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Have the banks ruined the economy?

R

reet hard

Senior Jockey
Joined
Aug 4, 2011
Messages
8,453
Seems we've turned full circle from the banking crisis, caused,of course , by the banks themselves with their greed in the mortgage markets,and ultimately reponsible for the years of austerity afterwards (ironic that one of its architects - David Cameron - is invited back in to the fold today :)).
The Banks are compounding the situation by settin stringent interest rates (never mind that they reap all the benefits:D).
To cap it all, our illustrious Government punishes them by restoring bankers' bonuses:).
You just couldn't make it up!:lol::lol:
 
You get all these people protesting about the clusterfuck in the middle east and the Just Stop Oil brigade - it is the bankers that should be the real target.
 
The term cashless society was obviously supposed to mean a transition or move away from using hard currency.

I increasingly think it's starting to have a more literal meaning, e.g the majority just don't have much cash per se.

Our local supermarkets have more security guards than you'd associate with your local bank on the high street for gods sake.

It mustn't be an easy time to be an alcoholic, and it's probably a good job the fags are stashed behind the counter....
 
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The level of knowledge of horse racing/betting demonstrated by many posters on this site is extensive and generally based on personal experiences . Reasoned arguments are put forward and respected even if they prove to be wrong.

The opinions expressed about bankers above are not knowledge based and are both ignorant and offensive. By and large problems in the sector originate from events and/or actions by governments. Interest rates and money supply are not determined by bankers. Remember Northern Rock , heroes lending to help the North East develop., oops, market rates changed. What evil people they were- misjudging market movements brought about factors beyond their control.
 
Tout Seul, wasn't the 2008 (?) crash down to bankers making dreadful/criminal decisions?

I haven't watched the film for a long time but isn't The Big Short about such bankers?
 
Those guys are TRADERS not bankers. Whilst there are bank employed traders, many of the mavericks are employed by specialist firms or trade on their own account.
The percentage of bankers that have any connection with trading is incredibly small.
Blaming all bankers is as pathetic as condemning all priests as as kiddy fiddlers. Of course there are some but the number is small with the overwhelming majority appalled by their behaviour.
 
NatWest have an entire building in Bishopsgate dedicated to traders, so I'm not sure I'm seeing the distinction.

I worked in banking for years - they are a shower of c*nts.
 
Tout Seul said:
The level of knowledge of horse racing/betting demonstrated by many posters on this site is extensive and generally based on personal experiences . Reasoned arguments are put forward and respected even if they prove to be wrong.

The opinions expressed about bankers above are not knowledge based and are both ignorant and offensive. By and large problems in the sector originate from events and/or actions by governments. Interest rates and money supply are not determined by bankers. Remember Northern Rock , heroes lending to help the North East develop., oops, market rates changed. What evil people they were- misjudging market movements brought about factors beyond their control.
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I don't particularly want to take you on at your specialist subject but surely if you misjudge market movements badly enough to collapse a bank you should be doing time and I know there have been runs on banks for centuries.
In Ireland Sean Fitzpatrick and Michael Fingleton should have went down for their part in collapsing two Irish financial institutions but despite the evidence against them they weren't convicted.
 
To start with- Apologies for my overreaction to the initial post!
1. Banks raise interest rates simply out of greed. - Untrue. Banks pay for money they lend and benefit when their own borrowings are cheap as they can offer competitive rates to customers. With competitive low rates they lend more to customers and customers can more easily afford to make repayments. For a number of years mortgage rates have been historically low - great for those buying a house. ( At one time in the distant past our mortgage was 14% ). Global issues now have resulted in those interest rates becoming much higher. If the rise in rates the banks have to pay and charge continue to increase some mortgage borrowers will find it impossible to repay .That’s bad for both borrowers and lenders. New buyers may have to delay house purchases , again no benefit for banks.
The big banks have to manage huge sums in various currencies, for varying lengths of time but their traders actions are strictly regulated nowadays though there will always people trying their luck. Government funding requirements have a major impact on the money markets as Truss demonstrated so well.
 
I admit I speak from a position of ignorance in this matter - I gave up Political Economy at Glasgow Uni after one term because it was so far over my head - and I can recall our mortgage rate in double-figures (when we built our own house, completed in 1996, our mortgage repayments were close to £900 per month and soon went up into four figures) but at the same time we were getting something like 10% interest on savings.

It seems nowadays there's a much bigger gap between the rates at which the banks are making their money and the interest rates on savings. The public perceive that as the banks prioritising profits for themselves (and their shareholders) before helping their customers. Most people I know - they too may well be speaking out of ignorance but they're generally intelligent, uni-educated people - see banks (and therefore bankers) as using every trick in the book to boost their profits while doing less and less for their customers.

I well remember the respect I had for our bank manager who made a point of speaking personally to customers and doing his best to make our money work smarter for us. In one episode, I had got really confused about a number of transactions and managed to get our account £800 overdrawn (circa 1982, so a lot of money considering I was only earning £4000 a year). I had booked us a holiday as part of the transactions and was horrified when the letter came through. I phoned him to discuss the overdraft. His response? "Go away and enjoy your holiday, Maurice, and we'll see what we can do for you when you get back." He allowed us time to pay off the overdraft interest- and fee-free. An absolute gem of a guy. Nowadays bank managers are totally invisible.

The extended period of ultra low rates was great for house buyers and mortgagees but the value of our money sitting in bank accounts has been eroded over the years by interest rates being lower than inflation. That was why, when I retired my lump sum was used to pay off our mortgage and when my wife retired a few years later her lump sum paid off the mortgage on the flat we own in Glasgow. Both those properties shot up in value between 2020 and 2022 having sat flat for a few years.

Apologies for the rambling incoherence of the structure of this reply. Just throwing down thoughts as they come to me.
 
Tout Seul said:
The level of knowledge of horse racing/betting demonstrated by many posters on this site is extensive and generally based on personal experiences . Reasoned arguments are put forward and respected even if they prove to be wrong.

The opinions expressed about bankers above are not knowledge based and are both ignorant and offensive. By and large problems in the sector originate from events and/or actions by governments. Interest rates and money supply are not determined by bankers. Remember Northern Rock , heroes lending to help the North East develop., oops, market rates changed. What evil people they were- misjudging market movements brought about factors beyond their control.
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Are you saying the banks weren't responsible for sub-prime mortgaging which caused 07-08 crash?
 
Banks are schizophrenic. The Retail side is completely different from the Markets/Investments side, and the two should never really be conflated - even when they operate under the same logo.

As far as the 07/08 crash is concerned, sub-prime was obviously a problem (driven by greed), but the crash itself was principally down to the collapse of CDO markets - particularly trade in synthetic CDOs, which were unadulterated gambling devices - all of which was managed by the Markets/Investment side of Banks. The CDO market itself was also subject to woefully (or purposely) misguided assessments by the Ratings agencies, whose lack of due-diligence had these basket-case products rated AAA.

I worked in the Retail side of Banking for many years. I left in August 2007 (my standard line is that it was my exit that really precipitated the crash :D), and was horrified to see the impact it had on my ex-colleagues; many of whom saw years of Sharesave contributions decimated, their Pension values collapse, and facing redundancy.

So when we talk about 'Banking' and its responsibilities during the crash, it's important to remember the distinction between Betty working part-time in a branch or Jonny working in a Head Office function, and the litany of spivs, degenerates, insouciant clowns (and their enablers) in the Markets/Investment side, that allowed the crash to happen. Also worth stating that not everyone who worked on the Markets/Investment side necessarily bear any responsibility for what happened.
 
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Grassy is right.

This is a horse racing forum and I’m sure everyone on here would take advantage of an idiot bookmaker offering double figure odds about Constitution Hill winning the Champion hurdle so why wouldn’t investors take advantage of the fact sub prime debts that on their own would be junk, immediately gained AAA ratings when packaged.

I’ve spent 35 years in this industry and while there are many fund managers and traders who are frighteningly inadequate, it’s not their objective to scam the investors and bite the hand that feeds.

LIBOR was yet another example of a loophole being exploited, hence its subsequent decommission.
 
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wilsonl said:
Grassy is right.

This is a horse racing forum and I’m sure everyone on here would take advantage of an idiot bookmaker offering double figure odds about Constitution Hill winning the Champion hurdle so why wouldn’t investors take advantage of the fact sub prime debts that on their own would be junk, immediately gained AAA ratings when packaged.

I’ve spent 35 years in this industry and while there are many fund managers and traders who are frighteningly inadequate, it’s not their objective to scam the investors and bite the hand that feeds.

LIBOR was yet another example of a loophole being exploited, hence its subsequent decommission.
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Yes it was an interesting post, including the opening few words, about banks being schizophrenic, which would mean different things to different people, and very much open to interpretation!
 
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