The private thoughts of bankers

One said there was no evidence that bankers were overpaid ..... Really?

To which the other supremo made the point - or so I am told - that banks are a regulated oligopoly and are not subject to "proper" competition ..... So there is at least one who has at least an idea of reality!

What are they hiding?

Alistair Darling is also going to have a secret meeting tomorrow. The private bankers can do what they wish but he is a publicly elected official. What is he hiding?

Speaking of the potential for s¡overeign default (as you do), perhaps you should make it clear the bankers did not need to mention the UK by name. That job has been contracted out to S&P

https://www.zerohedge.com/article/sp-we-no-longer-classify-uk-among-most-stable-and-low-risk-banking-systems

Without names and these so called sources being verified it is difficult to take much notice of what has been written here.

#3 armagediontimes

Quickly spotted....well this is it then!...the start of armagedon.

When talking about Private Equity and Proprietary Trading I do wonder whether politicians really understand what they are talking about.

It seems that common sense has gone out of the window because Private Equity firms are best attached to banks so that they can be regulated. Obviously you want them to buy businesses which are struggling and need their expertise to save them, and not behave like asset strippers. So have regulations that make this a requirement.

Similarly banks need to trade to provide the services their customers need. They need to have positions in FX so that they can trade, and will always take long or short positions depending on their view on the market. If George Soros was allowed to continue trading after destroying sterling why take action against banks which have acted far more responsibly. Banks are market makers and without the markets you do not have a global economy.

Failure by the politicians and the regulators they employed is what is at the heart of this problem so they should not be the people in charge of fixing it. The Financial Institutions need to come up with a system of regulation within which they can work, but which also is fair to all parties, especially customers and shareholders, and that will ensure that their trading books have manageable limits.

These proposals can then be discussed by new regulators with the prime objective of maintaining economic balance and no future asset bubbles.

> Attendees include Stephen Green, chairman of HSBC, Bob
> Diamond of Barclays, Joseph Ackermann, chairman of Deutsche
> Bank, Peter Sands, chief executive of Standard Chartered,
> Lord Levene, chairman of Lloyd's of London, Tidjane Thiam,
> chief executive of the Pru, and assorted other big financial
> cheeses.

We are entitled to haul these men before a select committee and
compel them to spill thier guts about what was said in these meetings. The money system is public property, now, and no banker is entitled to think about "private meetings".

Given the size of the bail-outs, we need to know the full story. They've got some face, those guys.

3. armagediontimes

The article you reference has nothing to do with sovereign debt. It refers to the private banking sector. The whole govt debt scare is a ruse by the finance sector to pursue their own agenda. Is there really any likelihood of the UK defaulting its debt?

#7

You know exactly what they'll be discussing. It's which one of them is going to tell Brown and Darling that they won't accept any form of new regulations and that if they try to impose any restrictions at all then they'll be off.

"A regulated oligopoly".....

Indeed, this is exactly what it is.

And the fact, of course, that they have been having a 'secret' meeting in Davos is prima facie evidence of cartel action..... if what Adam Smith said has any hint of truth in it..... "People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices".

But this does highlight the fact that the UK undoubtedly faces a problem here greater than any country in the world, with our huge financial centre in London.

The US can definitely afford another crisis like this, based on it's credit rating/overall debt vs GDP ratio etc etc (... yes, Obama would not get a second term, but the country would be OK... there would not be riots in the street/civil unrest etc).

However the UK absolutely cannot afford one. As 3 armagediontimes points out, the country is today already further on its way down the ratings agencies list (much as it hurts to pay any attention to these jerks who played such a big role in getting us in this hole in the first place).

And so this seems to me to indicate that, if:

a. there really is an overpowering conspiracy between the bankers to resist change
b. the US really does succumb to it, and hence it becomes a "global standard"

then we in the UK have absolutely no option but to steer our own course.

Gratifyingly, Mervyn King seems to have intimated he thinks this may be necessary.

It really will be the case, for us in the UK, of "if the financial system globally does not accept the reform that will enable the UK taxpayer to protect itself from the megabanks that happen to be on our soil i.e. in the City of London " then we must get rid of them and in due course accept that the City as a financial centre is over.

It will simply be a game with too high stakes for Joe Average UK taxpayer, and over time we will need to develop other economic strengths as a nation.

#5 freemarketanarchy. We crossed the start line sometime ago, and more recently passed the tipping point.

Remember "the dominoes fall slowly" but there is no longer either a way out or a way back.

#8 diarmidwp. I´m afraid not me old mucker. It is S6P seeking to deliver (not very well) coded messages. Read the commentary about the lack of testicular fortitude.

It is 100% certain that the UK will default on its debt. The only question is whether the preferred default by inflation option is in fact available.

Look at the numbers. Mckinsey estimate that aggregate UK debt stands at something over 460% of GDP. GDP itself is a flawed denominator and is ruthlessly fiddled by politicos. A big and real component of GDP is oil and gas and that is in terminal decline. How can you possibly work your way out of debt of such magnitude?

In the end its all very simple. The numbers do not add up. Fiddling the numbers (as we do) is nothing more than a manifestation of delusion.

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Based on the assumption that Mr Peston’s blog is accurate, the power to create debt and money should be taken away from them.

If the situation is left as is, we live under the control of the most financially ruthless dictatorship in the history of this planet.

Is there any truth in the rumour that Davos is to be re-named "Cloud Cuckoo Land".
Robert, your last sentence means that it probably should be.
Full of "big financial cheeses" you say.
Would that be Swiss cheese?.....full of holes, like their "profits".

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11. At 8:01pm on 28 Jan 2010, armagediontimes wrote:
'It is 100% certain that the UK will default on its debt. The only question is whether the preferred default by inflation option is in fact available'


Very good point, will the BOE print more, will Mr King be prepared to sacrifice what remains of his reputation as a central banker?

"But if the status quo is unsustainable, why would they wait to be coerced into reform?"

It's a bit like the armed robber in the bank, the building surrounded by police and he's trapped. He can sit down and drag out negotiations as much as he wants, but we all know the situation will end one way or the other.

The bankers are debating whether they should give themselves up, or go for it in a blaze of bullets.........

> no evidence that bankers were overpaid, because if that were the
> case the biggest payers of all would have been damaged as businesses

Short memory - slow learner I'd say.

Somebody remind this guy that many of those businesses did in fact go bust recently (Lehman Brothers anyone?), many more would have except for the largesse of taxpayers, and this is indeed arguably because their remuneration systems incentivised excessive risk taking.

Wake me when someone with an IQ is in charge...

11. armagediontimes

You're making it up. A Wall Street PR contract is no measure of virtue.

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# 17. At 8:18pm on 28 Jan 2010, copperDolomite wrote:

> The bankers are debating whether they should give themselves
> up, or go for it in a blaze of bullets.........

Like I said, if they weren't working for banks, they'd be robbing them!

I think the "bullets" option is better for us, because it's a worse
outcome for the perps, but the same outcome for the public (no robbers).
Whatever, I guess it makes no odds. As long as we knock some sense into
them, the whole credit crunch will be worthwhile. Our kids will be
able to look back at the "First World Bank War" and hope we don't need
another iteration (like the 20th century).

Yes!

Rights - v - privileges! The penny is dropping in Davos, Capitol Hill, 10 Downing St, Brussels, BoE and very few have the ability to tackle the matter of major banking regulatory reform as being fundamentally a mixture of politics, law and many other things. That's the good news.

Banking reform is also a significant constitutional issue in most jurisdictions - the sooner the policy makers and media understand this, so much the better.

Some of these constitutional issues would, in the UK, I believe, overlap with e.g. providing protection of British strategic businesses like e.g. Cadbury, Chorus, etc

Some of what Pres Obama would like to do can be challenged under the US Constitution and so the discussion abour rights - v - privileges has not started yet - until it does the issue of local regional and global banking reform and their collective behaviour will remain unaddressed.

The bad news is that the serious reform that most people other than bankers want to see in place, is several years away or indeed may never happen in some jurisdictions because also it is no use for US, EU and others to agree reforms and the see Russia, China, India, Japan carrying on with negative practices while the rest of the developed world tries to play fair.

This is partly why the bankers in Davos think Obama will not succeed or any time soon.

Major banking reform has to happen in the US first unless e.g. the ECB try and take it on - but they are too feeble to do that and if they do, are likely to make hash of it anyway.

Britain probably cannot reform its own banking system now under ECB influence/regulation/rules/protocols - has anyone considerd that properly yet?

Interesting times.

18. At 8:21pm on 28 Jan 2010, lsi-92 wrote:

> Wake me when someone with an IQ is in charge...

Wake me when a human being is in charge ...

Remuneration practices in banks and similar institutions need wholesale reform. There is no justification for bonuses to be paid to anyone for 2009. Exceptional performance can be rewarded with appropriate salary increases; good performance should equate to 'you're fortunate to still have a job.'

#19 diarmidwp. Unfortunately I am not making it up, and you are correct a Wall Street PR contract is no measure of virtue. So...stop believing Wall St. PR and start looking at relevant facts!

Profits full of holes?....Absolutely.
There's no doubt that some banks avoided the worst of the mess....fair play to them.
But many banks were reporting billions in profit year after year, and quite suddenly, within less than a year, they seem to have stumped up combined losses of several hundred billion.
Those banks gave all the others a bad name.
So what was the truth of those "profits" (on which colossal bonuses were paid")?
They were clearly just "paper profits", based on unreal asset values, and full of holes.
Hopefully any "profits" being reported these days are somewhat closer to reality.

If nobody is tired of economic mayhem and injury to self and others then we can let Islam take over. They'll run the country for us.

No thanks!

Read that book by Geoffry Bull 'when Iron gates yield'. He was there when the communists invaded tibet and he thought they would let him stay. Or leave. Doh. Religion is always a such a sore point for so many people. They're everywhere.

We all remember the old saying 'where there's muck there's brass. Nowadays it seems where there's 'confusion there's cash'

I used to have a quiet chuckle at the new world order conspiracy freaks. they informed us we would end up with one currency, We would be run by some elitist quango of the super rich. Democracy would cease to exist, Arsenal would win a trophy again......you know, nutters really.

But would one currency be a bad thing? I know the staff of the bureau DE change are marching with pitchforks and burning torches to my humble abode as I type this. But aren't all our financial woes just caused by 'confusion.'

Money could be the catalyst that unites the world. It's the one thing we all truly love. Would armies march against each other if they new how much it all cost..'Darling those missiles cost an arm and leg !'

We need one world currency....we could even call it the Davos !

#2. At 6:17pm on 28 Jan 2010, plamski wrote:

"What are they hiding?

Alistair Darling is also going to have a secret meeting tomorrow. The private bankers can do what they wish but he is a publicly elected official. What is he hiding?"

Would you prefer he did not attend this "Private meeting of private bankers" and thus stay out of the loop, that is what would happen if someone thought that he might have to divulge private, commercially sensitive information just to appease those who like to sit around the village stocks throwing rotten tomatoes at the wrong doers of the parish.

25. armagediontimes

Intelligence demands understanding and interpreting the facts. If you can understand this it would help you more than third-hand scaremongering.

https://blogs.ft.com/maverecon/2009/09/is-there-a-case-for-a-further-co-ordinated-global-fiscal-stimulus-part-2/

At Davos, the bankers talk about other bankers. My view now is that we pay (need pay) no attention to any of these people as their views on everything have been proven to be totally unsound. So this kind of gossip doesn't deserve airttime especially on the BBC.

#24 ARHReading. Of course bonuses should be paid. Take Goldman Sachs as an example:

It negotiates with the US government $ billions in loans, guarantees and support. (No-one knows how much money due to the fact that AIG was used to funnel money to Goldman and not all information is in the public domain). - And why not? Because of Goldman PR and government relations people, that is why.

Goldman is able to borrow money for nothing from the Fed and is able to use this free nmoney to make money. In order to supply Goldman (and others) with free money the US needs to run a budget defecit, and Goldman make more money through assisting the US government in selling US treasuries. They wouldn´t use Goldman unless their traders and bond salesmen knew exactly what they were doing.

All of this (and other stuff - like high frequency trading, and front running it clients) enable Goldman to make record profits. Imagine the technical skill required to set up a High Frequency Trading operation. Imagine the sheer nerve required to front run your clients.

Contemporaneously Goldman is able to reduce its average tax rate down from 34.1% to 1%. A reduction of 33.1% in average tax rates is worth a significant amount of money to Goldman. Think of the work done by their tax planners.

Could you set up a business that would be given $ billions by central government, and exploit every opportunity to make more money because the government had given you money and still manage to pay substantially no tax?

No, of course you couldn´t. Yet not withstanding the fact that you lack the ability to be given $ billions and pay no tax, you begrudge these guys bonuses. Do you have any idea how complex tax planning is? or how tedious government relations is?

at last someone with brains and not a knee jerking bandwagon jumping fool has said it like it is .
stop all the bank bashing and consider this: without the banks there is no capitalism, forgive, move on and stop wasting time on blaming those who already accept the blame. remember they too generate profits and pay taxes

'banks are a regulated oligopoly and are not subject to "proper" competition'

Which, surely, is where the politicians ought to be starting? Quit worrying about bonuses and tackle the problem at it's root. Lets not print money, lets print Banking licenses. If we get the competition right there won't be any money for super-remuneration packages.

28. At 9:02pm on 28 Jan 2010, AudenGrey wrote:
But would one currency be a bad thing? I know the staff of the bureau DE change are marching with pitchforks and burning torches to my humble abode as I type this. But aren't all our financial woes just caused by 'confusion.'

Money could be the catalyst that unites the world. It's the one thing we all truly love. Would armies march against each other if they new how much it all cost..'Darling those missiles cost an arm and leg !'

We need one world currency....we could even call it the Davos !


What an interesting point.

What a perfect name.

If nations controlled a world currency, and the creation of debt?

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28. At 9:02pm on 28 Jan 2010, AudenGrey wrote:

"But would one currency be a bad thing? I know the staff of the bureau DE change are marching with pitchforks and burning torches to my humble abode as I type this. But aren't all our financial woes just caused by 'confusion.'"

But what would we call this new system of exchange, I know, lets call it "Bartering"...

I understand that in pre Greek and Roman times it was quite widely practised!

31. At 9:17pm on 28 Jan 2010, plethora wrote:

"At Davos, the bankers talk about other bankers. My view now is that we pay (need pay) no attention to any of these people as their views on everything have been proven to be totally unsound. So this kind of gossip doesn't deserve airttime especially on the BBC."

That's a Stalk and sand moment if ever...

All the time these people are in control, even if they are not in charge, of huge sums of money (anyone's money, not just 'tax payers') we will have to carry on taking notice of what they talk about and even if the current set of 'Bankers' were removed we would still need to take notice of what their replacements talk about.

There is a saying "Meetings are indispensable when you don't want to do anything" and it seems thats just whats happening at the moment - all these meetings, all this talking but where is the doing, the action.

Are they all hoping if they talk about it long enough, we will all forget and give up hoping for change and everything can just carry on as normal

A Trio of Abstract Thoughts ∞
Re: Perpetual Financial Scams

1. How can the economy be improving when so many people have been laid off or are working on reduced hours?!!

2. How can people live in a so called "civilised" countries when they can't even eat food without money?!!

3. Are people in the west crazy for living in slavery and fools for giving away practically all of their individual legal and human rights and freedoms to exploitative multi-national corporations and money lenders?!!

more out-sourcing with them fries sir ?

cull the workers replace them automatons

repossess houses for property rebuilders

scam - scam - scam - scam - scam - scam

fraud = fraud = fraud = fraud = fraud = fraud

'Funds flee Greece as Germany warns of "fatal" eurozone crisis'
https://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/7095818/Funds-flee-Greece-as-Germany-warns-of-fatal-eurozone-crisis.html

#30 diarmidwp. Yes indeed intelligence demands understanding and requires the interpreting of facts. It also requires the selection of relevant facts.

A Goldman tax rate of 1% would suggest certain difficulties in demonstrating long term tax raising ability. The deployment of anti terror legislation against Iceland would suggest certain problems with "global co-ordination"

So the US should "boost their trade balances and de-emphasise domestic demand" Note Buiter provides no clue as to how this should be achieved and does not mention that currently 1 in 50 children in the US are homeless and that 1 in 8 US citizens already rely in whole or in part on food stamps. All of which is pretty relevant in "de-emphasising domestic demand"

Buiter cautions against guaranteeing "ex post existing loans and incestments that have gone bad" and argues for the marking to market (or model) of contingent liabilities.

It is a matter of record that huge existing loans and investments are being effectively guaranteed. Thus RBS has a balance sheet roughly equivalent to UK GDP and JP Morgan has a derivatives portfolio of roughly 1.5 times global GDP. The law has been surreptitiously changed to specifically avoid the need to mark any of these assets to market. Therefore, and as a consequence of design, no-one knows how many of these assets may have gone bad.

How can the UK demonstrate it has the ability to raise tax revenues when the good times return. What does the UK do that will enable it to service the debts that it has accumulated? Aggregate taxes already sum to around 46% of GDP and there are documented problems with raising taxes much beyond this level. The population is carrying record personal debts, and vast amounts of money are being expended on useless wars. (It is estimated that it costs $1 million/per year/per soldier in Afghanistan)

Inequality of wealth is at historic highs. This has severe consequences for the velocity of money, which in turn has severee consequences for aggregate economic activity - all of which is well understood.

Another thought that has crossed my mind, and perhaps which many of these bankers are only just grabbing....is that there is far too much cash sloshing around the world to be safely invested in the West, and when banks can't invest safely, they start making up new financial products (dodgy), and inventing new property markets (dodgy), and over-pricing property and assets (dodgy).
Anything in fact, except good solid investments.
Even new inventions and research can be rewarding in the long run.
Instead of investing all this world-cash in high-quality manufacturing, big-demand manufacturing or sensibly priced assets, it all goes on pie-in-the-sky rubbish, which is good for a few years until the cover is blown, then falls apart.
The nasty problem in all this is that the PUBLIC are required to pay all this cash back to the rest of the world....not the banks....not the receivers of the funds.....but the public.
Without serious controls, the City of London therefore becomes a threat to everyone in the country.
In future they may have to say to the world......"sorry, we don't want your trillions, we haven't got enough here to invest it in".

Sigh... I'll Try Again Mods Gods
Over zealous moderation and
legislation has put me down

emancipation and liberation
ain't happening today
what happened to yesterday ?

Oh no -

- more outsourcing to cheap foreign countries
(I didn't mean the bbc moderation / sellouts)

- repossessing properties and assets by glorified overpaid box checking legal experts / administrators

- the above is a generic problem with the legal system worldwide in that it is more concerned about corporate finances than justice

- and there was another important (moderated) point but I can't remember it now...

btw what is the point of a blog if the mods cull comments

#42 freemarketanarchy. Probably a bit too early. Some bodge deal will be put together to rescue Greece. The big brick to fall is Spain. That is when it will get interesting.

30 diarmidwp:

Yes, an interesting article up to a point, but I cringe when elements of the equation are subject to gross estimates and caveats are presented about off-sheet hidden criteria. However sophisticated an assessment is, if it is based on guesses it remains a guess.

Further a key element in the proposition presented is the requirement for what effectively are multi-country intergovernmental swap policies. Only severe pressure from mutual adverse emprical data will move such process forward. In essence what is proposed is little more than dressing up the idea that balance points move uder dynamic pressure which we all know can happen. In essence then things have probably got to get worse before they get better.

The issue of public debt is only part of the problem, another significant stumbling block is that in a debt-fed consumer-driven economy(s) that both the provision of consumer debt and consumer appetite have been hit hard. This is compounded with the inevitable necessary reduction in gross consumerism behaviour and the the need to reverse the shortening product lifespan trend.

Personally I consider this consumer issue a bigger problem than the public debt issue because at the end of the day, however difficult and political the public debt issue is, professionals are involved in negociation and seeking a solution - Whereas the consumer is, as we have seen in recent history, both irrational in behaviour and ill-educated as to consequences (the latter deliberately imo).

The atmosphere at the consumer end is the one you would expect following what has been a deliberate financial terror campaign to force through bank rescue packages. This has been followed by the typical tribal rally around the tribal leader when the tribe is under threat and following promises of pending solutions. However short term results, unsurprisingly, are not forthcoming so a collapse in trust with the tribal leader follows. The processes in transit do not yield improvement fast enough to maintain confidence, as Obama is finding out in the US. Ultimately all rests with the consumer and the way they behave.

The banks behaviour in seeking to rapidly rebuild the bottom line (in a time frame which is substantially shorter than other mechanisms ijn process) is not helping (nor incidentally is the regulatory demand that capital ratios be improved). As major shareholder in banks HMG pressure should be brought to bear in the matter in the same way regulatory pressure should have been brought to bear - at the retail banking point of sale when the boom was underway.

IMHO too much HMG attention has been focused on a load of bankers and public debt, not enough on the processes going on with the consumer, but I am not surprised. The consquence will be a bumpy bottomed trough for some time. Nota Bene - the situation with the US consumer is probably worse, more traumatised. All begins and ends with the consumer.

46 arma

That would be - you can't make a spanish omlette without breakling eggs then. Loads of cheap half reformed, as the call it, property piling up.

#48 riverside - semi reformada is the phrase, but it aint cheap - Yet!

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The issue of bank bonuses could be resolved easily and swiftly by regulators stepping in and insisting on greater capital reserves. Some of the talk from central bankers has already indicated that capital reserves particularily for banks involved in the more riskier investment banking activities will need to be much much higher. So why the hell aren't regulators stepping in now to insist on profit retention to build up capital buffers, I just don't understand why this is not happening?!?

I saw this quote elsewhere (https://www.guardian.co.uk/business/2010/jan/27/davos-2010-barclays-bob-diamond-obama-banks%29:

Here is what FDR said when announcing the Second New Deal
October 31, 1936:

"For twelve years this Nation was afflicted with hear-nothing, see-nothing, do-nothing Government. The Nation looked to Government but the Government looked away. Nine mocking years with the golden calf and three long years of the scourge! Nine crazy years at the ticker and three long years in the breadlines! Nine mad years of mirage and three long years of despair! Powerful influences strive today to restore that kind of government with its doctrine that that Government is best which is most indifferent.

For nearly four years you have had an Administration which instead of twirling its thumbs has rolled up its sleeves. We will keep our sleeves rolled up.We had to struggle with the old enemies of peace--business and financial monopoly, speculation, reckless banking, class antagonism, sectionalism, war profiteering.They had begun to consider the Government of the United States as a mere appendage to their own affairs. We know now that Government by organized money is just as dangerous as Government by organized mob.

Never before in all our history have these forces been so united against one candidate as they stand today. They are unanimous in their hate for me--and I welcome their hatred. I should like to have it said of my first Administration that in it the forces of selfishness and of lust for power met their match. I should like to have it said of my second Administration that in it these forces met their master."

If only our politician (Darling et al) had the spines to stand up to the financial oligarchs/plutocrats..

Interesting post, Robert.

House prices rose by 1.2% in January which pushed up the annual increase in prices by 8.6%.

Here we go, here we go, here we go.......

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Am I alone in being reminded of Douglas Adams in the hitch hikers guide, where 'useful' trades such as hairdressers and bankers were put on the first space ship and started a society where leaves were the currency? There certainly appears to be a proliferation of hairdressers around here.
All hail DA prophet of the people ;)

Thinking of a master plan

War(s) boosts the economy..

Thanks again, Robert, for your insight.

They can only behave like that because the jellybellies permit it. So they'll share justly in the downfall.
I bet they're so blind they'll give themselves so much rope they'll hang themselves.
Justice is waiting just round the corner - especially for all who two-facedly condoned their behavior - and they'll rightly get caught in the downdraught !

It's going to be fascinating to see how it unfolds.

Britain's banks downgraded by Standard & Poor's -
This story is in The Guardian, The Independent, The Daily Telegraph,
The New York Times, Reuters, Sky & Bloomberg.
It is not mentioned on the BBC website.
Has it been on the BBC News ?

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"To which the other supremo made the point .... that banks are a regulated oligopoly and are not subject to "proper" competition: they are therefore able to pass on the costs of their people to customers..."

...(my words) because they know if they fail Governments will have to pick up the pieces i.e. moral hazard!

So aside from a better system of regulation and overview, we need a system that hurts those Bankers who act recklessly. They need to have their oligarchic bonuses seized to pay for bailing them out.

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Hold the fornt page---report shows , yawn!! that some bankers simply don't really get it!

Unfortunately for bankers, the good old, credit fuelled past is now 'another country' something everyone else realised a long time ago; and now we do things differently here.

But their divorce from the new world and its changed realities, is both literal, and almost clinical---and of course it's also profoundly self-serving. Which is why so many bankers only increase the negative feedback load almost every time they open their mouths.

However, this report also shows that some are finally groping towards a realisation that there is a world outside their bunker that has changed profoundly since they went into it and closed the door..... and they have to really begin changing what they do, because even Masters of the Universe aren't completely stupid... and society has plenty of resources to apply to modify abberrant behaviour by vampire squids when reasonable argument and proportionate measures are seen to fail.

Private thoughts, banker A talking to banker B;

A) Well I don't see why we have to go along with this, status quo is not an option, idea?
B) Only that they could force us to change...
A)How are they going to do that? Politicians always "blink" first. So, we do what we always do, crank up the stories in the media threatening voters with abject poverty, blaming the politicians for interfering in our industry etc.
B)Yep, wins every time...

Politicians being overly mindful of bankers is a sure sign that things have gone horrendously wrong? It's because politicians don't have to be very afraid of any other industrial group, because there isn't any other sizeable group that competes with banking! (Excluding the Public sector perhaps.)

If we're exclusively looking to banks to protect our future then that view is just too narrowly focussed, surely?

We have lost the ability to make things of value. This is where the emphasis should lay in the immediate future, not exclusively with banking. Banking has a part to play, but ONLY that, a part.

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Talking to some of my banking buddies they agree that public perception of bankers is poor. But so is theirs towards some of their banking colleagues and other institutions that jumped on the property bandwagon. The ones I have spoken to did not agree or follow this boom in housing and would rather the poor risk takers had been allowed to fail and not be bailed out by Governments. The ones who made money and are still making money, but were not involved in the house price bubble, should not be penalised. They have stated that the housing market was and still is overinflated. They will be paying the price for others poor investments and Governments collusion to encourage home ownership, consumer spending resulting in increased personal debt. They tell me that any recovery we see in the UK is not real and short term because of the massive borrowing. (Its amazing what people confide in you when they are in the Dentists chair.)

What is a hypercompetitive, notoriously aggressive, greedy sales-obsessed banker to do, when the industry he once dominated withers around him. Will he self-destruct? Or can he change with the times?

The next big thing is suing individual bloggers
"It's not in my character to let somebody get away with saying something about my brand name"

R.I.P. Old Dirty Banker
( After The Laughter )
Brilliantly talented yet misunderstood and terribly troubled.
Old Dirty Banker died too young.

"You'll see me again."
Those were the last words he said when I left him in the visiting rooms of the Correctional Facility

The bankes do not dare to shoot the goose that laid the golden egg or their system will be lost for a long time!

The national debt has and will increase to try and save us from these greedy people.If we stop spending we will bring them, other nations and ourselves down with no way back as the oil
and gas have long gone and we do not make much any more.

#66 Dillers

'is it safe ?'

#66 Dillers

R u the dentist from the film 'Marathon Man'?

This comment was removed because the moderators found it broke the house rules. Explain.

1) Apparently its not safe
2) I now do triathlons rather than marathons
3) Diamonds are a good bet at the moment

This comment was removed because the moderators found it broke the house rules. Explain.

#4. At 6:31pm on 28 Jan 2010, chris wrote:
Without names and these so called sources being verified it is difficult to take much notice of what has been written here.

Incredible, most of our "news" has been reported like this for the last 20 years, but only now & and only on this subject has it become a problem? All of the media-manipulated scandals & miscarriages of justice can be laid at the door of "unnamed official sources" lying to the public and journalists reporting it as unquestioned fact. Shame none of this journalistic rigour was applied to the de Menezes reportage, or countless other cases, in fact most of the tabloid news would be hard pushed to actually find an attributable quote in the paper. "An official source said..", "A police spokesman told us.." etc. All just gossip, quasi "official" gossip and sometimes complete fabrication intended to manipulate public outrage all unattributable and the media never taken to task

The banks will not reform voluntary, but will wait for draconian measures by the politicians, because they are in a classical prisoner's dilemma sitiuation: if you move first to voluntary reduce, and the others don't, you will loose your people to the competition before the politicians level the playing field with their measures. If on the other hand, everyone else reduces comp and you don't, you get all the high quality people and only later reduce comp to the level of the others. Hence, everyone maximises their relative competitiveness by doing nothing, although this will give the worst result in absolute terms (ie. draconian measures).

This will be embarrassing for Brown and Ally..... US economic growth hit 5.7% in the three months of 2009.

https://news.bbc.co.uk/1/hi/business/8487611.stm

10. At 7:54pm on 28 Jan 2010, Noideaatall wrote:
"It really will be the case, for us in the UK, of "if the financial system globally does not accept the reform that will enable the UK taxpayer to protect itself from the megabanks that happen to be on our soil i.e. in the City of London " then we must get rid of them and in due course accept that the City as a financial centre is over.

It will simply be a game with too high stakes for Joe Average UK taxpayer, and over time we will need to develop other economic strengths as a nation."

Little more than a pipe dream considering our "other economic strengths" have either been "outsourced" or "privatised into foreign ownership"

We are a nation of consumers, with the last of our prestigious "brand names" being sold off to foreign competition, slipping rapidly down the economic table to join the rest of the Third World "plenty of demand, but no cash"

#47 #30 #66 and others...

By pure chance I was able to watch Richard Wolff's film 'Capitalism Hits The Fan'.

He has a particular perspective.

In any event, in the film he makes the point that the average american consumer is maxed out.

After I watched the film and contemplated further, I found myself asking several questions

a) when is any government maxed out?
b) do we need the UK government to compete in a league table of GDP
c) to what extent does it matter if we are 7th or 10th or 20th in that league if one of the mechanisms for competing is increased government debt or indeed government spending fuelled by taxes
d) is increased spending by government acceptable if the average UK citizen is maxed out?
e) if it is, how should that spending be directed at the average citizen?

I ask these questions because if you use the GDP of various nations in the top 10 and assess government debt per head of population one picture emerges.

If you use total external debt, another picture emerges.

I feel sure that if one did calculations based on total personal and government debt another picture would emerge.

In any event, IMO, deficit spending should be assessed in the context of total debt - basically should governments consume more when consumers can't?

If you can find the film, its an interesting way to spend an hour whether you agree or not.

Just to get this off my chest, although whether it will be read this far down the page...

I'm a firm believer in the free market and still am even after the last two years. I don't believe that nationalising banks would do more than mess things up, much as nationalisation did back in the 60's and 70's.

The reason that an employee of a bank can be paid astronomical bonuses is that they earn even more than that for their bank, and so it is worth it to the bank because overall everyone's a winner - it's the same old reason why an entrepreneur gives up 50% of his new company to investors, he's getting a smaller slice but of a much bigger pie - a bank gives up a large slice of its p(ie)rofits to its top employees because overall the p(ie)rofits are much larger.

So, the way to reduce a bank employee's pay is to make the activity that they do generate less profit for the bank, which means that they are worth less to the banks and so cannot command such high bonuses. How do you do that? I believe that somehow it must become easier for new market participants to enter the banking field. For example, are there some investment banks in China? How easy would it be for them to start an operation in Europe of the US? Ditto India...

Only when new players can enter the banking world more easily will we see the sort of competition that exists in most other commercial markets.

28. AudenGrey:

A one world currency? Fiat no doubt, and debt based, naturally?

Brilliant. Imagine the fun the elite could have inflating that away to their heart's content. Look at the increase in the money supply since we came off the gold standard, and how every paper currency in history has been devalued away to extinction by the very people who are supposed to guarantee its stability.

They can't help themselves. Its simply too much fun driving with your foot on the accelerator. Imagine all that power concentrated in the hands of a few world central bankers. Imagine perfect synchronization of boom and bust. The heights of the booms they could create, dizzying and breath-taking, and the depths of the bust that inevitably follow.

Now imagine hyper-inflation, a common end to the paper currencies. Now picture it occurring, instead of one country at a time, like Zimbabwe or Wiemar Germany, but in every country, in every time zone, happening all at once, with no alternative currency to fall back on.


Global catastrophe.


Do you trust them not to be stupid enough not to do it?

It's the Friedmanesque way the world is now run. The banks (and their big corporate mates who are in league anyway) operate almost globally in an almost free market. They can move their operations and money where they choose. They run the world.

National governments, however, are constrained by their national boundaries and any hope of getting strategic agreement on how the banks can be controlled is a pipe-dream. Don't believe the naivety of politicians that banks and bankers can't simply move elsewhere. They can, and their top people are indeed doing so. The banks are after all viable commercial organisations and understandably resent parochial governmental interference which will only hamper their endeavours.

Banks have the means to control local economies, as politicians with their naive prattlings are beginning to understand. How can a bank build up a larger capital adequacy while lending more in a riskier market when we all know that everyone including small businesses need to be weaned off borrowing?

And why shouldn't they be allowed to decide what to pay their people, when? As said, if they overdo it and those people don't deliver, they'll go under.

"80. At 2:02pm on 29 Jan 2010, edge540 wrote:

I'm a firm believer in the free market and still am even after the last two years. I don't believe that nationalising banks would do more than mess things up, much as nationalisation did back in the 60's and 70's.

Only when new players can enter the banking world more easily will we see the sort of competition that exists in most other commercial markets."

We need proper competition in all markets, but especially banking / debt creation / currencies.

Commodity-backed money can run alongside paper money - let business and individuals choose which they prefer. Let rates float without manipulation. A genuine 'free market.'

81. At 2:03pm on 29 Jan 2010, warwick

You're right: this is where we are heading, unless we wake up to it.

This comment was removed because the moderators found it broke the house rules. Explain.

82. At 2:38pm on 29 Jan 2010, doctor bob wrote:

"And why shouldn't they be allowed to decide what to pay their people, when? As said, if they overdo it and those people don't deliver, they'll go under."

This is why people are mad - they weren't allowed to go under!

We've given these banks a guarantee - heads they win tails we lose!!!!


PS. Good article here from the Guardian's Nils Pratley

Volcker rules:

'Jeremy Grantham, founder of big US fund manager GMO, is one of the world's most influential investors – and also one of the slickest commentators on financial matters. His quarterly dispatches are always a treat.

The latest deserves to be read widely, especially in Davos, where many of the world's top bankers are campaigning against President Obama's plans to reform the banking system on the grounds that his Paul Volcker-inspired ideas are unworkable or don't address the real problems. Grantham makes two points. First, proprietary-desk trading – banks ­trading their own capital – ­creates an obvious conflict of interest. "Since when wasn't conflict of interest and poor ethical standards reason enough to change the law?" he asks.

Then he hits his stride: "But since we bring it up, of course prop ­trading was indeed the rot at the heart of our financial problems. Watching traders take home their $28m bonus sent a powerful message to lowly salesmen and packagers of asset-backed securities, for example, to get out there and really take some risk.

"This rot spread to the very top, and pretty soon chairmen of boards were exhorting CEOs to leverage up and look more like some much more profitable rival that resembled a hedge fund rather than an investment bank. Thus encouraged – or intimidated – some CEOs just kept on dancing right off the cliff. Let's learn from our near disaster. Viva ­Volcker!" Bravo.'

Deutsche's Mr Ackermann asked those present to vote for one of three propositions on what was most likely to transpire over the coming years in respect of how they reward staff.

The choice was between a) bankers don't change their ways, the fuss about bonuses dies down and there's no change to the way they pay their top people; b) they take steps to reform their practices and that placates politicians and the public; c) they do nothing and politicians force draconian changes to the way they pay.

After much contemplation, there were few votes for proposition a), and something of a dead heat between b) and c).

Not much surprise here. There is no advantage in options 1&2 because it would lead to a reduction in income for them. Its intresting that the bankers beleive that only the letter of the law will control there accesses.

More reason for nationalision of the banking industry purhaps!

@ 28 & 81

i'm the other way to you, AudenGrey. I think we should each create our own currency.

I wish the focus could be on the "Social usefulness of so much trading" If it could be shown - and I am sure it can. That hyperactive trading does nothing to increse the production of goods and services and the vast profits generated are paid for as ahidden expense of our savings and pension funds. Then we could close down most of the finance industry and put all those super clever people to work making goods and services.

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I can't believe you people! What they are really saying is that if you leave things as they are then fine we can live with that. If you change things then fine, just define those changes and as fast as you do we will curcumvent those changes. The only thing that is confussing us is that you talk about change but without defining it, we can not start on circumventing it.

Do you not realise that whatever you come up with, as fast as it written into law the smart guys are looking at how to get around it. You can never win.

can you define "meaningful "?

also anyone who takes notice of anything that S&P say after they designated everything AAA for a handsome fee when it turned out to be rubbish must be the same people who believe Obama will change anything in the US, it is in more debt than anyone but they must have a nicer S&P person to bribe.

does anyone know now just how much toxic crap the banks have set aside or we are insuring ?? time we found out, drew our money out and put them into banks that didnt sup at the rip off bar, and let the institutions fail and then existing and current staff who made the decisions and benefited, take their assets and jail them. Have a trace on the funny money that was used to bail the banks to see where the money ended up and take it back

just for starters

The Bankers just don't get it.. Now where have I heard that before ?

What they don't understand is , as worker bees, they are only able to flourish because someone else has built the infrastructure for them to play within, and onstructed over decades if not centurys. What they might of done is actually of destroyed the whole thing in a few short years of frenzied feeding . The Jury is still out.

What will they do ? They are all going off to switzerland to avoid paying their small share for the damage done to the rest of us. Our roads will not be repaired, our services will be underfunded and they are running away from their responsibilities. In which case we must tax their activities within europe , be that sitting in switzerland and buying and selling anything with a european base , company , stock share, person or service. Even put a supertax on airfares from siwtzerland, so they pay to come and see their poor old mum and dad.

They are not masters of the universe, they are in my experience, fairly bright but ordinary people , having gone thru a university, just overwhelmed by their own importance. They even come along and tell me how to run my business, but are unable to create their own . If they were, they would be doing it.


The best (worst) comment I ever had, was when my bank manager came to see me for my annual review , and I showed a lack of potential expansion as uninterested in getting to big , and he said to me with a snear, " you run a a lifestyle business"" in other words, you create enough money for your own lifestyle.

My thoughtfull and unspoken reply was... you Mr Bank Man would be so lucky to have my style of life in your subsidised over morgaged 3 bed house with 2.2 children and a car on HP and your 6 weeks of holiday . I have no debts and haven't had any for twenty years and there is nothing I want that I am unable to buy.

I have a sales of 40m usd per annum which creates more than he could ever imagine . I hate paying my tax, now quite a lot of money , but I take great pride in the fact the tax will buy hospitals and policemen and I can legitimately complain when government fail in delivering value for my money. I dont have so much pride, I enjoy the tax take, but there is a good side to taxation. The bad side is the extra ten percent I will have to pay next year is their fault, and their answer is we are off outta here to Zug.. It's nothing to do with us.


As for those bankers that steal millions from their shareholders, the day of reckoning will come.. nothing and no one including greedy bankers are safe from the snare of the market . They are overpaid for doing no more than betting on a role of the dice.

They are no more than parasites that came close to destroying all of our combined wealth in the entire world. So they could crack another bottle of champagne on a friday night as they compared their pay cheques to see who gets the most zero's . They are like kids, making comparisons, mine is bigger than yours (salary) thus demanding even bigger ones in a circle of comparison that makes no sense whatsoever.


They have shown themselves to be the dregs of society , A cleaning woman in their toilet can have more pride than they will ever be able to claim as she does an honest days work. Now they want to pay less tax than the poor toilet cleaner.


Hate them ? Yes ...


Bill

What if the new well in advance that the oil was running out,
and the government were conplicite,would not this triger a series of financial events, what if gmc already did the work on electric cars
getting all the copywrites in place ,and then destroying all the cars they made,waiting for [PRIME OIL ]figures to be confirmed ,first we had the oil wells,then we had the wells shut down due to prime oil,then we had technology and the old wells were opened up and were wrung out again ,
then we had the same thing with the rigs at sea they had to produce good figures or be shut down ,then we had the tech boys in to wring the most out of them ,as the oil was and is running out the govs were thinking
of oil at the poles/canada just about any where there is oil ,the rules have gone out of the window on this one.

petrol /diesel will be going through the roof ,big players will be churning out biodiesel/and variouse forms of fuel for petrol engines
untill the electric car in all of it guises is firmly on line.
but what happens to the entire industrie that mfg,s parts for the internal combustion engine , 10,s thousands will be put out of work.

So what are the latest figures for PRIME OIL ,and has the brown stuff started to hit the fan ?

This comment was removed because the moderators found it broke the house rules. Explain.

This comment was removed because the moderators found it broke the house rules. Explain.

Well,
maybe Sarkozy will eventually succeed to reign in the egregious ‘oligopoly’, and inspire others to follow suit. So in place of (1-3) we may see #4) Tobin tax on all financial speculations + income tax (up to 90%) on high-rollers.

81. At 2:03pm on 29 Jan 2010, warwick wrote:
28. AudenGrey:

A one world currency? Fiat no doubt, and debt based, naturally?

Brilliant. Imagine the fun the elite could have inflating that away to their heart's content. Look at the increase in the money supply since we came off the gold standard, and how every paper currency in history has been devalued away to extinction by the very people who are supposed to guarantee its stability.

They can't help themselves. Its simply too much fun driving with your foot on the accelerator. Imagine all that power concentrated in the hands of a few world central bankers. Imagine perfect synchronization of boom and bust. The heights of the booms they could create, dizzying and breath-taking, and the depths of the bust that inevitably follow.

Now imagine hyper-inflation, a common end to the paper currencies. Now picture it occurring, instead of one country at a time, like Zimbabwe or Wiemar Germany, but in every country, in every time zone, happening all at once, with no alternative currency to fall back on.


Global catastrophe.


Do you trust them not to be stupid enough not to do it?

=================
Funny you should say that, I guess the Euro zone is basically a small scale experiment along those lines. I await the outcome with interest. You might say I'm waiting to see if PIIGS might fly?

82. At 2:38pm on 29 Jan 2010, doctor bob wrote:
It's the Friedmanesque way the world is now run. The banks (and their big corporate mates who are in league anyway) operate almost globally in an almost free market. They can move their operations and money where they choose. They run the world.


===========

I'll believe that when they all move to China and try the same stunts with their economy

The choice was between
a) bankers don't change their ways, the fuss about bonuses dies down and there's no change to the way they pay their top people;
b) they take steps to reform their practices and that placates politicians and the public;
c) they do nothing and politicians force draconian changes to the way they pay.
I've just read an article in the Guardian (see below), a pretty shocking article. The shocking thing is, I'm just not shocked at all at the utter contempt and lack of morality. There is a lot more wrong with banks and the financial industry than mere bonuses. Change Mr Finance, the alleged wizard. Change you will, one way or the other. The lack of morality, of dignity means it will take laws. Lots of laws.
I want bankers and the finance industry regulated as heavily as the healtcare industry - and in addition to the tightest ethical constraints we've ever known.
WOTW
This is a must read for you.
Everyone of us should cry, cry in shame that we live in such a world. No doubt, we will hear claims of 'an unfortunate administrative error'. Aye, right!
woman whose husband...
https://www.guardian.co.uk/theguardian/2010/jan/30/michael-moore-capitalism-a-love-story. [Unsuitable/Broken URL removed by Moderator]

You say:
"Also there was an intriguing exchange between two of the most powerful
bankers in the world (whom I won't name to spare their blushes)."

Why don't you name these bankers? Surely we, the people, have a right to know who they are? They either made these comments, or they didn't. If they did we should know about it, because their comments and actions directly and indirectly affect all of us.