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eric pebble

Daily Mail: Greedy Bankers Filling Their Boots

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Greedy bankers filling their boots

Despite being supported with a mountain of taxpayers' money, the bankers have shown themselves to be more interested in feathering their nests than supporting the small businesses and households that provide the backbone of Britain's prosperity.

Read more: http://www.dailymail.co.uk/debate/article-...l#ixzz0MY7xIuVe

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Guest X-QUORK

Not sure how the banks are supposed to recapitalise and provide loans at the same time. Mixed messages from the government.

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That is one of the worst informed articles I have ever read. Does anyone actually read the Daily Mail as a matter of choice rather than for an ironic laugh? :lol:

Could you say why? Would be informative.....

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Not sure how the banks are supposed to recapitalise and provide loans at the same time. Mixed messages from the government.

exactly, the sentiment on here whenever the muppet credit monkeys at MSE or mortgages gets brought up, we're in this mess because of lax lending. So they tighten it up and guess what, the government and people here moan. Then they moan about the cost of lending, which we all said was too cheap - so it's gone up.

Then everybody wants the banks to pay back what they 'borrowed' - so they need to make profits to do so, now people are moaning. you want the banks to stop being inefficient, but then moan when they fire people when their business is significantly down. You play hell about how much banks are losing on past investments - they are getting cash in to make sure they can cover those problems - you all complain.

What do you want - to be able to 'own' the banks forever and never let them pay off their debts ..... and to be able to hang people who earn more than you from the lampposts...

[note, you is 'collective']

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Could you say why? Would be informative.....

Of course. He is looking at the level of 3 month libor, which is at 0.92%, and believing, as many people do, that banks can borrow there. Once upon a time, that was true, but now, virtually NO lending gets done beyond the 1 week. If a bank wants to borrow for 2yrs or 5yrs, to match the maturity profile of the underlying mortgage loan, it would have to pay at least libor+100, which is currently 3.24% in 2yrs or 4.70% in 5yrs. This still assumes that the mortgage is paid off when the fixed period runs out, which it might well not be, and does not take into account ANY spread to account for arrears/defaults. Let's say the long run default is 5% and the loss given default is 20%, which might be a little conservative but probably not, then the defaults are worth another 1%. So the BARE minimum that a bank should be lending at is 4.24% in 2yrs or 5.70% in 5yrs.

The same can be applied to corporate lending, but the long run default is probably slightly higher and the loss given default is significantly higher since the lending is unsecured. Why is it surprising that banks want to charge a higher credit premium given the deteriorating state of customer finances.

The Government loves to point fingers at the banks and say how badly run they have been, and maybe they are right, but it would be a travesty if the banks now caved into Government pressure to be EVEN WORSE run, and lend money at uneconomic levels to people who can't afford it. I hope sincerely that the "greedy bankers" continue to resist that pressure.

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exactly, the sentiment on here whenever the muppet credit monkeys at MSE or mortgages gets brought up, we're in this mess because of lax lending. So they tighten it up and guess what, the government and people here moan. Then they moan about the cost of lending, which we all said was too cheap - so it's gone up.

Then everybody wants the banks to pay back what they 'borrowed' - so they need to make profits to do so, now people are moaning. you want the banks to stop being inefficient, but then moan when they fire people when their business is significantly down. You play hell about how much banks are losing on past investments - they are getting cash in to make sure they can cover those problems - you all complain.

What do you want - to be able to 'own' the banks forever and never let them pay off their debts ..... and to be able to hang people who earn more than you from the lampposts...

[note, you is 'collective']

Links please to people here moaning about the "high" rates and "tight" credit.

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By the way, if you want to have EVEN more of a laugh at an EVEN more badly conceived story, try this one

http://www.dailymail.co.uk/news/article-12...r-mortgage.html

I love the case study - surprisingly the bank wasn't keen to lend £200k to a firm which had seen turnover plummet by 66%!! Yeah, that's all the bank's fault, not yours for running a crappy business, honest.

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Of course. He is looking at the level of 3 month libor, which is at 0.92%, and believing, as many people do, that banks can borrow there. Once upon a time, that was true, but now, virtually NO lending gets done beyond the 1 week. If a bank wants to borrow for 2yrs or 5yrs, to match the maturity profile of the underlying mortgage loan, it would have to pay at least libor+100, which is currently 3.24% in 2yrs or 4.70% in 5yrs. This still assumes that the mortgage is paid off when the fixed period runs out, which it might well not be, and does not take into account ANY spread to account for arrears/defaults. Let's say the long run default is 5% and the loss given default is 20%, which might be a little conservative but probably not, then the defaults are worth another 1%. So the BARE minimum that a bank should be lending at is 4.24% in 2yrs or 5.70% in 5yrs.

The same can be applied to corporate lending, but the long run default is probably slightly higher and the loss given default is significantly higher since the lending is unsecured. Why is it surprising that banks want to charge a higher credit premium given the deteriorating state of customer finances.

The Government loves to point fingers at the banks and say how badly run they have been, and maybe they are right, but it would be a travesty if the banks now caved into Government pressure to be EVEN WORSE run, and lend money at uneconomic levels to people who can't afford it. I hope sincerely that the "greedy bankers" continue to resist that pressure.

The answer is/was simple. Let the banks go bust as they should in the capitalist system, guarantee deposits as pledged. Let the debt mess unwind and not be foisted off on our children and children's children. Let new banks arise to fill the voids left, ones which have seen what happened to their predecessors. Without all the artificial supports, house prices would fall, bankers wages/bonuses would halve or more, the economy would slowly recover. Instead we have this paralysis within our economy due to crushing debt that has a great big chance of reducing us to 2nd world status. That is slowly crushing the life out of healthy companies and ill ones alike.

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By the way, if you want to have EVEN more of a laugh at an EVEN more badly conceived story, try this one

http://www.dailymail.co.uk/news/article-12...r-mortgage.html

I love the case study - surprisingly the bank wasn't keen to lend £200k to a firm which had seen turnover plummet by 66%!! Yeah, that's all the bank's fault, not yours for running a crappy business, honest.

Yep, I read that article. They are in a business where the auto manufacturers are ending contracts with many of their EU suppliers (too expensive) and shifting sourcing to Romania, N. Africa and the Far East. Renault, PSA, Fiat et al have been follwing this practice for the last 18months.

I checked out their website.

http://www.hi-mark.co.uk/

Pisspoor.

Any banker looking at that site to get an impression of their business would be wise to be wary with taxpayers money :rolleyes:

<edit>

Also found they have been highlighted by in the Torygraph as well. Maybe they have good connections in the meeja ? :unsure:

http://www.telegraph.co.uk/finance/newsbys...n-question.html

Edited by Agentimmo

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This all misses the point.

Many businesses are living on or at the bread line because of the business unfriendly tax regime.

If Darling wasn't stripping businesses of so much cash, they would be more successful in building their cash reserves and they would not be reliant on bankers to stay afloat.

In most instances, the largest creditor of a struggling company is going to be the tax man.

More debt from banks is not going to address the real issue - small businesses are stripped of cash when they need it most, during their expansion phase.

And of course this affects job creation.

Businesses should recieve tax credits, not tax rises for creating jobs.

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This all misses the point.

Many businesses are living on or at the bread line because of the business unfriendly tax regime.

If Darling wasn't stripping businesses of so much cash, they would be more successful in building their cash reserves and they would not be reliant on bankers to stay afloat.

In most instances, the largest creditor of a struggling company is going to be the tax man.

More debt from banks is not going to address the real issue - small businesses are stripped of cash when they need it most, during their expansion phase.

And of course this affects job creation.

Businesses should recieve tax credits, not tax rises for creating jobs.

So many businesses that have sprung up in the last 10 years of this credit fuelled boom have saved nothing. Many small business owners have blown the money on financing a champagne lifestyle. I won't shed a tear for them.

PS. The business cited above was formed in the 70s, so is exempt from this criticism. It seems a victim of outsourcing more than anything else..........)

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The usual story Labour has deserted it grass roots supporters.

During the last 10 years the Rich have got Super and mega Rich

The Poor have got got totally broke and desolate .

Its the usual kick in the teeth for the hard working tax payer to see small companies going broke, jobs being lost with no help from the banks but the bankers living the life of luxury with the taxpayer and poor of this country bailouts, why not buy a Lear Jet and a 15th swimming pool on million pound bonuses coutesy of the muggins taxpayers of this country.

Tony Blair and Gordon Brown will be well remembered to turning this country back to pre Industrial Revolution Standards .

Edited by joey

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The answer is/was simple. Let the banks go bust as they should in the capitalist system, guarantee deposits as pledged. Let the debt mess unwind and not be foisted off on our children and children's children. Let new banks arise to fill the voids left, ones which have seen what happened to their predecessors. Without all the artificial supports, house prices would fall, bankers wages/bonuses would halve or more, the economy would slowly recover. Instead we have this paralysis within our economy due to crushing debt that has a great big chance of reducing us to 2nd world status. That is slowly crushing the life out of healthy companies and ill ones alike.

Nice troll, but what's that got to do with what I said? :blink:

I was talking about the cost of funds for banks... you are rambling about....? :huh:

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By the way, if you want to have EVEN more of a laugh at an EVEN more badly conceived story, try this one

http://www.dailymail.co.uk/news/article-12...r-mortgage.html

I love the case study - surprisingly the bank wasn't keen to lend £200k to a firm which had seen turnover plummet by 66%!! Yeah, that's all the bank's fault, not yours for running a crappy business, honest.

I agree. Slightly ridiculous that they were not prepared to put the "marital home" on the line, but expect the bank to take the risk.

However see the next busines, a translation agency which is "doing well" but overdraft rates are "unaffordable."

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However see the next busines, a translation agency which is "doing well" but overdraft rates are "unaffordable."

Yeah, I love the way she was moaning about 6.3%. 6.3% is amongst the cheapest unsecured business loan rates I have ever heard of, 0.5% base rates are totally irrelevant!

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I agree. Slightly ridiculous that they were not prepared to put the "marital home" on the line, but expect the bank to take the risk.

However see the next busines, a translation agency which is "doing well" but overdraft rates are "unaffordable."

that's just comedy - a rate of 6.8% on what is presumably an unsecured business loan to what is virtually a startup - and she's moaning - and doesn't want to pay a £500 fee..... joker.

She could easily need debt to expand for a second shop, so doing well and needing borrowings are not exclusive.

Edited by Rachman

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Nice troll, but what's that got to do with what I said? :blink:

I was talking about the cost of funds for banks... you are rambling about....? :huh:

You both make good points. He rambles less than you

Better to let these failed banks fall than argue about what they should lend out which is like not seeing the wood for the trees.

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You both make good points. He rambles less than you

Better to let these failed banks fall than argue about what they should lend out which is like not seeing the wood for the trees.

Apart from the fact that one is in the past, and one is in the present. So unless you have a time machine to go back and let them fail....?

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Apart from the fact that one is in the past, and one is in the present. So unless you have a time machine to go back and let them fail....?

No need for a time machine. Put an end to all the mark-to-fantasy asset valuation and derivatives-fuelled capital boosting cons, return the AIG loot they embezzled from taxpayers... and we can then see which banks are truly solvent. And which should fall

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So many businesses that have sprung up in the last 10 years of this credit fuelled boom have saved nothing. Many small business owners have blown the money on financing a champagne lifestyle. I won't shed a tear for them.

PS. The business cited above was formed in the 70s, so is exempt from this criticism. It seems a victim of outsourcing more than anything else..........)

I think many expect it all to continue, running a business takes still and hard work, I suspect many new businesses have had it easy and grown because consumers have had cheap credit. Those with good business models will survive those that rode the credit boom with luck will fail.

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Of course. He is looking at the level of 3 month libor, which is at 0.92%, and believing, as many people do, that banks can borrow there. Once upon a time, that was true, but now, virtually NO lending gets done beyond the 1 week. If a bank wants to borrow for 2yrs or 5yrs, to match the maturity profile of the underlying mortgage loan, it would have to pay at least libor+100, which is currently 3.24% in 2yrs or 4.70% in 5yrs. This still assumes that the mortgage is paid off when the fixed period runs out, which it might well not be, and does not take into account ANY spread to account for arrears/defaults. Let's say the long run default is 5% and the loss given default is 20%, which might be a little conservative but probably not, then the defaults are worth another 1%. So the BARE minimum that a bank should be lending at is 4.24% in 2yrs or 5.70% in 5yrs.

The same can be applied to corporate lending, but the long run default is probably slightly higher and the loss given default is significantly higher since the lending is unsecured. Why is it surprising that banks want to charge a higher credit premium given the deteriorating state of customer finances.

The Government loves to point fingers at the banks and say how badly run they have been, and maybe they are right, but it would be a travesty if the banks now caved into Government pressure to be EVEN WORSE run, and lend money at uneconomic levels to people who can't afford it. I hope sincerely that the "greedy bankers" continue to resist that pressure.

Trouble is that so much has been lent out this model is flawed, personally I believe 5.70% is far too high and too many would default. So now you have a catch 22, by pricing the risk in you create default, price too low and you can't raise the capital because there is no return.

Remember rates peaked in the US in 2006 at 5.25 in June and remained at that level for over a year, causing a huge Tsunami of sub prime defaults that sank the market. Even worse didn't subprime start kicking off in 2005 a full year earlier?

Interest rates in so many ways triggered this mess.

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5.70% is historically pretty cheap. Are you asking banks to loan at a loss to try and cut the default rate? That sounds like very shaky economics. I'm not sure anyone who can't afford interest of 5.70% should be taking a loan of any sort.

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