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We (Taxpayers) have just been fleeced ! (NatWest)


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Posted (edited)
2 hours ago, zugzwang said:

I'm not spreading malicious lies! The global financial system would have flatlined in September 2008 without an unprecedented intervention by the world's central banks and treasuries. Industrial civilisation would have effectively ended the day Lehman Brothers failed.

Absolutely ridiculous. 

In previous generations i.e the 1700's, 1800;s etc. banks went bust all the time and were not bailed out by governments or central banks.

Those that got involved in bubbles or overextended went BUST and people lost their deposits. People soon did their homework on where to park their savings. Effectively, depositors in the TRUE free market rewarded good banks.

You need to read some history on panics and banking crisis's pre 1913. 

Edited by Warlord
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LOL.  Say it ain't so.  I remember arguments on MSE at the time where the usual pro-HPI suspects were claiming that all the state led bank buyouts(ie bailouts) were going to make buckets of money for the taxpayer in a couple of years.

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2 minutes ago, Sour Mash said:

LOL.  Say it ain't so.  I remember arguments on MSE at the time where the usual pro-HPI suspects were claiming that all the state led bank buyouts(ie bailouts) were going to make buckets of money for themselves taxpayer in a couple of years.

FTFY

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I remember sussing out getting a mortgage from a Natwest owned bank and being told that me borrowing X amount from them (roughly equivalent to what I had with them in savings) would cost me 6% whereas they were paying me at best 1.5% on said savings which I was lending them.

Very shortly after that I bought loads of premium bonds and gold, and drastically reduced my savings with them.  They still have my currrent account but only because I am too lazy to change it.  When they rung me recently to point out that I had built up quite an excess and would I invest it in some products that locked it in and returned roughly 1.5% I thanked them for reminding me to buy some more anti-inflation assets. 😄

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4 hours ago, Warlord said:

Some would not have gone bust - the GOOD banks. Pure capitalism rewards GOOD Behaviour. The GOOD banks would have stepped in and taken all the custom .

 

4 hours ago, Warlord said:

Some would not have gone bust - the GOOD banks. Pure capitalism rewards GOOD Behaviour. The GOOD banks would have stepped in and taken all the custom .

There are no good banks. Most of them would have gone bust due to inter-bank lending, all of them would have lost money. Some might have been able to re-capitalise by tapping shareholders but without government / central bank bailouts there would be so few left that there would be a virtual monopoly operating.

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4 hours ago, Locke said:

You are an acolyte of a religious cult, though I doubt you realise it. Fiat currency is your soul, the central bank your church and its head your Jesus. MMT is like your bible.

 

MMT is the best explanation we have of how the macroeconomy actually works. Nothing to do with religion and not really a theory (there's no algorithm for getting the numbers out) but economists gave it the name not physicists.

 

 

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4 hours ago, Warlord said:

Absolutely ridiculous. 

In previous generations i.e the 1700's, 1800;s etc. banks went bust all the time and were not bailed out by governments or central banks.

Those that got involved in bubbles or overextended went BUST and people lost their deposits. People soon did their homework on where to park their savings. Effectively, depositors in the TRUE free market rewarded good banks.

You need to read some history on panics and banking crisis's pre 1913. 

 

Thousands of banks went bust after the GFC. Hundreds of money market funds and hedge funds too, including Bernie Madoff's infamous ponzi scheme.

I'm already familiar with the history of 19th century panics and banking crises. Those recurrent recessions were the reason the gold standard was abandoned.

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The bailouts were not the problem, they were just a panicked (but effective) sticking plaster.

The problem was what went before - letting the banks* get too big, too over leveraged and too over-connected.

 

* there's more to it than that, but never mind

PS. I posted a question in off-topic that some people here might be able to answer.

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3 hours ago, Timm said:

The bailouts were not the problem, they were just a panicked (but effective) sticking plaster.

The problem was what went before - letting the banks* get too big, too over leveraged and too over-connected.

 

* there's more to it than that, but never mind

PS. I posted a question in off-topic that some people here might be able to answer.

Instead of bailouts, the Government should've gone full Don Corleone and pushed for organised collapse - Bond holders and share holders are wiped out to teach moral hazard, UK depositors are backstopped 100%.  Prevent contagion by letting banks draw direct from BOE in return for full offshore disclosure to HMRC.

 

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9 hours ago, Warlord said:

Some would not have gone bust - the GOOD banks. Pure capitalism rewards GOOD Behaviour. The GOOD banks would have stepped in and taken all the custom .

Nah! Contagion wold have set in and pretty much all the banks would have failed like dominoes falling. Then you would have not been so insistent on the 'free market' when your saving where are risk...as if it [the free market] even really existed in the first place. Bonkers to even think that.

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47 minutes ago, msi said:

Instead of bailouts, the Government should've gone full Don Corleone and pushed for organised collapse - Bond holders and share holders are wiped out to teach moral hazard, UK depositors are backstopped 100%.  Prevent contagion by letting banks draw direct from BOE in return for full offshore disclosure to HMRC.

 

Yes, but for very obvious reasons, that was never going to happen.

To be fair, if there was anyone who (politically speaking) could have done it, it would have been Brown.

But he didn't. Because he couldn't / didn't want to / didn't think of it?

I dunno, but is there is one clear outlier in the above 3 options?

 

PS. Why can't I get a new line without it forcing a new paragraph?

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12 hours ago, msi said:

"Taxpayer stake in NatWest falls to just under 55% after discounted share sale" - oh how f****g grey could you be?

Bought 500p.  Sold 190p, a 62% loss, or about £700M lost.  Sky seem very shy about putting that number out

It's much worse than that, when adjusted for inflation £5 in 2008 is +£7 in 2021, then add the cost to purchase the stock to the national debt and financed for the past 13 years, plus administration costs...  Probably required a selling price of 900p to break even on the deal, which means a much bigger actual loss to the UK workers that do pay taxes.

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The bailouts weren’t designed to make a profit - they were designed to stop the entire U.K. banking system collapsing, and with it (temporarily) the whole economy.

If you think the supermarkets looked bare during COVID I can assure you it would have been worse and for longer if every bank had gone bust and there was no cash in the cash machines and no banking system to pay electronically.

The bailouts were a price worth paying to avoid a disaster.

The error wasn’t the bailouts, it was the 7-8 years leading up to them that allowed the problem to build.

 

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All very well and good but the bubble grows like a cancer distorting the abdomen of the unfortunate victim, the poor fellow continues to feel something is not right but carries on regardless 

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21 hours ago, zugzwang said:

I'm not spreading malicious lies! The global financial system would have flatlined in September 2008 without an unprecedented intervention by the world's central banks and treasuries. Industrial civilisation would have effectively ended the day Lehman Brothers failed.

Yes the intervention was socialism not free market capitalism.  Clueless

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57 minutes ago, scottbeard said:

The bailouts weren’t designed to make a profit - they were designed to stop the entire U.K. banking system collapsing, and with it (temporarily) the whole economy.

If you think the supermarkets looked bare during COVID I can assure you it would have been worse and for longer if every bank had gone bust and there was no cash in the cash machines and no banking system to pay electronically.

The bailouts were a price worth paying to avoid a disaster.

The error wasn’t the bailouts, it was the 7-8 years leading up to them that allowed the problem to build.

 

This.

With the addition - all bank employees should have been stripped of their pension apart from a bare minimum of 8k/y.

And the bank executives and board holders should have faced a court case that, if not jailing them, would have ruined them.

And Browns head should have been put on a stake.

 

 

 

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10 hours ago, IMHAL said:

Then you would have not been so insistent on the 'free market' when your saving where are risk

There is no such thing as "risk free" and it is molly coddling to pretend there is. If you trust someone to look after your wealth (i.e. a bank), there is always a risk they will break that trust.

Using the government to use overwhelming violence to reduce that risk to zero is evil and foolish.

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1 hour ago, scottbeard said:

If you think the supermarkets looked bare during COVID I can assure you it would have been worse and for longer if every bank had gone bust and there was no cash in the cash machines and no banking system to pay electronically.

Instead we just have everyone be a serf under the banks.

Brilliant.

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Posted (edited)

Barclays REFUSED BAILOUT FUNDS.

There were some banks that could have stepped in and took the custom. If depositors are wiped out that is HARDL UCK. just like the good old days in the 1800's where banks who overextended went bust all the time and the economy was not affected. Indeed around this time became the biggest revolution ever (pre-1913) all without bailouts and central banks (in US) . Ask yourself how this was possible ?  @zugzwang

 

Edited by Warlord
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2 minutes ago, Warlord said:

Barclays REFUSED BAILOUT FUNDS.

There were some banks that could have stepped in and took the custom. If depositors are wiped out that is HARDL UCK. just like the good old days in the 1800's where banks who overextended went bust all the time and the economy was not affected. Indeed around this time became the biggest revolution ever (pre-1913) all without bailouts and central banks (in US) . Ask yourself how this was possible ?  @zugzwang

 

Theres a logn way before retail depositors are wiped out.

Equity, then less senior debt then bond holders, than deposits over 30k - or whatever the limit.

At some point they need o have clawed back 10 years of bonuses and chucked the banks pension fund into the whole too.

 

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Just now, spyguy said:

Theres a logn way before retail depositors are wiped out.

Equity, then less senior debt then bond holders, than deposits over 30k - or whatever the limit.

At some point they need o have clawed back 10 years of bonuses and chucked the banks pension fund into the whole too.

 

Also most depositors were insured up to 15k I think? Not many have over 15k in their current account.

Anyway,, wipe out should have occurred. This is a good thing to happen, Capitalism rewards good behaviour and smaller banks would have stepped in (YES, THERE ARE SOME!). The current system of bailouts and moral hazard is NOT capitalism or FREE MARKET yet @zugzwangand some economists continues to peddle this lie 

They give capitalism a bad name! 

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50 minutes ago, Warlord said:

Barclays REFUSED BAILOUT FUNDS.

There were some banks that could have stepped in and took the custom. If depositors are wiped out that is HARDL UCK. just like the good old days in the 1800's where banks who overextended went bust all the time and the economy was not affected. Indeed around this time became the biggest revolution ever (pre-1913) all without bailouts and central banks (in US) . Ask yourself how this was possible ?  @zugzwang

 

Barclays got a £12bn bailout out from the Qatari royal family then lied about it.

 

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1 hour ago, Locke said:

There is no such thing as "risk free" and it is molly coddling to pretend there is. If you trust someone to look after your wealth (i.e. a bank), there is always a risk they will break that trust.

Using the government to use overwhelming violence to reduce that risk to zero is evil and foolish.

Tell that to the masses when they go hungry, lose their houses and are on the rampage. Society would have broken down. I don't think that is a good idea.

I fully understand the moral hazard but at that stage of the game I don't believe there was much choice in the matter. Best, as others have said would be to ensure that banks did not get too big to fail and restrict the amount of debt to a sensible level. In that way you can prevent contagion and allow the 'free market' to work. 

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On 11/05/2021 at 09:22, 24gray24 said:

No not wonderful. 

Want to start a revolution? 

I would start a revolution but I have such a comfortable life. What do you propose we replace the current system with?

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