Basel lll: A missed opportunity?

Morning Robert,

You talk about conspiracy, when you say ... "So you may also be concerned that a conspiracy of bankers and investors has gulled the Basel Committee on Banking Supervision into producing a new rulebook for banks' capital, liquidity and risk assessments that represents a futile attempt to strengthen the existing system, rather than engaging in more radical and effective reform." ....
You haven't posed the real question and that is whether or not this conspiracy is made up of Reptilian Shapeshifters. I think this needs serious consideration. There is a significant chance that this is the case.
Personally, I think we have great banks who generate real wealth for the economy and the fact that the accord only requires 7%, which is already acheived, should aid that wealth creation further. We have the excellent Mervyn King overseeing all this and we are in the midst of an economic recovery, which this accord should help. Many reasons to be optimistic despite the dinosaurs from the TUC threatening to take us back to the dark ages.

Bankers agree to defend the status-quo ....

Who would have thunk it?

'So you may also be concerned that a conspiracy of bankers and investors has gulled the Basel Committee on Banking Supervision into producing a new rulebook for banks' capital, liquidity and risk assessments that represents a futile attempt to strengthen the existing system, rather than engaging in more radical and effective reform.

Is there evidence for this depressing view?'

Thank you Robert. I don't think I can add anything useful to your answer to your own question.

"Now if you believe that investors suffer from an endemic bullish bias, then you'll be concerned by their cheerfulness. It implies that shareholders in banks are still imprisoned by an ideology that some would say had been shown to be bankrupt by the great crash of 2008, namely that the premier measure of success for a bank is not whether it is rock solid but whether it is growing its balance sheet and dividends."

- Education is the key!

1. At 09:59am on 14 Sep 2010, Sam_From_Hendon wrote:
"Personally, I think we have great banks who generate real wealth for the economy "

- Yes, if you mean 'real wealth' is actually non-existent money and you class wealth as a debt propelled economy?

Don't apologize for keeping up this stream of Basel III commentary, Robert, it's excellent to have someone airing it

Interesting, isn't it, that the French and others who are perennially critical of supposedly lax 'Anglo-Saxon' financial methods, are now so keen to avoid tightening it up.

Dear Sir,
During the recent 20 years, there has been a sequence of booms and busts. Each boom has allowed some bankers and other entrepreneurs to make huge amounts of money. Each bust can bring pain, unhappiness, and social breakdown to those elsewhere on the monetary reward scale.
It comes as no surprise that a system that has permitted huge financial gains to be made based on actual assets of 2% allows for disaster. It comes as no surprise that a system allowing for securitisation of homeowners mortgages as a further product will lead to collapse. The BoE is the lender of last resort, meanwhile the bankers have been gambling, not banking, and the Gambling Act applies, not the FSA regulation.
Yours faithfully.

I think the very fact that this is called "Basel III" is a clear indication of failure.

I mean when will is stop - Basel XIV?

It's like a Rocky film series - should have stopped at II.

@ 6. At 11:11am on 14 Sep 2010, Tommy
and 7. At 11:28am on 14 Sep 2010, writingsonthewall

They're the skills that pay the bills!

I'm afraid I don't have anything useful to add. The above sums it up. Next blog please.

The problem is its taken 20 years for the banks to get to this current level of low Tier 1 . It was never going to be reversed overnight..

The concern I have is that the majority of banks are sitting on the fence in terms of lending to customers and organisations, due to the possible double dip as we address the bloated spending for the last 10 years. If companies can't grow due to lack of capital we could be stagnating at low growth for years.

Basel III? It does remind me of when the cardinals choose the new pope.
Everybody waiting for those plumes of white smoke. I suppose if that were to happen at basel it would be nothing more than an indication of a good lunch.

"It implies that shareholders in banks are still imprisoned by an ideology that...the premier measure of success for a bank is not whether it is rock solid but whether it is growing its balance sheet and dividends"

It terrifies me that such a senior financial journalist should have such a basic misunderstanding of financial capital structure. Why on earth in the context of Basel III would you choose to focus on the equity price of banks to determine whether the market perceives them to be more or less risky? Equity valuation is almost entirely driven by earnings momentum, so of course their shareholders are imprisoned by that ideology. Credit risk, on the other hand, is not. The regulatory capital changes are attempting to address tail risk in the system and, by construction, the banks' creditworthiness. The stock price is an arbiter of the excess cash-flows, and in this sense not particularly relevant.

Since so many people are prepared to pontificate on these issues without educating themselves on the basic differences between debt and equity (including politicians, treasury officials and, dare I say it, business editors of national broadcasters), is it any wonder that the new capital proposals are in many respects incoherent? It is not actually the greed of bankers (let's take that as a given) that has diluted the process, it is the infection of ill-informed, populist diatribe that is putting our system at risk now.

New World Order has obviously already been established.
Bruxelles tells us off about cucumbers, Basel tells us off about money lending.

Does London have a saying in anything at all?

"Banks will be permitted to lend and invest 33.33 (recurring) times their tier one capital, a measure which includes capital with inferior loss-absorbing quality than equity or core tier one. It allows banks to be prone to bankruptcy from a 3% fall in the value of their gross assets - which does not seem altogether prudent."
Where did they find these (moronic) people that make up the comittee??!!
Is it just me or does this quote typify the kind of insane world we have come to live in?
I'd like to know how much time, effort and (worst of all) money has been put into coming up with this ludicrous outcome?
Seems like a complete wasted effort and this was nothing more than just lip service.

Now if you believe that investors suffer from an endemic bullish bias, then you'll be concerned by their cheerfulness. It implies that shareholders in banks are still imprisoned by an ideology that some would say had been shown to be bankrupt by the great crash of 2008, namely that the premier measure of success for a bank is not whether it is rock solid but whether it is growing its balance sheet and dividends.

There are still people who beleive the earch is as flat as rich tea biscuit! What can I say!

That's the problem with ideology.

The evidence matters not one jot making them a danger to public safety and need to be locked up, Typhoid Mary style.

Why is it so hard to find out which financial institutions received what amount and percentage of the £250Bn bail outs from 'Quantative Easing' etc?
If it was your money (which it is) then wouldn't you want to know where it went?
It is suggested that there have been more than 120 bank crises since the 1970s.Isn't a capital ratio of 7% like building a platform in front of a large wave when nobody knows when or how large the next wave will be? Wouldn't it be better to have a more flexible, finer grained process with traceability rather than leaving it to a financial ratio or two?

It is my understanding that, in a debt based monetary system more money each year has to be created as debt to satisfy repayments and interest on the existing debt. Therefore to keep the system afloat the overall level of debt must increase, or defaults will rise, and banks fail.

However there is one constraint on the creation of debt based money that is outside the Basel III rules, namely the demand for it.

For the system to function as it should, the annual demand for new debt must at least equal the annual interest on the existing debt + any debt due for redemption.

What happens if the interest and redemption on existing debt is larger than the demand for new debt?

As far as I can see economists are supposing that the annual demand for new debt will at least equal the annual interest and redemption of existing debt.

If Governments, corporations and the public in general overall reduce their levels of debt,
in short we collectively endeavour to pay off more loans than we take out, (and this seems to be what is being advocated) how will the annual interest and redemption of existing debt be serviced?

Is it hoped that nations not currently over indebted, take out more debt to keep the system functioning? And what happens, if, due to their customs and attitudes to debt, they don’t?

Banking should be a dull steady job for dull steady people.

If it isn't then there is something wrong.

Maybe the shares reacted positively as the UK banks have a lot higher ratio than 7% at the moment. I think most are on or near 10%. Elsewhere in the world, some banks will have to raise new capital, but that is how the cookie crumbles when rules change.

1. At 09:59am on 14 Sep 2010, Sam_From_Hendon wrote:

"Personally, I think we have great banks who generate real wealth for the economy "

please can you clarify which 'we' we're talking about - the 'we' here in Britain, the 'we' in Geneva or the 'we' in Hendon?

I hate to blow everyone's trumpet but.....

"Inflation defied expectations of a fall in August and held steady at the level that last month forced the Bank of England to write a public letter to explain why prices are rising so fast."

"Analysts had predicted a drop to 2.9 percent but inflation has repeatedly surprised on the upside"

Defied expectations? - well only those idiots who have unfounded expectations. If the journalists had come here they would have heard last month how the expectation was for continued high inflation (something to do with BoE intervention or something)

Well done all - beaten the experts again (apart from those who claim this is a sign of recovery and not off monetary collapse)

https://uk.reuters.com/article/idUKTRE68D16520100914

Don't expect the idiots who led you into thie mess to lead you out - it's common sense!

What you have missed is this: shareholders in banks at low capitalisation ratios prefer risk. A bank becomes more valuable in the hands of an equity investor the lower the capitalisation ratio – this paradox is induced by limited liability. Limited liability offers the equity investor an implied call option on the bank’s underlying assets. The problem with any form of option is that it becomes more valuable the riskier the underlying assets. In a situation where the time value of the option dominates the underlying risk is seen as a benefit to the investor. If I own shares in GSK or RR for instance I do not wake in the night worrying about the risk of default. Limited liability protection is not relevant to my state of mind. However, if I had shares in RBS in October 2008 I would have been mightily reassured that I had limited liability. Limited liability is very valuable to me. Indeed on that date a further contraction of assets would have given me a zero payoff, but like the holder of a penny share the chance of recovery would be where my value laid. The two sided nature of risk means that when I can ignore the downside what matters is the potential upside. Messing about with the capital requirements of banks is quite pointless. What is needed is a fundamental reform of the right of investors to walk away from a failing bank.

Still waiting to hear from yesterday Robert
but this is good-

on the one hand..

"But it was clear from my conversations with central bankers and regulators that they were chilled to their bones by the idea that they might one day be accused of precipitating a second credit crunch as a result of their sanitizing zeal."

on the other hand

"Third item, the new rulebook is - if anything - even more opaque and impenetrable than the Basel ll rulebook. Which means that it will provide endless scope for the brightest banks and bankers to game and arbitrage the system, fomenting new mini and major asset bubbles all over the place."

Result? Banks easily manipulate 'smart' regulators to create the very thing they didn't want An ecology for meltdown (or lots of mini melt downs) and lots of profit taking

"The investors to whom I've spoken are simply relieved that most big banks already have enough capital to meet the new standard. Which means that few banks will be coming to shareholders for more capital and most won't be constrained in their plans either to restart dividend payments or increase dividends."

thats the attitude, roll on same old same old...

and anyway they have got eight years...

#16

If Governments, corporations and the public in general overall reduce their levels of debt, in short we collectively endeavour to pay off more loans than we take out, (and this seems to be what is being advocated) how will the annual interest and redemption of existing debt be serviced?

===============

From the excess of income over expenditure of course.

...and further to the post above....

Have you noticed how the meja always have a 'valid reason' for rising commodity prices. With Wheat it was the Russian fires, with cotton this morning I think they were blaming the floods in Pakistan.

...how odd - you see I said there were commodity wars approaching months ago (and I'm not the only one) - and since then we have befallen so many disasters which affect commodity prices it's almost....well unbelievable.

You see natural disasters occur every year - the difference this year is that all the money which was being speculated in treasuries and the stock market is looking for a new home - commodities.

You'll all find out how far the Capitalist is prepared to go in order to 'retain profits' when the price of bread goes over £2.50.

https://www.google.com/hostednews/ukpress/article/ALeqM5iCpYY9BEsMGEPKWk74528tL3-U4g

...isn't it funny how all these 'export bans' are appearing on the world stage - but it's not protectionism by any means....honest.
If the sheepole cannot afford to buy their 'colleen copies' in Primark anymore then I think even they will get the picture.

Basel is a side show - banks will need a lot more than 7% if they are to survive the next crisis - an international socio-political one.

No comment.

https://www.independent.co.uk/news/uk/crime/exmps-to-appeal-to-supreme-court-over-expenses-claims-2078835.html

11.

HAHAHAHA

I read that as humour - it was, wasn't it?

nothing personal, but the world is full of very smart people (bankers, politicians,'investors', big oil, etc etc..) doing very dumb things. Or, lets walk past the boarded up shops and houses and 'tell me it ain't so'

11. At 11:45am on 14 Sep 2010, microman99 wrote:

"Why on earth in the context of Basel III would you choose to focus on the equity price of banks to determine whether the market perceives them to be more or less risky?"

You have missed the point.

We know equity price is NOT a good indicator of the strength of the bank.

But bonuses are related to the equity price / balance sheet growth - thus nothing has changed.

The health of the bank is still secondary because it doesn't grow the bonus pot!

@15. At 11:50am on 14 Sep 2010, stew wrote:
"Why is it so hard to find out which financial institutions received what amount and percentage of the £250Bn bail outs from 'Quantative Easing' etc?
If it was your money (which it is) then wouldn't you want to know where it went?"
If it really were my money then yes, I would. However I think by its very nature QE is not my money at all: it's the banks' money, which has been loaned to the government, who in turn used it to... bail out the banks.
I don't know about anyone else but this strikes me as being both a wrong and totally absurd situation. If I were really cynical I'd wonder if the whole point of gifting that money to the government was to confuse the populace into believing the government was somehow "forced" to rescue the banks, rather than the banks simply buying themselves out of a crisis through money that shouldn't exist.

Do we seriously think this coallition is going to get us out of the hole we're in?

I mean the transport secretary doesn't even seem to understand the difference between road tax and car tax!

https://ipayroadtax.com/?p=481

"I have it on very good authority that a senior civil servant in the Department of Transport patiently explained the intricacies of roads funding to Mr Hammond when he was appointed to his role earlier this year. He was told that the term ‘cyclists don’t pay road tax’ is wrong on many levels."

They really are the bottom of the barrel - I mean isn't there some sort of basic intelligence test you need to take before becoming a minister?

Sorry to digress, but Basel III is hardly exciting (or worthwhile) - we all know that banks can't 'make money' without an economy - and we're not going to have one for a while....

Permitting 33:1 leverage within a failed industry which privatizes gains and socializes losses is a dumb idea.

History shows that the busts just keep getting bigger and bigger. Each pathetic debacle is quickly forgotten as the cabal moves on to the next money making wheeze.

Duh!

Dempster
Thanks for the link to the Nathan Rothbardy book.

I enjoyed the discussion on the money supply and the failure of authorities to be able to measure it in any meaningful way because of those clever devious little bankers who keep devising more and more financial intruments that may or may not or should or should not be included in the figures or the reserves.

Like you I think a return to the Gold Standard is impossible and I also think that alot of the aforementioned deviousness could be strangled at birth if the State took control of the money creation process.

16. At 11:50am on 14 Sep 2010, Dempster wrote:
It is my understanding that, in a debt based monetary system more money each year has to be created as debt to satisfy repayments and interest on the existing debt. Therefore to keep the system afloat the overall level of debt must increase, or defaults will rise, and banks fail.
.............
Thats my understanding as well. Thats why the government is always looking for "sustainable economic growth", in order to increase the level of borrowing to service the debt. However, as you appreciate, in a world of limited resources, such a aim is simply not sustainable.

20. At 12:10pm on 14 Sep 2010, writingsonthewall wrote:
I hate to blow everyone's trumpet but.....

"Inflation defied expectations of a fall in August and held steady at the level that last month forced the Bank of England to write a public letter to explain why prices are rising so fast."

"Analysts had predicted a drop to 2.9 percent but inflation has repeatedly surprised on the upside"

Defied expectations? - well only those idiots who have unfounded expectations. If the journalists had come here they would have heard last month how the expectation was for continued high inflation (something to do with BoE intervention or something)
............
As most commodities seem to be priced in dollars, and the American economy is on a knife edge, I believe that the prospect of hyper-inflation of the dollar, is getting very close. I think everyone is holding on to their dollars to see who dumps them first, but once someone does, its game over, and welcome to Weimar II.

11. At 11:45am on 14 Sep 2010, microman99 wrote:
Why on earth in the context of Basel III would you choose to focus on the equity price of banks to determine whether the market perceives them to be more or less risky?

Err Because it may explain the shareprice rise today and yesterday after the news from Basel.

Love your last line though

24. At 12:20pm on 14 Sep 2010, writingsonthewall wrote:
...and further to the post above....

...how odd - you see I said there were commodity wars approaching months ago (and I'm not the only one) - and since then we have befallen so many disasters which affect commodity prices it's almost....well unbelievable.

...isn't it funny how all these 'export bans' are appearing on the world stage - but it's not protectionism by any means....honest.
If the sheepole cannot afford to buy their 'colleen copies' in Primark anymore then I think even they will get the picture.

Basel is a side show - banks will need a lot more than 7% if they are to survive the next crisis - an international socio-political one.
====================

very perceptive post WOW
if people think a bad winter is coming they fill the keep with grain, or if they are planning war they buy materials, and so on, so there is pragmatic positioning, and there is greed, and these days over all is greed.
not at all nice.

...they've even made a video about it....

https://www.youtube.com/watch?v=X9Fyj2GMxgo

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

https://www.bbc.co.uk/news/business-11293187
Youve got to hand it to the french, they're only increasing the pension age to 62 and they are all out on strike. I wonder what will happen when the real austerity measures are announced. We must learn from their example.

11. At 11:45am on 14 Sep 2010, microman99 wrote:

"It is not actually the greed of bankers (let's take that as a given) that has diluted the process, it is the infection of ill-informed, populist diatribe that is putting our system at risk now."

Oh so we've blamed the Communists, the Economists (not that real people listen to them anyway), we've blamed the foreigners, the rampant increasing population (that's blaming everybody), we've blamed the poor and the needy for borrowing, the meja and the 'interfering Government' - so is there actually anyone left in the world for bankers to blame?

They do seem to have serious responsibility issues in the giant glass towers in which they reside.

You state it's diatribe, but exactly what is diatribe?

This part maybe?
"Why on earth in the context of Basel III would you choose to focus on the equity price of banks to determine whether the market perceives them to be more or less risky? Equity valuation is almost entirely driven by earnings momentum"

So you will buy shares in a company which has earnings potential but might not see out the year as solvent?

I think (as many others do) that if a company looks like it's going down, then equity will be sold off as fast as bonds.....or did you think the dramatic fall in Northern Rock's share price was driven by the mass sell off sparked by an 'earnings warning'?

Why does everyone who starts (or ends) with "journalists simply don't understand about finance" - then immediately demonstrate that they know absolutely nothing about human instict - which after all is what finance is built on - or did you think it was 'mathematical'?

Come on, we could all do with a good laugh

Move on Pesto!

This story stopped being about the banks the moment governments chose to bail them out instead of nationalising them.

Rules are there to be examined and manipulated for thier profit as far as banks are concerned (e.g. higher margin on BOE interest rates v rates we pay because of this move) which will be one angle for them....

They know its a win win for them..if they get in to trouble the tax payer will come charging over the brow of the hill to save them at the last minute... unless of course he can not anymore because they they are effectively bankrupt.....

Please do keep up Robert.......

33. At 12:47pm on 14 Sep 2010, Averagejoe wrote:

"As most commodities seem to be priced in dollars, and the American economy is on a knife edge, I believe that the prospect of hyper-inflation of the dollar, is getting very close. I think everyone is holding on to their dollars to see who dumps them first, but once someone does, its game over, and welcome to Weimar II"

Basel III, Wiemar II, Crisis MXIV - are we on bailout IV? - I can't keep track.
Luckily this blog keeps me well informed about what's going on in the real world (and I mean the bits after Roberts piece - that's just an ice breaker)

....sorry Robert, didn't mean to hurt your feelings x x x x

Robert et al: you might be interested in the Swiss response to Basel III.

https://www.swissinfo.ch/eng/specials/finance_crisis/Banks_await_Swiss_finish_to_Basel_III_rules.html?cid=28318884

This is taken from the English language website of Swissinfo, the nearest equivalent to the BBC that we have here

@writingsonthewall

This is a response to an earlier blog.

""(I imagine you consider yourself rather cleverer than average - I guess that's why you work in finance...)"

Being cleverer than average bares no correlation to where I work"

I never said you were. I said you 'consider yourself' - which judging by your response, you clearly do.

And there is definitely a correlation between academic intelligence (which is I guess what we're measuring here) and chosen occupation.

7. At 11:28am on 14 Sep 2010, writingsonthewall wrote:
I think the very fact that this is called "Basel III" is a clear indication of failure.

I mean when will is stop - Basel XIV?

It's like a Rocky film series - should have stopped at II.

==========================

Nice line. Sadly part of the problem was Basel II and III is not really addressing it.

A little history is relevant here

Basel I was in place for some time. It was a bit simple ranking borrowers according to what they were (1st world countries, 3rd world countries, companies, individuals) and assigning capital weighting accordingly. It took no real account of actual ability to pay but its lack of sophistication meant everyone understood it.

Basel II decided (and rightly so) that bank capital should allocated to loans based on the likely risk of default. But Basel II contained a critical error - it allowed the banks themselves to develop the risk models on which capital allocation was based. Banks, not unsurprisingly, tended to be a little optimistic about risk and crucially did not understand all the risks they were running.

To compound Basel II, accountants changed accounting rules so that all loans written by banks had to be marked to market value irrespective of whether the bank intended to sell the loan on or hold it to maturity. The inevitable result was that banks ended up trading a much larger proportion of their loan books (after all if you are going to hung either way)

Basel III does not deal with the critical issue. Banks should not be responsible for credit at risk models. These should be developed independently. Of course there is a big risk that the independent developers would get it wrong but if the development was done in a transparant way we would all get an opportunity to suggest improvements. I have no doubt that an independent model might well be less sophisticated than the bank's own model but sometimes a little simplicity results in a more robust system

35. At 12:48pm on 14 Sep 2010, 24law wrote:
very perceptive post WOW
if people think a bad winter is coming they fill the keep with grain, or if they are planning war they buy materials

Barack Obama to authorise record $60bn Saudi arms sale
https://www.guardian.co.uk/world/2010/sep/13/us-saudi-arabia-arms-deal

Be careful out there! Nasty. Outlook:Poor annd worsening.

The IMF said there may be a link between rising inequality within Western economies and deflating demand.
https://www.telegraph.co.uk/finance/financetopics/financialcrisis/8000561/IMF-fears-social-explosion-from-world-jobs-crisis.html

UK solution? Let make massive spending cuts and worry about public debt even though we don't understand it.

Give me a gin

# 29 Do we seriously think this coallition is going to get us out of the hole we're in?


Absolutely spot on. We should give Labour a chance. They would never have got us into a mess like this would they? Oh, hang on........

They've been in power for less than 6 months, I think you should possibly give them a couple of years before you pass judgement, at least until we're through the doube dip. No bleating in the middle of the downturn please, its inevitable and necessary (see next para).

Personally, it wasn't until 1998 that I felt able to declare categorically that Tony and GB were going to lead us into economic disaster - I certainly didn't seize on one of Prezza's earliest pronouncements as "evidence".

.....oh why we're on the subject of blame - these anarchists have a lot to answer for...

https://abclocal.go.com/kabc/video?id=7659578

....oh and the communists....

https://www.youtube.com/watch?v=2RTHmPgKv7M

Don't worry Hendonites - you're quite safe from riots in LA - that's a very long way away...

(Sorry) RP but the whole essence of the your argument that agreement between the Banks and Basel is indicative that those "conspiring" bankers have "gulled" the Basel Committee is nonsence. One of the fundemental purposes of the commitee is to promote co-operation.
You seem to be implying that bankers should be ignored (other than to give a good kick in as one of your regular bloggers may say) and a set of rules, without the power of international law, be dictated to them.
This type of regulation would not take place in any other form of business life, consider how you would feel that as a result of recent intrusions into peoples private lifes, a set of rules relating to what can be reported, what level of emotive language can be used and full disclosure of who is "a sourse" was imposed on journalists and the very fact you had a comment to make means it should be ignored.

no 20 WOTW
Defied expectations? - well only those idiots who have unfounded expectations"
- how do you have the front to write this nonsense after your own predictions of hyperinflation.

Very interesting post Robert. But considering the speed at which things evolve, I'm ready to bet Basel III will be dumped as inadequate before anyone begins to think about a preliminary meeting to decide when to plan a meeting to decide on a date for a study of implementation. I don't see the next bubble in 60 years. Actually, two years after Lehman's demise I don't really see what has changed (more debt, perhaps).

38. At 12:59pm on 14 Sep 2010, Averagejoe wrote:

"https://www.bbc.co.uk/news/business-11293187
Youve got to hand it to the french, they're only increasing the pension age to 62 and they are all out on strike. I wonder what will happen when the real austerity measures are announced. We must learn from their example."

Very true - I went to France earlier this year and found it functioning perfectly well (much to my surprise).

I spoke to a bi-lingual Frenchman (yes, they do exists) about my surprise and he leaned forward to me and whispered "Shhh, nobody's told the people about the cuts in France yet"

It seems the cat is out of the bag - you wait until all the fishermen and farmers get wind of cuts - oh there will be a lot of trouble ahead - and unlike in the UK, strikers are supported by the majority of people. Now that's solidarity for you - which is why the French don't have to be taxed in order to support a royal family!

Freedom, in Britain - really? Well why do we still have a royal family when the majority of people are against them? - and more importantly why are we taking cuts when they are still funded by taxpayers?

(...and don't give me any wish wash about 'producing tourism for the country' - the tourists come to see the buildings, or the guards changing - they never get to see the royals!)

Lets start dismantling the state - it no longer serves the purpose for which it was designed.

WOTW:

I have read many of your posts with interest. Sometimes I agree, sometimes I don't. But at this point I must violently disagree.

ROCKY 3 (with Mr T) is easily as good as RockyII. They should only have stopped after RockyIV IMHO.

45. At 1:31pm on 14 Sep 2010, copperDolomite wrote:
Barack Obama to authorise record $60bn Saudi arms sale

Gotta do something with them dollars.
I wonder how that machinery will be put to use

44. At 1:21pm on 14 Sep 2010, Justin150 wrote:

'Banks, not unsurprisingly, tended to be a little optimistic about risk and crucially did not understand all the risks they were running....

...The inevitable result was that banks ended up trading a much larger proportion of their loan books...'

_____________________________________________________________

Justin, you almost make them sound innocent.

Bankers gave out loans to anyone and everyone then sold the toxic loans on ASAP telling big fate porkies about AAA status...

Remember Goldman bet against the CDOs they were peddling.

46. At 1:44pm on 14 Sep 2010, Alesha Soba

Not read 'The Globalizer Who Came In From the Cold'?
https://www.gregpalast.com/the-globalizer-who-came-in-from-the-cold/

The bit at the end about the Middle Ages just about sums it up.

Same old same old.

47. At 1:46pm on 14 Sep 2010, a_sensible_comment wrote:

Who said labour would be any better?

All three main parties are neoliberal.

Neoliberal ideology is the problem.

43. At 1:20pm on 14 Sep 2010, marky_makry wrote:

"I never said you were. I said you 'consider yourself' - which judging by your response, you clearly do."

Well you're making me look very clever at the moment.

"And there is definitely a correlation between academic intelligence (which is I guess what we're measuring here) and chosen occupation."

Ha, ha, ha, ha, ha - so the ability to regurgitate facts (academic intelligence) and chosen occupation have a correlation? Clearly you're one of the misguided souls who think we live in a meritocracy - well can you explain the successive 'idiot' prime ministers we've had (any in the last 30 years, I'm not fussy) - surely the highest job in the land requires the 'best intelligence'?

...so why is it so many bright academics are unemployed?...and how did I get my job (as I have no degree) - and yet I have a long line of MBA 'academics' requesting my help on a daily basis (although at this moment in time they're CFA's)

Oh you have a lot to learn - but not in the way you're thinking.

46. At 1:44pm on 14 Sep 2010, Alesha Soba wrote:

"Give me a gin"

Now, now, Alesha, let's not give in to the demon drink. We need to be awake and sober for the battle - let the politicans get drunk on their own stupidity and we'll "fly right in my hawkmen".

Bwoohrhahrhahahahahahah

So Robert
Are you saying that Ba111les has no cohones?

47. At 1:46pm on 14 Sep 2010, a_sensible_comment wrote:

"Absolutely spot on. We should give Labour a chance. They would never have got us into a mess like this would they? Oh, hang on........"

Why do you assume that my point about the coalition means I want to have the inflationists back? That's their game of 'musical Neo-liberal' - not mine.

"They've been in power for less than 6 months, I think you should possibly give them a couple of years before you pass judgement, at least until we're through the doube dip. No bleating in the middle of the downturn please, its inevitable and necessary (see next para)."

I've got a bet to win, it won't last a year - there's a big £10 riding on it and I am merely following my own self interest. Besides, why will this set of Neo-liberals be any more competent than the last?
If you say "Neo-liberal, Neo-liberal, Neo-liberal" quickly it sound like "wibble, wibble, wibble" - which is about the sum of it.

"Personally, it wasn't until 1998 that I felt able to declare categorically that Tony and GB were going to lead us into economic disaster - I certainly didn't seize on one of Prezza's earliest pronouncements as "evidence"."

Congratulations - now for a bonus - can you tell us all which Neo-liberals we'll vote in after these Neo-liberals?

I don't think it will last a year, there are already Lib Dems who are feeling a little unsure about the destruction of the state by the Tories.

It all comes down to how much Nick Clegg wants power - because this is his only shot - after this - his party is finished I'm afraid.
Once you deal with the devil, you're burned with the mark of hell. I've never met so many 'angry liberals' (now there's a parody) since the election was 'won' in May.

never mind, when it breaks down we'll all be back at the polls to put some more X's in boxes - sadly we will have run out of Neo-liberal choices by then and will have to pick the Nazi's or the Communists (that's if voting's still allowed)

No attempt to push for a seperate tier 1 on investment banks then? That is the sort of bank that should attract the 12% limit. And still no mention of the other big problem: the massive overhang of personal debt. Until this particular 'elephant' is shot there will always be a danger of Great Recession II never mind Basel III. No-one, to my mind, should be allowed more than one credit card and mortgages should relate to income, not property value. That was the way it used to be. And it worked, there may have been property value inflation but not a monstrous bubble.
Regards, etc.

49. At 1:54pm on 14 Sep 2010, Kudospeter wrote:

"no 20 WOTW
Defied expectations? - well only those idiots who have unfounded expectations"
- how do you have the front to write this nonsense after your own predictions of hyperinflation. "

???? - you've got me there - I don't understand your point. Do you mean because I said Hyperinflation was one of the 2 possible disasters to befall us....and that it hasn't arrived yet, that I am somehow similar to those who think this will all blow over quietly?

Well this is a free market, if you don't like my predictions you can go elsewhere for them.

The fact is that there will be either catastrophic inflation or catastrophic deflation - anyone who tells you differently probably works for the treasury.
I don't personally care which one (and nor do most people) - because it will all be bad for us. However anyone who is surprised that after pumping the Economy full of QE that inflation would be 'sticky' is clearly a complete moron.

....in any case, inflation is a Government approved figure based on a 'basket of goods' chosen by the same Government.

Real food inflation is running much higher...

https://www.telegraph.co.uk/finance/personalfinance/investing/7955733/10-ways-to-profit-from-food-inflation.html

...but who needs food eh? - it's CD's and LCD TV's we need to survivie right?

...oh and someone wake up those over extended landlords from Hendon and tell them to fling their properties onto the market now - low rates can't last forever!
https://www.thisismoney.co.uk/news/article.html?in_article_id=512668&in_page_id=2&expand=true

52. At 2:21pm on 14 Sep 2010, Dale_Lemma wrote:

"I have read many of your posts with interest. Sometimes I agree, sometimes I don't. But at this point I must violently disagree.

ROCKY 3 (with Mr T) is easily as good as RockyII. They should only have stopped after RockyIV IMHO."

No - I can't have that, I don't want to be accused of bullying but you're WRONG. Rocky IV was awful, and worst of all Apollo Creed dies.

I suggest you take that back.

Face facts, you can't beat the 'run up the steps in Philladelphia'.

"This is the only Rocky film (rockyIV) in which Rocky does not run up or appear on the steps of the Philadelphia Museum of Art, known as the Rocky Steps, but the moment is mirrored in this film when Rocky reaches the top of a mountain and puts his arms up."

I don't even count it as a Rocky film.

Will Basel III fix this?

https://www.bbc.co.uk/news/business-11298300

What about Rocky VII - will that resolve these banking problems?

May as well give it a try, I mean we've failed with every other fix in the last 100 years.

I bet the Afghans love us, used to have a dependable, reliable crop based Economy without western music (imagine, no wailing Girls Aloud) - now we've taught them how to have bank crises and Government bailouts - oh and we've massacred a few of them and put a puppet in power - who isn't even elected...oh and destroyed their crop to boot.

We must be viewed as the 'Frank spencers' of world politics.

55. At 2:41pm on 14 Sep 2010, copperDolomite

Oh Great. Thanks Copper. Thats really cheered me up NOT.

Better make it a double

55. At 2:41pm on 14 Sep 2010, copperDolomite wrote:
Now read 'The Globalizer Who Came In From the Cold'?
https://www.gregpalast.com/the-globalizer-who-came-in-from-the-cold/


It beggars belief doesn't it.

"Ha, ha, ha, ha, ha - so the ability to regurgitate facts (academic intelligence) and chosen occupation have a correlation? Clearly you're one of the misguided souls who think we live in a meritocracy"

What gave you that idea. You made a claim - "Being cleverer than average bares no correlation to where [one] work[s]". I explained that this is wrong.

While we're on the topic, the ability to "regurgitate facts" is not regarded by pedagogical theory as requiring that much Ac Int. It is a low order skill. People with high levels of Ac Int do things like analysis and sysnthesis. These are much more difficult. Those who excel at them GENERALLY will be found in better paid, more respected jobs and careers. Hence, the correlation.

" - well can you explain the successive 'idiot' prime ministers we've had (any in the last 30 years, I'm not fussy) - surely the highest job in the land requires the 'best intelligence'?"

I never said there was perfect correlation. In case you didn't you know, correlation can range from -1 to 1. Not trying to be patronising, it is just that your response seemed to missed the point rather by assuming that I meant perfect (positive) correlation (the case where it equals 1).

"...so why is it so many bright academics are unemployed?...and how did I get my job (as I have no degree) - and yet I have a long line of MBA 'academics' requesting my help on a daily basis (although at this moment in time they're CFA's)"

You don't NEED academic qualification to have academic intelligence. Also, god forbid someone with an MBA should ever need help with anything. I don't know what you do, but the analogy I'd use is that of a junior doctor knowing less than a nurse with experience. If it's an unfair comparison I'm sorry, but it seems you have put too much credibility into too little data - your own personal experience.

So, if bank A issues some new shares that are bought by Bank B (let's call it investing some of the customers' deposits) and the same is done vice-versa: would the ratio of equity capital rise for both banks??

Surely it can't be that simple, can it?

>"And there is definitely a correlation between academic intelligence
>(which is I guess what we're measuring here) and chosen occupation."

>Ha, ha, ha, ha, ha - so the ability to regurgitate facts (academic >intelligence) and chosen occupation have a correlation? Clearly you're >one of the misguided souls who think we live in a meritocracy - well >can you explain the successive 'idiot' prime ministers we've had (any >in the last 30 years, I'm not fussy) - surely the highest job in the >land requires the 'best intelligence'?

Blanket statements are often a bit pants. But of course there are positive correlations. For example, I have found empyrical evidence of correlation between certain degrees and GPs, Dentists, Civil Engineers etc. Likewise the absence of a degree is more likely in (say) the fish factory I worked in during summer holidays than (say) in Civil Service Fast Stream jobs.

Am I saying that the system works, no I am not expressing an opinion on that. But to say there is currently no correlation is surely fallacious.

On a separate note, the ability to "regurgitate facts" is pretty useful in some professions. I mean, look at "House".

#57 Leechonthewall wrote:

“...so why is it so many bright academics are unemployed?...and how did I get my job (as I have no degree) - and yet I have a long line of MBA 'academics' requesting my help on a daily basis (although at this moment in time they're CFA's)”

Poor Leechonthewall, dinnerlady is indeed a demanding job, poor you…ah ah ah

Basel lll: A missed opportunity?
Yep.
They are still treating the symptom not the cause.
There will be no improvement until the banks are forced to pay a high basic wage and make the payment of bonuses uneconomic. The risk takers will then head off to pastures new and leave the organisations that are too big to fail to darkness and to me.
Dream on.

Hmmmm.

US student loan debt?
https://www.thenation.com/blog/154638/major-student-loan-mistakes-and-ways-avoid-making-them

We'll have some of that then!

WOTW:

This is serious, the allegory of Rocky vs Drago and USA vs USSR ranks amongst the greatest of human artistic acheivements. It helped to bring down the Iron Curtain and cure the world of the Cold War.

Yes it hurts when Creed dies, but Micky was already dead and there were hardly any other characters to kill off for crucial motivation. Would you rather they killed Adrian?

Sure I love the Rocky steps, but the power of Rocky's training in the wilderness, all alone, is certainly powerful. It also neatly avoids overexposure to the Rocky steps, which would turn them into a cliche.

At least we both agree that Rocky V was balls.

The primary change in banking has been to develop a bonus system that benefits staff and not necessarily the depositors. Until the bank boards of directors go back to a salary system the staff will always figure out a way to bend the rules to their own benefit. As we have seen the cause of the current crisis was the bonus system and how it could be manipulated by the staff to their own benefit even if the results would be a world wide financial collapse. This one change would do more for prevention of a future melt-down than any other action that could be taken. Will not happen, but should. Incentive based contracts always lead to corruption.

https://www.bbc.co.uk/news/business-11296790

Don't be alarmed, this is merely your pension scheme

The FSP schemes of the executives are well protected. It wasn't until I worked in the industry that I discovered that Executives often have a different scheme to that of ordinary workers within the same company.

Funny that - you would have thought "we're all in this together" - I guess not then.

Never mind chaps - back to work - we've got an executives pension to fund.....

Right I'm going into rehab for a few days to ponder the following:

I've got the private debt + public debt = the money supply - 3% bit
We all blame private banking. Fine. Greedy nasty people

I agree the state should control money creation but I'm not convinced on the argument (if there is one) for debt free money in the private sector because the money supply has to be controlled but obviously at a price that eliminates the said bankers slice.

Govt spending can and should however be debt free because they don't actually need to borrrow the stuff in the first place to spend it.

The Govt therefore needs to control private banking through a state bank and operate it for the good of both savers and borrowers (business and personal)

The Govt also needs to spend in both the public and private sector to encourage successful businesses to produce goods and services for consumption and export and also to look after the social and defence needs of the country.

The state bank and the politicians would need to watched closely. Personally I'd give WOTW the job but I'm 99% certain he would either not take it or he would resort to physical violence at the earliest opportunity.

I'm sure its not that simple but If I don't have a logical starting point, I'll carry on going round in circles.

This truthseeking is hard work.

Laters

• 58. At 2:48pm on 14 Sep 2010, writingsonthewall wrote:
46. At 1:44pm on 14 Sep 2010, Alesha Soba wrote:

’Now, now, Alesha, let's not give in to the demon drink. We need to be awake and sober for the battle - let the politicans get drunk on their own stupidity and we'll "fly right in my hawkmen".

Bwoohrhahrhahahahahahah’

I know we haven’t seen him since shortly after the election but do you think ‘Gordon’s alive!'

65. At 3:32pm on 14 Sep 2010, Alesha Soba wrote:

Sorry but sometimes it is better to know thy enemy.... then you know how to organise a defensive plan.

UK inflation: why discuss it? We've devalued the pound by more than 15 % (and for a few months of importing by more than that) and we import most of what we consume. Therefore, inflation is inevitable.

Even if BoE increased interest rates to something sensible tomorrow and the pound recovered to Euro 1.4 tomorrow, we still have a mass of stock paid for at a less favourable rate.

66. At 3:41pm on 14 Sep 2010, Dempster wrote:
It beggars belief doesn't it.

That is what I find so dangerous and frightening. It is belief.

11. At 11:45am on 14 Sep 2010, microman99 wrote:

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

Actually you are ill-informed. Luckily for RP's reputation, I am a Risk Analyst and provide some support to his argument.

"Why on earth in the context of Basel III would you choose to focus on the equity price of banks to determine whether the market perceives them to be more or less risky? Equity valuation is almost entirely driven by earnings momentum, so of course their shareholders are imprisoned by that ideology."

Please explain to me why the share price of Northern Rock collapsed when the market found out how risky their business model was? Equity owners actually carry the greatest credit risk. Do you not account for this in your investments? When the liabilities of a company exceeds its assets, its equity in theory is worthless. How is this not credit risk? Credit risk isn't simply identifying who may or may not repay a bond, its about understanding how the company makes it money and what may break the company's model, its very similar to equity analysis.

"Equity valuation is almost entirely driven by earnings momentum, so of course their shareholders are imprisoned by that ideology. Credit risk, on the other hand, is not"

You talk about earnings momentum, but isn't it earnings that pay the coupon and principal on bonds. If earnings diminsh, then whether you are an equity holder or a bond holder you are both in trouble. Only difference is, one is in more trouble than the other.

"The regulatory capital changes are attempting to address tail risk in the system and, by construction, the banks' creditworthiness. The stock price is an arbiter of the excess cash-flows, and in this sense not particularly relevant."

Whilst a higher percentage of capital means the bank is better prepared to insulate against a loss, it isn't necessarily the best indicator for creditworthiness. A higher amount of capital could be equally consumed as a lower amount if the loss event was big enough. As per RP's article, a 3% drop in asset value on the banks balance sheet may render it insolvent and last time I checked a 3% drop in asset values was hardly a tail event.

"Since so many people are prepared to pontificate on these issues without educating themselves on the basic differences between debt and equity (including politicians, treasury officials and, dare I say it, business editors of national broadcasters), is it any wonder that the new capital proposals are in many respects incoherent? It is not actually the greed of bankers (let's take that as a given) that has diluted the process, it is the infection of ill-informed, populist diatribe that is putting our system at risk now."

Please educate yourself on banking before issuing charges against others. Some of us who comment on here work within the system, only difference to us and the spivs is that we know the system is corrupt and needs to be fixed. The others who post on here have far too much common sense and intelligence to let bankers continue to pull the wool over their eyes.

Why don't we all stop kidding ourselves?

Isn't it time to scrub the United Nations and replace it with the United Banks?

After all, they're the people who are really running the planet, not the national Governments.

1/ The Banks who have a greater Tier 1 than required will now begin to reduce it to the specified figure ; and , release the capital for more gain or what some might call the ' casino operation '.

2/ Inflation is still high and the BOE is failing in its fundamental task given to it in 1997 with independence to set the rates . They should NOT dabble with GROWTH because that is the job of the UK government ........ " too many cooks ....... " come to mind and NO ONE takes responsibility.
Thank you .

> banks should endeavour to build up their ratios to
> around 12% when the good economic times return (if
> they ever return).

Don't worry about that - they good times will return the instant we show the greedy London bankers the door. Those leeches have been bleeding the country dry for years, and we’re calling time on their antiquated working practices and inefficient methods.

76. At 4:26pm on 14 Sep 2010, Alesha Soba wrote:

The state bank and the politicians would need to watched closely. Personally I'd give WOTW the job but I'm 99% certain he would either not take it or he would resort to physical violence at the earliest opportunity.

Sometimes a good kick up the backside to help fools on the way out of the door is what is needed!

The cheering crowd will pay for tickets and give great applause...


True story:
I heard of one guy who let rip at the office supervisor/nutter a few weeks ago - he just swore loudly, told him about reality etc.

The entire staff in the large office stood up, applauded and cheered.
What I'd have paid to be a fly on that wall!

Methinks the workers of Middle England have had enough of kow towing to the fools!

WOTW no 62 ???? - you've got me there - I don't understand your point. Do you mean because I said Hyperinflation was one of the 2 possible disasters to befall us....and that it hasn't arrived yet, that I am somehow similar to those who think this will all blow over quietly?

your exact phrase was "Wheelbarrows at the ready folkes - Hyperinflation here we come"

Sounds like a prediction to me Teehee

67. At 3:46pm on 14 Sep 2010, marky_makry wrote:

"What gave you that idea. You made a claim - "Being cleverer than average bares no correlation to where [one] work[s]". I explained that this is wrong."

...but left it vague enough not to specify which jobs and which level of intelligence.

"While we're on the topic, the ability to "regurgitate facts" is not regarded by pedagogical theory as requiring that much Ac Int. It is a low order skill. People with high levels of Ac Int do things like analysis and sysnthesis."

That's odd - as my job is analysis.

"These are much more difficult. Those who excel at them GENERALLY will be found in better paid, more respected jobs and careers. Hence, the correlation."

mmmmm - don't know if that's a compliment or a detraction - but then I don't really care - brain the size of a planet and all that...

"I never said there was perfect correlation."

..an imperfect theory? - in the bin with it then.

"In case you didn't you know, correlation can range from -1 to 1. Not trying to be patronising, it is just that your response seemed to missed the point rather by assuming that I meant perfect (positive) correlation (the case where it equals 1)."

OK

"You don't NEED academic qualification to have academic intelligence. Also, god forbid someone with an MBA should ever need help with anything. I don't know what you do, but the analogy I'd use is that of a junior doctor knowing less than a nurse with experience. If it's an unfair comparison I'm sorry, but it seems you have put too much credibility into too little data - your own personal experience."

Where's Jaded Jean when you need them.

I'm so thick I've forgotten what this conversation was about to begin with. Someone pass me that crack pipe!

70. At 3:56pm on 14 Sep 2010, darksurfer wrote:

"#57 Leechonthewall wrote:

Poor Leechonthewall, dinnerlady is indeed a demanding job, poor you…ah ah ah"

Now that's intelligence - do tell us how much effort you put into thinking up that name for me - an hour? 2 maybe?

I think you have issues - let it go - I'm not worth it.

Shouldn't you be rejoicing in the glory of the recovery by now?

Hmm, but what about the gradual removal of Post War Social Security ?

Will there be free forelock tugging lessons in State schools ?

And why, despite the obvious flaws and corruption present in the American Banking Model is it still being used by British and European Banks.

The securitisation of Loans and Mortgages for onward sale is fraught with problems.

Loans should stay on the Books of the Lender, that is the only way to keep the lenders behaving responsibly.

Of course, the Investment banks won't make commissions that way.

Levying a Five percent stamp duty on all purchases of securities would help reduce these problems and raise funds for the treasury.

Closing the tax loopholes would probably make a big difference.

Raising the higher rate of Income tax, and raising Inheritance tax would also help.

Instead they will, hum and haa about new banking rules that will not address the fundamental problem of poor lending decisions made purely for commission.

And the Gov't will reduce or remove the Social Security safety net (NHS, Pensions, benefits) instead in order to protect their friends and relatives working in the City.

I wonder what Jobs the MPs hope for on their retirements from Public Office ? Something nice in an American Investment Bank perhaps ?

1. At 09:59am on 14 Sep 2010, Sam_From_Hendon wrote:
Morning Robert,

"You haven't posed the real question and that is whether or not this conspiracy is made up of Reptilian Shapeshifters...[We have]Many reasons to be optimistic despite the dinosaurs from the TUC threatening to take us back to the dark ages."

Are you suggesting that the TUC are the Reptilian Shapeshifters? Fortunately, Merv will protect us with his ninja monkeys who are also zombies.

Long may the banks continue to create wealth.The alternative is a world where we have to make our own cars! I don't even have to lower myself to drive mine!

73. At 4:07pm on 14 Sep 2010, Dale_Lemma

We will have to disagree on this one - I cannot accept a Rocky film which doesn't have him running up steps being chased by a thousand enthusiatic (and paid) extras.

Now watch this - and tell me you don't start tingling all over.

https://www.youtube.com/watch?v=UMKtdn2k1_0&feature=related

81. At 4:53pm on 14 Sep 2010, RiskAnalyst

Go risk analyst, Go, go, go!

https://www.youtube.com/watch?v=UMKtdn2k1_0&feature=related

#79, WolfiePeters:

" . . . and we import most of what we consume. "

Fear not - WOTW informs me that the UK doesn't need to import anything.

He's even offered to clarify it: "You name one item you think we have to import and I will demonstrate how it's not required. "

25. At 12:22pm on 14 Sep 2010, writingsonthewall wrote:
No comment.

https://www.independent.co.uk/news/uk/crime/exmps-to-appeal-to-supreme-court-over-expenses-claims-2078835.html


Perhaps parliamentarians charged with abusing their expenses have a point about the Bill of Rights. Maybe it would be better if they were tried by their peers. But they should be careful what they wish for. Parliament, as a court, would not be constrained by tariff limits or other niceties. It is a sovereign body, and may hand out such penalties as it wishes, including expropriation and imprisonment.

80. At 4:47pm on 14 Sep 2010, copperDolomite wrote:
66. At 3:41pm on 14 Sep 2010, Dempster wrote:
It beggars belief doesn't it.
================

How about this horror of the darkside Robert?

https://www.gregpalast.com/the-globalizer-who-came-in-from-the-cold/

Surely it couldn't be true... and it was years ago...

Maybe in here, or of course commodities, is your missing headline.

The banks will never change until they are subject to the same competitive market forces that other industries have to contend with. Currently the banks are not fearful of the customer because they know that people typically do not bother to change banks. Its currently too time consuming and obstructive to bother for just a 0.5% extra interest per annum on their savings (think of all the direct debits you will have to transfer; the banks certainly dont help you to do this).

Banks know this and so milk their existing customers to feed their fat wallets. Noticed that all banks adverts focus on customer services rather than rates? Yeah, thats just what people really need; a van with a couple of frumpy women popping by to your village to give 'savings advice'. Its a con people. Its designed to keep you whilst giving you a rubbish deal.

If people changed banks as often as they changed supermarkets then rates for borrowing would come down over night and interest on savings would go up. Where would the money for this come from? Well the jet set crew that run the banks thats where. They would have to lower wages to compete with the next bank. This is the sort of thing that happens in every other industry. And if it happens across the world then the fat cats have no where to run.

Dont wait for the politicians to pull their finger out folks. YOU can make a difference right now. Just swap your banks often and gve them a reason to fear you. And the government can help by making this easier.

Bert. x

#64 "I bet the Afghans love us, used to have a dependable, reliable crop based Economy without western music (imagine, no wailing Girls Aloud) "

Yep, it was a great crop - so good that most of it was exported to the western world after it had been harvested and refined. Although the middlemen made a greater profit on it than the farmers who had little choice about what else they grew.

And yes, no Girls Aloud - girls were rarely able to open their mouths. let alone sing.

And they were free to worship whatever they wanted, free to move about the country, free to do blow up world heritage statues.

Wow. what a great place that must have been....

Zombie Ninja Monkeys ! How inspired ! That can be concept number forty eight.

"Long may the banks continue to create wealth" L from hendon.

The Banks used to make money for their Shareholders (Pension Funds etc).
Now they have decided to make money for their staff as Bonuses and their friends through unusual deals, such as Goldman and Paulson.

If Banks returned to making reasonable profits for their Shareholders, and more ethical behaviour towards the public in general, I think a lot of the criticisms might go away.

89. At 5:25pm on 14 Sep 2010, supercalmdown wrote:
Hmm, but what about the gradual removal of Post War Social Security ?

Will there be free forelock tugging lessons in State schools ?

What State Schools?
You don't think Gove is leaving that alone do you?
He's got all his ideas from the US so look out for the re-branded Charter schools and 'new teaching materials' suppliers - and this is what it will look like -

https://www.youtube.com/watch?v=YXsi76rBDNU
From 4:30 minutes in

You can read more about it if you look at how the New Orleans school system was 'repaired'.

"mmmmm - don't know if that's a compliment or a detraction"

Neither. I don't know you.

"..an imperfect theory? - in the bin with it then."

Not a theory. Correlation is a statistical measure based on empirical data. All I did was state that which is observed. No theory. No attempt to link things or explain why. Just a statement of fact.

"Where's Jaded Jean when you need them.

I'm so thick I've forgotten what this conversation was about to begin with. Someone pass me that crack pipe!"

This statement has nothing to do with what you pasted above it in your post. Why bother pasting a chunk of what I wrote if you're not going to respond to anything written in it.

Also, I don't know who Jaded Jean is.