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Bonuses for bankers

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Poll Question: Should any banker be awarded a years salary or more as a bonus?
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Post Options Post Options   Quote lazland Quote  Post ReplyReply Direct Link To This Post Topic: Bonuses for bankers
    Posted: February 28 2013 at 16:09
Funniest banker thing I ever saw, which is probably off topic a little bit, but never mind.

ITV, some years ago, were showing a League Cup Semi Final Mach live. Gary Newbon, one time sports reporter and latterly chief editor, was on the touch line for a live feed. Cue thousands of fans behind him, who started chanting::

"Gary Newbon.....he's a wa**ker, he's a wa**ker....."

The camera cut out, and the editor went back to the studio. Cue embarrassed silence, whereupon Jimmy Greaves turns to a distraught presenter (Tony Wilson), and says deadpan:

"I didn't realise Gary was a merchant banker, Tony!"

The adverts followed immediately as the entire studio collapsed laughing. 

Many a true word spoken in jest, eh?


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Post Options Post Options   Quote ProgMetaller2112 Quote  Post ReplyReply Direct Link To This Post Posted: February 28 2013 at 17:12
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Post Options Post Options   Quote JJLehto Quote  Post ReplyReply Direct Link To This Post Posted: February 28 2013 at 17:14
Originally posted by Jim Garten

Originally posted by King of Loss

I mean have you read the origins of HSBC, I mean the bank was set up for the drug business.


Bonuses aside, this is a serious accusation - backup??


...ya didn't hear?
Well OK I don't know about it's origins, that seems a little nutty,  but yeah there was a huge non scandal about HSBC and links to drugs
http://www.rollingstone.com/politics/blogs/taibblog/outrageous-hsbc-settlement-proves-the-drug-war-is-a-joke-20121213
http://www.nbcnews.com/business/report-hsbc-allowed-money-laundering-likely-funded-terror-drugs-889170
http://www.huffingtonpost.com/2013/01/02/hsbc-money-laundering-colombian-drug-traffickers_n_2395167.html
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Post Options Post Options   Quote JJLehto Quote  Post ReplyReply Direct Link To This Post Posted: February 28 2013 at 17:19
I really don't care, I used to...oh when I was a pissed off progressive I wanted them all to burn. Especially after the recession.

In recent years, I've realized I really don't care about the wild world that is wall street. They can live in their small universe where they shuffle money around, make millionaires multi millionaires, live and die by the volatile stock market, even use their insane lending techniques....as long as it stays in their small universe.
Sadly, they have increasingly been moving into the economy at large and I fear now we all are becoming tethered to them and their games! That is what I don't like and seems like a dangerous place to be, especially when they don't pay for their stupidity.
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Post Options Post Options   Quote Jim Garten Quote  Post ReplyReply Direct Link To This Post Posted: March 01 2013 at 02:26
Originally posted by JJLehto


Originally posted by Jim Garten

Originally posted by King of Loss

I mean have you read the origins of HSBC, I mean the bank was set up for the drug business.


Bonuses aside, this is a serious accusation - backup??
...ya didn't hear?Well OK I don't know about it's origins, that seems a little nutty


Nope - call me Mr head in the sand, but I genuinely did not know that

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Post Options Post Options   Quote Dean Quote  Post ReplyReply Direct Link To This Post Posted: March 01 2013 at 02:54
Originally posted by Jim Garten

Originally posted by JJLehto


Originally posted by Jim Garten

Originally posted by King of Loss

I mean have you read the origins of HSBC, I mean the bank was set up for the drug business.


Bonuses aside, this is a serious accusation - backup??
...ya didn't hear?Well OK I don't know about it's origins, that seems a little nutty


Nope - call me Mr head in the sand, but I genuinely did not know that
To be fair, the opium trade was legal back then, and it is still legally cultivated for medical pharmaceutical use today.


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Post Options Post Options   Quote Easy Livin Quote  Post ReplyReply Direct Link To This Post Posted: March 01 2013 at 03:07
I'm certainly not going to defend the actions of those who have created the mess the Banks find themselves in. There is however a lot of hypocrisy, misinformation and misunderstanding when it comes to bankers and bonuses.

The term Bankers is misleading for a start. The vast majority of people who work for banks receive average or lower salaries. The people who serve you in your branch for example probably get paid less than you. Even the branch manager these days is little more than a glorified supervisor. If they get a bonus at all, it might be 3 or 4 % of their salary, and then only if they are deemed to have "performed" really well. I'm sure we all know people who work in banks who would laugh at the idea that they get enormous bonuses.

The people getting the big bonuses are the people in the top jobs and the traders in the global markets who effectively gamble with the banks' money. These people are not "bankers" in the traditional sense, they are commodity traders who might just as easily be dealing in petrol or gas or gold. These traders should be grouped together under a global title, not just conveniently called bankers. 

Looking at bonuses themselves, these are an effective incentive if they are used properly. They are used in all walks of life. No one ever questions a footballer getting a huge bung for winning the cup, do they? A bonus is the "at risk" part of your salary. A "Banker's" salary might be say £100,000. His employer's say to him, we will pay you £50,000 guaranteed. To get the other £50000 you have to make the company £1 million. If you don't, you don;t get the bonus. If he does, he appears to get a bonus of the equivalent of his salary. What if they had jsut paid him £100,000, would you be happier because it was less transparent?

Taking it further, the employer says to the"banker" for every £1 million profit you make for the company, we will give you £50,000. The guy makes a profit for the company of £10 million. His bonus is £500,000. He has added £10 million to the companies profits though. Does this show that incentives a work? Maybe.

And what happens to those profits? They go to the rich eh? well actually most of them go to you and me. The big investors in companies are pension funds, and other investors such as unit trusts, mortgage equity savings, etc. You and I demand that our pension funds make as much money as they can for us. The pension funds in turn put pressure on the companies they invest in to perform well and make big profits. The companies offer their staff bonuses to make big profits. Who is behind the banker's bonuses, why it's YOU!!

So a bit less of the hypocrisy. It's very easy to put your head in the sand and point the finger at others. A bit more honesty all round when it comes to our own greed would not go amiss.
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Post Options Post Options   Quote Jim Garten Quote  Post ReplyReply Direct Link To This Post Posted: March 01 2013 at 03:12
Originally posted by Easy Livin

...what happens to those profits? They go to the rich eh? well actually most of them go to you and me. The big investors in companies are pension funds, and other investors such as unit trusts, mortgage equity savings, etc. You and I demand that our pension funds make as much money as they can for us. The pension funds in turn put pressure on the companies they invest in to perform well and make big profits. The companies offer their staff bonuses to make big profits. Who is behind the banker's bonuses, why it's YOU!!
So a bit less of the hypocrisy.

It's very easy to put your head in the sand and point the finger at others. A bit more honesty all round when it comes to our own greed would not go amiss.



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Post Options Post Options   Quote Dean Quote  Post ReplyReply Direct Link To This Post Posted: March 01 2013 at 03:26
I think most people are aware that the banking industry is divided between trading and retail and it is the trading half that is at the centre of the controversy. I would be surprised if people really thought Capt. Mainwaring was getting a thumping great bonus for looking after your current account. I'm pretty sure they also know that it was the trading half that buggered everything up. I also suspect that the public is aware that several of the banks that were bailed-out using several billion of public money are currently paying out several million in bonus payments - we (the public) have no quarrel with bonus payments coming from profit - but when that profit is either the result of a bail-out, or could have been used to pay-off some of that bail-out then public outrage is not only right, it is necessary.


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Post Options Post Options   Quote Blacksword Quote  Post ReplyReply Direct Link To This Post Posted: March 01 2013 at 04:42
Originally posted by Easy Livin

I'm certainly not going to defend the actions of those who have created the mess the Banks find themselves in. There is however a lot of hypocrisy, misinformation and misunderstanding when it comes to bankers and bonuses.
The term Bankers is misleading for a start. The vast majority of people who work for banks receive average or lower salaries. The people who serve you in your branch for example probably get paid less than you. Even the branch manager these days is little more than a glorified supervisor. If they get a bonus at all, it might be 3 or 4 % of their salary, and then only if they are deemed to have "performed" really well. I'm sure we all know people who work in banks who would laugh at the idea that they get enormous bonuses.
The people getting the big bonuses are the people in the top jobs and the traders in the global markets who effectively gamble with the banks' money. These people are not "bankers" in the traditional sense, they are commodity traders who might just as easily be dealing in petrol or gas or gold. These traders should be grouped together under a global title, not just conveniently called bankers. 
Looking at bonuses themselves, these are an effective incentive if they are used properly. They are used in all walks of life. No one ever questions a footballer getting a huge bung for winning the cup, do they? A bonus is the "at risk" part of your salary. A "Banker's" salary might be say £100,000. His employer's say to him, we will pay you £50,000 guaranteed. To get the other £50000 you have to make the company £1 million. If you don't, you don;t get the bonus. If he does, he appears to get a bonus of the equivalent of his salary. What if they had jsut paid him £100,000, would you be happier because it was less transparent?
Taking it further, the employer says to the"banker" for every £1 million profit you make for the company, we will give you £50,000. The guy makes a profit for the company of £10 million. His bonus is £500,000. He has added £10 million to the companies profits though. Does this show that incentives a work? Maybe.
And what happens to those profits? They go to the rich eh? well actually most of them go to you and me. The big investors in companies are pension funds, and other investors such as unit trusts, mortgage equity savings, etc. You and I demand that our pension funds make as much money as they can for us. The pension funds in turn put pressure on the companies they invest in to perform well and make big profits. The companies offer their staff bonuses to make big profits. Who is behind the banker's bonuses, why it's YOU!!
So a bit less of the hypocrisy. It's very easy to put your head in the sand and point the finger at others. A bit more honesty all round when it comes to our own greed would not go amiss.


I think it is broadly understood what is meant when the media refers to 'bankers' I don't know anyone who thinks this term refers to a cashier at Bacrlays on the High Street. It's poppycock to suggest otherwise.

What do you mean no one minds when footballers get awarded huge sums of money for for turning up on a Saturday?? I think I have only ever heard people complain about that.

The issue is not so much the fact that some people earn vast amounts of money, it's that they STILL get paid vast amounts of money when they fail or their organisation is implicated in criminal activity. When they are sacked, they STILL get a vast payouts. The investment banks f***ed up beyond measure and they were STILL given billions in bailouts from the public purse, with which they were supposed to start lending out to businesses to stimulate the economy. They have broadly failed to do this, and yet STILL they are promised more. In the US they have been basically promised unlimited QE until the currency is rendered virtually worthless.

There is absoluetly no hypocrisy at all in levelling criticism at this industry and how they reward their traders. The problem here is that despite the huge bonuses and payouts for generating huge profits for these banks, in the fullness of time these pension funds are all too likely to collapse due to the ultra high risk nature of the investments, and the risks are getting higher! If the pension market is fluttered in a derivative bubble, when that goes 'pop' you'll have f**k all for your retirement. But guess what, the mooks who pissed your money away will STILL be awarded sums of money that you and I cannot even comprehend. It's also not so much a case of you and I demanding vast returns from our pension funds, it being sold the prmoise of vast returns without having the full extent of the risk explained to us. If expectations were set accordingly then our collective demands for great wealth in retirement would be tempered by reality. Not that I actually know anyone who either expects or demands to be rich in retirement. Who are you referring to when you say we?
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Post Options Post Options   Quote rogerthat Quote  Post ReplyReply Direct Link To This Post Posted: March 01 2013 at 04:51
Originally posted by Blacksword


The issue is not so much the fact that some people earn vast amounts of money, it's that they STILL get paid vast amounts of money when they fail or their organisation is implicated in criminal activity. When they are sacked, they STILL get a vast payouts. The investment banks f***ed up beyond measure and they were STILL given billions in bailouts from the public purse, with which they were supposed to start lending out to businesses to stimulate the economy. They have broadly failed to do this, and yet STILL they are promised more. In the US they have been basically promised unlimited QE until the currency is rendered virtually worthless.


Nailed it.   If they want their liberty to do as they please to be preserved, they cannot also seek refuge under "too big to fail".   This discussion is not just about hypocritical rhetoric.  An IMF paper from 2006 urged a re-look at the way incentives in investment banks were organised as they seemed to reward risk without corresponding penalties for failure.   It warned of a huge crisis if the potential for these risks to materialize wasn't taken cognisance of and managed.  It wasn't paid heed to then and I don't know that it is today either.  As you say, Bernanke has basically written a blank cheque for the banks.   I shouldn't have to worry about it as I don't live in America but unfortunately, their unwarranted risks affect everybody in the inter-linked world economy. 


Edited by rogerthat - March 01 2013 at 04:52
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Post Options Post Options   Quote rogerthat Quote  Post ReplyReply Direct Link To This Post Posted: March 01 2013 at 04:55
However, bankers aren't the only culpable parties in this matter.   Rating agencies also played a huge part and sorry to say that their defence that "a rating is just an opinion" is hogwash.   A lawyer, doctor or accountant is accountable for the professional integrity of his opinion and can be made liable for gross negligence.  So if it is just an opinion and not one that can be reasonably relied upon, then it's worth about as much as my or anybody else's opinion on an instrument or economy and no more.   I believe the US Justice dept is now pursuing S&P but it might be too late.  They have already 'ensured' that civil suits on S&P would be time-barred, I think.   

Edited by rogerthat - March 01 2013 at 05:05
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Post Options Post Options   Quote Blacksword Quote  Post ReplyReply Direct Link To This Post Posted: March 01 2013 at 05:07
^^^ The ratings agencies are a bit of a mennace really in my opinion. They can do more harm than good. Many countries have been downgraded over the last 18 months or so. I'm surprised we held on to tripe A for as long as we did although I'm not certain what the exact measures are. Probably combination of debt to GDP ratio, overall size of national debt and deficit (?) The conseqence of being downgraded is that it potentially costs more to borrow. Osbourne is currentluy borrowing at levels that would have made Darling blush, and yet our economy still fluctuates between stagnation and contraction, and the overall national debt continues to increase. The increased cost of borrowing at the national level inevitably is passed on to Joe public.

The issue of unlimted QE in the US will ultimately affect all of us. The problems in the Eurozone will also have a significant bearing on how the US economy performs as the EU is such an important export market. But this is the nature of the problem. It's interlinked and international. When any country with a significant import/export market has a deep recession it affects, at least to some degree the global economy. When the US and the EU go into nosedive that's big boys stuff, and potentially beyond the depths of the great depression. The only reason it hasn;t manifested itself as such in the US is because of a crippilingly expensive food stamp program masking the full scale of the calamity.

Edit: A note of caution around the IMF and the World Bank. They may come out with all these common sense reccomendations for the global economy, but they are not the 'good guys' in all of this. They are the loan sharks of last resort and ultimately feed the global banks with their plunderings. They loan money to a struggling country, and in return the nation agrees to a set of conditions 'Special Drawing Rights' which usually commit that country to selling up its public assets at bargain basement prices to the IMF who then sell them on to the private sector.

Edited by Blacksword - March 01 2013 at 05:13
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Post Options Post Options   Quote rogerthat Quote  Post ReplyReply Direct Link To This Post Posted: March 01 2013 at 05:30
Originally posted by Blacksword

The conseqence of being downgraded is that it potentially costs more to borrow. 


Which is fair as long as ratings agencies do their jobs.   Issuing AAA ratings to instruments derived from underlying subprime mortgages does not strike me as very prudent. 

Originally posted by Blacksword



Edit: A note of caution around the IMF and the World Bank. They may come out with all these common sense reccomendations for the global economy, but they are not the 'good guys' in all of this. They are the loan sharks of last resort and ultimately feed the global banks with their plunderings. They loan money to a struggling country, and in return the nation agrees to a set of conditions 'Special Drawing Rights' which usually commit that country to selling up its public assets at bargain basement prices to the IMF who then sell them on to the private sector.


Aye, we are quite familiar with their ways and keep them at arm's length.   My point was, therefore, that even IMF had sounded out central bankers on the coming tsunami so it is not the case that it was unforeseen and caught them by surprise.   They were and continue to be reluctant to acknowledge the problems of the financial system as it exists today.
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Post Options Post Options   Quote Blacksword Quote  Post ReplyReply Direct Link To This Post Posted: March 01 2013 at 06:53
Yeah, I agree. There seems an overall reluctance to reform the dynamics of investment banking at the global level. In fairness the G20 do discuss it and float ideas about how to reform it. No actual policy ever seems to emerge. Maybe individual nation states are too frightened to lose their own competitve edge in trying to save the overall system. That said, you could argue that a system that is fundamentally built around unlimited debt was never going to be sustainable forever.
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Post Options Post Options   Quote King of Loss Quote  Post ReplyReply Direct Link To This Post Posted: March 01 2013 at 12:35
I think banking does a great deal in allocating assets and resources by investing in commercial operations, but the problem comes in when they actively manipulate the money supply into their own pockets. Most of the general public is not really benefiting too much from the heedless mindless consumerism that is derived from all of this crazy banking debt ponzi scheme. I mean how much healthier are the public in these wealthier countries compared to before. I mean most of the United States is fat, overweight and tired after all of the stuff that is consumed, which they must in turn consume more of other things in order to feel better.


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Post Options Post Options   Quote King of Loss Quote  Post ReplyReply Direct Link To This Post Posted: March 01 2013 at 12:38
Originally posted by rogerthat

Originally posted by Blacksword

The conseqence of being downgraded is that it potentially costs more to borrow. 


Which is fair as long as ratings agencies do their jobs.   Issuing AAA ratings to instruments derived from underlying subprime mortgages does not strike me as very prudent. 

Originally posted by Blacksword



Edit: A note of caution around the IMF and the World Bank. They may come out with all these common sense reccomendations for the global economy, but they are not the 'good guys' in all of this. They are the loan sharks of last resort and ultimately feed the global banks with their plunderings. They loan money to a struggling country, and in return the nation agrees to a set of conditions 'Special Drawing Rights' which usually commit that country to selling up its public assets at bargain basement prices to the IMF who then sell them on to the private sector.


Aye, we are quite familiar with their ways and keep them at arm's length.   My point was, therefore, that even IMF had sounded out central bankers on the coming tsunami so it is not the case that it was unforeseen and caught them by surprise.   They were and continue to be reluctant to acknowledge the problems of the financial system as it exists today.


The whole entire issuance of AAA is fraud itself. If the United States and the United Kingdom looked at its real debt, it should get a FFF debt rating, because both countries are 100% bankrupt. The reason why the government hasn't taken these banks to jail is because the lies that the banks perpetuate help to prop up the entire corrupt and greedy political establishment by issuing fake paper currency.


Edited by King of Loss - March 01 2013 at 12:44


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Post Options Post Options   Quote King of Loss Quote  Post ReplyReply Direct Link To This Post Posted: March 01 2013 at 12:42
Originally posted by JJLehto

Originally posted by Jim Garten

Originally posted by King of Loss

I mean have you read the origins of HSBC, I mean the bank was set up for the drug business.


Bonuses aside, this is a serious accusation - backup??


...ya didn't hear?
Well OK I don't know about it's origins, that seems a little nutty,  but yeah there was a huge non scandal about HSBC and links to drugs
http://www.rollingstone.com/politics/blogs/taibblog/outrageous-hsbc-settlement-proves-the-drug-war-is-a-joke-20121213
http://www.nbcnews.com/business/report-hsbc-allowed-money-laundering-likely-funded-terror-drugs-889170
http://www.huffingtonpost.com/2013/01/02/hsbc-money-laundering-colombian-drug-traffickers_n_2395167.html


Well, it's a thing called narco-terrorism. I think it has been around since some blokes in the City of London came up with a great way to make money.

I mean, just think about how much drugs has flooded into Russia, Europe and the United States these last 20 or so years.


Edited by King of Loss - March 01 2013 at 12:51


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Post Options Post Options   Quote Blacksword Quote  Post ReplyReply Direct Link To This Post Posted: March 01 2013 at 13:21
Originally posted by King of Loss



Originally posted by rogerthat


Originally posted by Blacksword

The conseqence of being downgraded is that it potentially costs more to borrow. 
Which is fair as long as ratings agencies do their jobs.   Issuing AAA ratings to instruments derived from underlying subprime mortgages does not strike me as very prudent. 
Originally posted by Blacksword


Edit: A note of caution around the IMF and the World Bank. They may come out with all these common sense reccomendations for the global economy, but they are not the 'good guys' in all of this. They are the loan sharks of last resort and ultimately feed the global banks with their plunderings. They loan money to a struggling country, and in return the nation agrees to a set of conditions 'Special Drawing Rights' which usually commit that country to selling up its public assets at bargain basement prices to the IMF who then sell them on to the private sector.
Aye, we are quite familiar with their ways and keep them at arm's length.   My point was, therefore, that even IMF had sounded out central bankers on the coming tsunami so it is not the case that it was unforeseen and caught them by surprise.   They were and continue to be reluctant to acknowledge the problems of the financial system as it exists today.
The whole entire issuance of AAA is fraud itself. If the United States and the United Kingdom looked at its real debt, it should get a FFF debt rating, because both countries are 100% bankrupt. The reason why the government hasn't taken these banks to jail is because the lies that the banks perpetuate help to prop up the entire corrupt and greedy political establishment by issuing fake paper currency.


As I said I suspect the criteria for rating is almost certainly not just based on a nations debt. If the nation in question is experiencing an increasing level of GDP growth, then it's arguably in a favourable position to begin reducing that debt. The UK was downgraded because it's economy is at best stagnant, while it's borrowing is going through the roof.

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Post Options Post Options   Quote King of Loss Quote  Post ReplyReply Direct Link To This Post Posted: March 01 2013 at 13:32
Originally posted by Blacksword

Originally posted by King of Loss



Originally posted by rogerthat


Originally posted by Blacksword

The conseqence of being downgraded is that it potentially costs more to borrow. 
Which is fair as long as ratings agencies do their jobs.   Issuing AAA ratings to instruments derived from underlying subprime mortgages does not strike me as very prudent. 
Originally posted by Blacksword


Edit: A note of caution around the IMF and the World Bank. They may come out with all these common sense reccomendations for the global economy, but they are not the 'good guys' in all of this. They are the loan sharks of last resort and ultimately feed the global banks with their plunderings. They loan money to a struggling country, and in return the nation agrees to a set of conditions 'Special Drawing Rights' which usually commit that country to selling up its public assets at bargain basement prices to the IMF who then sell them on to the private sector.
Aye, we are quite familiar with their ways and keep them at arm's length.   My point was, therefore, that even IMF had sounded out central bankers on the coming tsunami so it is not the case that it was unforeseen and caught them by surprise.   They were and continue to be reluctant to acknowledge the problems of the financial system as it exists today.
The whole entire issuance of AAA is fraud itself. If the United States and the United Kingdom looked at its real debt, it should get a FFF debt rating, because both countries are 100% bankrupt. The reason why the government hasn't taken these banks to jail is because the lies that the banks perpetuate help to prop up the entire corrupt and greedy political establishment by issuing fake paper currency.


As I said I suspect the criteria for rating is almost certainly not just based on a nations debt. If the nation in question is experiencing an increasing level of GDP growth, then it's arguably in a favourable position to begin reducing that debt. The UK was downgraded because it's economy is at best stagnant, while it's borrowing is going through the roof.



There are countries that completely reduced and paid off their debt like Russia, but their rating is still nowhere as high as the UK, US, Germany, etc.

I think it's not accurate to have 3 Wall Street agencies measure the credit ratings for the entire world, is it? There are some competing agencies coming around, I'm hoping their numbers will get coverage, but doesn't seem like the monopolistic media will grant them much exposure.


Zizou 1988-2006
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