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Wires 74

Bankers Are Getting Away With Murder

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Guest BoomBoomCrash
And yourself, ironically enough.

Wrong yet again. The mess we have is the free market at work. These bankstas were unencumbered by regulation such that they were able to make the institutions for which they worked too big to to fail; this state of affairs is now being relentlessly abused. This will always happen in a free market model, someone company becomes too big and powerful, the comany then beings to act in full knowledge that however reckless it is in pursuit of greater and greater profit, wider society will always have to bail it out as the consequences of its failure would be too great.

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Wrong yet again. The mess we have is the free market at work. These bankstas were unencumbered by regulation such that they were able to make the institutions for which they worked too big to to fail; this state of affairs is now being relentlessly abused. This will always happen in a free market model, someone company becomes too big and powerful, the comany then beings to act in full knowledge that however reckless it is in pursuit of greater and greater profit, wider society will always have to bail it out as the consequences of its failure would be too great.

Which is worse the lack of negative rules saying "don't lend too much" or the presence of positive rules which grant the the banks a monopoly to create credit?

Many companies get very (and some may say too) big and there can be downsides to those but the economy wasnt brought to the edge of ruin by Marks and spencer selling too many pairs of chino slacks or nike selling too many trainers. The problems caused by banking are of a unique nature as a consequence of the powers they are granted by the state.

It is very difficult to take seriously an anti free mrket argument which does not recognise thes facts.

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I don't actually find this story especially different from the sort of Daily Fail outrage-builders that get posted to Off-Topic.

We have a society that doesn't respect implied limits on decent behaviour and the popular delusion that one is 'entitled' to anything you can take. This is true from top to bottom, from Kappa'd chav to pinstriped City 'gent'. This is various blamed on lefty liberals and righty Thatcherites which is really a false dichotomy, they are all singing from the same 1960s movement toward individualism and the fracture of society. You're worth it, do whatever you want, you only answer to yourself, rules are for idiots, not you. Of course both want rules for everyone else, just so long as they don't have to have any, hence much complaining about the amorality of hypercapitalism/broken britain et al.

And as usual nobody really has a workable solution beyond the idea that if people won't respect implied limits they should be forced to observe imposed limits. The problem with this, quite apart from ethical/moral/economic/political arguments is that policy makers usually refuse to accept just how low people will sink, and again I think thats as true of the financial community as any other gang of chavs. In much the same way, for example, social housing rules present a race to utter degradation that millions are only too happy to compete in to see who can render themselves the most helpless and in the biggest mess, so to the banks and their 'too big to failism' are quite happy to put the taxpayer into just the same form of blackmail.

And no, I don't have any solutions either. Genuinely solve one and you could probably the solve the other though.

Edited by Cogs

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Adair Turner, Darling and the Telegraph don't get it. The banks tell them what to do. Darling doesn't call the banks in for talks. They call him in and tell him what will happen. All that is to be agreed is his post political job with them and remuneration. Why do you think the proposed bank reforms are so weak?

Policymakers are meanwhile being hijacked by City lobbyists, who are achieving ever greater success in neutering and watering down some of the more radical proposals for change.

Any chance of "policy makers" being "hijacked" by the voters? No I thought not. Lying corrupt scum the lot of them.

Edited by HostPaul TAFKA Rover2000

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We have an 'epidural economy' as the government uses large infusions of borrowed money to create an aura of economic well being. This may help sentiment but the fundamentals cannot be ignored. One fundamental is that we cannot compete in a global economy whilst UK workers have to pay £1000 a month just to keep a roof over their heads. The cost of government has also become a major disincentive for investment in the UK.

House prices remain artificially high. The banks are using this breathing space to shift risk from their books to the borrowers. They are using low short term interest rates to pull in borrowers with big deposits. Goodbye 129% mortgages, hello 60% mortgages.

Amazingly, many people still see houses as a one way investment bet. This has motivated them to rent out second homes rather than sell. When it comes to house prices there are three elephants in the room; Employment, Income and Sentiment. When E or I suffer, S goes with them. Employment levels and income in the UK have been heavily subsidised with borrowed money. This has to come to an end sooner or later.

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Adair Turner, Darling and the Telegraph don't get it. The banks tell them what to do. Darling doesn't call the banks in for talks. They call him in and tell him what will happen.

Had you considered that maybe Darling should work out how banks work before telling people what do to? His comments in the press lately about "OMG WHY AREN'T YOU LENDING AT 0.5%" show very clearly that he doesn't have the foggiest about how bank funding actually works.

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I don't actually find this story especially different from the sort of Daily Fail outrage-builders that get posted to Off-Topic.

We have a society that doesn't respect implied limits on decent behaviour and the popular delusion that one is 'entitled' to anything you can take. This is true from top to bottom, from Kappa'd chav to pinstriped City 'gent'. This is various blamed on lefty liberals and righty Thatcherites which is really a false dichotomy, they are all singing from the same 1960s movement toward individualism and the fracture of society. You're worth it, do whatever you want, you only answer to yourself, rules are for idiots, not you. Of course both want rules for everyone else, just so long as they don't have to have any, hence much complaining about the amorality of hypercapitalism/broken britain et al.

And as usual nobody really has a workable solution beyond the idea that if people won't respect implied limits they should be forced to observe imposed limits. The problem with this, quite apart from ethical/moral/economic/political arguments is that policy makers usually refuse to accept just how low people will sink, and again I think thats as true of the financial community as any other gang of chavs. In much the same way, for example, social housing rules present a race to utter degradation that millions are only too happy to compete in to see who can render themselves the most helpless and in the biggest mess, so to the banks and their 'too big to failism' are quite happy to put the taxpayer into just the same form of blackmail.

And no, I don't have any solutions either. Genuinely solve one and you could probably the solve the other though.

Superb post - thanks. I'd add that we all make judgements at least partly based on our own view of what we would do; how low we would sink etc.. And most of us think that we are better than average, so the rules that policymakers decide upon (or for that matter, communities of chavs) always seem to have a negative (in the moral sense) feedback loop built in because most of us are average. Perhaps we should let the machines take over after all - so that decisions about social engineering are made by an objective party.

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Had you considered that maybe Darling should work out how banks work before telling people what do to? His comments in the press lately about "OMG WHY AREN'T YOU LENDING AT 0.5%" show very clearly that he doesn't have the foggiest about how bank funding actually works.

You're not cynical enough here I'm afraid. Darling understands exactly how bank funding works but he's reckoning on most of the voters not bothering to find out. The logic goes something like:

1. we've cut rates to 0.5% (most people have no idea, or don't believe, that the MPC is in any way independent from the government).

2. your mortgage or loan should now be really cheap thanks to your munificent NuLab overlords (again, most people have no understanding at all of how bank funding works).

3. but those horrible bankers are thwarting our attempts to help you through the recession.

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Any chance of "policy makers" being "hijacked" by the voters? No I thought not. Lying corrupt scum the lot of them.

Report to the thought police immediately. Policy makers are not there to work for the voters. Do you think we live in some sort of democracy.

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You're not cynical enough here I'm afraid. Darling understands exactly how bank funding works but he's reckoning on most of the voters not bothering to find out. The logic goes something like:

1. we've cut rates to 0.5% (most people have no idea, or don't believe, that the MPC is in any way independent from the government).

2. your mortgage or loan should now be really cheap thanks to your munificent NuLab overlords (again, most people have no understanding at all of how bank funding works).

3. but those horrible bankers are thwarting our attempts to help you through the recession.

better mortgage holders, the "beneficiaries" of the the "wealth" theyve invested in, pay for the banks bailouts, rather than the taxpayer.

7, 8 or 9% mortgage rates are good...saves the taxpayer billions.

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Had you considered that maybe Darling should work out how banks work before telling people what do to? His comments in the press lately about "OMG WHY AREN'T YOU LENDING AT 0.5%" show very clearly that he doesn't have the foggiest about how bank funding actually works.

Darling does know how bank funding works. Its improbable being Chancellor that he doesn't.

He is merely playing to the mob, whilst being told what to do by the bankers. I do not believe a word he says.

The Government (in theory) has a substantial investment in the banks, so its not a case of asking them nicely. He could pack the boards of these banks with his own people.

The reality is that the financial industry runs the government.

Nothing much has changed, it used to be ship owners, and mill owners running things. Admittedly back in the 19th century, these people were directly in Parliament, now their proxies are.

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The reality is that the financial industry runs the government.

Nothing much has changed, it used to be ship owners, and mill owners running things. Admittedly back in the 19th century, these people were directly in Parliament, now their proxies are.

Deeply sad - but true...

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