How The Bankers' Minds Work

[tallguy]

Indeed. Not advocating we shoot them, but words mean nothing to them. I just hope one day they get their comeuppance.

Nice Tomodachi avatar by the way!

I take it you are only speaking for yourself

I do advocate we shoot the b*stards

[tallguy]

Barclays were one of the few high street banks to not fling themselves at the feet of Gordon Brown when the going got tough, politicians in general were quite miffed that they had the temerity to refuse public money when it was wafted under their nose. In fact IIRC they even salvaged some parts of the wreck that was Lehman Brothers during the depths of the crisis, that shows confidence in the face of adversity! Yes they have gained from the general low interest, banker friendly environment but the only people to blame for that are the Labour party.

It would make more sense for Diamond to grill the MPs, and he'd do a better job of it.

Diamond's bank would have gone down with the others if the bailouts hadn't happened. The other banks were bailed out so the likes of Barclays didn't have to be.

There may only be a few names at the door of the taxpayer. However, indirectly, the whole financial system was bailed out.

Edited January 17, 2011 by tallguy

[Colin]

I take it you are only speaking for yourself

I do advocate we shoot the b*stards

Yes, but start with their legs and arms.

I want them to feel real pain...

[LuckyOne]

How long have you been here Chef?

Barclays were bust. They lent money to individuals to buy parts of their business to recapitalise themselves.

They have taken full advantage of the change to the rules to suspend mark to market accounting.

They availed themselves of the liquidity window at the central banks.

They have benefited from the near 0% rates, the money printing, the artificial maintaining of asset prices at bubble levels.

How on earth can you (or Bob) argue that Barclays are not alive today because of the tax payer. The mind boggles.

Even if you just include the banks who would have gone bust - they would have been a mere domino.

EDIT: Here - lending money to buy parts of its business to recapitalise itself - should be banned!

http://www.ft.com/cms/s/0/f1b1b602-56e0-11de-9a1c-00144feabdc0.html#axzz1BEk3md2d

Re Blackrock's purchase of BGI for instance:

The crux of the issue is QE and ZIRP.

The costs to the taxpayer of these two policies is indirect rather than direct.

The best response from Diamond would have been :

"I am grateful to Brown, Darling, King, Paulson, Geithner and Bernanke for debasing the savings of taxpayers and massively increasing claims on their future output, without consulting them or seeking their approval, to ensure that weaker institutions than mine would survive which was key to our own prosperity."

Edited January 16, 2011 by LuckyOne

[tallguy]

The crux of the issue is QE and ZIRP.

The costs to the taxpayer of these two policies is indirect rather than direct.

The best response from Diamond would have been :

"I am grateful to Brown, Darling, King, Paulson, Geithner and Bernanke for debasing the savings of taxpayers and massively increasing claims on their future output, without consulting them or seeking their approval, to ensure that weaker institutions than mine would survive which was key to our own prosperity."

Precisely

A wall against their backs is the only thing these f*ckers will ever understand. Our government's not going to do it for us. Consequently, what needs to happen is for a few big-name main-branches to go up in flames, literally.

Fat chance of course, more's the pity.

Edited January 17, 2011 by tallguy

[Joboxer]

Well it would have been an interesting scenario to not have had any central bank inteference. Over here, the crap started when Northern Crock couldnt fund its book cos everybody got a whiff of the shite in the Granite securitisations, and the short term money book was funding 25 yr obligations - a practice done by most banks cos of the upward sloping yeild curve. Essentially liquidity dried up, as everyone started to question eveyone else, short-term rates rocketed etc the crunch was in. The authorities had a choice, they could - and many bankers would argue probably should - have said ******em, guarantee depositors, cherry pick the mortgage books, provide liquidity but stop short of providing capital. Banks have been going bust for centuries. Badly run banks should go to the wall, and the efficient (or less badly run) should take up the slack. The Govt is the lender of last resort, however it has a moral, but no legal obligation to help. It was the lines of people queing outside NR to withdraw spooked them, so to avert possible run on all banks they oiled up the printing press.

The problem was - and still is - as banks bought each others securitised debt, they just passed the non-performing loan parcels to each other. Its my guess there are still a few swimming trunk less bathers avoiding the outgoing tide.

Had the Govts/Central banks not intervened, it would have been real carnage and pain, but out of the rubble would have emerged a new system. A complete industry restructuring. Smaller, with fewer staff, returning to 'real' banking. Instead we have shoved a sticking plaster on the wound, retained (and rewarded) lossmakers, kept prinipally the same old business lines, and provoked suspicions and divisions in society that will never be healed (whilst managing to quadruple budget deficits)

[@contradevian]

i have to admit, bankers seem to be made the scapegoat for every problem.

at the end of the day, its the public who borrowed too much money, and couldnt afford to pay it back.

the people borrowing the money have been made out to be victims when they are the ones who have caused all the problem.

its like accredting obesity problems to food manufacturers rather than individuals.

Isn't it a bankers core duty to assess the risk?

Edited January 17, 2011 by Sir John Steed

[tallguy]

Well it would have been an interesting scenario to not have had any central bank inteference. Over here, the crap started when Northern Crock couldnt fund its book cos everybody got a whiff of the shite in the Granite securitisations, and the short term money book was funding 25 yr obligations - a practice done by most banks cos of the upward sloping yeild curve. Essentially liquidity dried up, as everyone started to question eveyone else, short-term rates rocketed etc the crunch was in. The authorities had a choice, they could - and many bankers would argue probably should - have said ******em, guarantee depositors, cherry pick the mortgage books, provide liquidity but stop short of providing capital. Banks have been going bust for centuries. Badly run banks should go to the wall, and the efficient (or less badly run) should take up the slack. The Govt is the lender of last resort, however it has a moral, but no legal obligation to help. It was the lines of people queing outside NR to withdraw spooked them, so to avert possible run on all banks they oiled up the printing press.

The problem was - and still is - as banks bought each others securitised debt, they just passed the non-performing loan parcels to each other. Its my guess there are still a few swimming trunk less bathers avoiding the outgoing tide.

Had the Govts/Central banks not intervened, it would have been real carnage and pain, but out of the rubble would have emerged a new system. A complete industry restructuring. Smaller, with fewer staff, returning to 'real' banking. Instead we have shoved a sticking plaster on the wound, retained (and rewarded) lossmakers, kept prinipally the same old business lines, and provoked suspicions and divisions in society that will never be healed (whilst managing to quadruple budget deficits)

excellent summary of the shit we are in

[@contradevian]

Well it would have been an interesting scenario to not have had any central bank inteference. Over here, the crap started when Northern Crock couldnt fund its book cos everybody got a whiff of the shite in the Granite securitisations, and the short term money book was funding 25 yr obligations - a practice done by most banks cos of the upward sloping yeild curve. Essentially liquidity dried up, as everyone started to question eveyone else, short-term rates rocketed etc the crunch was in. The authorities had a choice, they could - and many bankers would argue probably should - have said ******em, guarantee depositors, cherry pick the mortgage books, provide liquidity but stop short of providing capital. Banks have been going bust for centuries. Badly run banks should go to the wall, and the efficient (or less badly run) should take up the slack. The Govt is the lender of last resort, however it has a moral, but no legal obligation to help. It was the lines of people queing outside NR to withdraw spooked them, so to avert possible run on all banks they oiled up the printing press.

The problem was - and still is - as banks bought each others securitised debt, they just passed the non-performing loan parcels to each other. Its my guess there are still a few swimming trunk less bathers avoiding the outgoing tide.

Had the Govts/Central banks not intervened, it would have been real carnage and pain, but out of the rubble would have emerged a new system. A complete industry restructuring. Smaller, with fewer staff, returning to 'real' banking. Instead we have shoved a sticking plaster on the wound, retained (and rewarded) lossmakers, kept prinipally the same old business lines, and provoked suspicions and divisions in society that will never be healed (whilst managing to quadruple budget deficits)

+100

[Joboxer]

True Sir John. But what you gonna do when a guy turns up with fraudulent wage slips ? There was a whole industry of counterfeiters who could provide all the necessary docs to make an application look bone fide - Brick lane was a good place to go to get these.

Bankers didnt check enough, but the greed of the average punter was breathtaking. I remember a London cabbie telling me he had 12 BTLs - all on 'hooky' mortgages.

Where banks did get it so wrong was in multiples - up to 6x basic at 125% of propery value.

Thank god for sensibilty returning of 3x at 20% deposit. Thats how banking used to be,

[Democorruptcy]

Barclays were one of the few high street banks to not fling themselves at the feet of Gordon Brown when the going got tough, politicians in general were quite miffed that they had the temerity to refuse public money when it was wafted under their nose. In fact IIRC they even salvaged some parts of the wreck that was Lehman Brothers during the depths of the crisis, that shows confidence in the face of adversity! Yes they have gained from the general low interest, banker friendly environment but the only people to blame for that are the Labour party.

It would make more sense for Diamond to grill the MPs, and he'd do a better job of it.

LOL.

Barclays borrowed plenty.

Barclays borrowed $863bn from the Fed, with almost half coming in overnight loans through the Primary Dealer Credit Facility, a programme established by the central bank to help those banks that deal in US Treasuries

http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/8175432/UK-banks-borrowed-more-than-640bn-from-US-Federal-Reserve.html

I would have asked Bob Diamond why he was thinking of handing out bonuses when on the same day as the treasury committee, there was a suggestion that Barclays needed to set up a £200bn bad bank. If they have so many "non-performing" assets surely if they were marked to market there would be no profits and so no bonuses?

Surely ignoring all the "non-performers" i.e. bad debts also makes a mockery of the Basel III capital requirements?

BARCLAYS could soon start a radical restructuring to spin out a “bad” investment bank to wind down poorly performing assets, analysts said yesterday.

Shedding non-core and credit-impaired assets by repackaging them into a separate entity would allow it to meet its looming Basel III capital requirements while maintaining high earnings and dividends to shareholders.

Barclays is likely to announce the decision alongside its full-year results in February under new chief executive Bob Diamond, UBS analysts led by Philip Finch said.

“The clearest way for Bob Diamond to stamp his authority upon the group, in our opinion, is to initiate a restructuring at Barclays to exit low-return assets and businesses and deliver a higher return bank with a smaller balance sheet,” they said.

Such a “work-out bank” could include up to £200bn of non-performing mortgages, parts of Barclays Capital or some of its stake in asset manager BlackRock. Barclays would follow Northern Rock, Royal Bank of Scotland and Lloyds Banking Group, all of which have created run-off entities following the credit crunch.

http://www.cityam.com/news-and-analysis/barclays-may-set-bad-bank-weak-assets-analysts-say

[@contradevian]

True Sir John. But what you gonna do when a guy turns up with fraudulent wage slips ? There was a whole industry of counterfeiters who could provide all the necessary docs to make an application look bone fide - Brick lane was a good place to go to get these.

Bankers didnt check enough, but the greed of the average punter was breathtaking. I remember a London cabbie telling me he had 12 BTLs - all on 'hooky' mortgages.

Where banks did get it so wrong was in multiples - up to 6x basic at 125% of propery value.

Thank god for sensibilty returning of 3x at 20% deposit. Thats how banking used to be,

Slightly amazed they even accepted wage slips, in this day and age! If we knew what was going on, then they did.

[THE BALD MAN]

Well it would have been an interesting scenario to not have had any central bank inteference. Over here, the crap started when Northern Crock couldnt fund its book cos everybody got a whiff of the shite in the Granite securitisations, and the short term money book was funding 25 yr obligations - a practice done by most banks cos of the upward sloping yeild curve. Essentially liquidity dried up, as everyone started to question eveyone else, short-term rates rocketed etc the crunch was in. The authorities had a choice, they could - and many bankers would argue probably should - have said ******em, guarantee depositors, cherry pick the mortgage books, provide liquidity but stop short of providing capital. Banks have been going bust for centuries. Badly run banks should go to the wall, and the efficient (or less badly run) should take up the slack. The Govt is the lender of last resort, however it has a moral, but no legal obligation to help. It was the lines of people queing outside NR to withdraw spooked them, so to avert possible run on all banks they oiled up the printing press.

The problem was - and still is - as banks bought each others securitised debt, they just passed the non-performing loan parcels to each other. Its my guess there are still a few swimming trunk less bathers avoiding the outgoing tide.

Had the Govts/Central banks not intervened, it would have been real carnage and pain, but out of the rubble would have emerged a new system. A complete industry restructuring. Smaller, with fewer staff, returning to 'real' banking. Instead we have shoved a sticking plaster on the wound, retained (and rewarded) lossmakers, kept prinipally the same old business lines, and provoked suspicions and divisions in society that will never be healed (whilst managing to quadruple budget deficits)

+++1. These bankers remind me of British Leyland workers in the seventies..baled out by tax payers but still striking for more pay...still produce c**p products that no one wants.

[THE BALD MAN]

Barclays were one of the few high street banks to not fling themselves at the feet of Gordon Brown when the going got tough, politicians in general were quite miffed that they had the temerity to refuse public money when it was wafted under their nose. In fact IIRC they even salvaged some parts of the wreck that was Lehman Brothers during the depths of the crisis, that shows confidence in the face of adversity! Yes they have gained from the general low interest, banker friendly environment but the only people to blame for that are the Labour party.

It would make more sense for Diamond to grill the MPs, and he'd do a better job of it.

He only has a job thanks to us tax payers. The whole system would have collapsed without TP intervention..Barclays was part of that bankrupt system. Of course politicians contributed by lax regulation of their friends in the city.

[Bloo Loo]

I don't hear too much whinging about Quick Quid.

APR 2,248%.

Still people borrow. Total madness.

ive seen red herrings before...but this is the fishiest and the reddist I have EVER seen.

[babesagainstmachines]

I think this thread needs more apologists.

Hug a Banker, they deserve your love.

[singlemalt]

i have to admit, bankers seem to be made the scapegoat for every problem.

at the end of the day, its the public who borrowed too much money, and couldnt afford to pay it back.

the people borrowing the money have been made out to be victims when they are the ones who have caused all the problem.

its like accredting obesity problems to food manufacturers rather than individuals.

+1

I've always thought this. It really annoys me when the media wheel out some cretin who's up to their ears in debt to decry the banks but they can't see their own personal role in the equation.

[singlemalt]

Isn't it a bankers core duty to assess the risk?

Not entirely. To use mfp123 illustration of someone with an obesity problem. Some guy ambles into McDonalds and order 1/2 the menu. Is it the employee's core duty to assess the risk (to his health, to the NHS? - the cost of treating him, the risk of him falling over and crushing a small child?) No. Their core duty is to dish up Big Macs and large fries. The banks simply did what they do. Dished up Big Mortgages and large loans.

Too much hubris maybe but that's a seperate thing entirely.

[@contradevian]

Not entirely. To use mfp123 illustration of someone with an obesity problem. Some guy ambles into McDonalds and order 1/2 the menu. Is it the employee's core duty to assess the risk (to his health, to the NHS? - the cost of treating him, the risk of him falling over and crushing a small child?) No. Their core duty is to dish up Big Macs and large fries. The banks simply did what they do. Dished up Big Mortgages and large loans.

Too much hubris maybe but that's a seperate thing entirely.

Rubbish analogy. McDonalds sell burger, take cash, thats it. No risk attached if the customer keels over and dies. If however MacD's were selling the burger on credit over 20 years, they may take more interest in his health and ability to pay.

[Joboxer]

...there was also political pressure to go easy on mortgage application criteria. Politicians who thought they had ended boom and bust, decided house ownership would ease the fact that there was jack-shite money in the pension pot. The 'My House is my Pension' mantra was probably first proposed at some Labour Party think-tank during 1999.

[Blod]

+++1. These bankers remind me of British Leyland workers in the seventies..baled out by tax payers but still striking for more pay...still produce c**p products that no one wants.

+1

This is a perfect analogy of the way that the banking industry is. What is shocking is that there are any MPs who know what is going wrong and are choosing to kick the can down the road as far as restructure and reform. We are head for a total melt down and it's not if but when.

[singlemalt]

Rubbish analogy. McDonalds sell burger, take cash, thats it. No risk attached if the customer keels over and dies. If however MacD's were selling the burger on credit over 20 years, they may take more interest in his health and ability to pay.

Yes quite. Clearly a rubbish example to illustrate that ordinary people also bare some responsibility for their actions. Why think that bankers should act in anybody's interest but their own?

[mdman]

Not entirely. To use mfp123 illustration of someone with an obesity problem. Some guy ambles into McDonalds and order 1/2 the menu. Is it the employee's core duty to assess the risk (to his health, to the NHS? - the cost of treating him, the risk of him falling over and crushing a small child?) No. Their core duty is to dish up Big Macs and large fries. The banks simply did what they do. Dished up Big Mortgages and large loans.

Too much hubris maybe but that's a seperate thing entirely.

This is quite possibly the most retarded thing I've read on this website.

Well done

Aside from the analogy being balls, you completely misunderstand what the role of a banker is. It is to manage financial risk when assessing people/ companies/ councils/ nations for loans. He does not simply hand out loans to anyone who wants them. If the role of the banker were akin to dishing up loans on demand regardless of risk, it would be a menial job attracting low salary.

[@contradevian]

...there was also political pressure to go easy on mortgage application criteria. Politicians who thought they had ended boom and bust, decided house ownership would ease the fact that there was jack-shite money in the pension pot. The 'My House is my Pension' mantra was probably first proposed at some Labour Party think-tank during 1999.

True but the bankers were not forced at gun point to go along with it. Fact is they repackaged the mortgage debt onto bigger fools who funnily enough were sometimes themselves, but that didn't matter as a healthy bonus was paid out for each stage of "pass the parcel."

Merv will now be sitting on a nice parcel of turds no doubt.

[erranta]

Barclays were one of the few high street banks to not fling themselves at the feet of Gordon Brown when the going got tough, politicians in general were quite miffed that they had the temerity to refuse public money when it was wafted under their nose. In fact IIRC they even salvaged some parts of the wreck that was Lehman Brothers during the depths of the crisis, that shows confidence in the face of adversity! Yes they have gained from the general low interest, banker friendly environment but the only people to blame for that are the Labour party.

It would make more sense for Diamond to grill the MPs, and he'd do a better job of it.

That's coz they were hiding the level of their exposure to their Toxic exploding CDO's and internal debts/bankruptsy. Were they also at levels of £50:1 lending?

The agreement for the loans woz they had to hand over all their books for accountability - some chose not to, to hide their Toxic exposure, due to the fear of the other banks finding out and them stopping lending or raising the interest(insurance risks) on borrowing to unaffordable levels.