financial crisis « Talking Bollocks

Posts Tagged ‘financial crisis

Nov

Stewart Fraser more bothered by hippies than financial incompetents

Categories: Economics, News, People and Politics
Tags: "credit crunch", Chairman of the Policy & Resources Committee, City Of London Corporation, financial crisis, occupy london, Occupy protest, St. Paul's Cathedral, Stewart Fraser

Stewart Fraser - bothered about hippies

On the 15th November I was watching Channel 4 News and saw Stewart Fraser, the Chairman of the Policy & Resources Committee of the City Of London Corporation, say that the Occupy protesters at St Paul’s cathedral should be moved. He made the usual excuse of our whinging elite when he said that the protesters had no solution, only criticism.

Of course! They are not professional economists or bankers. They represent the people who have suffered from the policies of people like Mr. Fraser. This is like the captain of the Titanic blaming the passengers for complaining. Mr. Fraser would do well to focus more on the incompetent bankers who got The UK into the current mess rather than trying to suppress the people who are protesting.

Anyway, I wrote the bloke an Email which, so far, he has ignored. I suggets anyone else who is interested in this write him an Email too. You could try this address: COL-EB-TC@cityoflondon.gov.uk

Attention: Stewart Fraser,

I just saw your appearance on Channel 4 news in which you were completely dismissive of the protesters at St. Paul’s cathedral and seemed to be making up reasons for their eviction on the fly.

I have worked in the City before but not at any great seniority. I also realise that there will necessarily be conflict between authorities and the protesters in such a situation.

However, you arrogant dismissiveness is extraordinary. You have a bee on your bonnet about a handful of protesters in the street yet where were you during the credit crunch? Where were you as the banks and politicians ruined the economy? Not a squeak. Not a squeak.

As Evan Davis has pointed out, just prior to the credit crunch, at the end of a boom which had run on for ten years (and was therefore due to bust), a major bank (I forget which) had lent £40 for every £1 it had in deposits. This meant that if the value of its investments were to fall by just 2% the bank would be insolvent. This is incompetence and complacency on a massive scale.

Further, at the same time, while the economy was booming, the Chancellor, Gordon Brown, was running a deficit. (If you can’t repay debt in the good times then when can you?)

And where was Stewart Fraser? Nowhere to be seen. Yet when a bunch of hippies pitch tents in the street there you are swaggering around on TV.

Further, while I understand that bonuses can be a useful tool most investors are in it for the long term. It is therefore idiotic to pay traders massive bonuses because they made good profits in a single year.
As a man approaching retirement I require long term growth not erratic variations in my investments. As it is my investments have plummeted.

Your arrogant dismissive attitude emphasises that you guys still don’t realise that a lot of people are suffering because of your actions.

Your profile on The City Of London web site states that you enjoy walking, I suggest you walk. Step down from your role as Chairman of the Policy & Resources Committee.

Fantastic Art Photography

Nov

Occupy Brighton

By jonesxxx 1 Comment

Categories: brighton, democracy, Economics, Finance, News and Politics
Tags: "credit crunch", brighton, faith, financial crisis, gold standard, King and Queen, money, occupy brighton, Occupy protest, victoria gardens

Occupy Brighton

An Occupy protest has sprung up in Victoria Gardens Brighton oposite the King & Queen pub. A bunch of tents and some friendly people open for a chat. They had some good slogans. “Chose love over fear” and “All money is a matter of belief”.

I guess the latter has been true since governments came off the gold standard. Since then it is possible that, if the politicians and bankers screw up enough, people will lose all faith in money. They will see it for what it is: mere paper and numbers in computers. The problems is that millions of us, necessarily, have stakes in money in the form of investments, savings and pensions. However, these being hit by the current crisis the danger is that people do lose belief in the system. Like God, money requires faith. Without faith, it is nothing.

Occupy Brighton

hove station

Oct

Occupy protest at Saint Paul’s Cathedral

By jonesxxx Leave a Comment

Occupy London protestes at St. Paul's Cathedral

On Saturday I visited the Occupy London protest at St. Paul’s Cathedral. I’d imagined that as the protesters had set up tents they would be mainly around the back in the gardens but the gardens are closed and padlocked and the protesters and their tents are all around the front and partially along the north side.

Immediately in front of the entrance a few wooden pallets had been piled on top of each other and a bloke stood on top with a microphone and was addressing the protesters and tourists who were assembled on the steps of St. Paul’s. The guy was talking about alcohol. It seems that the protesters have agreed that the protest should be alcohol and drug free but I suspect that some had been breaking the rules hence his speech. After this guy a series of people stood up and gave speeches. They seemed to have created a series of working parties. The woman form the kitchen talked about the times that food was served, a guy from the Tec Team talked about trying to set up a live streaming video link and another guy talked about setting up a Political Tent and where this should be located.

There were people there who were obviously knowledgable about the financial situation and one of the sign proclaimed a very specific demand: “End Fractional Reserve Banking”. Others appeared to be more protesters by temperament. Several people wore V for Vendetta masks which seems to have become a badge of the Anonymous movement. and one guy was dressed in a suit of armour. Other individuals seemed to have their own agendas that may or may not overlap with the Occupy movement. One guy wore a sort of billboard which attacked smoking. I talked to him and he was really just trying to get people to recognise that smoking was dangerous and, perhaps, should be banned. Another American guy was telling bloody curdling stories and seemed to have been at this quite a while. Another guy was dressed in some kind of weird Irish kilt and danced around proclaiming that Israel is a fulfilment if bible prophesy and that Jesus would soon return to become king of the world.

However, there was organisation here. Some of the speakers appeared to be seasoned protesters who had done this sort of thing before and it occurred to me that if you got involved in this sort of protest you’d run into the same problems again and again. It must be quite difficult to harness the energy of the protesters and direct it in a useful way.

Though I do believe that the protesters have a point I did not get the impression that this was a grass roots protest by people who had suffered specifically from the financial crisis. By that I mean that I saw nobody say that they had lost their job or lost their house or had some benefit cut. Whereas the media coverage of the protesters in New York gave me the impression that these people were involved at the Wall Street protests. This may just be a matter of time. As the cuts start to bite the government should be worried that this currently small scale protest might become the focus for a much bigger protest. As one of the protesters pointed out the Lord Mayor of The City of London is due to make a speech at St Paul’s soon and the protest could prove an embarrassment. It’s worth noting here that The City of London is the financial area and that Lord Mayor of The City of London is trustee of St. Paul’s. Perhaps this explains the apparent U-turn in policy toward the protesters?

An odd little hand gesture seemed to have evolved. By waving their hands and wiggling their fingers the protesters seemed to signal agreement and support tot he speakers. At one point a wedding party emerged from the cathedral, all suits and hats and dresses. They stood on the steps surrounded by the protesters while their photographer, amidst a sea of other photographers, made the best of a difficult assignment. The mood was very good natured, the confetti was thrown a cheer went up and the bride and groom swept their way through the crowd. I spoke to one of the guests who said it had been a beautiful ceremony.

Confetti and Protest

The Bride & Groom

hove station

Apr

Banks recovery is a cheap trick

By jonesxxx 1 Comment

Categories: Bollocks, Economics, Labour, new labour, News and Politics
Tags: "credit crunch", bail out, banks, blame, bonus, financial crisis, interest rates, Jamie Dimon, Joe public, JP morgan, Labour, putting prices up, share the pain

Simple strategy: Make the public pay

I get a little irritated when Labour supporters blame the current financial crisis on the banks as they’re merely trying to sidestep their own incompetence. The generally accepted root cause of the credit crunch amongst Economists is interest rates held too low for too long and the blame for this lays with the chairman of the America Federal Reserve, Alan Greenspan and, in the UK, the Chancellor, Gordon Brown.

This is not to say that others should not share the blame. We, as individuals, were to blame for knowingly borrowing far too much and, yes, the bankers were to blame for their incompetence in lending far too much and for tying themselves in knots with odd financial instruments such as credit derivatives.

However, I too am angry with the bankers because they are not sharing the pain. It might be argued that the rich, by definition, never suffer during financial crisis but what irks me is the bankers arrogant inclination to actually raise their income by large amounts while everyone else is having to cut back. Today’s Guardian reported that the head of JP Morgan, Jamie Dimon, received a 51% pay rise!

What planet do these morons think that they’re on?

Bankers argue that they have done a brilliant job in making profits for the banks since the credit crunch and in so doing dug the banks out of the mess they were in. This disingenuous as they have achieved all this merely by the putting their prices up. Competition has dropped out of the market, base rates are ludicrously low let yet loan rates and fees are high.

So who is really paying for the banks recovery and Mr. Dimon’s bonus? You are! Joe bloody public again. The same poor bastard who also paid for the banks bail out. You don’t need to pay a £3m bonus for a trick like that.

Whenever criticised bankers usually reply that you have to pay the market rate or you will lose people. Well, OK, let’s lose some of these people. Firstly, where can they go? Secondly, if they have so little solidarity with their fellow countrymen then bollocks to them and thirdly their past performance IS an indicator of future results so good riddance to them.

Jan

Choose debt?

By jonesxxx Leave a Comment

Categories: Commerce, Economics, Finance, News and Politics
Tags: Argentina, bankers, banks, BBC, capitalist, choose debt, debt, EU, experts, financial crisis, Greece, Iceland, ireland, liquidity, loans, pension funds, Radio 4, renumeration, repay, resources, salary, The Economist, The World Tonight, working people, write off

Choose Debt

I just caught the end of The World Tonight a serious pontificating BBC Radio 4 program where the “expert” said that everyone is treating the financial crisis as a crisis of liquidity whereas in reality it is a crisis of debt. I’m no expert on this but Wikipedia defines Market liquidity as “an asset’s ability to be sold without causing a significant movement in the price and with minimum loss of value” and Accounting Liquidity as “a measure of the ability of a debtor to pay his debts as and when they fall due.”

I think that what the guy was getting at is that the great and the good thought that if we print more money then we can introduce liquidity and buy the distressed debt. Yeh, great, but all that achieves is that some other sucker (the tax payer) owns the debt.

The Economist this week mentioned again that all that has really occurred since the financial crisis is that the private debt which the banks owned has become public debt.

So in the opinion of both BBC expert and The Economist the debt has not gone away. The BBC expert said that some countries (implicitly Greece and Ireland) do not have the resources to repay their debt and merely giving them loans from the EU does not change this.

I believe that free market capitalist theory says that when the debtor cannot repay then the debt is written off and the lenders lose their money. It is easy to scoff that the money is lent by a lot of rich institutions but we must remember that in many cases these institutions are the pension funds of ordinary working people.

So what is to be done?

I have heard that Argentina defaulted on its debt in 2002 yet my recollection is that The Economist has had some good things to say about its economy recently. Iceland also hit troubled times and let its investors face write offs yet an Economist article on Ireland cagily suggested that Ireland could learn a thing or two from the way Iceland handled its crisis.

It seems that all the “experts” are suggesting that the debts be written off. Yes, the lenders (read your pension funds and rich bastards) will lose out in the short term but perhaps this is no worse than dragging the problem out for years and arriving at the same conclusion years later.

So why are the debt not being written off? In whose interest is it to maintain bad debt on a companies book?

Ah yes, The Bankers. It is in the interest if the bankers to pretend that the idiotic loans which they made will eventually come good because it make the banks balance sheet look better and therefore gives the CEO some leverage in bumping up his already considerable salary.

Jul

Bankers, Regulators and law makers “stumble” on a bargain

By jonesxxx Leave a Comment

Lord Levene - Gets his hands on the branches

Levene - Can't wait to get his hands on the branches

It seems that the Bankers are still lining their pockets and this time they have rowed in regulators and law makers from the House of Lords.

Lord Levene, the chairman of the Lloyds insurance market, is to create a new high street bank to be floated on AIM and initially funded by £50m from City institutions including Invesco and F&C. The bank will then issue shares to gain more funds and expand rapidly to acquire other businesses including Northern Rock’s state-owned “good bank”. Not the bad one, mind you, that is to be left for the tax payer.

I heard Lord Levene on the radio a week or so ago who said that he considered that the High Street banking business could do very well but an article in The Independent newspaper quotes Neil Saunders, of the DataMonitor consultancy, as saying “All banks face apathy in terms of switching behaviour….It takes an awful lot to get people to change bank.”

No problem, Lord Levene has thought of that and plans to simply buy up the 600 branches that Lloyds Banking Group had been ordered to sell following its state rescue.

Lord Levin obviously spotted the chance to make some money as did half the regulators and House of Lords.

One has to wonder who it was who decided that Lloyds should be ordered to sell the 600 branches and whether any of those involved in Lord Levine’s new bank had any involvement such as the “non-executive directors” of the new bank Sir David Walker (former official of the Treasury and Bank of England and deputy chairman of Lloyds bank), Lord McFall (chaired the House of Commons’ inquiry into the banking crisis) or Charlie McCreevy (former EU commissioner). Presumably these honourable men merely spotted a chance which came about coincientally following thier decision to force Lloyds to sell its branches. One can imagine them around the board room able: “Buy up the 600 branches? By Jove, never thought of that!”

The article in The Independent says that “executives will be appointed after the flotation”. It seems odd to wait until after the flotation to appoint executives but perhaps the new bank will be such a money spinner that they could employ any old fool to run it. If past performance is any indicator of future results then they probably will though it is not known if Sir Fred is still available.

Lovely Jubbly as del boy would say.

Jul

Balls talks bollocks

By jonesxxx Leave a Comment

Categories: Bollocks, Conservative, democracy, Economics, Finance, Labour, new labour, News and Politics
Tags: . “has to be pushed”, Alistair Campbell, Andrew Rawnsley, asset price bubble, “Blair is never going to go”, “Confess the heinous sin of heresy”, “it's all in place”, “it's going to happen”, “it's too late”, “reject the works of the ungodly”, “you mustn't be weak”, “You've been weak for too long”, cheap money, chuck them out, debt, economy, Ed Balls, financial, financial crisis, Gordon Brown, hatchet men, infighting, inflation, interests rates, interview, iraq, John Humphries, Mandelson's diaries, Monty Python, new labour, peter mandelson, punish governments, rewarding incompetence, Shadow Education Secretary, Spanish Inquisition, talking bollocks, The Evening Standard, tony blair

Balls' Balls - Banquets and Balls

This morning I listened to John Humphries interview the Shadow Education Secretary, Ed Balls, on BBC Radio 4′s Today program. Yes, I know, I should move on from ranting about the inadequacies of New Labour and start ranting about the Tories and Lib Dems but hang on.

Following the publication of Mandelson’s diaries and a book by Andrew Rawnsley both documenting the infighting within the New Labour cabinet between Blair and Brown, Humprys was trying to pin down Balls on his association with the infighting through his association with Brown. Mandy had called the infighting an insurgency and Humphries said that Andrew Rawnsley’s book claims Mr. Brown was vacillating before a planned “coup” in 2006 and Ed Balls told Mr Brown: “It’s too late. It’s all in place. It’s going to happen.”. Adn article in The Evening Standard claimed Balls also said: “Blair is never going to go. He has to be pushed. You mustn’t be weak. You’ve been weak for too long.”

So Mr. Balls waffled and said the book was full of inaccuracies but, tellingly, did not deny the specific incident.

Humphries drew attention to Labour’s part in the financial crisis and a McKinsey document stating the UK’s horrendous debt. Mr. Balls waffled, saying “interests rates were low” and “inflation was low” and went on to say that the crisis was global, implying that nobody is to blame at all.

This tosh is like a second rate rehash of Gordon Brown’s interview technique and shows that Balls, like Brown, does not understand the linkage between cheap money (low interest rates), the asset price bubble and the financial crisis. I am reading the diaries of Tony Benn – “More Time For Politics” at the moment and he wrote something which goes to the heart of New Labour spin. He said: “….I no longer feel that I am required to believe what I am told by (new Labour) ministers”.

It occurred to me that the feud between Brown and Blair may have contributed, in a very substantial way, to the prevalence of manipulators, bullshitters and bullies surrounding the New Labour government. Both Blair and Brown would have needed hatchet men and this need would have driven out any wise, thoughtful or competent advise. Leading on from this one can speculate on the whole nature of the New Labour years without the likes of Campbell, Mandelson and Balls. If wiser heads had prevailed might Blair have remained relatively sane and not led the UK into Iraq? Might Brown have had more time for the economy and avoided the worst of the financial crisis? We shall never know.

Several people have commented to me that the Tories would have screwed things up just as bad as Labour. Maybe. But of course they didn’t did they. It was Labour and you have to punish governments who screw up by chucking them out otherwise you are just rewarding incompetence.

No doubt the Tory/LibDem coalition will draw my attention in time, though right now I just find the absence of Mandy bullshit a refreshing change and with the remnants of New Labour still voluminously TALKING BOLLOCKS it is easy to get distracted.

The Labour party wont move on until it faces up to its mistakes and rejects the unsavoury characters from the New Labour years. If it doesn’t then, once the Tories have fallen out of favour, we will be faced with another Labour government wastin ti’s time on spin rather than achieving objectives. In the words of Monty Python’s Spanish Inquisition the Labour party need to “Confess the heinous sin of heresy”and “reject the works of the ungodly”. ie admit that they screwed up and chuck out the likes of Balls.

Jan

Sub Prime

By jonesxxx Leave a Comment

Categories: Uncategorized
Tags: "credit crunch", financial crisis, mortgage mis-selling, mortgage self certification, mortgages, nija mortage, sub prime

Below is a link to a Powerpoint presentation with as good an explanation of the current financial mess as any.

sub-prime1

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