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Posts posted by Scooter

  1. Insurance contracts are the result of centuries of experience garnered and bought to bare on the unsuspecting proposer.

    In English? I as a humble policyholder have no chance understanding the implications of every detailed clause in an Insurance contract (including detailed policy rules usually held at head office and not automatically given to a proposer as I have discovered of late). However, I have 'faith' in the Insurer as my positive human nature persuades me that the policy must be MORE OR LESS suitable and that the insurer wouldnt seek to mini ise thier exposure through jargon. I therefore accept a policy in good faith. At claim stage the warts reveal themselves. For example I had a laptop stolen. The insurers insist I then buy a cheaper laptop as 'technology had improved'. This proved extremely detrimental to me. Ive heard of people with a carpet stain being told they can only claim for the area damaged. When they inform the insurer the carpet is no longer available they are told 'tough' you should have read the small print.

    Unfortunately my trust is misplaced and the odds are against me as the contact designers have hundreds of years of expeirence on thier side and many months to construct a new policy. My faith was no match for an insurers small print.

    Ok, I see what you are getting at. I have had similar problems with various kinds of domestic insurance and they can be quite slippery on the wordings, even for me knowing what I am looking for.

    Not that yours was a personal attack but in my own defence I only sell to mostly very clued up commercial buyers who have experienced brokers driving a hard bargain for them. I still think theft is a bit harsh in most cases but so be it.


  2. So if murder was legal it would not be murder?

    Q. What do you call 1000 lawyers at the bottom of the ocean?

    A. A start.

    First question makes no sense. Legal killing cannot be murder as murder is by definition unlawful killing but I guess by your minor rant you were not looking for a proper answer.

    Second, yep, heard that one a few thousand times. I am long since an ex-lawyer so not too fussed either way... B)


  3. Marko, we are not going to agree on this.

    You percieve FRB as a scam I percieve it as a legitimate 'magic money making' scheme.

    My basic argument is that this is but one 'scam' amongst many. You are obsessed with FRB, where as I am more inclined to view FRB along side most other business endeavours.

    This bit might cheer u up though; I do consider Banking and Insurance as legalised theft.

    But (and there is a but), I also see many other sectors indulging in legalised theft. Notably Lawyers. They string out divorce settlements that could in many cases be settled in a 3 hour meeting up - front.

    The fact there are so many scams in business causes me not to become vexed about FRB.

    The argument between us is one of perception. You are entitled to consider FRB your biggest concern. I am entitled to group it together with thousands of other business scams. In fact, Government waste vexes me far more than magic money schemes.

    At last a Doggy post vaguely aimed in my direction? :) I really only ask because I am bored, as Lloyds is dead in August but how is insurance legalised theft? As I said to Marko in previous posts, the intangible but very genuine product is risk transfer sold in return for premium, no compulsion to buy if you do not like the cover or the price and no theft involved legal or otherwise.

    Actually as an ex-barrister, I might also take issue with your concept of legalised theft since theft is defined in the Theft Act (from memory) as dishonest appropriation of property belonging to another. If it is legal, it is not dishonest at law hence cannot be theft never mind whether there is any appropriation, meaning roughly taking something from someone against their will... ;)


  4. Tax the living f&ck out of BTL landlords. After all, it's "unearned income", something the Labour Party traditionally wanted to discorurage, it diverts capital from industrial investment, and the BTL numpties cant hide it or 'offshore' it.

    Go get em, Gordon.

    I have read too many accounts of NuLab parasites, sorry socialists, with their own BTL empires for this to happen, not to mention specifically large country homes I am aware of owned by Hain, Prescott and one or two similar slime. Turkeys won't vote for Xmas...

  5. Dear Scooter,

    You're right you're right....I went off on it against insurance again when I am still not sure that it is a swindle. I apologize. I am sure you work very hard to earn your cash...and I have no problem with that (unless you were involved in the names scandal! :) ). Just spare a thought for those who are not at the top of the income ladder...they are being made to struggle more and more as income gaps widen, and not necessarily because they are stupid or lazy. I remember visiting a satellite underwriter in Lloyds of London when I was doing my doctorate...Brian Branch, maybe you know him. We visited the Bell, he waffled a bit about underwriting, and then it was a three hour red-wine liquid lunch in a wine bar with a bloody great spread of Salmon sandwiches. Nice work if you can get it! :)

    But if you defend insurance but not banking, it would imply that you agree with myself and others (Smell, Wuluf etc) that FRB is a scam. Given this, could you please point this out to any banker chums you may know in the city? Maybe over lunch? As they tuck into their expensive nosh, braying about how much money they earn, wearing expensive suits and planning their next weekend snowboarding trip....could you just point out to them that they are from an economic perspective funtionally equivalent to ar5eworms.

    Cheers! :D

    Thanks for that-I think I work quite hard but mostly I just make good underwriting decisions, broadly trying to insure the people who do not have claims very often, so that premium in exceeds claims out but easier said than done. I was not involved in the names scandal and I do not know Brian Branch. Many underwriters in and outside Lloyds are not very bright and there are a large number of wastrels who enjoy the kind of days you describe.

    I am sympathetic to people doing useful jobs and not getting much/enough for it and living in London I am very well aware of what things cost, hence my addiction to HPC.co.uk. I reserve my contempt for scroungers (saw my tube exit local panhandler on his mobile phone last week, he looked a bit embarrassed) but just because I work in the City please don't assume I automatically look down on people who do other things. Most of my friends do not work in the City and my partner is an astrophysicist so I get plenty of grief at home for being a fat (metaphorically)capitalist pig.

    I do not really have many banker friends but I will pass on your kind words to those I do know when I see them. :D

    Unfortunately you cannot imply that I agree with you on FRB. Banking not my business and I am only just understanding the concept.


  6. Dear Scooter,

    I agree with your sentiment that this great 'Levellers' desire by socialist types is a dead end....I get wound up when I see my tax money being slashed up the wall by the state (not least on 'street-scene coordinator' jobs in the Guardian :angry: ) or on chavscum with 8 kids. I am not a socialist, and smarted talented hardworking people should not be dragged down by the politics of envy.

    HOWEVER...( ;) ) what if the source of your big salary is an industry-wide scam?(and I am not sure I have fully swallowed your 'insurance is different' argument yet....the Swiss love reinsurance, and they love banking too, which already makes me think 1>adequacy ratio insurance is quite possibly a scam.) In this case, earning differentials are not equitable, and TWT has a point.

    Have a good day too

    If insurance is a big scam, then most of the scammers are not too good at it because as an industry here, in the US and elsewhere commercial insurers barely make an underwriting profit over ten or twenty year periods. In the US, longterm property insurance claims run at between 97% and 105% of premium never mind expenses. Most profit has been made on investment earnings on premium but the risk transfer product itself is often priced at cost. Luckily my own results are far better than that but it is rare.

    You seem to have made your mind up that insurance is like banking and you are very keen to work backwards from there. In my mind, I price difficult products that facilitate many kinds of industry and commerce , sell the insurance with a profit margin (I already know you do not expect me to do it for free thankfully), pay all my claims on time. What do you want from me. blood? :)


  7. I hardly can think about a more stupid way to clear one's conscience


    Earning differences are now outrageous and growing... ridiculous!.

    I thought I was out of this argument...oh well. I am not sure why you think I have some issue with my conscience-I really don't.

    Actually I am often angry about how much I put into the public purse relative to what I take out (nil). All I see is my taxes going to pay for other people's benefits, healthcare, kids schooling. Do people taking massively disproportionately from the state have troubled consciences? I doubt it but maybe they should sometimes.

    "Typical"-not quite sure what that means but I am sure you will enlighten me, just as a temporary distraction from my evil day job eating babies and selling insurance.

    Earnings differences are outrageous? Hmm, this seems to smack of New Labour making everybody appear equal plus an unhealthy dose of jealousy and envy. Why should my earnings be in any way proportional or related to yours? I reckon I should be paid relative to how good I am at my job. The easiest way to judge my work-but not necessarily other kinds of work-is how much profit I make for my employer/shareholders. How is that related in any way to what you do (no idea what you do anyway :) ) and why on earth should it be?

    If you feel you should be better paid for what you do, get another job or negotiate within the one you have. But going to your boss and saying you should get more just because some bloke doing a completely different job gets more may appear to him a bit of a silly argument, although this is what you seem to be suggesting by calling for less earnings disparity.

    Whatever you are doing, have a good day. :)


  8. Everybody thinks it's different where they live - well it isn't, everywhere is in someway linked. If prices come down in London, as they are, then why shouldn't they come down in Brighton?

    They should come down especially in Brighton as many people seem to have moved there to avoid London where they were priced out a couple of years ago, inadvertently taking the bubble with them. The connection is clearer than in many places....but still nice for the odd visit. :)


  9. I think this sounds reasonable....I will gladly at this point (because I have a headache!) retract any claims that the underwriting industry is functionally equivalent to FRB - I am not fully convinced but I literally am having trouble focusing anymore!

    Scooter thank you for being the only one on this forum who has offered a reasonable argument.

    You are also right, this could go on forever, because everytime I ask for someone to explain why FRB is not theft, I get some ham-fisted response. :(  All you bankers out there I am still waiting for the answer - if you cannot provide one, then accept the conclusion.....Banking is immoral.

    Then my job here is done and I can go back to underwriting. Have a good one...


  10. This could go on forever. :)

    I am not convinced that the banking transactions that you describe are analogous to what we do.

    The "manufacturing cost" of a book of insurance policies is the claims cost plus admin/staff/office expenses. We then try to build a profit margin on top of that into the premium paid by the buyer. We take the premium and sell risk transfer as a "product". If for example we sell 100 policies knowing historically/statistically only ten will have a claim in a normal year but we reserve for say 30 policies having claims in a freak year and we are sufficiently reserved and capitalised to pay 30 claims, then I do not see how we are making a profit on borrowed or non-existent capital. We sell risk transfer and we deliver to everybody who buys since risk is transferred to us regardless of whether the insured makes a claim or not and we can honour all claims made, assuming that the catstrophic worst case scenarios set for us by the regulators-30 claims out of 100 policies in the example above-are correct.


  11. Scooter,

    To understand Fractional Reserve Banking maybe you can read this:


    If the bank's reserve ratio is 10% (i.e. they only keep 10% of their deposits and notes as reserves to satisfy demands for withdrawals) it can LITERALLY CREATE 10 times its reserves of legal tender in notes and demand deposits that are used as money.

    Money is made from nothing. It is functionally equivalent to counterfeiting. The result? Banks create money that is ALL THEIR OWN from nothing! Worse still, the whole practice is inflationary because it pumps money into the economy....some people seem to argue that this is a good thing, though I cannot for the life of me see why, seeing as this money belongs to the BANK. Consequently, the fraction of the total money supply that is held by the banks is increased at the expense of those people in the productive economy who actually created the wealth: IT IS THEFT.

    The whole thing is in principal very simple, which is why I find it so bloody annoying that people don't see this thing that is right there in front of them and shut the whole racket down!

    Leaving aside the names scandal (I will leave others to make their mind up about that), if Lloyds do not have sufficient capital to fully honour ALL claims held against it, then as far as I can see Lloyds is partaking in a form of FRB.


    Thanks for the lesson on fractional reserve banking, not that I ever remember asking about it. :)

    As for being able to pay claims, what I was trying to say was that since only a small percentage of insurance policies sold ever actually have claims, it would be preposterous to suggest that an insurer should hold reserves for the more or less impossible situation where they have to pay on every single policy or even most of them.

    In practice, FSA and other regulators who determine capital adequacy ratios (assets to exposures) set levels which are anyway deliberately extreme and way beyond normal loss frequency and amounts. If these were increased to contemplate the unlikely scenario you suggest, what do you think would happen to your premiums? That is correct, so we would sit on piles of premium never used to actually pay claims, earning us interest. :D I am guessing you would fire off an angry email or three if your insurers did this...


  12. Dear Scooter,

    "you sound like a thoroughly unhappy guy, tormented by jealousy and disatisfaction with your own choices"

    AGAIN you have resorted to Ad Hominem...is this some kind of hobby with you people?!! Ad Hominem is a FALLACY, and is NOT A VALID ARGUMENTATIVE TOOL.


    Do not worry about me I am not tormented...like I said I enjoy my job, although I am a bit unhappy about not being able to afford a house! :(

    Anyway, you are right, I should not lump the insurance industry in with the bankers completely...I completely understand that insurance is a vital part of the economy as it involves the spreading of risk - absolutely crucial I agree. And don't worry I realise that intangible products are subject to the same market constraints and logic as tangible assets. Although I have serious reservations about the integrity of some of the operators at Lloyds (the names scandal over asbestos claims for example) I will leave the insurance industry out of this. My target is the banks.

    by the way, for those interested in what happened at Lloyds (those paragons of virtue) here is a brief summary :

    http://www.truthaboutlloyds.com/fraud/timeline.html  :blink:

    Anyway, could you tell me Scooter, do the underwriters at Lloyds have enough capital to fully honour all the outstanding claims against them? If so, great, if not, then isn't offering insurance that is not fully backed a bit like earning money on capital that does not exist? Let me know.

    Scooter, are YOU going to be the one to tell me why fractional reserve banking is different to counterfeiting? I think you are! Come on! :D

    Who are "you people" that I am supposed to be one of? I am not a number etc.

    I am glad you are not tormented.

    Yes, there are some serious questions about some past practices in Lloyds but more to do with how some people for drawn into providing capital when it was inappropriate for them and also possibly being used to bail out the reinsurance spiral on some syndicates. Asbestos and pollution was more about Lloyds being screwed by the US courts using ancient insurance policies to pay claims for what were, at the time of underwriting, standard manufacturing industry practices (eg unrestrained dumping of byproducts in rivers/landfills) . The US needed someone to pay for cleanup/industrial disease and that meant current syndicates who had inherited old synidcates with policies assumed to be long expired.

    Can we honour all the claims? If every policy had a claim, no, as there is no more unlimited liability, largely because of the issues you raised regarding private capital (names) and even if we did, you would bankrupt everyone before the claims were all paid. But the idea of every policy having a claim is no more likely than every single loan a bank makes having a default. There is very ample money to pay even very severe and unusual loss frequency/amounts vis WTC, 4 large hurricanes last year, large aircraft losses occasionally. Loss trends are very closely monitored as well as so called Realistic Disaster Scenarios (RDS) most likely seen only in Hollywood disaster films, so there is massive margin for error on the downside.

    Can we honour all of the current outstandings meaning current known claims against Lloyds insurers as opposed to policies issued? Yes, without a doubt.

    Fractional reserve banking? Only heard of it yesterday so not a clue.


  13. Bored,

    'You work in one of humanity's most dangerous and capital intensive activities. Why don't you apply your much vaunted brightness to working out the importance of those you disdain to rocketry? Your toys would never get off the ground without them.'

    What kind of argument is this!?! When did I ever say I did not appreciate other professions!? I fully appreciate the legions of people who work in very different areas to me....all the usual selfless types, nurses, aid workers etc., as well as those who grow my food, transport it, build me fantastic digital cameras etc. etc....

    ...what I don't like are PEOPLE WHO MAGIC MONEY OUT OF THIN AIR and call it a job. Incidently, the private sector underwriting pool for rocket launches is staggeringly insufficient because those parasite syndicates at Lloyds won't touch it, as it is too risky and unpredictable. Consequently launches are most often underwritten by government (if at all). Now, what was it you were implying about how my 'toys would never get off the ground without them'?

    And talking of magicking money out of thin air, I notice that NOONE has yet to explain to me why fractional reserve banking is different to plain old counterfeiting.

    'If you are not in favour of something you yourself as well as everyone else benefits from then you are beyond logic' - NO I AM NOT THIS IS PATENT NONSENSE! The UK benefits from having a world class financial cluster because it brings in money, but what about the rest of the world? Do they benefit from this fiddle? NO they do not. Wanting to end something that I see is harmful to wider society, despite its small benefit to me, is not 'beyond logic'...that is a preposterous statement!

    'I do not think it stinks and am indeed proud to serve this great wealth-creating metropolis'

    Yes, wealth creating....OUT OF NOTHING! Please again, I am asking one of you people who think banking is so f**king worthwhile to explain to me why fractional reserve banking is different to plain old counterfeiting...come on, I AM WAITING. Instead of constantly resorting to Ad Hominen ('beyond logic', 'not very bright', 'samctimonious' etc etc) respond to my question using a reasoned argument.


    Lloyds was a big insurer of satellite launch/in orbit in the 1980's/early 1990's (me included sometimes) and it was a profitable if volatile class. After that, sniffing the profit, many new syndicates piled in, insurance prices dropped by around 70%, losses were made, as there was not enough premium to meet claims over an extended period and the market reduced as a reaction.

    Like any other seller of a product, if the production costs, here claims, are higher than the selling price, here insurance premium, then a sensible business stops selling the product. You seem to think that insurers have a duty of some kind to offer you cover at a loss. Why? Is that what you expect when you do your shopping at Tesco? Get the brain you boast about around the concept of the economics of intangible products and you will find they are not that different from tangibles.

    As for "parasite", sorry but you sound like a thoroughly unhappy guy, tormented by jealousy and disatisfaction with your own choices. Tough but not my fault or the fault of insurers, bankers or whoever.

    I note that someone harsher than me was not that impressed by your career "playing with spaceships" on the public purse, so who is the parasite? I never took a fiver from the public coffers either personally or professionally but I surely fill them.


  14. Dear BoredTrainBuilder,

    I agree...all we export now is a little bit of energy, guns and financial products. So of course you are right that the financial industry drives UK plc and keeps us going...but is 'I keep the economy going' a good enough reason for people in the city to earn so much more than everyone else? If it is, fine, give me a massively overinflated salary and I will drive the economy with my spending. Of course it was different back in the golden days, when people who actually made stuff got paid well...

    ...yes Scooter, that's right, I am an engineer. I have a Doctorate in astronautical engineering, have worked at the Spaceport in French Guiana for CNES (French Space Agency) developing reliability models to help iron out problems with Ariane 5, have also worked for ESA at their technical facility in Holland (ESTEC), and I am now working for a private space industry company in the UK, on future ESA space science missions. Oh yeah, and I earn a lot less than most bankers and am lodging in a tiny boxroom as a consequence.

    Yes, I do useful, hard, REAL work. ;) Of course you may not think any of this stuff is worthwhile, seeing as it doesn't make 8-12% a year WITH capital appreciation yaddah-yaddah-yaddah.

    So as you can see, I actually have integrity to back my arguments up. Like I said: GET A REAL JOB.

    I agree you do a useful and no doubt interesting job...but so do I. We do not all snort coke in Lloyds and some of us have a lot of postgraduate qualifications as well and are economically beneficial to society in many ways. I just take very mild offence to your broadbrush attack on an industry and environment I work in and enjoy. Yes, there are a lot of tossers but that is true of many places and there are also a lot of decent, hardworking people. Cue your cynical response no doubt...


  15. Dear DrB,

    Yes, we already had this argument!! I will freely admit, there IS a bit of envy wrapped up in my disgust at these people...but there is also some good old-fashioned righteous indignation: the money markets have genuinely become a weeping sore on the side of the real economy. Again, I will say what I said last time when you brought this up: I would not mind if those who worked in the financial economy allocated capital efficiently, but I think it is pretty obvious to most of us that this does not happen! People who work in these jobs get paid waaaay over the odds compared to the value they add....and the only reason is because they are greedy people in proximity to a lot of OTHER PEOPLES money.

    The litany of examples of greed and theft perpetrated by those in the square mile stretches on and on and on...again I refer you to this website for a taster:


    I UNDERSTAND THE NEED for efficient capital allocation...helping to spread

    consumption, lend money for small businesses etc., and in sum contribute to improving the real economy. Read some of the stories in the following link:


    and then honestly tell me if you 'efficient capital allocation' is what is happening here. Was it 'efficient capital allocation' that I saw at the end of the dotcom boom when people were talking up shares they KNEW were shit?

    Of course the wonderful new 'hot-ticket' in the financial world at the moment is Hedge funds, for example RAB Capital who managed to carve off for itself last

    year 4.6% of the money entrusted to it: Wages bill of £19m - which works out at about £400,000 for each of its 48 employees and on top of this shareholder profits.

    I mean, come on, is it just me, or are these numbers just SILLY? I happen to know a few people in the city, and one of them in particular who works for a syndicate at Lloyds is a prime example of everything I detest about this whole thing - never studied, never really worked, daddy got him a job as a front-man for an underwriting syndicate, and now he is being made a director: this guy is a Coke-snorting pr1ck, and nothing more.

    As for fractional reserve banking, it is economic parasitism. We can all appreciate that counterfeiters (people who print money illegally) effectively embezzle money from everyone else in the economy...now tell me WHY is it different when a bank creates money from nowhere?

    THERE IS NO DIFFERENCE. Result? There is a huge financial economy nowadays which dwarfs the real economy, has been created by banks, and therefore is owned by banks. This is so simple that I don't understand why more people do not get it (and are as disgusted as I am).

    And in response to your final point 'it is not attractive'...I am trying to make a social comment, not pick you up! ;)

    So go on, what is your contribution to society? What do you do for a living just as a comparison to those thousands unknown to you that you have been attacking?

  16. "I... hate Bloomberg, bankers and all the associated money-sh1ts that parasitically feed off the rest of us!!!"


    What value do some high-paid persons like footballers, rockstars, and actresses add to the economy?

    How would you propose that capital got allocated instead, by computer? (hey, that happens all to often now).  Or worse, by government?

    I think this is pure envy speaking.  And if so, it is not attractive.

    I'll echo that sentiment. Taxes on my aarnings and on the profits I make for my company are sufficient in their own right to pay for a school and hospital or two. I know of very few people whose jobs so directly contribute to the economic welfare of others.


  17. There is a flat I've kept my eye on and I made an initial low offer, but the EA told me there was a cash buyer ready to buy the place and 'turn it around'. It's now been 3 months and the price has been reduced by 5K, I called again last week only to be told the flat has now sold...but on assertahomes, findaproperty etc it is still advertised as being available and not under offer etc....I'm starting to think that the EA is the owner of the flat and is holding out for the highest price he can get...Should I call and be a little more forward in my questions and demand to be put in touch with the vendor or should I stay on good terms with the EA?

    I suggest a pickaxe handle, wrapped in a hanky if you want to be nice...

  18. Look at the 'jobs' of the two people who they talked to about their properties:



    I guess those sh1ts at Bloomberg just couldn't be bothered to ask anyone with a REAL job about housing...probably they just popped out of their office in The City and asked the first two people walking past! Also I guess that it is only d1cks who steal money for a living in The City that can afford houses in the first place.

    I f**king hate Bloomberg, bankers and all the associated money-sh1ts that parasitically feed off the rest of us!!! :angry: These pricks should be dragged into the street, whipped and then re-employed as kitchen porters or binmen. That would be a fine day! :D

    Get a REAL job ar5eholes!

    What do you do?

  19. The political suicide isn't really the point i'm trying to make.

    Rather, i know the figures on debt are outlandish $1 trillion or something, but that is money that is an asset to the banking sector.  They are owed this money from secured lending.  If repossessions rise and prices of these assets fall (30%) then the banks have instantly lost 30% of what they are owed.

    Its not in their favour to allow such massive falls.  They'd rather inflate/interest rate it away.  So we end up with 30% real falls, 5%ish nominal falls and the value of STR stashed cash eroded away.

    Surely the many lending banks-as opposed to the BoE-are not in a position to affect general inflation in a concerted way, although they are collectively responsible in part for house price inflation? Faced with mounting mortgage default, they will have to repossess sooner rather than later and sell off repo'd properties, which is unlikely to raise inflation.



  20. Couldn't Gordon Clown simply redefine the MPC's inflation target, much like he did with his golden rule 'cycle'?

    That way, interest rates wouldn't have to rise and nominal falls might not happen :unsure: (real falls would happen, but if they're masked by inflation it's a lot less politically suicidal!)

    Sadly yes he could change the target or the method of inflation calculation, as he has done before. Having been pilloried widely over the golden rule change though, I am not sure how often he can do this and get away with it.


  21. The guy is simply a salesman.

    He will present any "feature" as a "benefit", if he can.

    Standard sales training.

    He would sell a square wheeled car on the benefit of low petrol consumption.

    True, of course. I should be more tolerant of EAs I suppose...but sorry, I can't. Virtually every one I ever met in a social or professional context was a tosser. Also, I sell for a living in a manner of speaking but I do not ******** routinely about my market (insurance).


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