Fred Goodwin...sir

[Undisputedtruth]

How Banking Harms the Economy

 

[Jah Lush]

> How people life Jeffery Archer kept their

> knighthoods after being to prison is beyond me.

That's Lord Archer to you. He never received a knighthood. I take your point though. Should have been banished from the House Of Lords and stripped of his title. The man is devious lying little shit and his books are fecking shite.

[indiepanda]

Whoops, you're quite right Jah.

Actually... thinking on... why do we even have a House of Lords? In a democracy why do we have a group of unelected individuals able to slow down or stop legislation being passed. If we really need a second house, I'd far rather it was elected than the present situation. No one should be given power for life.

[El Pibe]

One for another thread I'm sure, but noooooo, stick with the lords.

Very few hereditary peers any more, mostly life peerages gained through merit (or political patronage, but nothings perfect). By definition older folk who are naturally rather than politically conservative. It serves as a counterweight to the knee jerk, populist nature of much proposed legislation.

Elect it and we'll end up with an upper chamber composed of David Beckham, One Direction and Sue Pollard who do whatever the prime minister tells them too.

['bout now]

A little reading for Damian-H

Sub Prime was a product invented for those who they knew would have difficulty repaying. I know its wiki but anyway

http://en.wikipedia.org/wiki/Subprime_lending

[katie1997]

Jeremy Wrote:

-------------------------------------------------------

> DamianH, you are right in that people taking out

> unrealistic mortgages were a part of the problem,

> but financial institutions have an obligation

> (moral and legal) to provide products/services

> that are suitable for the customer.

How could financial institutions provide a suitable product for the customer if it was based on incorrect or deliberately dishonest information provided to them by the customer? Or is this more about them doing sufficient checks before dishng out the products so still they are at fault? (The banks).

[katie1997]

Lords Reform. Not one of Labour's success stories. Tony's cronies did alright.

And now its Dave's faves...

[MrBen]

And on Hester - I think he should have been allowed to keep the bonus. They had to get someone of his calibre and to pay him that just to take the job or he would have gone to one of the many other banks. Anyone in the city knows that just about every other bank (including some part owned by the tax payer) will pay even their CEO's a package that makes Hester's look like small change - even now in 2012, despite what's just happened. But it's not widely reported in the press.

If Hester helps the taxpayer get their money back...and that is already a below market pay packet BTW...then that's money well spent in my book.

[KidKruger]

Katie1997 said:

How could financial institutions provide a suitable product for the customer if it was based on incorrect or deliberately dishonest information provided to them by the customer? Or is this more about them doing sufficient checks before dishng out the products so still they are at fault? (The banks).

I think Jeremy means the latter. Determining the 'suitable' products is more realistically the banks developing a portofolio of products that they believe will generate revenue from provision for the key financial events and needs the general public are likely to have. This will be a function of market research, experience and developmental products.

Before the crash it was common practice for people to abuse the mortgaging facilities at banks, to obtain debt they could not afford in the pursuit of a propery portfolio they hoped to be able to cover though rent or home inprovements / renovations and resale.

[Parkdrive]

Damian H Wrote:

-------------------------------------------------------

> Parkdrive Wrote:

> --------------------------------------------------

> -----

> > Damian H

> > But what about the millions of 'Ordinary Joes'

> who

> > lied through their teeth to get mortgages and

> > cynically exploited a lax financial system to

> get

> > hands on properties they knew they could not

> > afford to pay for? What about them? I am sure

> each

> > of them would say they are small fry - too

> > insignificant to have had any impact. Yet they

> > lied and falisifed declarations of income

> > nonetheless, significantly contributing en

> masse

> > to the collapse of the sub-prime market which

> was

> > the catalyst for the global financial collapse.

> >

> > First of all why was such a lax system allowed

> to

> > be implemented? Probably because those that

> > implemented it thought there was money to be

> made

> > from the poor sods who saw this as the only way

> on

> > to to the property ladder. As for the comments

> on

> > here that many of us are jealous of these high

> > earners, yes probably. But it doesn't alter the

> > fact that the culture of paying people for

> failure

> > HAS to end. Are these people vilified unjustly?

> > Perhaps, but then I'm sure their salaries will

> > more then compensate for the grief and I'm sure

> it

> > goes with the territory.

>

> Parkdrive,

> Your response buys into exactly the scapegoating

> mentality that has been described and that I

> challenged. Effectively you are saying that the

> 'poor sods' are so desperate that no-one can

> expect them to behave honestly when they are given

> the opportunity to engage in a scam. This

> completely absolves those who lied and cheated

> from any moral culpability for their actions and

> blames those they lied to. That is absurd! It is

> the same mentality that says we should write-off

> third world debt as it's unreasonable to expect

> such countries to repay the loans they took out

> and promised to repay. It's the same mentality

> that says it's ok for people to shoplift from

> Sainsburys because its a victimless crime and

> Sainsburys are a b****rd corporate so they deserve

> it.

>

> Yes, I have no doubt that banks entered the

> sub-prime market in order to make money. In fact,

> of course they did, they are commercial

> organisations. That does NOT excuse the

> exploitation of their products by dishonest

> people. If we take this sort of mentality of

> allowing people to shrug off any responsibility

> for their actions and simply claim 'victim' status

> there are going to be consequences (apart from the

> obvious financial meltdown). One, if we write-off

> third world debt there is just about zero prospect

> of anyone lending these countries a penny in

> future. They have got out of their current

> obligations but have made themselves credit

> pariahs in the eyes of the world. In terms of

> sub-prime defaulters - go ahead, blame the banks

> and march on Wall Street. The fact is that no

> financial institution will touch the sub-prime

> market ever again so those who wanted to get on

> the property market will be shafted.

>

> If people act as if they cannot be held

> accountable or behave responsibility, if they

> default to 'victim' status the moment things go

> wrong, they will not be given responsibility (in

> this case that means credit opportunities).

>

> It's one reason why I can't stand this 99%

> movement that emerged from Occupy Wall Street.

> The message from that is "we, the 99%, are

> wonderful, decent, honest people and the 1% are

> villians who should be hung by their own

> intestines from a lamp-post." It's claptrap. I

> have no doubt that a great many of the 99% had

> their snouts in the trough as much as anyone, just

> on a smaller scale per individual.

>

> I have no problem with bonuses being tied to

> achievements - that is as it should be, but a

> great many people simply don't want to see bonuses

> to bankers AT ALL. Full stop!

>

> In terms of whether people should take

> vilification if they are paid enough - I don't

> think that is anyone's job description. People

> should be held reasonably accountable, certainly,

> whatever their level in society. When someone is

> used as a political football and has their

> property attacked as an act of scapegoating for

> others to conceal their culpability that is

> unacceptable.

I don't buy into any such scapegoating. At the end of the day any institution or group of individuals that really believes it ok to let people take on a mortgage/loan without due diligence or robust financial checks deserve all it gets. Taking as gospel a claim that an individual earns 4 or 5 times their actual earnings, because the the way the product is pitched actually encourages them to do is bordering on criminal negligence. That doesn't excuse the applicant, but pitching such a product and then expecting nobody to apply for it sort of defeats the object of the exercise. I've never said or even hinted that anyone, bankers included, shouldn't receive a bonus for a job well done. But very few people in the UK today get a bonus full stop. I haven't for the best part of 10 years and I'm not really fussed as I knew that when I took my jobs on.

I find your remarks somewhat patronsing. Going back to the sub prime thing, you seem to suggest that the fault should be laid at the door or those that bought into the product and that those that pushed it are blameless, try and get your balance right and you might find some support. Bonuses are a sore point and that will remain the case while only a small perecentage of the population have any chance of getting one. I speak as someone that has enjoyed packages that included an end of year bonus in the region of 10% of gross salary and 15% non contributory pension plan, and free BUPA from family and I. This is no longer is the case, so I can understand both sides of the argument, but I don't try to lay the blame on a single entity of individual, I'd settle for proportional responsibility weighted against those that sell the product.

[Undisputedtruth]

Leverage

The real problem was leverage where Banks multiplied their gains from the subprime mortgages security products but instead multiplied their losses. This multiplication factor could be either 10, 100, 1000 times - even more. No one really knows the true scale of the losses apart from the Banks themselves.

The miss-selling of mortgages only accounts for a small part of the financial crisis.

Now if you don't understand leverage then you will never understand the finnacial crisis of 2007.

[Huguenot]

Fortunately UDT we have you with your exceptional international financial skills to help us see the light ;-)

I can't believe Goldman Sachs ever let you slip through their fingers...

[El Pibe]

I'm just gutted he's discovered the font tag!! Not a geek eh?

[ibilly99]

[Undisputedtruth]

El Pibe Wrote:

-------------------------------------------------------

> I'm just gutted he's discovered the font tag!! Not

> a geek eh?

I'm pretty good as most things from plastering to playing football. Hardly geek!

I know Dreamweaver and Photoshop as well.

I'm always looking for new projects so at some point I'll start a project to kick Hugo's ass. That will be fun. >:D<

[Undisputedtruth]

Huguenot Wrote:

-------------------------------------------------------

> Fortunately UDT we have you with your exceptional

> international financial skills to help us see the

> light ;-)

>

> I can't believe Goldman Sachs ever let you slip

> through their fingers...

That may be true as I'm familiar with trading techniques and knew about leverage since 1999.

Sadly, I do lack your skills in bullsh!tting people.

[El Pibe]

"I'm pretty good as most things from plastering to playing football"

From plas* to play*

There's not an awful lot in between is there.

Plate spinning?

Plax gargling?

[maxxi]

plating

[*Bob*]

Undisputedtruth Wrote:

-------------------------------------------------------

> I'm always looking for new projects so at some

> point I'll start a project to kick Hugo's ass.

If I could suggest the houses of parliament out of matchsticks?

That would be the real sucker punch.

[Jeremy]

Dreamweaver and Photoshop, eh? Didn't realise you were an IT expert as well as a financial guru!

[Undisputedtruth]

Jeremy Wrote:

-------------------------------------------------------

> Dreamweaver and Photoshop, eh? Didn't realise you

> were an IT expert as well as a financial guru!

Able to program as well.

[*Bob*]

sky+ ?

[Undisputedtruth]

No, computing programming. Quite easy really.

[*Bob*]

10 PRINT "HELLO"

20 GOTO 10

[katie1997]

I can use Excel. Does that make me a computer programmer?