Saturday, August 10, 2013

Reluctant prosecutors

"Too big to fail, too big to jail"

It looks like that prosecuting of those who caused the financial crisis is not anymore an outlandish thing. At least the talk about the financial crimes has become mainstream. The pressure must go on.

Posted by ant @ 12:14 PM (2512 views)
Please complete the required fields.



32 thoughts on “Reluctant prosecutors

  • Same for Sovereign Debt. Japan is up to one quadrillion debt. Too many digits for simple calculators at W.H Smiths.

    Too Big To Contemplate…TBTC ?

    Reply
    Please complete the required fields.



  • I never really cared about this banker stuff when it hit the news 5 years ago. I care even less now.

    We had an almighty boom that lasted for an unusual length of time. Almost everyone had a ball. All parties come to an end, so why waste so much energy looking for scapegoats? Almost everyone played their part. It’s a human thing.

    This ant/Pytel fellow swore blind that the entire economic system would collapse into the worst depression ever seen by 2011, at the very latest. I remember this because I made him commit to a date. He was happy to oblige because he claimed to have a deep understanding of the numbers and of the banking system. Well evidently he doesn’t.

    I see big numbers bandied about but I’ve yet to see anyone put a a real cost on the bankers ‘behaviour’ complete with a detailed worksheet.

    As far as I can make out the cost is somewhere between nothing and an eventual profit. Let’s face it, the aggregate world economy never stopped growing and UK unemployment got no where near as high as it did in past recessions. The government is clearly going to make a profit on the ‘nationalised’ banks (they’ve been charging huge fees for years and they’ll eventually make a profit on the share price).

    The UK economy needed to be rebalanced and the economic crisis helped to set the ball rolling. Time to put the pitchforks away and move on.

    Reply
    Please complete the required fields.



  • stillthinking says:

    So house prices rise forever? That’s the pitchfork, so just buy in now.

    I must suffer from some kind of paranoid delusion about some posts, but sterling did lose about 30% of value. There is a continuous government deficit. Yet you freely post that we must move on. Is the rebalancing over? The UK is in a catastrophic fail state. Nobody has any money in the UK. You have a better chance of a housing deposit in the UK if you go to Brazil and work as a barman in the pool bar.

    Everybody is broke, Flashman. Everybody. Non-owners lose 70% of their income on tax and rent. The pension funds are a make believe. You seem to be a rear guard action about how bad things are. If you want to jolly people along then you can, but I think on this site you seriously misjudge the people who read. The UK is in a terrible place. Maybe get everybody to think its better and it won’t be so bad, but don’t do it here. How can people put the pitchforks away, what a crazy idea? People are poorer.

    People are poorer and they can’t afford a place to live. Do you think thats not true?

    Reply
    Please complete the required fields.



  • @flashman: I hope you have the same attitude to the perpetrators of London riots a couple of years ago. Why prosecute them? It was a big party that ended, wasn’t it? And the economy is broke. If you do not see government debt figures, and that banks are broken (why they do not lend, do you think?), you must be living on a different planet. Now, a difficult one, what about pensions, annuities, savers, etc?

    Reply
    Please complete the required fields.



  • Stillthinking: no not a paranoid delusion. Maybe a wilful one? You are making the mistake of picking an abnormal high in the charts as a start point. Go back a few years and you will see that the Pound has traded against the Dollar in a range between around 1:1 and 2:1. It’s trading at pretty average levels now. Lot’s of people in the UK have money and are doing well. This is particularly so in the most populous part of the country where unemployment is very low. That’s why so many sectors are doing well. The world considers the UK to be a safe haven, for a reason

    Reply
    Please complete the required fields.



  • ant, I do actually. Couldn’t give a monkeys. Let them go. It’s just a bit of youthful exuberance.

    Reply
    Please complete the required fields.



  • @flashman: then I respect your thinking. It’s consistent.

    Reply
    Please complete the required fields.



  • Stillthinking: I was a little cautious in my reply to your post because I thought you might have been a little under the weather. However I seriously resent your comment “don’t do it here’. I’ll give any option I want and you bring this site into disrepute by ‘insisting’ that it is exclusively for people exactly like you. ‘Jollying everyone along’ couldn’t be further from my mind. I actually have to resist the urge to give ‘wallowers’ a cyber kick in the pants. One of the ways I do this is by dealing exclusively in facts and options that can be supported by facts. I would find it physically impossible to issue crazy statements like ‘nobody has any money in the UK’. Preposterous nonsense. The UK is one of the world’s wealthiest countries.

    I didn’t say or even imply that the ‘rebalancing’ was complete. It has only just begun. I can and have supported this opinion with data. Unlike you I have an absolute belief in free speech but in weaker moments I’d like to ban sound bites that cannot possibly be supported by facts and data. ‘Nobody has any money in the UK’ indeed. I had to book my Sunday lunch table well in advance. Why is that?

    Reply
    Please complete the required fields.



  • Flashman, the ‘recovery’ you are talking up – I see most economists and even the Treasury aren’t as bullish as you – is mirrored by ever-increasing private and public debt. I remember Cameron and Osborne talking about ‘maxing’ the UK credit card, and saying how, just like individuals, it was time to pay it off, we – as a nation – cannot go on increasing our debt. However, that’s exactly what has been happening. Our national public and private debt has grown year-on-year throughout this parliament and is expected to continue growing until beyond the next general election.

    Sometime, it’s going to have to be paid back – according to our elected leaders – so when’s that going to begin? That’s when I would consider we are moving into ‘recovery’.

    Reply
    Please complete the required fields.



  • Flashman, the ‘recovery’ you are talking up – I see most economists and even the Treasury aren’t as bullish as you – is mirrored by ever-increasing private and public debt. I remember Cameron and Osborne talking about ‘maxing’ the UK credit card, and saying how, just like individuals, it was time to pay it off, we – as a nation – cannot go on increasing our debt. However, that’s exactly what has been happening. Our national public and private debt has grown year-on-year throughout this parliament and is expected to continue growing until beyond the next general election.

    Sometime, it’s going to have to be paid back – according to our elected leaders – so when’s that going to begin? That’s when I would consider we are moving into ‘recovery’.

    Reply
    Please complete the required fields.



  • Stuart, bet you can’t prove to me that you understand the different types of debt (and debt instruments) and that you can put them into proper context. Don’t be fooled by the political nonsense spouted by the right and left. Our debt is easily serviceable and it is not particularly high by historical standards. When you are proving that you truly understand debt don’t forget to take assets into consideration and don’t forget to separate business from the economy.

    Reply
    Please complete the required fields.



  • @ stuartking

    One of the charts to watch is the debt/income ratio. UK households have deleveraged a bit, but not nearly enough, and are now being egged on by government (doesn’t deserve a capital g) to increase it again. If external and market based forces push interest rates up in Britain, it doesn’t take much ruminating to figure out the consequences.

    UK Debt2Income ratio

    Reply
    Please complete the required fields.



  • dill, the deleveraging has continued since that chart finished and the positive trend is clear. In the US it has done so quite spectacularly.

    Last I looked household assets were 11 times larger than household debt. That’s an example of context. Too many sound bites, not enough meaning.

    Reply
    Please complete the required fields.



  • One thing many people overlook, particularly when talking about household debt, is that it is serviced out of income, not, for example, by selling off a spare bedroom, half the bathroom and the loft space.

    Private debt should be compared to income, not ‘asset’ values – particularly where they are mortgaged. For the overwhelming majority, real incomes have been falling year-on-year since the last general election, which is why an increase in indebtedness is dangerous.

    @10, Flashman: It seems what you are saying is all this ‘austerity’ is political preference not economic necessity – if right, that makes it even more insidious what the government is doing in the name of ‘good financial housekeeping’.

    Reply
    Please complete the required fields.



  • @11 Dill: Nice chart. Consider how would that chart might look if median rather than average income was used and the debt was applied to income bands. I imagine it would be skewed heavily towards the bottom 75 per cent, rather than the top 25 per cent.

    Reply
    Please complete the required fields.



  • Stuart:

    “Political preference”. Of course it is.

    Wages have fallen because we needed to be more competitive. We are more flexible (in this regard) than countries like France and Spain and they will suffer as a consequence. Look, I truly wish that everyone could earn more but it’s just not possible. The days of a British worker earning much more than his foreign counterpart, for no apparent reason, are gone forever. In a way it’s elitist and imperialist to think otherwise. I’m afraid that globalisation and mechanisation have altered things permanently. It is not reasonable or realistic to quote this situation as proof of us not doing as well as the growth figures suggest.

    The answer is not tax and redistribution. That acts as a palliative for some but it doesn’t address structural issues and it eventually makes them worse. The globally in demand UK workers are getting richer in this recovery and the rest are standing still or getting poorer. Only a massive skills trading program will alleviate this situation but we’re unlikely to get it with this austerity crap. Before you get politically excited, I hate your lot almost as much as I hate the Tories.

    Reply
    Please complete the required fields.



  • @15 Flashman, so your ‘recovery’ is based on the majority earning less (it doesn’t apply to FTSE 100 company directors, who by and large have increased their earnings massively over the past decade or more) and most of us having to pay a greater percentage of our income for housing, rental or buying, at a time of artificially low interest rates.

    Your ‘recovery’ doesn’t bode well for the future in the UK, more so when you consider those with higher levels of training, eg university graduates, will be starting out on their careers – if they can find suitable jobs – with historically high levels of debt due due to students loans for tuition fees, etc.

    Reply
    Please complete the required fields.



  • No, no no. “My recovery” is based on the economy growing. It’s a straight undeniable fact so I report it. Stuart, I just report facts and make unemotional conclusions. There is far too much melodram on this site. The world has changed and no amount of pouting will change that. It’ll change again eventually. If you’re still alive, you might like it or you might think it’s even worse.

    Unemployment is quite low compared to similar stages of previous recoveries, so it is quite reasonable to assume that unemployment will be very low in a few years time. People will get paid what they are worth in global terms which of course means that some people will earn less than they used to and some will earn more. On average there will be more money so if you’re hard working, skilled, lucky or ambitious you could do very well indeed. A good few years ago people howled at me on this site for suggesting that many unskilled workers would end up in manufacturing plants on ‘second world’ wages or in domestic service. People always seem to confuse my forecasts with what I want to happen. I actually want world peace and prosperity for all.

    Reply
    Please complete the required fields.



  • @17 Flashman: Your ‘recovery’ – which some economists and commentators dispute is growth – is built on the sand of ever-increasing debt – it won’t take much to blow it all away. As Jeremy Warner says in his Telegraph blog: “…though there is undoubtedly some kind of a recovery going on, it’s not the recovery – based on business investment, exports, savings, and the “march of the makers” – the Government was either hoping for or predicting. In fact it is the same old unsustainable form of growth that took place under Gordon Brown.”

    See: It’s growth all right, but not as they would like it: the mirage of Britain’s economic recovery, by Jeremy Warner, assistant editor of The Daily Telegraph – http://blogs.telegraph.co.uk/finance/jeremywarner/100025283/its-growth-alright-but-not-as-they-would-like-it-the-mirage-of-britains-economic-recovery/

    Reply
    Please complete the required fields.



  • @17 Flashman: Your ‘recovery’ – which some economists and commentators dispute is growth – is built on the sand of ever-increasing debt – it won’t take much to blow it all away. As Jeremy Warner says in his Telegraph blog: “…though there is undoubtedly some kind of a recovery going on, it’s not the recovery – based on business investment, exports, savings, and the “march of the makers” – the Government was either hoping for or predicting. In fact it is the same old unsustainable form of growth that took place under Gordon Brown.”

    See: It’s growth all right, but not as they would like it: the mirage of Britain’s economic recovery, by Jeremy Warner, assistant editor of The Daily Telegraph – http://blogs.telegraph.co.uk/finance/jeremywarner/100025283/its-growth-alright-but-not-as-they-would-like-it-the-mirage-of-britains-economic-recovery/

    Reply
    Please complete the required fields.



  • “I would find it physically impossible to issue crazy statements like ‘nobody has any money in the UK’. Preposterous nonsense.”

    Stillthinking, you sophist!

    Reply
    Please complete the required fields.



  • Stuartking: as I said earlier I don’t think you remotely understand debt. How can you base your arguments on something you don’t understand – unless of course your are intellectually strangled by political preference or by the need to write something entertaining (journos)

    This recovery like all recoveries is based on a growing Economy. Manufacturing is up, exports are up. If you want to make a point them show me some current figures that show otherwise. You won’t be able to so.

    Reply
    Please complete the required fields.



  • Got to go. Wife getting annoyed. Thanks for the debate. It’s been a cut above the normal

    Reply
    Please complete the required fields.



  • stillthinking says:

    Maybe you had to book your lunch table well in advance because you are in a wealthy minority Flashman…

    As I said people are poor and getting poorer and they can’t afford a place to live. This is true so I think its reasonable enough to say stop jollying people along with how great things are. Things are not great. Perhaps its true that recoveries are made of sentiment, and perhaps its true that gloom sayers like myself in some small way might handicap the great rush of endeavour currently filling the British public. However, we have not moved on in any sense and people have lost a great deal of money.

    I hope that I can avoid losing money by reading the opinion of people on this site. The situation in the UK is dire. You seem to demand that I justify what is a history of news and commentary in a single posting. You can read through the site history which is mainly commentary on news articles as you know, we are not posting articles ourselves (cough).

    Reply
    Please complete the required fields.



  • stillthinking says:

    ..too late.

    Reply
    Please complete the required fields.



  • @ flashman “..the deleveraging has continued since that chart finished..”

    Please post an update, from a credible source, to back that up. Thank you.

    Reply
    Please complete the required fields.



  • The old “debt to asset ratio” fallacy

    Credit bids up the price of assets.

    I cannot see this latest recovery progressing much beyond our ability to load up on our previous levels of debt.

    Unforutnately I see no net savings, there need to be savings for there to be a useful recovery i.e. one where prosperity increases, not one where the rate at which we run around pointlessly increases.

    Reply
    Please complete the required fields.



  • dill, if you are serious then here is a link. You’ll have to scroll down a bit. Many of us are beginning to think that household deleveraging has gone too far. 17 percent over the past four and a half years is unprecedented. The US number is even higher

    http://www.ons.gov.uk/ons/dcp171766_316997.pdf

    Reply
    Please complete the required fields.



  • Stillthinking: The problem as I see it is that there’s an obsessive search for anything depressing to post on this site and anything positive is studiously ignored. This produces a kind of negative feedback loop where posters reinforce each-others determinedly negative take on things and this site becomes increasingly insular and detached from reality. I think that misery is just a hobby for some and for others misery literally likes company. Are you serious in your hope that this site will save you some money? This site has a very poor record of predicting what happens next. Has there ever been a group that has got it wrong so often, for so long? I think that’s why so many people have left disillusioned. I can remember quite a few ex posters signing off with words to the effect that they wish they hadn’t wasted so many years following the collective wisdom of this site. I’m here because I’d really like house prices fall (if that’s ok with you) but don’t expect me to go along with the daily dose of fantasy island depression.

    By the way, I think you’re in a much smaller minority than I am. I live in England with my wife and young children. I continuously take them to parties and clubs and talk to literally hundreds of other parents. I also work in England and talk to hundreds of other business folk and workers who work in England. You on the other hand live in Japan and appear to get your UK news and gossip from this site.

    Reply
    Please complete the required fields.



  • @26 Flashman: “… This site has a very poor record of predicting what happens next.’
    So has the Bank of England, lots of economists and most of our ‘political elite’. But, I suspect you are the guru now, so await your next pronouncement with interest.

    Reply
    Please complete the required fields.



  • stillthinking says:

    I would certainly agree that this site is an economics doom and gloom centre, but given the name… also I there is more than enough offsetting optimism elsewhere. I haven’t been in Japan that long. I was working in London and the South East.

    The collective wisdom of this site missed the part that if you are a late arrival to a bubble e.g. find yourself in need of a house around 2005, then your best move would have been to get your savings out of the currency and avoid the structured pension schemes. That was the mistake. I still have my doubts that a sharp nominal correction in the UK can be avoided.

    Reply
    Please complete the required fields.



  • “so await your next pronouncement with interest”

    I haven’t steered you wrong yet. My ‘trick’ is that I don’t have any skin in any particular game. Most of the experts who ‘got it wrong’ were paid to give a dodgy opinion or were lent on politically. I never met an economist or analyst who didn’t know what was really going on (and I’ve met hundreds of them)

    stillthinking: sorry I went a bit hard on you earlier. Your last post was measured so I will follow suit. Yes all that’s true but hindsight is a wonderful thing. For what it’s worth I’ve managed my own pension for a long time. It became obvious to me that it’s nigh on mathematically impossible for ‘structured pension schemes to work’. I’ve expressed my anger at the great pension fraud (on this site) many times.
    I absolutely agree that there could be a good fall in house prices but I haven’t been able to put any likely numbers on it yet. Ironically it’s the recovery that might be the catalyst

    Reply
    Please complete the required fields.



Add a comment

  • Your email address is required so we can verify that the comment is genuine. It will not be posted anywhere on the site, will be stored confidentially by us and never given out to any third party.
  • Please note that any viewpoints published here as comments are user´s views and not the views of HousePriceCrash.co.uk.
  • Please adhere to the Guidelines

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes:

<a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>