anti-investment-banker as anyone, but in favour of those financial services which serve the real economy. The only slight disagreement I have with him is that he sees (or saw) investment banking as an annoying sideshow while the real economy hummed along, driven to a large extent by technology (correct me if I'm misrepresenting your views flashy). I think top investment bankers are kleptocrats who inflict significant damage on the real economy.
The interesting question is whether the Browns and Badgers are complicit or misguided in bailing them out. Surely you don't shove hundreds of billions their way in the HOPE that they'll do what you want.
11. devo said...
The underlying premise of the sites I mentioned above is that the financial system is mortally wounded.
I don't get the same impression from HPC and certainly not from the most financially-literate posters, namely flashman and 666.
I find this confusing. Either they are holding back on saying how bad things are going to get, or they are not as clever, in a wider sense, as they think they are.
12. icarus said...
Mortally wounded? Depends which part of the financial system we're looking at. The top 5 or 6 investment banks are doing very well indeed.
13. devo said...
"The top 5 or 6 investment banks are doing very well indeed."
Courtesy of the taxpayer. Trouble is, the taxpayer is coming to the stage where he has given until he can give no more.
14. icarus said...
True, without govts using money from taxpayers, China, oil states etc. there would have been no revival of the big investment banks. And there's a definite limit to which that funding will continue. But do those banks need continuing govt support? The rest of the banking sector is certainly in deep trouble, but while the majority of banks are desperately trying to repair their balance sheets Goldman, JP Morgan and a few others are making huge spec profits (without doing a damned thing to revive the non-bank economy). We'll have to see how long they can carry on like this while the rest of the world suffers.
15. devo said...
And what about the $quadrillion derivatives wildcard?
(Cue obligatory notional/net 666 post.)
16. quiet guy said...
@devo
"the financial system is mortally wounded."
Any views on how it will play out? A currency crisis or a very long Japanese-style recession seem to be the most likely scenarios (I'm talking about the USA here) but some claim that the dollar will collapse in value this year (Jim Sinclair says early November!!)
Perhaps part of the reason that we don't have much discussion about these things is to avoid being labelled as lunatic fringe and because there is no mainstream political interest in financial reform - everybody would be quite happy to go back to the debt binge again.
17. titaniccaptain said...
I think the root of this resentment comes form the preferential treatment that one specific sector has received at the expense of other sectors footed by the taxpayer....which is not the fault of the sector.
Agreed the mess we are in is a result of this sector's (Banking) practices but that has been a political decision which started with Thatcher.
Also we need to focus alot more on the REAL criminals in this scenario i.e. People like Fred Goodwin who encouraged and promoted the culture of risk within banks.
The bankers are the foot soldiers in this debacle who as I am sure many of the bloggers on this site who hold jobs within the financial sector know were caught up amongst the greed fest just as all of us were on different levels....this is not absolution of blame but putting things into a truer perspective.
If someone said to you your going to receive a six figure bonus at the expense of the taxpayer...how many of you would really turn it down?
You may have a bitter taste in your mouth...but you would take it...particularly if you have a family to support and want to secure the best future you can for your family.
Flashman and 666 or whoever may have taken such bonuses and fair play to them...well done I am jealous lol
Is it fair? no....
Is it their fault?............................no its called human nature.
18. letthemfall said...
titanic
I'm not sure that anyone can accept rewards but remain totally blameless, even if it is by default. It's the following orders, going with the flow thing. I don't lay blame at any individual's door, with the exception of the obvious culprits who've been roundly blamed already, but nor do I absolve the rest. The readiness of one to accept large bonuses also presumes a readiness to work in a field where such is possible.
19. titaniccaptain said...
@Letthemfall
As I said it does not absolve blame but lets get real if you have a family and want the absolute best for them then your not going to question where the paycheck is coming within reason.
Can you say honestly that you would not turn down such bonuses if the industry your working in offered you a bonus that your conscience squirmed at but still remained within the boundaries of taste?.....I can claim no moral high ground and in a day and age when we ALL are a part of sustaining a social framework that still encourages greed we need to look alot more deeply at the disease and not the symptoms.
20. shipbuilder said...
My conclusion is that the sense of community and responsibility to others that once existed in this country and elsewhere in the world has been both actively and passively destroyed to make way for individualist consumerism. It was not some evil plan, but was the obvious route to be taken by those wishing to maximise their profits and personal wealth.
What better way to do this in the UK than simultaneously destroying the only political party and political view that ever stood in some opposition to it, as incompetent and ultimately self-serving as that party was. When everyone is convinced that socialism = state control, that it is evil sent to destroy the individual, then logically the only refuge is individualism, a world where you are in competition with your neighbour, where other people are to be feared and ultimately your only responsibility is to yourself. This was achieved in the 70s and 80s in the US and in the 80s and 90s here.
It beggars belief that so many cannot see the link between this self-obsession and our celebrity culture, our banker's and politician's greed, abuse of the welfare system. Any suggestion that we may want to work together has become evil collectivism and it seems to me that any sense of balance has been lost.
Sadly, this point will be lost in a world where most only see the extremes - "If you're not with us, you're against us", as someone said.
21. devo said...
16. quiet guy said... Any views on how it will play out?
I suppose this is the reason for my first comment.
How can we start to solve the problems we face if those that caused them refuse to acknowledge that they exist?
Any further comments from myself will delve into the realms of tinfoilhattery, so I will resist the temptation for the time being.
22. titaniccaptain said...
@Shippy
I agree with what you said with regards to us becoming an insular society however my own personal feelings are that we can equally lose ourselves within the state which is one of the prejudices you mentioned.
I think neither socialism or capitalism works for the benefit of the TRUE community.
It is my belief that the community is the heart of the nation and what constitutes as a community has become too vague because of the friction between left and right policies.
More fundamental issues are being brushed over by our focusing on our political and financial systems.....i.e. who are we as a community/nation/race/species?
Until we address those questions we are wandering around in the dark trying to make square pegs fit round holes.
23. shipbuilder said...
Actually, my point about "What better way to do this in the UK than simultaneously destroying the only political party and political view that ever stood in some opposition to it" could as easily be applied to parts of old Conservatism pre-Thatcher as old Labour pre-Blair.
24. icarus said...
shipbuilder - did you see the last two minutes of B, B & Fortune a few weeks ago (unfortunately the only part of the show that wasn't put online). A Nye Bevan speech to the Lab Party Conference 50-60 years ago, dubbed with Bevan saying (Welsh accent sounding just like Bevan) "I say give the people what they want. National Health Service? They don't want a f***ing National Health Service They want iPods with thousands of tunes" (Wild applause), Warms to his theme - "Education? Free education? Do you think people want education? No, that's not what they want. What they want is mobile phones with over 500 ringtones" (Standing ovation)
25. titaniccaptain said...
@Devo
Don't worry looks like I have dived straight into the deep end of tinfoilhattery on this thread.....oops
It just seems to me that when we continually point fingers we forget the finger points straight back at us....we have all become lazy and refuse to acknowledge we only ever work in favor of ourselves, be that ourselves collectively in a socialist state or ourselves in the personal sense.
We are all seeking material and creature comforts to better ourselves and our environment.
@Shippy
We will never be satisfied with whatever social structure we put in place if we focus on our environment and not our deeper needs as a species...........many a rich man has committed suicide.
26. shipbuilder said...
TC, ultimately it is about getting rid of the systems designed to benefit the few at the expense of the majority - whether they be via the vehicle of the state, or the vehicle of business. Most people I talk with on this subject just can't get over this first hurdle - they either believe that big business or big government is the solution to our problems and bizarrely can't see the similarities between the two. The demonisation of the individual by totalitarian regimes has been replaced with demonisation of collectivism by those that 'defeated' them and we have lost the balance between the two that is most true to our nature. Unfortunately, anyone who argues against the prevailing mood will be regarded as part of the 'opposition'. Divide and conquer.
27. titaniccaptain said...
Bloody good point Shippy..........
As a Christian I am never going to be satisfied with any political system lol.
28. shipbuilder said...
Icarus - unfortunately I didn't see that - it sounds good, I'll look for it on youtube. I guess the point is that the people get what they want. I think that's a bit chicken and egg - our views are formed from childhood by the society around us - I don't buy the line that we are all fundamentally self-serving. All the evidence suggests that in the absence of a corrupting culture, people work together in communities. It can't be a coincidence that the rise in mental health issues has been in tandem with our isolation from and fear of each other.
29. titaniccaptain said...
@Icarus
Talking of ring tones....Mrs TC and myself just got our phone upgrades...so we both have Iphones....DEMONIC THINGS!!!
The thing is incredible piece of kit but all of a sudden you feel like a borg...
30. shipbuilder said...
27. titaniccaptain said...
"As a Christian I am never going to be satisfied with any political system lol."
Though a system which prioritises people over mammon and is based on love (rather than fear) of your neighbour might be a start? It seems incredible that, given our leader's claims to Christianity, we have ended up with the exact opposite of this, doesn't it?
31. titaniccaptain said...
"It seems incredible that, given our leader's claims to Christianity, we have ended up with the exact opposite of this, doesn't it?".........a bit like Kirstie Allsopp a property expert.
32. titaniccaptain said...
oops should read "a bit like calling Kirstie Allsopp a property expert."
33. icarus said...
shipbuilder - I think people's tastes/demands are shaped by the political/media/economic environment. Here I'm talking about the mass/majority of people. You and I may not react the way we're supposed to but those who pull the levers know public opinion and how it will react (+ or - 3%) to given stimuli/policies/messages. Look how quickly the populations of much of the world became avid property speculators when the powerful put the conditions in place.
The reason the Bevan 'speech' was funny and absurd is that it's inconceivable that Bevan would say that - but it's not inconceivable that an opportunist like Blair would say something along those lines - look at how the Labour government has privatised parts of govt depts in ways that make millions for individuals (e.g. the govt's international development fund - privatised, concentrates on anything but low-profit but development-enhancing areas like agriculture in third-world countries, preferring instead to invest in high-margin shopping centres and - yes - mobile phones with a choice of 500 ringtones. These are areas that would attract private money anyway and don't need quasi-public backing).
TC - most people I know use their phones to let their mates know that the gang has changed its mind and will be in the Rose and Crown instead of the Carpenters' Arms.