How the banks hope to help small businesses

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1. £1.5bn is a drop in the ocean. This "growth fund" needs to be investing at least £10bn over 5 years to make a real difference. In any event it's been previously announced that the real idea behind the fund is to ensure companies are properly capitalised so that they represent a minimum risk for lending. It's called having your cake and eating it twice.

2. If the banks don't also fund a real venture fund then there will be a further fall in the company birth rate and we can't afford that.

Sounds great, let's see it in action however before we can pass judgement.

It's worth remembering that 98% of businesses are SMEs and employ ~60%% of the workforce. However 95% of the businesses in the UK employ less than 5 people, and are classsed as micro businesses. There isn't much assistance here.

We're a micro business, and this month alone I've secured about 30% of my last year's turnover in export sales. However, this leaves me with a cash flow problem, as I can't afford to buy all the bits due to the size of the orders. My bank manager informally says, don't bother applying for a short term loan, because based on last years accounts ( a bad year , remember?) head office won't approve it. This is despite the largest order going to a Hungarian State financed institution ( the others are to France, China and the US).

So it's begging bowl out to relatives and friends, who are frankly getting bored of me asking them. Alternatively of course, I could just refuse the orders?

So let's see help for all sizes of business; how about putting back bank managers into branches, and giving them lending discression?

RP wrote:

"It's the Business Growth Fund which is the most eye-catching proposal. This will be a brand new institution which aims to make equity investments in businesses with a turnover between £10m and £100m."

£10m - £100m turnover?? What a laugh!! How to direct money to the already rich more like...

We need equity investments in start-ups and micro businesses, not already bloated mega-corps.

On the other hand there is the PwC report that predicts a million private and public sector jobs lost over the next four years. It will be working capital and cash flow relief that SME's will be tapping the banks up for not new investment.
Why do the banks need to take a 10% stake in businesses rather than just provide a loan on fair commercial terms. They are not exactly rushing into this - when is next spring May 2011. This is window dressing and a subtle part of pressurising the government for more support and less being on their backs.

Speaking as the Financial Manager of a company on the precipice of £10m annual turnover I can assure you that borrowing is still a very tough process and that without property equity in the UK as security, the banks just aren't interested.

It's pretty difficult to find enough equity when property prices are so low and so the vicious circle continues. It's just a microcosm of the whole economy and despite all these soundbites and promises I'm very pessimistic.

It would be churlish not to see an extra £1.5 billion investment as a "good thing". But if they're buying equity it's hardly generous.

Meanwhile, let's wait and see how many billions are taken out of the demand side of the equation. A propos of which, can anyone tell me whether the oft quoted figure of £82 billion cuts (or so) is an annual figure or a cumulative figure over the period to 2014?

Thanks

All fine words, but I'll believe it when I see it. My small business has just seen its £5k overdraft withdrawn by Lloyds with no warning, and after assurances that it would be renewed. Compounding the problem is that fact that it's almost impossible to talk to someone who knows what's going on. Phone calls are referred to our account manager, who is perpetually unavailable. Is there actually any business bank with good customer service? I'd really love to know.

The business growth fund is a good idea but the messages are still mixed.

On the one hand the banks say that nobody wants to borrow and on the other companies say that no one is willing to lend.
The banks need to raise capital which companies think precludes them from offering lower cost finance but the banks need to lend at a realistic prices which includes the possibility of the loans not being repaid which is perceived to be higher.

Confidence in the other side is low and so business between the two is also low.

Credit Crunch II (the return) will occur simply because no-one trusts the financial system anymore, the risks in the system seem to outweigh the benefits and this looks like a self-tightening loop.

If it has taken 3 years from Crunch to Crunch II then it will only take 1.5 years until Crunch III as everyone knows about diminishing returns on sequels.

Hopefully by the time Crunch IV comes around we will have weaned ourselves off the current financial franchise and it will be irrelevant.

The business growth fund is probably too little too late, the tide is already on its way out and it does seem to be going out a bit further than usual.

This is an interesting proposition. I understand that credit drives the economy, that the banks have addressed the widespread conception that smaller businesses have felt harshly treated by banks and this is a potential growth area for the UK eonomy.
What I am supsicious of is the way eevrthing depends on the vagaries of bond markets (which like other markets do not behave rationally when left to their own devices.) Too much of it seems psychological - we hear constantly about how the markets "feel" about the outlook for the economy and how this effects whether we move forward or backward with regards to economic growth.
This all sounds a little too familiar and I fail to see how yet more credit providing the basis for economic growth is actually a stable or dependable model. The government appears to be passing decisions on what shape the economy will take to institutions which have far from a spotless record when it comes to looking at the bigger picture (i.e. fueling the housing bubble).
The German economy seems to be more strategic. They are willing to look at the overall picture. Which business sectors would these new banking organisations be willing to back? Will the government have any influence over the decisions they make?

> there remains a serious risk that we'll soon be hit by Credit
> Crunch 2 ... the Treasury is painfully aware that if asset-backed
> bond markets don't perk up a good deal more in the coming
> few months, it will have to keep the banks on financial
> life support for a good deal longer than it would want.

We have made painfully little progress making those banks
too small to give a hoot about. They are still a threat, even
now.

When will we start to disempower these spooky, bloated organizations?
They need to be true servants of the people, which requires a total
culture change.

Surprise , surprise the banks still need our help .

The banks have completely out witted the government/ regulators

1. The banks have passed over the most toxic loans to the general public.
2. Any bad loans the banks have now been off set against taxable income.
3. Banking has never been so profitable with mortgage margins at 2% -3% (£3000 a year for every £100,000 mortgage to move money from one pot to another ??)
4. Bank bonuses back to where they were pre crunch.

The only way out of this is get rid of them in all but basic banking requirements, it may cost 5% GDP but in the long run it will be the best thing for the average joe public, the politicians are simply not up to the task of managing these spivs...

I have said it before - Banks are the Only business.

Here we see them realising that their property companies. The ones that ended up being owned, lock stock, by the Banks. Crest Nicholson and McCarthy Stone have a worthless business model unless the property market goes up. Inflates.
What better way to do this than feed some money into the lower echelons?
They know that any money created will get back to them via their companies.

And they look good in the process.
Clever bankers.

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

Robert,

"But there remains a serious risk that we'll soon be hit by Credit Crunch 2."

Is credit crunch 1 over?

When did that happen?

"Credit where it's due. Britain's biggest banks appear to have made a serious effort to respond to the concerns that they are not providing enough financial support to small and medium size businesses."

Robert - have you been reading the PR releases from banks again?
Do I have to tell you again - the banks will say anything to get out of their responsibilities - I mean we own this one and it still thinks it's OK to 'rip off customers' with worthless PPI.

https://www.telegraph.co.uk/finance/personalfinance/insurance/incomeprotection/8059528/Lloyds-snubs-FSA-as-it-puts-PPI-claims-on-hold.html

"The proposals fall into three broad categories:"

1) Another useless appeals process for small businesses which should help them waste just enough time that they will be bankrupt by the time their appeal is heard.
2) A new collateralised debt instrument
3) More data collection (which can be lost on a train) - and still nowehere near the better method of LOCAL BANK MANAGER WHO KNOWS WHAT HE'S DOING!

I can't believe you sucker Journalists fall for this everytime. Tell us Robert how many times did the following appear in this report?

"Working together"
"Stable lending environment"
"Responsible lender"
"Encouraging Entrepenuerism"
"Stimulating Growth"
"Working hand in hand with.."
"Protecting Capital ratios and regulatory requirements"
etc.

If I had a penny for everytime I've seen one of these BS filled reports then I would be running my own bank by now.

The FACT of the matter is that BANKS DON'T WANT TO LEND TO SMALL BUSINESSES - for the same reason most people don't want to - we're in a depression and small businesses are most at risk - because larger corporations can weather the storm better and are less likely to be swallowed up by a rival.

Banks ARE SCARED TO LEND - which is why they have upped their lending criteria - don't believe me? - look what they did to mortgages...

https://www.housepricecrash.co.uk/graphs-mortgage-approvals.php

They CLAIM this is because of a lack of demand, but the desire to own a house is just as keen as it was in 2007 - IT'S THE BANKS WHO HAVE CHANGED.

It's the same for small businesses - and as the French aptly demonstrated with previous methods of protectionism - you can be fairly inventive when you're trying to prevent the movement of goods or capital without showing that you are.
Extra forms, more scrutiny, a longer lending process - all of which add to the delay in the loan and there are a good number of potential customers who will simply give up - go elsewhere - or literally give up their business. In addition to this the banks can offer all the money they like - if it's offered at a rate far greater than the current savings rate then small businesses will struggle to justify such a loan (no matter how desperate they are)

I still can't believe an experienced journalist like you is lapping this cobblers up - believe me, if the banks could lend, they would - their greed would ensure that - you want to concentrate on what they're hiding from us all - a much better story I think.

They hope it will make something like £1.5bn of investments over a number of years


There was a time when a figure and statement like that would have been impressive from the banks...............

No longer , its a tiny amount , and hardly worth mentioning alongside the amounts tax payers are funding the banks by daily.

Without loans and debt the system will grind to a halt in no time at all.

The big difference between the pre and post WW2 periods is the availability of credit/loans for people who want to get ahead.

The system can be abused by morons but the overall trend has been an increased standard of living because the vast majority of people are responsible where money is concerned.

1. At 10:18am on 13 Oct 2010, the_fatcat wrote:

> Now look at these: $144bn bonuses to Wall Street

I know - bankers are crazed with fear and greed. It's going to be
hard to crush their culture, but we have no choice - they declared war
on Britain and we can't afford more appeasement.

It's time to break them up. All of them.

I don't think forcing banks to lend to business is a priority. An absolutely solid foundation is. There are lots of companies out there which are a result of the credit boom which has completely distorted our society. The tightening of credit is a natural and good mechanism to return to when you had to really think hard as a businessperson, investor, and customer rather than having cheap money thrust in your face and customers willing to buy anything which even the most naive are starting to realise was completely insane. I am a small business owner who funded my business by saving when everything was being done to discourage saving by inducing the asset bubble to delay the recession we should have had about 10 years ago. When people tell you there are perfectly sound businesses out there that can ONLY succeed if the banks are forced to lend like the last decade they are almost certainly lying. There are other ways - hell, get in touch if you think you have because I'll invest.

Our bank want to 'restructure' our finance, however if they do, then they remove our overdraft facility, which is our cashflow saviour at the moment.....we are a micro business, there are 2 of us. If we don't have the overdraft facility, we can't buy the quantity of stockls we have to bring from abroad; if we have no stock we can't sell it obviously, so no money to service their 'restructuring'; £10m seems like a lottery win to us, not a turnover, but as others have said, the larger companies are supported and eventually go bankrupt for millions, whilst the micro businesses with a 10k debt are forced to close - something wrong somewhere I think.

Fatcat: a £10m turnover company manufacturing something will almost certainly be employing less than 50 people. That makes it a small company not a bloated mega corp. Even a £20m turnover company will be one typically employing less than 100 people

However, I do agree that the size range for companies needing assistance on finance is wrong. £60-100m turnover companies should not need that help. I am more concerned about companies turning over £1m-10m which have severe difficulties getting finance. It should not be necessary for directors to put their houses on the line to obtain invoice discounting finances, but all too often that is what is being asked for.

This article reads like a press release from the Business Finance Taskforce. Where is the insightful critique?
It seems it is up to the regulars here to pull it apart.

We've heard this slick type of spiel before already. Once bitten twice shy don't ask why.
It's like Merrill Lynch enticing lucky customers to MBS securities or junk bonds before the market tonks or mortgage brokers dishing out sub-prime loans on industrial levels.

When Markets are poor bear, the Banks Sales Teams cold-call customers telling them how much they can help if they invest their money with them.

'Good Customer relationships' are another marketing angle for manipulation with hype lip-talk when in reality it is only in Banks self interests to boost up numbers during their down time.

Platitudes...

Lending money to businesses that look likely to fail in an harsh economic environment is an idea that is just as flawed as lending to the housing market bubble.

In the end, it is our money and wasting it does not make economic sense...

11. At 10:41am on 13 Oct 2010, Jacques Cartier wrote:
When will we start to disempower these spooky, bloated organizations?
They need to be true servants of the people, which requires a total
culture change.
-------------------------------------------------------

When King Philip IV of France found himself heavily in debt to the Templars (who ran an early form of banking) from his war with the English, he had them discredited and then burnt at the stake.
When will our government learn.

@ 10. At 10:39am on 13 Oct 2010, i wrote:

> What I am supsicious of is the way eevrthing depends on the vagaries of
> bond markets ... Too much of it seems psychological

That's right. It's driven by atavistic bankers, who are half crazed by fear and greed.

Look, we now need to put the outmoded practices of 19th century goldsmiths firmly behind us. That means we must engineer and control the money system for ourselves, taking it right out of the hands of those who have failed so abysmally to administer it in a reliable way, i.e. the bankers.

@ 18. At 11:01am on 13 Oct 2010, ady wrote:

> The big difference between the pre and post WW2 periods is the
> availability of credit/loans for people who want to get ahead.

If everybody wants to get "ahead", then nobody can be "ahead" of
anybody else! Greed is the whole problem.

Brilliant article provided by the fat_cat confirms my suspicions. Our credit based economy is illusory.
The link provided explains perfectly how a credit based economy disables the consumers ability to keep up with cyclically increased rent and interest charges to the point where the economy periodically overheats beacause there are no consumers left. The Ponzi pyraid of credit upon credit upon credit - or in this case bonds fueling banks who then provide credit to business leads to businesses who cannot make a profit. A similar process is currently occuring at Liverpool football Club. In the end compund interest is so high thats its cumulative manifestion cannot be supported by economic growth - resulting in the collapse of the interlinked global economy. This means that businesses don't invest and grow from profitability and like us all become dependent on banks whose function is to bleed the true economy (Making things) dry resulting in boom and bust economics. In short, the banking sector acts as a gigantic parasite and undermines capitalism itself leading, periodically, to a collapse of the system which results in the further parasitism of requiring governmenst and tax payers to bail them out.
In this light how is it remotely responsible to pass over key decisions on future investment to the very institutions which threaten it most and do most to undermine it? I don't think credit is due to the banks for the simple reason that their self-interest will ultimtely undermine any gains made by real industry. We serve the banks, the banks don't serve us. Like any predator, it becomes a victim of its own success and the 'prey' of real businesses (capital flows of any kind) and individuals run out resulting in a flatlined economy (like Japan). Money being used to 'make' money does not count as real productivity - its just creaming capital of the truly productive sector of the economy until it kills it and in the process kills itself. This is what the banks have done and the upshot is that we have resuscitated them so they can do it again.
In this light why are we handing over key decisions and processes which will aid the mythical "recovery" that the media are constantly droning on about to institutions who will inevitably bleed more and more from the system. The banks control us and credit, by its very nature kills its host. Growth should be based on profit but instead, like premiership football teams, business find that simple profit isn't enough and everyone gets conned into cheating by using borrowed money to steal a lead in a game in which everyone loses eventually.

If we don't control banks they will control us and collapse once more. As Peter says, Credit Crunch II.

19. At 11:02am on 13 Oct 2010, Jacques Cartier wrote:

"I know - bankers are crazed with fear and greed. It's going to be
hard to crush their culture, but we have no choice - they declared war
on Britain and we can't afford more appeasement."

...they declared war and now they have a 'taskforce' - time to take the battle to the streets.

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

Golf Clubs should be doing well in this recession....
TAXing the many to enrich the few....
Bankers and the City are the winners....Everyone else loosers.
And the party continues for the pinstripes.
But will this solve this recession in the UK.??
Meritocracy is no more.
This is the land of the priveledged few.
I'm afraid that I must girn about these pestilences.

here is a good example of the banks investing in sound busienss ideas! small busines owners read it and weep-

from rte.ie today -

HBOS 'LOST MILLIONS ON US CASINO' - The Guardian reports that Lloyds Banking Group, which is partly owned by the UK taxpayer, has lost more than $500m (£317m) on loans to M Resort Spa Casino in Las Vegas - the second massive financial hit the bank has taken in America in as many months.

19. At 11:02am on 13 Oct 2010, Jacques Cartier wrote:
1. At 10:18am on 13 Oct 2010, the_fatcat wrote:

> Now look at these: $144bn bonuses to Wall Street
=================
It now says 91bn INCLUDING SALARIES up 4% on last year.
Has it been changed since you read it?

Apologies for just repeating what has been said before, but as AquaLung pionts out the amount touted is neglegible, before even considering how much of it is actually available and sensibly directed.
And as WOTW & bother Jacques and others say, where's the journalism and interrogation? This is just spin and pure cronyism.
Really, really disappointing stuff

23. At 11:25am on 13 Oct 2010, Kit Green wrote:

"This article reads like a press release from the Business Finance Taskforce. Where is the insightful critique?
It seems it is up to the regulars here to pull it apart."

- True - but according to Andrew Marr we're simply 'angry spotty teenagers' - but it seems clear to me we're filling the void left by weak journalists who take their 'stories' from the ticker output from the corporations PR department.

https://blogs.telegraph.co.uk/culture/lukeslewis/100047933/andrew-marr-thinks-bloggers-are-anti-social-geeks-the-reality-is-quite-the-opposite/

We have a classic example here where the 'story' is regurgitated PR nonsense about lending - but the reality is (as many SME owners have testified on here) that banks are withdrawing overdrafts or making the rate so painful it's not viable.
I don't rely on the testimony here either - every SME owner I have met in the last 3 years has had the same complaint - at the time when they're struggling - the banks pulled the rug (what do they say about banks only lending umbrellas when it's fine weather?)

Well fellow 'citizen journalists' - if the moderators actually let this through and stop protecting snobby journalists we shall see who is better at analysis - because it seems to me more people knew the collapse was coming outside of the world of journalism - than those within it.

The truth is the 'recovery plan' is to simply provide enough BS to convince everyone to start spending money they don't have (again) - but I think the British consumer is a little more sensible than that - and the only people who will fall for it are already bankrupts in waiting. It's our job to ensure that this doesn't happen because it will only store up an even greater problem in the future.

" But there remains a serious risk that we'll soon be hit by Credit Crunch 2."
I would say its a certainty.

"But the Treasury is painfully aware that if asset-backed bond markets don't perk up a good deal more in the coming few months, it will have to keep the banks on financial life support for a good deal longer than it would want."
How many bailouts does it take before the masses realise we are being taken for a ride by bankers who have bankrupted the country. It must be brought to an end, and investors should suffer the losses not the public sector services, and those who did not do any wrong.

I do genuinely hope that something can be done to help smaller businesses.

On the other hand the amount being taken out of the economy by the attack on the public sector is likely to overwhelm any of this. Just today we have ....

PWC - 1 million people, 1/2 in the private sector, to lose their jobs directly from the cuts

Nationwide - consumer confidence down

Unemployment - 3 months to August continue downward trend, September claimant figure is UP

Even if the smaller businesses are not funded directly by goverment contracts, I would still not fancy their prospects for growth when the economy is being pushed back into recession.

1. At 10:18am on 13 Oct 2010, the_fatcat wrote:

(https://michael-hudson.com/2010/07/from-marx-to-goldman-sachs-the-fictions-of-fictitious-capital1/%29

"Marx described how periodic financial crises were caused by the tendency of debts to grow exponentially, without regard for growth in productive powers."

i.e. - Overproduction fuelled by debt issuance and causing a credit contraction (crunch)

Excellent article.

The banks can say all they like about helping small business - truth on the ground is that they aren't. I own and run a business with 750k turnover - we've recently had part of our overdraft converted into a loan. Doubtless this now appears on the banks records as a new loan to a small business! There was no benefit to us in the conversion and only benefited our, so called, relationship managers figure.

At a high level these proposals sound and look good - in the real world they are meaningless. Our bank is less than helpful in pretty much every respect.

We approached them to finance half of the purchase of a new company- we were financing the other half ourselves - the request was turned down on the basis of our own poor profit performance over the past few years. The addition of the new business woudl do wonders for our own cash flow and profitability as we woudl have none of their costs.

Where small business is concerned banks remain focussed on repairing their own balance sheest and are not bothered about anything else.

....and banks are a productive necessity because????

"Industrial capital makes profits by spending money to employ labor to produce commodities to sell at a markup, a process he summarized by the formula M-C-M’. Money (M) is invested to produce commodities (C) that sell for yet more money (M’). But usury capital seeks to make money in “sterile” ways, characterized by the disembodied (M-M’)"

At least the Capitalist 'does something' - banks accumulate capital from nothing more than having previously accumulated capital (a capital which wasn't actually theirs in the first place) - and this results in an increasing power to accumulate more capital - as well as a propensity to blow it on frivolous non-essentials (bonuses, fast cars, strip clubs etc.)

This article is excellent - it wraps up everything I am trying to say - the whole lot are linked, FRB, floating exchange rates, Ursary, Using debt to extend the time between crises (but making those crises more volatile as a result).

"The result is not unlike the “primitive accumulation” by armed conquest – land rent paid initially to warrior aristocracies. And much as the tribute taken by the military victors is limited only by the defeated population’s ability to produce an economic surplus, so the accrual of interest on savings and bank loans is constrained only by the ability of borrowers to pay the mounting interest charges on these debts. "

...parasites...

"The problem is that the financial system, like military victors from Assyria and Rome in antiquity down to those of today, destroys the host economy’s ability to pay."

If anyone can read this article and still bring forward an argument as to why free market Capitalism works - then please bring it on. I am so glad to find something that I didn't write which clearly encompasses everything I have deduced for myself - it's like knowing you found the correct path on your own.

Robert - I suggest you read this tonight and write something tomorrow to discuss it - it's your duty as a journalist to investigate the monetary conquests which have little difference to those in aincient times - the powerful exploiting the weak - still 3000 years on.

https://michael-hudson.com/2010/07/from-marx-to-goldman-sachs-the-fictions-of-fictitious-capital1/

29. At 11:51am on 13 Oct 2010, i and fat_cat

Brilliant. If anyone was in any doubt about the reality of why we're in this mess, these posts cover the whole episode off nicely.

Its only logical that a virus which feeds on its host ultimately dies itself when its host can no longer survive.

Asking the main protagonists of this situation for a solution only leads to a repeat of history somewhere down the line.

A minor PR exercise in advance of the bonuses.

Just got an e-mail from the bank this morning telling me I can not pay my wage run as it will go over our overdraft limit. This has been caused by our customer not paying us on time.
Interestingly this would not have happened 2 years ago - there has been a distinct change of attitude over the last 3 months. Why this is is beyond me.
The gauling thing is our cash shortfall has been caused by the recent expension of our orderbook.
How ironic that the people who put us here in the first place are now trying to keep us where we are not trying to pull us back out.

Isn't the whole issue here 'credit' i.e. the cause of the 'credit crunch' ?

Whilst I sympathise with businesses that can't get credit to ease cashflow or tool up for big orders, wouldn't it be better if they were sufficiently capitalised in the first place without needing to rely on credit. This might mean that they have to save and grow much more slowly but they would be in a much stronger position as a result.

Credit is just a device that allows banks and others to get rich by enslaving the rest of us. It's bad enough that most of us are forced to do it in order to 'buy' our houses, without using more credit to buy worthless chinese machines. Now our children are enslaved as soon they leave school to enter university.

Ideally families would work to accumulate wealth so that they can buy/build houses for their children rather than using mortgages and pay for school/university fees without using credit etc. Think about it, the bulk of your hard working life is to pay at least 3x the cost of your house to your bank.

Of course the banks would be a lot poorer but the country would be a lot stronger.

We can't wholly blame the banks for our current predicament - they were just pursuing profit and responding to customer demand and opportunities

The government ought to be setting a clear example here instead of being the worst offender and promising £1tr in pension benefits that will (hopefully) be funded from people who are still at school and yet to be born. Why haven't the current workers contributions been saved and why have they not been making sufficient contributions during their working lives to pay for their own pensions ?

...and still they make the workers pay for their greed.

https://www.bbc.co.uk/news/business-11531564

Well they may talk of lending more - but what happens to demand when you cut jobs on this scale? - will lending to small businesses help them when the banks are cutting demand in the economy (through job losses) at an astonishing rate - thereby reducing cutomers.

The banks and the politicans live in a bad venn diagram - they think these things are mutually exclusive - but one is cause and the other effect - just like the natural world.

It's time to show the Government what cause and effect looks like - you cause poverty and discontent through your assistance in robbing the needy to feed the greedy - and we shall show you what an angry Britain looks like.

3 and a half MILLION french citizens demonstrated to their Government who needs who more - it's time we did the same.

October 23rd - London - 11am - bring everyone who is angry following the spending review on the 20th - the Government won't change until you show it we mean business.

Do you know anybody who is borrowing more money at the moment, personal or business. No, neither do I, simply because we are all in the process of de-leveraging having decided that it really isn't a good idea to spend money that you haven't got, a concept that got us all into this mess in the first place. So why are we surprised that the banks are not lending? Seems to me that the idea of forcing banks to lend to people who don't want to borrow might have a couple of flaws and a whole bunch of unintended consequences.

Too little too late ... they're only doing it now because, though they don't say it in the report, they know they'll get more government money and hope that the government will ease off the big stick a bit (the stick isn't big enough in my eyes though!)

I am afraid that Credit Crunch 1 became a weak recovery, hyped up by this government, yet their very actions are going to bring on Credit crunch 2 - upto 600,000 public sector jobs to go, this will eventually lead to more private sector jobs going too as there are many private sector companies whose business is 50% or more involved in local government, central government and NHS contracts. So with higher unemployment over the next 2 - 4 years, mistrust between businesses, the banks and the general public there will be very little in the way of an economic recovery. House prices will continue to fall as more and more 1st time buyers stick to renting because they cannot get mortgages. Who in their right minds working in public sector (or in private companies associated with public sector contracts) are going to go on a spending spree to buy us out of recession? Very few indeed.

I don't trust Cameron or Osbourne - they are too quick to blame everything on the last government, even the Lib Dems are making statements to that affect rather than owning up to either having changed their minds to gain power and playing 2nd fiddle to this Tory Government!

The next 6 months are going to be crucial, if they get it wrong this credit crunch will last decades. But still the rich will still be rich, bankers still get their bonuses and MPs will keep blaming everyone else whilst they make the British working people pay!

Ninja Biziness Task-Force Takeover Control The Area
===================================
Who say Big Bankers don't cry. Money is Power. Don't blow or give your blessings and opportunities away (again) or throw it all away. Nothing lasts for ever, especially good times and sunshine. The country can't run without no money. Want you to know this is a different stylee..

Barrington Levy - Money Move
https://www.youtube.com/watch?v=E1TRJetvcMI
Money move money move. Want you to do the money move
Everybody making moves. Why don't you make the right moves

Interesting to see the markets rising in the expectation of more QE easy money for the banks. Or is it because banks are cutting their cloth to make a few more immoral quids.

https://www.bbc.co.uk/news/business-11531564

I always thought the idea was to bet on a winner.

#38. At 12:19pm on 13 Oct 2010, jon112dk wrote:
"I do genuinely hope that something can be done to help smaller businesses."

It won't be because they don't care, they like BIG business, especially as all the banks and corporations are in each others pockets.

The only growth fund that bankers are interested in is their own personal one. A friend of mine tried for ages to convince various banks to help him with his business but not one was interested, in the end he pretty much gave up working for himself and went to work for another company. So much for helpful banks.

Its a choice between Keynesian investment and credit from banks.
The U.S and the U.K. economies rely heavily on Keynesianism by the back door - investment in the military.
The Banking system ruins businesses whose practices are distorted by bank's need to "pull the rug" from under the feet of businesse as soon as the market for credit dries up.
Whats true of business is true of individuals with the mortgage scam disabling the economy to the point where demand for goods and services drops when people are pushed to the brink by the housing market bubble. We then have the vast inefficiency of huge amounts of capital tied up in over priced housing (through mortgages) whose value should be depreciating and business going bankrupt, resulting in the loss of vast amounts of capital earned through profit and wages with which those companies were originally built.

Some people seem to think that its about having the "right amount" of credit in the economy to prevent this happening. This is like a cap on profits for banks. Would the same people argue that a cap on profits should apply to (mega) business too?

Tax and stragegic Keynesian investment are the way forward.

£1.5 billion?

Oooooooooooooh.

Drop in the ocean. This is a non-story Robert...

39. At 12:25pm on 13 Oct 2010, writingsonthewall wrote:
1. At 10:18am on 13 Oct 2010, the_fatcat wrote:

(https://michael-hudson.com/2010/07/from-marx-to-goldman-sachs-the-fictions-of-fictitious-capital1/%29

"Marx described how periodic financial crises were caused by the tendency of debts to grow exponentially, without regard for growth in productive powers."

i.e. - Overproduction fuelled by debt issuance and causing a credit contraction (crunch)

Excellent article.

........
Had a quick skim. Difficult for average joe to understand but I think I get the essense of it. An explanation would be appreciated. I think it backs up my view that a debt based money system doesn't work as the debt grows exponentially. It also seems to suggest that the issue of debt is an important and additional problem to the exploitation of labour and surplus value and the tendency for profit to diminish.

The more I read, the more I find it difficult to get away from the point that: Sustainable growth = sustainable debt.

And to sustain debt in a debt based monetary system, you have to create ever more debt. But the current level of debt we have, isn’t actually sustainable as this recession has made us acutely aware.

So if you want to have ‘sustainable growth’, you have to have ‘sustainable debt’, which in turn means reducing the current level of debt to a ‘sustainable level’.

Which, presumably means either writing a lot of it off, or printing more money to pay it off.

So far we’ve gone down the printing more money route.
Trouble is, it now appears the amount printed wasn’t anywhere near enough.

So Mr King, if you really want to fix things, print another £2tr that should do it.

I know it’s going to be £5.0 for a litre of diesel, but look on the bright side, we’ll be currency competitive, at least until everyone else does it.

It's no wonder people are buying gold.

46. At 12:43pm on 13 Oct 2010, writingsonthewall wrote:
...and still they make the workers pay for their greed.

https://www.bbc.co.uk/news/business-11531564
--------------------------------------------------------

Why is there integration of IT operations between Lloyds and HBOS when I thought there was still to be an amount of forced separation to come(by EU rules)? Is the stopping of integration the real reason?
Am I thinking of someone else?

The only Assets we have is our Homes (and cars). If you got equity, banks will lend, if you default they take the home, rack up legal costs and write it off as a loss. Same old shenanigans squared is not enough when they can exploit the same formula to the power of infinity until it all burns and crashes again. There will always be another next generation to bleed and suck dry. Let me repeat it again there is no money there is just homes for the sharks and vultures to target in their scam plans.

34. At 12:14pm on 13 Oct 2010, AnotherEngineer wrote:
19. At 11:02am on 13 Oct 2010, Jacques Cartier wrote:
1. At 10:18am on 13 Oct 2010, the_fatcat wrote:
> Now look at these: $144bn bonuses to Wall Street
=================
It now says 91bn INCLUDING SALARIES up 4% on last year.
Has it been changed since you read it?

Strange - the link is "...Greed-returns-Wall-Street-Bankers-pay-hit-record-144bn-despite-financial-crisis.html"

Anyway, the disconnection with the real world shows that financial sector profits are *fake*.

Remember Madoff? "Too good to be true" was the verdict. *Fake*.

Same applies to bank profits. Bubble economics is still with us. *Fake*.

Banks to help business? *Fake*.

As someone trying to start a small business, it seems to me that the problem isn't the lack of credit. Rather, it's the banks' failure to recognise modern business requirements. Two simple things: why do none of the big banks provide a simple way to deposit cash takings outside business hours? As a retail business, we will have to leave the shop during our trading hours to bank our takings. Secondly, why is taking card payments so complicated to set up?

The first thing any business has to do is get its customers to pay; and if the banks really wanted to help small businesses and startups they'd concentrate on making payment processing cheap and simple. We don't have time to go to "free" seminars, and I don't trust any bank to be impartial givers of insurance or legal advice. Particularly when it's "free".

And the pricing structure is opaque. Comparing business banking tariffs makes choosing a mobile phone contract seem like child's play.

Am I being simple or is there an equivalent of a building society or (forgive this parlance) 'savings and loan' for businesses? Surely it would be better to cut the banks out of the system altogether if at all possible.

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

further to my earlier post at 42 refering to fat_cat's link and in addition to i, Avg Joe and WOTW's subsequent posts...this is perhaps the most consise (althought its long in itself) single source of clarity I've read in the past few years.

(seems fat_cat is having his post looked at by the mods as I type though?!)

I urge everyone to read this and second WOTW's request to get RP to read and provide a debate on this asap and the challenge for anyone to come up with why the current system is so good it should continue.

(https://michael-hudson.com/2010/07/from-marx-to-goldman-sachs-the-fictions-of-fictitious-capital1/%29

Sorry Avg Joe...trying to precis this into a succinct yet full enough summary...i'm sure someone else will beat me to it though.

Hardly lending to SMALL businesses is it! As I own what is apparently classes as a 'micro' business I think that this amount of investment would make a difference in many more micro companies than a few hundred 'small' companies.

I know with investment as small as a few grand I could do a lot - unfortunately unless you're unemployed or live in the north there isn't any grants/loans available at all, fair? Not really!

The 6th form economic debating society is really active this morning. Couple of observations if I may to add to the "discussion":

1) Recessions are inevitable - one of the many big mistakes GB made was over-stimulating the economy through opening the public spending spiggots in the early part of the last decade when most of the rest of the world went into a small downturn. Hence, the nation carries on as though Labour really has "abolished boom and best" and we end up with the largest deficit between our spending and revenues as a percentage of GDP of any country in the G20. And for the umpteenth time, just because we are about to get a double dip recession it does not validate the head in the sand let's keep spending approach. Your arguments make no sense - you wish to solve a crisis caused by too much debt, by err borrowing more money.....Absolute and utter nonsense. The country has been proved to have been living beyond its means pure and simple and it has to end, and it will be ugly and painful but there it is. THERE IS NO ALTERNATIVE HONESTLY, despite what your text books and professors in their ivory towers funded by public monies tell you.

2) The banks were allowed to get too big - I think outside Iceland and Ireland, our banks have the biggest balance sheets as a percentage of GDP of any other nation. Plenty of other nations' banks did not go crazy as they were well regulated and well run e.g. Canada and most of Scandinavia (both of which had mini-banking crises in the mid 1990s not coincidentally). I am personally totally in favour of splitting the investment banking business from the commercial and retail banking activities due to moral hazard and conflict of interest reasons. The fact the banks remain in a hole does not require the ending of capitalism. These things just get fixed and it takes time, and its painful - you lot need to grow up, there are NO QUICK MAGICAL FIXES. Best of luck with the demo btw. Suspect you're wasting your time as usual though.

3) You have no credible alternative to capitalism. All other systems that have been tried have woefully failed their citizens - best example the Berlin Wall as Eastern Germany was actually propped up by Russia and then China as a "model" for communism (Mao famously starving his own citizens to export wheat and livestock there) - and they still poured over it in their droves once it came down. As I have mentioned before, the economic model produced in Western Europe and North America (copied in Australia and New Zealand) are the only systems that have ever attempted to improve the lot of the individual. No capitalist claims it is perfect but it has worked pretty well for us so far. When it is actually put into practice, communism, marxism or whatever other alternative nonsense you hawk will only ever care about the state.

But anyway, I'll let you get back to your teenage angst, I realise I'm wasting my time even pointing this stuff out to you. In another 5 to 10 years you might get it.

As already mentioned there is little here for sole traders and small partnerships which make up the majority of private sector employment. However alternatives to traditional bank finance do exist in the form of Business Cash Advances etc. They may appear expensive but normally serve a very valid purpose for a growing service sector or retail sector enterprise that is starved of growth capital and business finance.

@ 29. At 11:51am on 13 Oct 2010, i wrote:

> If we don't control banks they will control us and collapse once more.

Who would entrust anything as important as the money system to a bunch of greedy, discredited bankers?

As there is talk of the need for additional QE, why couldn't the BoE put some funds in to the proposed Business Growth Fund, and rely on the banks to use their "expertise" to decide which businesses would benefit most from its largesse. Surely a win/win situation - and no government interference in what would be a purely business transaction.

Average Joe - a basic over-riding point, amongst many others that need some more dedicated effort to explain, is that usury capital (banksters & money men and their interest rates) creates the notion of wealth or profit out of thin air by simply insisting that the compound mulitipier applied as an interest rate on a debt is actually creating something.
In reality as our good friend WOTW points out this is not the case.
The basic issue then comes from the dislocation between what can reasonably be created by industrial capital (the combined efforts of you and me)becoming more efficient year-on-year (growth) and the failure to keep pace with the exponential compound interest mutliplier.
THe banksters allow this to continue and suck everyone into the debt game and then periodically review the situation, realise that there isn't enough industrial capital or capacity out there to pay their debts so they call it in, bankrupt as many as possible and claim the assets. After a correction in which they also get to re-set the system by issuing money as debt through FRB, we all begin again.
As I say, there's a lot more to it than this, and it's better explained by someone who really lives and breathes it.
Interesting articles by David Degraw on the dastardliness of banking on ampedstatus.com website also

I thought this government was against QUANGO's and here is a new on starting up.
On the bright side with all the others been closed down here is a job opportunity.
On the dark side it is involved with banking.

In the old days were not bank managers the people that did this type of thing. What has changed in the banking system?

I'd liken 'Credit Crunch 2' to being let off lightly. 'Depression 2' is closer to the reality of it. You simply can't have this much credit dependancy and think that a couple of years of recession, which by far too many wasn't really felt, will be enough to appease such a monster situation. A bit morose perhaps but who'd be naive enough to believe we were immune from the horrors of the past with regard to financial crises? We've hardly done enough differntly to believe we can end up in any other situation.

In an attempt to get it level in my head

(#5 Watriler; I 100% agree) Plus it smacks of the late 70’s admin (bank) takeovers.

So when GB used UK Plc money to ‘bail out’ the banks on an incomplete balance book, he, as I understand it, gave away all voting (board) rights, so! For all intent and purpose a loan? On the other hand the banks are not prepared to offer this deal in response; HOW STRANGE!

For the sake of argument lets say the banks were lent 100bln and the banks lend 10bln for a 10% stake

= UK Plc -100bln and Banks +90bln with 10bln, 10% shares and a place on x number of boards (OK 5 years: yes ok if you say so)

Future = Banks pay UK Plc back (on the back of us [UK Plc]) leaving the banks with all these 10% share that have not been paid back and seats on x number of boards. Nice work if you can get it?

Just worked it out – Dragons Den, lets hope VC and the ilk see through it!

12. At 10:48am on 13 Oct 2010, hughesz wrote:

> the politicians are simply not up to the task of managing these spivs...

Spivs provide a valuable service at times of shortage, supplying fags
and stockings etc.

But bankers are just greedy, parasitical scroungers.

I for one do not believe this will be of any help at all.... as someone earlier on said "too little too late"... I was trying to get a (pretty small) loan of start-up funds for a business I REALLY wanted to buy, so that both my husband and I could better our income and start repaying off our debt properly... but nooooo, all the Business Manager could say is "the business is doing very well" (as I went to see the Business Manager of the bank where the business was being kept at)... but with all that, I could not get a loan. So sadly I've had to let it all go... my husband was retrenched because of the Credit Crunch... he has not been able to get a decently paid job since... it took a good 6 months before he could get anything, then a friend of a friend of a friend got him in somewhere, earning minimum wage!!!! That's what our hard earned money has done!! Bailed the banks out of the muck, but just about bankrupted everyone else in the process.... but boy are they quick to threaten if you don't repay your loan!!! But pray tell... how does one do this with no income (or very little income)??
Sadly, with myself working for the government.... I will not see an increase in pay for a good 2 to 3 years... and so, we WILL go bankrupt fairly soon, as we cannot cover all our outgoings with what we are bringing in..... Talk about vicious circle!!!

65. At 2:13pm on 13 Oct 2010, a_sensible_comment

I'm with you on point 1. You cant borrow your way out of an excess borrowing crisis.
Point 2, banks are too big, definitely but "These things just get fixed" is a tad naive. How do they get 'fixed'? Or do they just discount the problem to sometime in the future?!
Point 3, if there is no credible alternative to capitalism, why does that support capitalism as the right route since capitalism is failing its citizens woefully also. If it's 'worked for us so far' it depends on your standpoint. If you've been able to hoard, sorry, earn enough wealth for yourself to secure enough chairs to sit on whilst the music plays such that when it stops, you are the one with many chairs and everyone else has none so is dropped out of the game, then yes, its worked very well for you. But don't be so ignorant to believe that your situation somehow is reflective of everyone else. Please don't also claim that its helped fund hospitals and police and welfare as these services are all suffering from the system which had apparently benefited them.

Read the article alluded to by fat_cat at post 1 and come back and argue how this system can be suitably fixed. The difference lies between producing whats sustainable and whats not.

63. At 2:00pm on 13 Oct 2010, Hugh_Joctopus wrote:

"(seems fat_cat is having his post looked at by the mods as I type though?!)"

Funny that....no rude words, no libel, no personal insults.

Maybe they didn't like the second bit, linking to something in the DM - one has to keep standards up!

Anyway, here's the important bit again:

(https://michael-hudson.com/2010/07/from-marx-to-goldman-sachs-the-fictions-of-fictitious-capital1/%29

I am bit concerned. Robert Peston seems a bit too close to the banks for my liking. It probably, however, is the price he has to pay for securing those excluisves he became noted for at the height of the banking crisis. I know of an excellent business with a short-term growth record which has not unsucessful in securing funds for new plant and equipment because of the attitude of the banks.

59. At 1:22pm on 13 Oct 2010, PacketRat wrote:
34. At 12:14pm on 13 Oct 2010, AnotherEngineer wrote:
19. At 11:02am on 13 Oct 2010, Jacques Cartier wrote:
1. At 10:18am on 13 Oct 2010, the_fatcat wrote:
> Now look at these: $144bn bonuses to Wall Street
=================
It now says 91bn INCLUDING SALARIES up 4% on last year.
Has it been changed since you read it?

Strange - the link is "...Greed-returns-Wall-Street-Bankers-pay-hit-record-144bn-despite-financial-crisis.html"
Yes it is strange if, as I did but you obviously did not, read the article at the other end of the link which says 91bn.

Why has 1. TheFatCat's posting been removed? Robert - please see the feedback throughout the blog on this piece. I've read it through and it encapsulates exactly what many of us are saying. I beseech you - any chance of a blog solely to discuss the content of this article? Can any of the bloggers refute any of it's content? Our current system did not, cannot, and will not work. Fundamental change is required, and the sooner our elected representatives get this message the better for all.

https://blogs.telegraph.co.uk/culture/lukeslewis/100047933/andrew-marr-thinks-bloggers-are-anti-social-geeks-the-reality-is-quite-the-opposite/

An analogy with a biological system is worthwhile to explain the relationship between the private banks and the people.
The words "parasite" and "virus" have been used.
The private banks act as peudo-symbiotic parasites; they appear to benefit both but the effect on the host population in time is simply obligate in that they need us to thrive.
They don't want to kill their host, we provide their wealth.
Another analogy would be cancer for they are out of control cells with only one objective.
Is it benign or malignant?
You decide.

60. At 1:53pm on 13 Oct 2010, ejoftheweb wrote:
As someone trying to start a small business...

Me, too. And many other posters today are startups/micro businesses.

Banks are predatory parasites. They are an extortionate skimming cartel. We know it. Why pretend otherwise? Small business must learn to stand on its own feet. Help? There is no "help", and never has been.

Break them up.

65. At 2:13pm on 13 Oct 2010, a_sensible_comment wrote:
The 6th form economic debating society is really active this morning....
...But anyway, I'll let you get back to your teenage angst, I realise I'm wasting my time even pointing this stuff out to you. In another 5 to 10 years you might get it.

Gotcha! You're Andrew Marr, aren't you.

Banks lost credibility when Pension Funds custodised in their Safekeeping Accounts were annihilated. Legal proceedings claims from the likes of Leham Brothers are so painful and slow.

Surely people are realising that the money system is not fit for purpose.
A 17th century money system based on plunder does not work for a 21st century society based on human rights.
Read Thomas Paine, especially "Agrarian Justice" of 1797.
There are money reform groups around and there is a meeting of "The Bromsgrove Group" in Bromsgrove, last weekend in October.

There is just no way out of this until we hit a bottom and that is just too far off until there is a reality that in a capitalist market economy the market has to take its natural course.

All these tactics being used are only stalling the length of time it will take to get there and the degree and depth of hardship that ordinary people will have to endure.

They are talking about a recession which is a normal part of the cycle and there are procedures in place for dealing with this. Deficit reduction being one.

However the real problems are caused by the banking crisis which has been exacerbated by governments taking on the bank debts and bailing them out.

Until there is clear water between the two and the sovereign debt crisis is resolved one way or another a paultry amount lent to small businesses is but a tiny drop in the oceon compared to however many unknown trillions of debt are hanging around somewhere in cyberspace ready to rain upon us all.

Those who survive that are those countries who have made plans to be self sufficient whether it be home grown businesses or a home grown banking system that protects the interests of its own people.

Re: Post 1

"Off topic" - apparently....

77. At 3:10pm on 13 Oct 2010, rekrap wrote:
I am bit concerned. Robert Peston seems a bit too close to the banks for my liking.

Robert is positively in love with banking. For example, "The Future of Banking Commission" states:

Evidence from Robert Peston
'One of the things that seems to be slightly odd about banks is
if you look at social [and] economic institutions, it’s very hard to
think of any… that does [anything] that is more useful....

This is what makes his views so compelling. He is a decent person whose love of banking leads to dismay at its flaws. Classic tragedy.

Re post 79.

argh! Wrong link! Try this one instead!

Aaahttps://michael-hudson.com/2010/07/from-marx-to-goldman-sachs-the-fictions-of-fictitious-capital1/

78. At 3:12pm on 13 Oct 2010, AnotherEngineer wrote:

59. At 1:22pm on 13 Oct 2010, PacketRat wrote:
34. At 12:14pm on 13 Oct 2010, AnotherEngineer wrote:
19. At 11:02am on 13 Oct 2010, Jacques Cartier wrote:
1. At 10:18am on 13 Oct 2010, the_fatcat wrote:
> Now look at these: $144bn bonuses to Wall Street
=================
It now says 91bn INCLUDING SALARIES up 4% on last year.
Has it been changed since you read it?

Strange - the link is "...Greed-returns-Wall-Street-Bankers-pay-hit-record-144bn-despite-financial-crisis.html"
Yes it is strange if, as I did but you obviously did not, read the article at the other end of the link which says 91bn.

Oi! No shouting! *Obviously* I had read the article. My point stands.
Work it out.

78. At 3:12pm on 13 Oct 2010, AnotherEngineer wrote:
59. At 1:22pm on 13 Oct 2010, PacketRat wrote:
34. At 12:14pm on 13 Oct 2010, AnotherEngineer wrote:
19. At 11:02am on 13 Oct 2010, Jacques Cartier wrote:
1. At 10:18am on 13 Oct 2010, the_fatcat wrote:
> Now look at these: $144bn bonuses to Wall Street
=================
"It now says 91bn INCLUDING SALARIES up 4% on last year.
Has it been changed since you read it?

Strange - the link is "...Greed-returns-Wall-Street-Bankers-pay-hit-record-144bn-despite-financial-crisis.html"
Yes it is strange if, as I did but you obviously did not, read the article at the other end of the link which says 91bn."

$144bn ....... £91bn. Notice the subtle difference?

If you don't like the DM, try any number of US sources eg US Financial Post:

www.usfinancialpost.com/wall-street-big-bonus-payouts-in-spite-of-reform/851075/

Actually, it's only £90,800,000,000 at today's exchange rate. Looks good written like that, doesn't it?

Sorry if I've missed any zeros.

#65 a_sensible_comment - "THERE IS NO ALTERNATIVE HONESTLY, despite what your text books and professors in their ivory towers funded by public monies tell you."

You're delusional.

A page full of comments from people working in the private sector and many many small business men and you persist in raving about student lefties. It must be impossible in some way for you to admit to what is actually happening to us.

The banks stopped lending to each other because their lies delusions and greed came home to roost two years ago. This entailled a massive bailout - on a scale unknown in human history by any measure - from public money. The greedy City boys looked slightly abashed for a miniscule fraction of a second then started shovelling the rescue money down their throats - its all 'other peoples money' they don't care where it comes from.

The stupefying size of the bailout destroyed public finances - UK debt was low by historical standards - and wrecked the last governments chances at the election. Not being that much of a 'leftie' - I even 'have a wash' most days haw haw - I have mixed feelings about that. but I feel no ambiguity about how the blame is being pinned on the public sector, for all its many faults, and the financial services industry and big corporations are let off their obligations to pay tax left right and centre. Even though they will be unable to repay their £300 billion loan to us they will make damn sure they get their bonuses

The City boys have stolen all your money and have now dropped their trousers and are jamming their sweaty behinds up against your living room window - and you persist in imagining its some form of spotty adolescnet sixth form moaning to be unhappy about it.

Its not left/right - its right/wrong

Re Jasp27's re link to Andy Marr's outburts - I really had to laugh! No doubt this has been mentioned somewhere before but it smacks of journalists suddenly realising that most people can type, have internet access and nowadays those who can are often far closer to the real truth and insides of a matter than a reporter could hope to get. Must feel like their USP is being eroded fast - albeit only being in a position to get their thoughts published whereas the masses once couldnt.

I commend the beeb for having such forums as these but it would be good if sometimes the interviews or insights were garnered from people who could show the true picture. Its a bit like turning up at a restaurant saying you're a food critic and expecting to experience a normal service. You will get a biased response based on that restaurant wanting you to report favourably.

What ever happened to the suggestion that RP interviews WOTW (or the Diamond vs WOTW white collar boxing match for that matter?!). RP, please don't be scared to dig deeper for the real truth or insight - its only a small step away.

82 PacketRat... ha ha ha. Legend!

76. At 3:10pm on 13 Oct 2010, the_fatcat

Sorry for miss typing your name earlier - how rude. Perhaps RP is the only moderator left and indeed he is reading the whole article you posted a link to to check its suitable to show here and ready himself for the requested discussion of it tomorrow?

86. At 3:52pm on 13 Oct 2010, the_fatcat

You're kidding? I have got bangers and mash for tea. That must be off topic - will it get passed the moderators beady eye?!

@ 65. At 2:13pm on 13 Oct 2010, a_sensible_comment wrote:

> Recessions are inevitable

Are you also a member of the Flat Earth Society?

I guess my post at 95 isn't off topic....they may believe I can no longer afford to eat grouse as a small business owner who can't get a bank loan - how insightful!

Would like a little help on https://www.bbc.co.uk/news/business-11531925
"JP Morgan has reported a 23% rise in profit in the third quarter, as the bank was able to set aside less money to cover loan losses. The bank set aside $1.55bn for retail credit losses during the quarter, less than half the $3.99bn it set aside during the third quarter of 2009."
Isn't this just fudged accounting, i.e. cooking the books?
"The bank said its profit was the result of "the good underlying performance of our businesses" "
What, by changing its liability allocations to look better?
I'm sure this really is sound business practice but it just sounds a lot like they got tired of governmental advice on reserves required against liabilities and decided to do a quick profit boost by shunting those reserves but with no real change in their actual "wealth" (ahem).
"...income at its retail unit rose from $7m to $907m."
A misprint?
"But despite setting aside less money for loan losses, profits at its mortgage banking and other consumer lending business fell 50% to $207m."
So, why bother lending to any businesses (micro, SMEs, "small" or whatever) when they can just do accounting trickery and still have their profits increase? Trebles all round!

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

Our summer holiday was spoilt as the bank suddenly wanted the company to reduce the overdraft by 50% in 6 weeks (probably impossible) and also increase the guaranteed securities. As some income from sales comes from abroad (on a termly basis) it was not counted! My husband had to fly back for an emergency board meeting. We hunted around to try to raise sufficient income but managed to go back to a previous bank, with no real alteration to the credit agreement. We cut our holiday short to sign papers to change banks.

If we had been unable to change banks to the only one who was willing to have us, the business of 30 years standing would probably have failed due to no fault of our own. We have kept going through all the other recessions, and continued to grow throughout the last year - no mean feat! We have financed all this ourselves by sheer hard work, and going without salary several months over the years when it was necessary - difficult to do but essential at times when cash flow was not good.

The banks say that they are lending - all they are doing is offering loans to businesses that do not need them, and them saying the money is set aside for those loans. Certainly having an overdraft cut by 50% is not lending. We have about 100 employees so there could have been another 100 families without work - just because of the bank and their desire for their bottom line looking good.