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Bankers Must Have Bonuses

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http://www.timesonline.co.uk/tol/comment/c...icle6823312.ece

Of course, there are differences between the grand prix business and banking: when Lewis Hamilton or Jenson Button wins a race it makes many Britons feel a warm glow of happiness. Yet when people get a cheaper mortgage because some financial whiz-kid on the trading floor did some clever forward buying in the currency markets, they don’t feel any particular sense of gratitude to the bank. Even in the good times, politicians are not likely to be misjudging the public mood if they propose to do something a bit nasty to bankers.

Absolutely nauseating twaddle that even manages to take a swipe at British engineering.

Beneath contempt.

If indeed Mr Lawson is correct then we are being held to ransom. The usual action when someone abroad is doing this is to drop things that explode out of aeroplanes until they stop. Apparently when 40,000 or so hold the whip hand over 65 million the thing to do is to write them a cheque and give them a cuddle.

Edited by Cogs

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I can't help thinking though that politicians are looking for easy point scoring over this issue of bankers bonuses.

I personally want the government to be found maintaining a fare market and avoiding or limiting systemic risk. We should avoid any bank becoming too big to fail in future.

Once they've done that, there is very little reason in my eyes why the banks can't operate commercially and pay what they want to whom they want.

This possibly even extends to those where we have a public interest, as we all want to see the best commercial performance relating to our investment in the banks.

Save for the odd bit of jealousy, I think the average man on the street would think the same. Have the politicians misjudged the public mood on this one?

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Is that how it works then? City trader whizz kid does a great deal resulting in a cheap mortgage deal?

I think not.

City trader boy needs millions of suckers to keep buying overpriced houses methinks. Its us that should get a bonus for putting up with the City!

Really the City should be able to buy better PR than this. They have bought off everyone else.

Wuff Boris!

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city traders had little to do with mortgages.

mortgages are loans.

securitization had a bit to do with traders, but the mortgages? no.

If one bank did cheaper mortgages, it was nothing to do with trading, it was to do with competition, otherwise some banks would have pulled from the market as their traders didnt do so well.

I still ask: If banks had earned so much...why was their system broken and rescued by the taxpayer? was it overtrading? was it bad debts? why yes...both....they sold many times more "product" than they had reaw material for....and not just one bank...just about ALL of them.

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"Yet when people get a cheaper mortgage because some financial whiz-kid on the trading floor did some clever forward buying in the currency markets"

Agreed

agree? which bit, twaddle or the trader.

ALL the banks were at it....ALL their traders must have been genii, and NO-one lost out on the trades. now THATS clever.

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agree? which bit, twaddle or the trader.

ALL the banks were at it....ALL their traders must have been genii, and NO-one lost out on the trades. now THATS clever.

The article. Why would you be buying forwards in the currency markets?

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The article. Why would you be buying forwards in the currency markets?

I think it might refer to a customer buying currency at a fixed rate in the future to ensure the levelness of his cost base.

What has that to do with enormous bonuses.

the money used belongs to the client, and the bank. the bank is financed by savers and bondholders. It is owned by the shareholders.

the trader does a job of work. he takes no risk with his wealth other than needing to get a job he can do.

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Funny isn't it? When the British Empire was at its peak, looting the rest of the world for resources, the lot of the average Brit was not good. Either dying in some horrendous war, or living in a slum and worked to death in a "dark satanic mill."

Despite North Sea oil, we never got cheap oil. So now we have this goldmine called the City and we don't even get cheap loans. Instead we got an overvalued currency, ruined manufacturing, a hollowed out economy and inflated house prices.

The fact we haven't had a revolution in this country is remarkable.

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Funny isn't it? When the British Empire was at its peak, looting the rest of the world for resources, the lot of the average Brit was not good. Either dying in some horrendous war, or living in a slum and worked to death in a "dark satanic mill."

Despite North Sea oil, we never got cheap oil. So now we have this goldmine called the City and we don't even get cheap loans. Instead we got an overvalued currency, ruined manufacturing, a hollowed out economy and inflated house prices.

The fact we haven't had a revolution in this country is remarkable.

no revolution as we all benefitted from the trickle down effect :lol::lol:

time for us to repay all this generosity hence the current torrent up of bailout cash etc ;)

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I believe people need to keep banging away at City myth.

Simply put, the City does not create wealth. It has instead performed a form of regulatory capture over the money supply in part by colluding with the Government.

1) Moral Hazard: The way things stand, the City is a bit like a pool of poker players. Say three decide to each borrow £50k to play against each other. The outcome of the game is that one loses everything, one loses £30k and the winner takes homes £130k. So within the closed system of the poker game money has been transferred and the winner is celebrated as a "rare and unique talent" meanwhile of the losers one goes bankrupt and the other becomes an impaired loan on the book of the bank that lent the money. So now that bank needs a bailout. In my book this is form of institutionalised fraud or perhaps system inspired fraud. Of course the politicians are happy to allow this as the winner will pay taxes and frankly the bank bailout will be paid by the taxpayer - Privatise the Profit and Socialise the losses.

2) Bloated state and bloated banks: Of course the state loves the city. If the Bank of England literally printed money and gave it to the Treasury then everyone would work that out too quickly. So instead we go through the charade of the Bank of England buying back bonds at inflated prices (hence low interest rates), so that the banks can then take this money and lend it to the Government. Again the city is adding no value, but gets to cream off a small percentage on a very large number and helps keep the bloated Government ticking over by disguising the fact that its actually engaged in Zimbabwe economics.

In my view the bloated state and bloated city of London are one and the same thing. Both could be slimmed down 50% and it would not impact the lives of ordinary taxpayers and electors.

Edited by mikelivingstone

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What a pathetic comparison.

Just shows how out of touch these morons are. The city talked about financial engineering, they don;t know the first thing about stable systems, nor that matter risk. There is no comparison with the ability of a team that creates an F1 car - multiple disciplines where every calculation has to be right or right as can by (and all the manufacturing in the background). The financial engineers come up with a few cooked up equations and they fail on an epic scale, totally bogus cooked up junk and they expect the taxpayer to ay for it and still receive their bloated paychecks.

The only reason the bankers are making money at the moment is they they are being given free money to do some more gambling with.

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Ok, so an F1 driver crashes his car and risks death in a fireball. A bank CEO crashes his bank and walks away with millions in payoffs and pension.

No...to be honest I'm just not seeing the analogy here. Maybe it's that both banks and racing cars have the same logo's on them?

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We already donate 50% of our bonuses to the worthless scroungers, but you're still not grateful!

Seriously, what's wrong with the little people? Thankyou not in their vocabulary?

Maybe mass unemployment or a lifetime of debt wasn't exactly what they wanted? There's just no pleasing some people is there?

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I can't help thinking though that politicians are looking for easy point scoring over this issue of bankers bonuses.

I personally want the government to be found maintaining a fare market and avoiding or limiting systemic risk. We should avoid any bank becoming too big to fail in future.

Once they've done that, there is very little reason in my eyes why the banks can't operate commercially and pay what they want to whom they want.

This possibly even extends to those where we have a public interest, as we all want to see the best commercial performance relating to our investment in the banks.

Save for the odd bit of jealousy, I think the average man on the street would think the same. Have the politicians misjudged the public mood on this one?

No, they've misjudged public mood by not going in hard enough.

And yes, if a set of impossible preconditions were met then sure, but they can't be and they won't be.

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What a pathetic comparison.

Just shows how out of touch these morons are. The city talked about financial engineering, they don;t know the first thing about stable systems, nor that matter risk. There is no comparison with the ability of a team that creates an F1 car - multiple disciplines where every calculation has to be right or right as can by (and all the manufacturing in the background). The financial engineers come up with a few cooked up equations and they fail on an epic scale, totally bogus cooked up junk and they expect the taxpayer to ay for it and still receive their bloated paychecks.

The only reason the bankers are making money at the moment is they they are being given free money to do some more gambling with.

How long did you work in F1 and banking to come to this conclusion?

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Classic diversionary tactics.

If banks hadn't been allowed to lend more than 3.5 times peoples salaries for mortgages then none of this would have happened. Gov't and banks have diverted everyones attention by talking about bonuses and its worked.

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Classic diversionary tactics.

If banks hadn't been allowed to lend more than 3.5 times peoples salaries for mortgages then none of this would have happened. Gov't and banks have diverted everyones attention by talking about bonuses and its worked.

It was worse in the US...US homeowners used to fix for 25 or 30 years.

teaser rates and the promise of renewing to keep the rate down boosted the market.....affordability criteria were the order of the day..we all know where it ended.

you have to have a limit to the pile of money you lend compared to the pile money the person is able to accumulate. to compare the lending pile with the COST of the Pile at the time of the loan is to dangerously ignore future possibilities

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It’s worth recalling now how very well thought of by government were the likes of Northern Rock and Bradford & Bingley. They were making mortgages available on a grand scale to many people who up till then would have found it difficult, if not impossible, to buy decent accommodation for their families, instead of renting in perpetuity. Who then would have argued that the transactions of such firms, as they sought to finance this innovative lending in the wholesale money markets, were “socially useless�

This is the heart of the problem yet many people are still unwilling to accept it because of their irrational loathing of the banks.

People wanted to borrow large amounts of money to put a roof over their heads else face renting for ever and the banks enabled these transactions to take place so people could buy a home. If housing is too expensive then ultimately its not the banks fault, its the fault of the housing market. The only reasonable action the bank could take would to not lend money which doesn't make them a very good bank and would lead to accusations of stifling the economy and money hoarding if this template was used on a national scale.

I would prefer a system that included easier credit as well as cheap and stable house prices, under the current arrrangment this is impossible because EVERY time the economy picks up the housing/land component sucks the life out of it.

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Couldn't they just get a job and live within their means?

Yes, they could.Untill people like you turned the economy into a casino and homes into an 'asset class' for gambling purposes.

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