Jump to content
House Price Crash Forum
MickeyC

They All Wanna Slice Of It Now!

Recommended Posts

Backfire!

Isn't moral hazard a wonderful thing? :lol:

EDIT:

She said savers into final salary pension schemes that crashed were told their money was safe in government literature and by their employers. Despite the reassurances they found they lost almost all their savings when their employers went bust. A report by the parliamentary ombudsman ruled that the government was at fault and should offer full compensation.
Edited by Goldfinger

Share this post


Link to post
Share on other sites
Guest DissipatedYouthIsValuable
Backfire!

Isn't moral hazard a wonderful thing? :lol:

Haha! I think I'm going to insist on being paid in Swiss Francs from now on.

Sterling is toast. No benefit in living here whatsoever.

Edited by DissipatedYouthIsValuable

Share this post


Link to post
Share on other sites

Blimey - just cited that as an example of precisely why people don't trust the Government, especially when it comes to their money.

"Your benefits are guaranteed", it said.

New Labour's definition of "guaranteed" is not the same as the one in the OED.

This could be interesting if it runs long enough. There are lots of very angry people out there affected by this.

Share this post


Link to post
Share on other sites

My partner said this to me last night that this was gonna backfire spectacularly. Now everyone will expect to be bailed out and the old "i'll spend like running water" is going to escalate.

Now we have all those who lost millions when they would not bail out the pensions and now I am hearing from friends in unions that all the unions are asking well if you can afford to bail out banks what about our pay rises you wont give us. I think Brown has made a mistake on a massive scale here.

I am also thinking that this has set a dangerous precedent in that doing so, could other institutions conceivably in the future sue the govt for not bailing them out when they had done so previously to another bank. Can of worms?

Share this post


Link to post
Share on other sites
I am also thinking that this has set a dangerous precedent in that doing so, could other institutions conceivably in the future sue the govt for not bailing them out when they had done so previously to another bank. Can of worms?

I think you could take 95% (of main listed companies) and make a case that their operations were way more professionally run, were not making risky bets to garner market share and were not personally raking in excessive salary/bonus packages. On that basis they should have every right to be propped up by the BOE and NOT have to go and pay some retail bank 5% over base rate for the pleasure of borrowing money.

Share this post


Link to post
Share on other sites
I think you could take 95% (of main listed companies) and make a case that their operations were way more professionally run, were not making risky bets to garner market share and were not personally raking in excessive salary/bonus packages. On that basis they should have every right to be propped up by the BOE and NOT have to go and pay some retail bank 5% over base rate for the pleasure of borrowing money.

The propping up has all the hallmarks of panic and not thinking it through the consequences before they opened their gobs, another classic Labour method.

Share this post


Link to post
Share on other sites

What I find most bizarre about this whole episode is that there WAS no panic.

There were a few hundred very calm and philosophical people waiting patiently to withdraw funds from one bank only. If it had been left to run its course through this week, the queues would have died down naturally as those who wanted their cash put it somewhere else.

Even in a worst case scenario, it is unlikey it would have spread beyond 3 banks in total. All of whom aren't real banks, they're pseudo banks. The cash wouldn't have left the "system", but just been re-arranged a bit and then we would have seen exactly how robust those 3 banks business models are and the weakest would have either gone into administration or been taken over.

By the end of this week the situation would have calmed down and we would be 1 bank fewer.

Darling panicking has escalated what would have been a bad situation (rightly) for a lousy business into a full scale problem for the country as a whole.

I still can't believe he understands fully what he has done.

Share this post


Link to post
Share on other sites
What I find most bizarre about this whole episode is that there WAS no panic.

There were a few hundred very calm and philosophical people waiting patiently to withdraw funds from one bank only. If it had been left to run its course through this week, the queues would have died down naturally as those who wanted their cash put it somewhere else.

Even in a worst case scenario, it is unlikey it would have spread beyond 3 banks in total. All of whom aren't real banks, they're pseudo banks. The cash wouldn't have left the "system", but just been re-arranged a bit and then we would have seen exactly how robust those 3 banks business models are and the weakest would have either gone into administration or been taken over.

By the end of this week the situation would have calmed down and we would be 1 bank fewer.

Darling panicking has escalated what would have been a bad situation (rightly) for a lousy business into a full scale problem for the country as a whole.

I still can't believe he understands fully what he has done.

The alternative view is that had Darling not done anything, there could have been some contagion - B & B and A & L looked for a little while as though they could be hit by a similar run as NR.

Share this post


Link to post
Share on other sites
The alternative view is that had Darling not done anything, there could have been some contagion - B & B and A & L looked for a little while as though they could be hit by a similar run as NR.

And quite rightly if their business is a crock as well.

The minute they went to the B o E for help savers wanted their cash out. Rightly imo. In exactly the same way as when Rover got into difficulties people stopped buying Rovers (if they had any sense). The govt. didn't offer to service your Rover for you.

So long as you give people some warning, and time to make alternative arrangements it doesn't matter. That is exactly what was going on until Darling opened his mouth.

Now you have the situation where some savers THINK the Rock is a sound well run business. But they still need the BoE to function, are losing money on any mortgages they now write and their losses can only increase from this point. If it was "safe" Mervyn wouldn't be charging them a penalty rate on emergency funding. Nothing has changed since Friday, except savers are being conned into thinking all is well. If things don't improve NR will still go out of business and these savers will still need to get their cash back and it won't be simple and straighforward.

Moreover, Darling's "promise" is time limited. i.e. existing savers and current crisis. If they go t*its up in 6 or 12 months time he will likely claim they had plenty of opportunity to withdraw their cash when he backed it. It can only end in tears.

Share this post


Link to post
Share on other sites

NR depositors were not the real real they were bailed out. The bailed them out to keep the mortgage market going, thereby keeping HPI positive.

Share this post


Link to post
Share on other sites
Moreover, Darling's "promise" is time limited. i.e. existing savers and current crisis. If they go t*its up in 6 or 12 months time he will likely claim they had plenty of opportunity to withdraw their cash when he backed it. It can only end in tears.

I can't see how this is sustainable even in the short term.

I see a speedy U-turn, just like 15 years ago.

Share this post


Link to post
Share on other sites

People should only be rewarded for taking risks. It's immoral and intolerant to suggest that people who take risks should in any way lose. That's just not fair at all, I mean they took a risk. :lol:

Share this post


Link to post
Share on other sites

They're fcking morons and this is going to prove it even to the morons in the media that keep calling them geniuses.

I still don't understand the whole pensions thing. I never read a decent article on it that explained everything and because I was not in the media when it happened I didn't get a chance to properly research it.

But there should not be single pension fund or bank in business tnat 'lost' a single penny of paid-in money. This is easy to enforce but the very people who lost the money are still in business and many probably went out and bought mortgage-related paper over the last few years.

The Answer: Give them bigger bonuses. Bigger bonuses means better people handling our money.

I think all pension funds should be scrapped. They should not exist. If you don't have the savvy to put some money into an account or buy a share or a bond or whatever then you should stick it in a biscuit tin.

Scrap pension funds tomorrrow and make the world a better place.

Indeed, why should these people not be paid back thirty or more years of payments? Our prisons should be full of pension fund managers. Instead we give them even more money to lose for us.

Share this post


Link to post
Share on other sites
People should only be rewarded for taking risks. It's immoral and intolerant to suggest that people who take risks should in any way lose. That's just not fair at all, I mean they took a risk. :lol:

People who pay into pension funds do it because they think they're avoiding risk by doing it because our government told them that.

Share this post


Link to post
Share on other sites
Cue the Railtrack shareholders.

Too many people have got the wrong end of the stick with this "bail out"

The BoE has extended the NR credit for which it has taken securities from NR. Therefore the tax payers money is safe and it has not cost the BoE anything apart from credibility

Share this post


Link to post
Share on other sites
it has not cost the BoE anything apart from credibility

Um.

I thought credibility was everything.

Share this post


Link to post
Share on other sites
Guest Shedfish

it would appear Labour are trying to utterly bankrupt the UK.

if they do this, then i'll have to leave. the older generations already have more wealth that the younger ones will ever see. my taxes are already paying for enough - this would be just larceny. some people made a bad investment decision, and that is not my fault

Share this post


Link to post
Share on other sites
Too many people have got the wrong end of the stick with this "bail out"

The BoE has extended the NR credit for which it has taken securities from NR. Therefore the tax payers money is safe and it has not cost the BoE anything apart from credibility

I may have the wrong end of the stick but there's a point on the end I've got.

Whether it 'costs' the taxpayer money or not is not the issue.

The issue is money itself for if one extrapolates this BOE policy one finds that the money that it doesn't cost us has no value anyway.

You can't simply switch the presses on to the tune of more than twenty billion pounds and say that it'll all come out in the wash.

They are money-launderers. They have been laundering since 9/11 and even before, in the aftermath of the dotocm crash. Now they are so confident they think they can do it right in front of us with a few Tommy Cooper magic spells.

Money does not exist. All that exists is our perceptions and big rolls of quality toilet paper.

Share this post


Link to post
Share on other sites
some people made a bad investment decision, and that is not my fault

If taxpayers money is used for this I, having deposited my taxes with UKGovPLC, will seek compensation for loss of said deposits under the scheme.

Share this post


Link to post
Share on other sites

I may have the wrong end of the stick but there's a point on the end I've got.

Whether it 'costs' the taxpayer money or not is not the issue.

The issue is money itself for if one extrapolates this BOE policy one finds that the money that it doesn't cost us has no value anyway.

You can't simply switch the presses on to the tune of more than twenty billion pounds and say that it'll all come out in the wash.

They are money-launderers. They have been laundering since 9/11 and even before, in the aftermath of the dotocm crash. Now they are so confident they think they can do it right in front of us with a few Tommy Cooper magic spells.

Money does not exist. All that exists is our perceptions and big rolls of quality toilet paper.

Just because my post was directly after yours, it doesn't mean I was replying to you. My quote was actually to MarD.

Whats with the bold typeface? Problem with the bb code?

Share this post


Link to post
Share on other sites

It's a very expensive thing for the treasury to do.

Time to put £20 billion aside for all Northern Rock depositors as NR is going bust.

Hopefully A&L and B&B can reform their business fast enough to avoid going under and the gov will not need to find £60 billion total.

£20 billion represents about 3-4% of UK GDP 2007, in a brilliant twist of fate they will need to auction a huge volume of bonds to pay for it.

Unless they can find someone willing to fork out £114 billion for a firm that makes a 5% loss on every £ is sources from libor, this single transaction making up 70% of their business.

If the great unwashed were better educated about the world of finance such expensive mistakes would not be necessary.

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 355 The Prime Minister stated that there were three Brexit options available to the UK:

    1. 1. Which of the Prime Minister's options would you choose?


      • Leave with the negotiated deal
      • Remain
      • Leave with no deal



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.