Tuesday, Dec 22, 2009

Taxpayers: Happy New Year 2010 and brace up for coughing up more money

Greg Pytel: Banks are behaving like loan sharks

Bankers bonuses story is diverting our attention from a larger problem that is brewing up in the financial system. It looks increasingly likely that next year we, the taxpayers, will be rescuing banks with even more money.
In the meantime we may well have a Marry Christmas.

Posted by ant @ 03:06 PM (1700 views)
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7 Comments

1. crunchy said...

http://www.youtube.com/watch?v=kwUdnemn74I&feature=related

http://www.youtube.com/watch?v=jGdbHW9Nlds

How far can people be pushed?

Tuesday, December 22, 2009 03:21PM Report Comment
 

2. jack c said...

Talking of Loan Sharks this was on daytime TV yesterday www.quickquid.co.uk/quickquid-tv.html

Terms and Conditions apply. Finance charge will be between £10 and £14.75 per £50 borrowed. Typical 2356% APR.

Tuesday, December 22, 2009 03:52PM Report Comment
 

3. ant said...

@jack c: this sounds like a bargain compared to what the banks are doing the the taxpayers

Tuesday, December 22, 2009 04:05PM Report Comment
 

4. jack c said...

@ant - I'll be picky here and rephrase your statement - this sounds like a bargain compared to what the banks are being allowed to do to the taxpayers

Further example - Bank charges challenge is dropped by regulator - news.bbc.co.uk/1/hi/business/8425766.stm

Tuesday, December 22, 2009 04:22PM Report Comment
 

5. crunchy said...

Some people will always have to learn the slow, hard and painful way. They never listen.

Tuesday, December 22, 2009 04:29PM Report Comment
 

6. ant said...

@jack c: you are right. the financial system looks incredibly corrupt and perverse. it resembles the communist system on its last legs which was a massive drain on general public. read this: Late Brezhnev era in finance - http://gregpytel.blogspot.com/2009/09/late-brezhnev-era-in-finance.html

Tuesday, December 22, 2009 04:31PM Report Comment
 

7. icarus said...

The sway of the banks is far greater than this. They have killed any chance of recovery.

While there's overcapacity and atrophy in mature capitalist economies, gov'ts and central bankers have created a world in which surplus capital generates windfall profits for the parasitic classes, by transferring wealth from workers to speculators by way of price inflation of paper assets - thro' govt subsidies for investors purchasing toxic 'assets' and QE to stuff banks with money and inflate stock markets. (QE is nonsense anyway - bank lending isn't constrained by lack of reserves but by lack of creditwothy customers who want loans; banks lend to such customers and worry about the reserve position afterwards.)

There's obviously no way of stimulating economies by monetary means, but the diversion of wealth to banks has precluded effective fiscal stimulus. Only small amounts have gone to job-creating infrastructure and green technologies, and now everybody wants to slash deficits since they haven't worked to stimulate anything either. Where do we go from here?

Let's see. Why didn't Obama use his visit to China last month to remonstrate about the dollar peg, which is helping to deindustrialise the US? Or just take unilateral action to weaken the dollar against the Yuan? Or take stronger action against subsidies used by the Chinese, also for the purpose of sucking in western jobs? The answer is that the way it currently works suits the US banks. China sells cheap stuff and recycles the money into US Treasuries and financial products, thus supplying US banks with cheap capital to inflate shares and other assets and thereby boost their profits. It also creates US unemployment and weakens US unions but this is great for US and other multinationals, which open branches in China and use the cowed, cheap labour there - most of that increase in Chinese exports over the last decade has come from such multinationals. In addition the US financial sector is looking to create "deep, flexible financial markets" and healthcare insurance and other financial products from Chinese and other emerging market bases. So the US govt is holding hands with China at the same time that it is hand-wringing about the effects of the cheap Yuan and Chinese subsidies.

Have yourself a merry little christmas.

Tuesday, December 22, 2009 06:28PM Report Comment
 

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