Confessions Of A Debtor

[Bloo Loo]

Banks' directors, on short-term incentives (annual bonuses), were taking too much risk, against the long-term interest of the banks' owners = shareholders. In plain English: Banks' directors fecked banks' owners.

which shareholders were wiped out?

[Tired of Waiting]

which shareholders were wiped out?

Sorry Bloo Loo, but ... what do you mean??

I am talking about this chart below, with Lloyds share prices. It is "graphically" clear :

[uncle rogi]

You keep saying that. But how exactly?

are any of them going through bankruptcy proceedings ? if not then that is how.

And most of the gov. support were in guarantees and loans. How the "bailout"

none of which should have been created and a lot of which will never be paid back at anything like par, every taxpayer thus pays for the banks mistakes, without them having had any say in the matter.

when this happened in Iceland the people had a mini revolution and told the banksters to stick it, the same thing is likely going to happen in ireland as they come to realize that the bailout they are getting is just the ECB robbing them to bailout german and other bondholders ....

legitimises borrowers defaulting, and not paying back what they borrowed?? I am sorry, but I don't understand what you mean exactly.

a simple moral equivalent response for example a bailout for the bank holding your mortgage but no bailout for you when you lost your job = more people walking away then otherwise would have.

there are many other examples and explanations in the body of this thread.

[Bloo Loo]

Sorry Bloo Loo, but ... what do you mean??

I am talking about this chart below, with Lloyds share prices. It is "graphically" clear :

they still have their shares...bailed..

[Tired of Waiting]

are any of them going through bankruptcy proceedings ?

Here:

And Northern Rock shares went down to zero.

This removes the main base for your position.

[Tired of Waiting]

they still have their shares...bailed..

Shares that went down fro £600 to £40. A loss of 93.3% of their capital. And that pressed by Brown, to "rescue" Halifax Bank of Scotland.

And Northern Rock shareholders lost 100%.

Shareholders were fecked. This is a known fact.

[shermanator]

Here:

And Northern Rock shares went down to zero.

This removes the main base for your position.

Banks should have been allowed to go the wall like any other private entity - unless you think the rules of the market and 'creative destruction' don't apply to lenders? Shareholders and senior bondholders totally 100% wiped out and the loan books of the lenders wound down by a government appointed body. Think what would've happened - no bail outs, no more bankster bonuses, no more moral hazard and the task of re-balancing the economy a whole deal easier.

It didn't happen because the banksters and their useful idiots all bought into this nonsense of banks being 'too big to fail'. Interestingly, ex 'Tory' MP Howard Flight supported the bail outs despite being a big 'free market' cheerleader. Much like HPC actually.

[Tired of Waiting]

Banks should have been allowed to go the wall like any other private entity - unless you think the rules of the market and 'creative destruction' don't apply to lenders? Shareholders and senior bondholders totally 100% wiped out and the loan books of the lenders wound down by a government appointed body. Think what would've happened - no bail outs, no more bankster bonuses, no more moral hazard and the task of re-balancing the economy a whole deal easier.

It didn't happen because the banksters and their useful idiots all bought into this nonsense of banks being 'too big to fail'. Interestingly, ex 'Tory' MP Howard Flight supported the bail outs despite being a big 'free market' cheerleader. Much like HPC actually.

Look, to be frank, I do share you feelings about all that. But if all these banks were allowed to fail, and all lenders to these banks were affected, then the whole western countries financial system would have collapsed. The whole thing. All banks. Yours included. Including the bank used by employers. All cash machines would have stopped.

The consequences would have been ... unforeseeable.

I am not capable to foresee how deep and widespread the problems would be. Are you?

And the banks' owners, the shareholders, did "go the wall". The institutions were rescued (employees, brands, premisses), but not the owners.

[uncle rogi]

This removes the main base for your position.

nope, all it does is highlight the monumental fraud and double standard that has been imposed by government fiat on everyone making a mockery of so called free markets and the creative destruction element of the bankruptcy component of capitalism.

then the whole western countries financial system would have collapsed.

yeah, and then re-started just like they always do, only this time purged of the excesses and hopefully without the mechanisms that allowed the ponzi to build to such a level.

all that has happened is the day of reckoning has been postponed for a while and in so doing more than likely made the ultimate resolution even more painful, as the answer to a debt problem is NOT more debt. (government issued or otherwise)

[Bloo Loo]

Shares that went down fro £600 to £40. A loss of 93.3% of their capital. And that pressed by Brown, to "rescue" Halifax Bank of Scotland.

And Northern Rock shareholders lost 100%.

Shareholders were fecked. This is a known fact.

they still have £40 per share.

they should have taken more care of whom they bought.

the bailout left them with £40.

[Bloo Loo]

Look, to be frank, I do share you feelings about all that. But if all these banks were allowed to fail, and all lenders to these banks were affected, then the whole western countries financial system would have collapsed. The whole thing. All banks. Yours included. Including the bank used by employers. All cash machines would have stopped.

The consequences would have been ... unforeseeable.

I am not capable to foresee how deep and widespread the problems would be. Are you?

And the banks' owners, the shareholders, did "go the wall". The institutions were rescued (employees, brands, premisses), but not the owners.

why? are there no real assets in the economy? were all financial institutions insolvent?

I dont think so....pain yes, inconvenience and losses, yes, total collapse? no....but we are heading that way. the debt remains.

[Tired of Waiting]

nope, all it does is highlight the monumental fraud and double standard that has been imposed by government fiat on everyone making a mockery of so called free markets and the creative destruction element of the bankruptcy component of capitalism.

You keep ignoring the fact that shareholders were completely (Northern Rock) or virtually completely (Lloyd's) wiped-out.

yeah, and then re-started just like they always do, only this time purged of the excesses and hopefully without the mechanisms that allowed the ponzi to build to such a level.

all that has happened is the day of reckoning has been postponed for a while and in so doing more than likely made the ultimate resolution even more painful, as the answer to a debt problem is NOT more debt. (government issued or otherwise)

why? are there no real assets in the economy? were all financial institutions insolvent?

I dont think so....pain yes, inconvenience and losses, yes, total collapse? no....but we are heading that way. the debt remains.

Are you both 100% sure of it? Coz you can imagine the consequences if you were wrong. Right?

Would you actually risk it? Seriously?

Suppose for a moment that you had access to a little red button that would actually do that. Would you really push it? Honestly?

[uncle rogi]

You keep ignoring the fact that shareholders were completely (Northern Rock) or virtually completely (Lloyd's) wiped-out.

first of all it is not bankruptcy so i am ignoring nothing, secondly what did or did not happen to shareholders etc is and would be the lesser of two evils, the greater evil being the assumption of private sector debt on the taxpayers with little or no precedent and no legal or moral authority.

Are you both 100% sure of it? Coz you can imagine the consequences if you were wrong. Right?

Would you actually risk it? Seriously?

Suppose for a moment that you had access to a little red button that would actually do that. Would you really push it? Honestly?

yes 100%, and i personally would push it, i like buttons.

Edited January 23, 2011 by uncle rogi

[Tired of Waiting]

the lesser of two evils, the greater evil being the assumption of private sector debt on the taxpayers with little or no precedent and no legal or moral authority.

private sector debt such as the OP's!

Can you see it now?

yes 100%, and i personally would push it yes, i like buttons.

You would be playing Russian roulette with the western civilisation, including the well-being and even survival of people you care about. Too risky a gamble for me. I think wipe-out the shareholders and nationalise the banks are a good start. In my case my ideal scenario would be a full public inquiry into this bubble, leading to prison sentences for Brown and some bank directors and main institutional shareholders (our pension funds directors). And perhaps a prudent hair-cut on banks lenders.

Also the media should be investigated. And MPs property interests.

Edited January 23, 2011 by Tired of Waiting

[Bloo Loo]

You keep ignoring the fact that shareholders were completely (Northern Rock) or virtually completely (Lloyd's) wiped-out.

Are you both 100% sure of it? Coz you can imagine the consequences if you were wrong. Right?

Would you actually risk it? Seriously?

Suppose for a moment that you had access to a little red button that would actually do that. Would you really push it? Honestly?

Iceland didnt sink into the sea.

Argentina is still there.

Germany were even able to start a war.

the economy is you and me...not banks.

[Tired of Waiting]

Iceland didnt sink into the sea.

Argentina is still there.

Germany were even able to start a war.

the economy is you and me...not banks.

I am not talking 1 small country. I am talking UK + USA financial systems, hence Europe and the rest of the world would collapse s well. Also international trade would collapse as a consequence.

Compared to the 1930s depression, considering today's infinity more complex and integrated economies, the Great Depression would look like the Little House in the Prairie by comparison.

Imagine the consequences on law and order then.

Etc.

Would you really risk that?

[Bloo Loo]

I am not talking 1 small country. I am talking UK + USA financial systems, hence Europe and the rest of the world would collapse s well. Also international trade would collapse as a consequence.

Compared to the 1930s depression, considering today's infinity more complex and integrated economies, the Great Depression would look like the Little House in the Prairie by comparison.

Imagine the consequences on law and order then.

Etc.

Would you really risk that?

it wont collapse....its credit...its not real.

bankers will lose their jobs.....wealth is not at risk....credit is...waste is.

Im not saying it will be by any means pleasant....but the debt remains a drag on everything.

[uncle rogi]

it wont collapse....its credit...its not real.

bankers will lose their jobs.....wealth is not at risk....credit is...waste is.

Im not saying it will be by any means pleasant....but the debt remains a drag on everything.

+1

Edited January 23, 2011 by uncle rogi

[Tired of Waiting]

it wont collapse....its credit...its not real.

bankers will lose their jobs.....wealth is not at risk....credit is...waste is.

Im not saying it will be by any means pleasant....but the debt remains a drag on everything.

You are not getting it. I am not talking about "credit". Companies (employers) cash would disappear, companies collapse, mass unemployment, economic collapse. All over the place. On the real economy. Consumption would collapse, and production, and jobs. Everything. Law and order could collapse too. Think for a moment.

[uncle rogi]

You are not getting it. I am not talking about "credit". Companies (employers) cash would disappear, companies collapse, mass unemployment, economic collapse. All over the place. On the real economy. Consumption would collapse, and production, and jobs. Everything. Law and order could collapse too. Think for a moment.

it will happen anyway, best to get it over and done with as it can be done in a more or less orderly way , and thinking about it only makes it more obvious.

the fact that you are so wedded to the idea of the bailout being the right thing to have done only makes it more necessary as far as i am concerned.

[Bloo Loo]

You are not getting it. I am not talking about "credit". Companies (employers) cash would disappear, companies collapse, mass unemployment, economic collapse. All over the place. On the real economy. Consumption would collapse, and production, and jobs. Everything. Law and order could collapse too. Think for a moment.

I understand what you are saying...Tanks in the Street and all that.

the problem was way too much credit and not enough "cash" to settle it.

When the crunch happened....were YOU short of cash?...was your firm? was the GOVERNMENT?

no...it was only the banking and shadow banking systems. short of cash...not devoid of it.

[Tired of Waiting]

I understand what you are saying...Tanks in the Street and all that.

the problem was way too much credit and not enough "cash" to settle it.

When the crunch happened....were YOU short of cash?...was your firm? was the GOVERNMENT?

no...it was only the banking and shadow banking systems. short of cash...not devoid of it.

My cash was in bank accounts. I guess the government would still be able to guarantee those £50k per person. But not companies' (employers') cash.

[shermanator]

Tired of Waiting - you at least see the need for shareholders to be wiped out, a wide ranging public investigation with sanctions and the formal nationalisation of banks. However, when you go on about the Western world would've collapsed, you're dealing with hypotheticals; nobody knows what would've happened definitively but even worst case scenario would be far better than postponing the inevitable for just a few months whilst burning through trillions.

Do you also swallow the banksters line re bonuses that "we have to pay the best to attract the best talent". Hah, how on earth anyone can argue that with a straight face is beyond me. Shall I tell you the definitive effect of the bail outs; banksters have collected 100s of billions more in bonuses, the necessary process of creative destruction has been delayed (much to the chagrin of HPCers) and the underlying problem of debt hasn't been fixed.

You're clearly not a fool but reading your posts is like reading the latest 'there is no alternative' cr*p in the Daily Trashgraph or Daily Fail.

[Bloo Loo]

My cash was in bank accounts. I guess the government would still be able to guarantee those £50k per person. But not companies' (employers') cash.

you do know there is a 4.3bn ish TOTAL annual limit to the FSCS.

Small firms are covered by the FSCS.

Most building societies would have remained intact, and when excess capacity was defaulted in the banking industry, from within the rubble a new lean system would have emerged.