Print Page | Close Window

Bonuses for bankers

Printed From: Progarchives.com
Category: Topics not related to music
Forum Name: General Polls
Forum Discription: Create polls on topics not related to music
URL: http://www.progarchives.com/forum/forum_posts.asp?TID=92252
Printed Date: August 01 2014 at 20:21
Software Version: Web Wiz Forums 9.69 - http://www.webwizforums.com


Topic: Bonuses for bankers
Posted By: Blacksword
Subject: Bonuses for bankers
Date Posted: February 28 2013 at 04:48
The EU has agreed a cap on bankers bonuses, limiting such payments to a miserly 1 years salary.

http://www.bbc.co.uk/news/business-21608938


^^^ Sorry, not able to post links today..

This is clearly a difficult time for bankers, but thankfully the UK government is showing compassion by opposing this cap, saying it would make the City of London uncompetitive. Our government of chinless horse fiddling aliens, proves once again they bear no relationship to reality and does not reflect the will of its people.

But reality aside, I would like you to all take a moment to spare a thought for the investment banking industry and all the good work it does, with it's huge derivtive bubbles, sub prime mortgage criminal Ponzi schemes and other such products that no one really understands. Remind yourself that despite the fact that they have effectively bankrupted the western world, and subsequently, like a cancer sucked financial nourishment from their respective governmental hosts, leaving a trail of austerity and political instability in their wake, they too are human and to take away their rewards for failure and corruption is a clear breach of their human rights. Please write to your MP, or congressmen today and pledge your support for this poor forgotten class of people, and if possible donate your home, your savings and maybe at least one of your children to them. They too are human. Don't forget this.

Call this number now to donate the shirt off your back: 0800 666......etc

-------------
Ultimately bored by endless ecstasy!



Replies:
Posted By: someone_else
Date Posted: February 28 2013 at 05:01
I don't really care because I principally refuse to care about someone else's money, but it becomes rather sour when a top banquo grabs some €26.000.000 for steering a bank towards the abyss.

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


Posted By: Jim Garten
Date Posted: February 28 2013 at 05:16
Originally posted by Blacksword

I would like you to all take a moment to spare a thought for the investment banking industry and all the good work it does, with it's huge derivtive bubbles, sub prime mortgage criminal Ponzi schemes and other such products that no one really understands. Remind yourself that despite the fact that they have effectively bankrupted the western world, and subsequently, like a cancer sucked financial nourishment from their respective governmental hosts, leaving a trail of austerity and political instability in their wake, they too are human and to take away their rewards for failure and corruption is a clear breach of their human rights.


I really appreciate where you're coming from Andy - you've listed a lot of their good works, but in addition to all that, they still find time to assist the reconstruction of the western banking system by fixing the LIBOR rates & mis-selling products in order that they're guaranteed a future drain on their resources by way of hundreds of millions in compensation.

[edit]

BTW - Alan; if you read this - none of this is aimed at you.

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

Jon Lord 1941 - 2012


Posted By: Blacksword
Date Posted: February 28 2013 at 06:20
Originally posted by Jim Garten

Originally posted by Blacksword

I would like you to all take a moment to spare a thought for the investment banking industry and all the good work it does, with it's huge derivtive bubbles, sub prime mortgage criminal Ponzi schemes and other such products that no one really understands. Remind yourself that despite the fact that they have effectively bankrupted the western world, and subsequently, like a cancer sucked financial nourishment from their respective governmental hosts, leaving a trail of austerity and political instability in their wake, they too are human and to take away their rewards for failure and corruption is a clear breach of their human rights.


I really appreciate where you're coming from Andy - you've listed a lot of their good works, but in addition to all that, they still find time to assist the reconstruction of the western banking system by fixing the LIBOR rates & mis-selling products in order that they're guaranteed a future drain on their resources by way of hundreds of millions in compensation.

[edit]

BTW - Alan; if you read this - none of this is aimed at you.


A lot of what they do is actually criminal in real terms. Fixing LIBOR rates is fraud. Sometimes you just have to call these things out for what they actually are and not what the BBC or our politicans like to spin them as. Then of course there's HSBC laundering money for Mexican drug cartels. All on record. All admitted. The media furore should be deafening - and ongoing - and heads should be rolling left right and centre, but no. A few fines here and there. A bit of a ticking off and a bit of an apology now and then. A few stern words about 'what we can learn' etc etc,and round it all goes.

What do you call an organisation that operates above and beyond the law with impunity (unless it's politically expedient to hang some hapless individual out to dry)? You call it 'the establishment'

-------------
Ultimately bored by endless ecstasy!


Posted By: Dean
Date Posted: February 28 2013 at 06:22
The collective name for Bankers?
 
 
A Wunch.


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


If you cannot be wise, pretend to be someone who is wise and then just behave like they would - Neil Gaiman


Posted By: CPicard
Date Posted: February 28 2013 at 08:22
The question of bonuses for bankers could be asked about nearly any profession with high responsabilities AND high salaries AND low morality.
In fact, from my point of view, there should be no bonuses for anyone, except collective bonuses at the end of the year.


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


Posted By: King of Loss
Date Posted: February 28 2013 at 08:23
They really f*cked a lot of the world. I mean, worldwide about a hundred million people in the world lost their jobs and some in wealthier countries can't even find a half-decent job. I think some of them should be given an unfair trial just like the unfairness they gave us over the last 5 years for this piss economy where our wages are a lot lower.


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


Zizou 1988-2006


Posted By: King of Loss
Date Posted: February 28 2013 at 08:40
Originally posted by Blacksword

Originally posted by Jim Garten

Originally posted by Blacksword

I would like you to all take a moment to spare a thought for the investment banking industry and all the good work it does, with it's huge derivtive bubbles, sub prime mortgage criminal Ponzi schemes and other such products that no one really understands. Remind yourself that despite the fact that they have effectively bankrupted the western world, and subsequently, like a cancer sucked financial nourishment from their respective governmental hosts, leaving a trail of austerity and political instability in their wake, they too are human and to take away their rewards for failure and corruption is a clear breach of their human rights.


I really appreciate where you're coming from Andy - you've listed a lot of their good works, but in addition to all that, they still find time to assist the reconstruction of the western banking system by fixing the LIBOR rates & mis-selling products in order that they're guaranteed a future drain on their resources by way of hundreds of millions in compensation.

[edit]

BTW - Alan; if you read this - none of this is aimed at you.


A lot of what they do is actually criminal in real terms. Fixing LIBOR rates is fraud. Sometimes you just have to call these things out for what they actually are and not what the BBC or our politicans like to spin them as. Then of course there's HSBC laundering money for Mexican drug cartels. All on record. All admitted. The media furore should be deafening - and ongoing - and heads should be rolling left right and centre, but no. A few fines here and there. A bit of a ticking off and a bit of an apology now and then. A few stern words about 'what we can learn' etc etc,and round it all goes.

What do you call an organisation that operates above and beyond the law with impunity (unless it's politically expedient to hang some hapless individual out to dry)? You call it 'the establishment'


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


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


Zizou 1988-2006


Posted By: Jim Garten
Date Posted: February 28 2013 at 08:46
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??

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

Jon Lord 1941 - 2012


Posted By: King of Loss
Date Posted: February 28 2013 at 08:56
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??


http://en.wikipedia.org/wiki/The_Hongkong_and_Shanghai_Banking_Corporation

Read.

And it also supplies state sponsors of terrorism with money laundering services.


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


Zizou 1988-2006


Posted By: chopper
Date Posted: February 28 2013 at 08:58
Originally posted by Jim Garten

Originally posted by Blacksword

I would like you to all take a moment to spare a thought for the investment banking industry and all the good work it does, with it's huge derivtive bubbles, sub prime mortgage criminal Ponzi schemes and other such products that no one really understands. Remind yourself that despite the fact that they have effectively bankrupted the western world, and subsequently, like a cancer sucked financial nourishment from their respective governmental hosts, leaving a trail of austerity and political instability in their wake, they too are human and to take away their rewards for failure and corruption is a clear breach of their human rights.


I really appreciate where you're coming from Andy - you've listed a lot of their good works, but in addition to all that, they still find time to assist the reconstruction of the western banking system by fixing the LIBOR rates & mis-selling products in order that they're guaranteed a future drain on their resources by way of hundreds of millions in compensation.

[edit]

BTW - Alan; if you read this - none of this is aimed at you.

Thanks Jim, I entirely agree anyway.

btw - I'm not a banker, I'm an IT technician who happens to work for a Bank.


-------------
http://www.last.fm/user/chopper777/?chartstyle=basicrt10" rel="nofollow">


Posted By: King of Loss
Date Posted: February 28 2013 at 09:01
Originally posted by Jim Garten

Originally posted by Blacksword

I would like you to all take a moment to spare a thought for the investment banking industry and all the good work it does, with it's huge derivtive bubbles, sub prime mortgage criminal Ponzi schemes and other such products that no one really understands. Remind yourself that despite the fact that they have effectively bankrupted the western world, and subsequently, like a cancer sucked financial nourishment from their respective governmental hosts, leaving a trail of austerity and political instability in their wake, they too are human and to take away their rewards for failure and corruption is a clear breach of their human rights.


I really appreciate where you're coming from Andy - you've listed a lot of their good works, but in addition to all that, they still find time to assist the reconstruction of the western banking system by fixing the LIBOR rates & mis-selling products in order that they're guaranteed a future drain on their resources by way of hundreds of millions in compensation.

[edit]

BTW - Alan; if you read this - none of this is aimed at you.


I don't think they plan on fixing the Western banking system anytime soon. Too much profits to be made... Only once most of the people start waking up, this can be fixed...


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


Zizou 1988-2006


Posted By: The T
Date Posted: February 28 2013 at 09:35
Bankers need and deserve our full support. They have rough lives of privation and hunger yet they manage to put greed aside in benefit of all their charitable work for the masses. How horrible you people are talking about these seraphims on Earth without your full respect.

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


Posted By: Jim Garten
Date Posted: February 28 2013 at 09:42
Originally posted by King of Loss

http://en.wikipedia.org/wiki/The_Hongkong_and_Shanghai_Banking_CorporationRead


Many thanks - good old Wiki, eh?

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

Jon Lord 1941 - 2012


Posted By: King of Loss
Date Posted: February 28 2013 at 10:17
Originally posted by Jim Garten

Originally posted by King of Loss

http://en.wikipedia.org/wiki/The_Hongkong_and_Shanghai_Banking_CorporationRead


Many thanks - good old Wiki, eh?


It's not even a secret that HSBC launders money for drug cartels, gangs and terrorists, so why be surprised at the history?


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


Zizou 1988-2006


Posted By: Blacksword
Date Posted: February 28 2013 at 12:21
HSBC mainstream articles about money laundering activities..

http://www.guardian.co.uk/business/2012/dec/11/hsbc-bank-us-money-laundering" rel="nofollow - Guardian

http://www.dailymail.co.uk/news/article-2230349/HSBC-accused-setting-thousands-tax-evading-accounts-Jersey-including-drugs-arms-dealers.html" rel="nofollow - Daily Mail

http://www.aljazeera.com/news/americas/2012/07/2012716213139157207.html" rel="nofollow - Al Jazeera

http://www.dailyrecord.co.uk/news/business-consumer/hsbc-accused-of-helping-drug-dealers-1428404" rel="nofollow - Daily Record

http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/9665751/HSBC-investigation-Mexican-subsidiary-investigated-over-money-laundering-claims.html" rel="nofollow - The Telegraph


I could go on...

Anyway, the dubious activities of HSBC are the tip of the iceberg. The dubious trading of institutions such as Goldman Sachs, Lehmen Brothers and J.P Morgan Chase in relation to the derivatives market would make your head spin. Just as government turned a blind eye to mafia operations for years, they have extended the same courtesy to these institutions, occasionally hanging some fall guy, like Madoff out to dry.

-------------
Ultimately bored by endless ecstasy!


Posted By: Gerinski
Date Posted: February 28 2013 at 13:11
Banking was a more or less respectable business in its origins, when people having money lent it in exchange for a return with interest (and vice-versa).
Nowadays it has become a business where they lend money they do not have, the whole economy is built on money or wealth which does not yet exist, only on the expectation (or rather, hope) that it will exist in the future. This is what makes the modern financial world an irresponsible risk to the rest of the society.


Posted By: King of Loss
Date Posted: February 28 2013 at 13:17
I think the reason why the government lets the banks off of the hook, cause they pretty much provide the government with a free ride... I mean look at the debt spending binges of countries like the US, the UK, Germany, Japan and China.

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


Zizou 1988-2006


Posted By: Gerinski
Date Posted: February 28 2013 at 15:32
Originally posted by King of Loss

I think the reason why the government lets the banks off of the hook, cause they pretty much provide the government with a free ride... I mean look at the debt spending binges of countries like the US, the UK, Germany, Japan and China.
Yes but again, if they bought all that sovereign debt with money they have that would be quite legitimate, the problem is that they buy debt with money they do not actually have.
Last year, with most of the Spanish banks bordering bankrupcy which was strangling Spanish economy to death because companies could not receive financing from the banks (caused by a crazy real-state bubble which is not the purpose to discuss here), the EU Central Bank finally provided an injection of capital for 40 billion euro to re-capitalise the Spanish banking sector. What has happened? Since the interest of the Spanish debt is very high (around 6%) the banks are using the money they received to buy Spanish debt instead of pumping it into the real economy. The economy is not moving at all because the companies do not yet get any financing from the banks, a relatively safe and attractive 6% interest from the Spanish government is more interesting than lending money to a company which who knows if they will make profit or losses. The government is happy because they can show decreasing risk premium figures but it's all a masquerade quite removed from real economy. A lot of money pumped in but not to boost real economy, just to make 'the investors' quiet and safe.


Posted By: Man With Hat
Date Posted: February 28 2013 at 15:46
BANKERS ARE OUR LORDS
WE SHALL BOW DOWN TO THEM AND LICK THEIR FEET
TOUCH THEM WHERE THEY WANT
AND FILL THEIR LIVES WITH PLEASURE

-------------
Dig me...But don't...Bury me
I'm running still, I shall until, one day, I hope that I'll arrive
Warning: Listening to jazz excessively can cause a laxative effect.


Posted By: lazland
Date 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?


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


In Lazland, life is transient. Prog is permanent.


Posted By: ProgMetaller2112
Date Posted: February 28 2013 at 17:12
The Last One Angry

-------------
“War is peace.
Freedom is slavery.
Ignorance is strength.”
― George Orwell, Nineteen Eighty-Four

"Ignorance and Prejudice and Fear walk Hand in Hand"- Neil Peart



Posted By: JJLehto
Date 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" rel="nofollow - 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" rel="nofollow - 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" rel="nofollow - http://www.huffingtonpost.com/2013/01/02/hsbc-money-laundering-colombian-drug-traffickers_n_2395167.html


-------------
"It's fine, luckily we're all English so no one will ask any questions. Thank you centuries of emotional repression."


Posted By: JJLehto
Date 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.


-------------
"It's fine, luckily we're all English so no one will ask any questions. Thank you centuries of emotional repression."


Posted By: Jim Garten
Date 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

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

Jon Lord 1941 - 2012


Posted By: Dean
Date 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.


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


If you cannot be wise, pretend to be someone who is wise and then just behave like they would - Neil Gaiman


Posted By: Easy Livin
Date 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.


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


Posted By: Jim Garten
Date 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.




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

Jon Lord 1941 - 2012


Posted By: Dean
Date 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.

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


If you cannot be wise, pretend to be someone who is wise and then just behave like they would - Neil Gaiman


Posted By: Blacksword
Date 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?

-------------
Ultimately bored by endless ecstasy!


Posted By: rogerthat
Date 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. 


Posted By: rogerthat
Date 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.   


Posted By: Blacksword
Date 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.

-------------
Ultimately bored by endless ecstasy!


Posted By: rogerthat
Date 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.


Posted By: Blacksword
Date 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.

-------------
Ultimately bored by endless ecstasy!


Posted By: King of Loss
Date 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.


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


Zizou 1988-2006


Posted By: King of Loss
Date 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.


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


Zizou 1988-2006


Posted By: King of Loss
Date 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" rel="nofollow - 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" rel="nofollow - 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" rel="nofollow - 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.


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


Zizou 1988-2006


Posted By: Blacksword
Date 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.



-------------
Ultimately bored by endless ecstasy!


Posted By: King of Loss
Date 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


Posted By: Blacksword
Date Posted: March 01 2013 at 14:03
^^^ Yes, that's true re; Russia, and I would agree that 3 WS based agencies should probably not be in charge of rating the whole world.

-------------
Ultimately bored by endless ecstasy!


Posted By: JJLehto
Date Posted: March 01 2013 at 17:52
EL is right, and indeed while this is not a popular answer...the work required to make it in banking is pretty brutal.

Most of us don't want this life, I certainly as hell don't, but you gotta be exemplary in school, get an MBA, then endure insane hours, cut throat competition and just bust your ass. Constant threat of being tossed out and probably get a lot of sh*t from bosses.
So really kinda messed up to get angry over it, outside a general jealousy. Any of us could pursue such a life, if you wanna make big money. So why be mad?

Like I said the issue is when it spills out of their world and starts impacting ours. Now to the point that many modern economies are built heavily on bankers madness. This is the problem!


-------------
"It's fine, luckily we're all English so no one will ask any questions. Thank you centuries of emotional repression."


Posted By: Dean
Date Posted: March 01 2013 at 18:11
Originally posted by JJLehto

EL is right, and indeed while this is not a popular answer...the work required to make it in banking is pretty brutal.

Most of us don't want this life, I certainly as hell don't, but you gotta be exemplary in school, get an MBA, then endure insane hours, cut throat competition and just bust your ass.
So really kinda messed up to get angry over it, outside a general jealousy.

Like I said the issue is when it spills out of their world and starts impacting ours. Now to the point that many modern economies are built heavily on bankers madness. This is the problem.
I couldn't give a flying fart how brutal it is and it certainly is nothing to do with general jealousy. Getting paid for doing your job is called salary, geting paid extra for doing it well is called a bonus. If you get paid a bonus whether you do well or screw up is not a bonus, it's salary with tax benefits.

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


If you cannot be wise, pretend to be someone who is wise and then just behave like they would - Neil Gaiman


Posted By: JJLehto
Date Posted: March 01 2013 at 18:15
Indeed, but that's there whacky ass world and really what can ya do besides fume over it?
Just don't make all of us pay for your f**k ups.
Which of course keeps happening, and they are propped up constantly along the wayAngry


-------------
"It's fine, luckily we're all English so no one will ask any questions. Thank you centuries of emotional repression."


Posted By: King of Loss
Date Posted: March 01 2013 at 21:21
Now I bet everyone is noticing those much higher prices on everything. I think the most obvious stuff is food, oil and other daily necessities. It's just a bugger for us, but in poorer countries, it's terrible.

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


Zizou 1988-2006


Posted By: rogerthat
Date Posted: March 01 2013 at 21:46
Yeah, prices of everything has gone up at least by 100% if not more in just the last 5-6 years here.   It's ok for the middle class but I really wonder how the poor can possibly cope with such monstrous inflation.


Posted By: fusionfreak
Date Posted: March 04 2013 at 16:48
Originally posted by rogerthat

Yeah, prices of everything has gone up at least by 100% if not more in just the last 5-6 years here.   It's ok for the middle class but I really wonder how the poor can possibly cope with such monstrous inflation.
I can tell you it's not very easy all the time for the have nots,everything seems so expensive!But one can't forget that middle classes are also suffering a lot.Bonuses should be diminished and top bankers such as Jamie Dimon or Stephen Hester should be punished because they went dangerously wrong.Every government should separate deposit  from trading in the banks.By the way Jolly Banker by Woody Guthrie is a very good song.

-------------
I was born in the land of Mahavishnu,not so far from Kobaia.I'm looking for the world
of searchers with the help from
crimson king


Posted By: Blacksword
Date Posted: March 05 2013 at 01:56
^^^ The middle class are feeling it too. You're right, and people often forget that the working class and middle class need each other in a functioning economy. Our last government re-branded the concept of being 'middle class' The labour party - historically the champions of the working class - claimed we were 'all middle class now' In fact all they meant is that we were all now allowed to accrue vast amounts of debt to pay for 'stuff' we wouldn't previously have been able to buy. It made many people feel and look richer, but those people are now discovering they were conned, and this current government is just rubbing their noses in it, and grinding them into the dirt.

-------------
Ultimately bored by endless ecstasy!


Posted By: Easy Livin
Date Posted: March 05 2013 at 03:08
The assumption that people get bonuses for not performing is quite laughable. These organisations may be ethically challenged, but they do not just give their money away out of charity. Bonuses are usually based on meeting and exceeding pre-set targets. In the case of a company that is on the ropes, the bonus might be payable if the incoming staff appointed to turn it around can initially get the losses down to a manageable level. There's no magic wand for turning the company around, so you have to offer incentives to get the people in who can do the job.

There's a great lack of understanding or heads in the sand here about how things actually work. As I've said before, I don't seek to justify the way things are, but let's live in the real world. I notice too that no one has refuted the notion that it is our own greed that is at the root of the issue.


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


Posted By: Dean
Date Posted: March 05 2013 at 03:45
Originally posted by Easy Livin

The assumption that people get bonuses for not performing is quite laughable. These organisations may be ethically challenged, but they do not just give their money away out of charity. Bonuses are usually based on meeting and exceeding pre-set targets. In the case of a company that is on the ropes, the bonus might be payable if the incoming staff appointed to turn it around can initially get the losses down to a manageable level. There's no magic wand for turning the company around, so you have to offer incentives to get the people in who can do the job.
Somehow when a bank gets a bail-out, posts losses for that year and still pays bonuses then that's not laughable, it's cryable. It's tantamount to being criminal.
 
The incentive to get people to do their jobs is called salary. If those people who can do the job were not paid bonuses where would they go? More to the point: what are those people actually for? If they are not "doing the job" and making money for their employers then what are they there for? Seriously, what is the point of an investment banker who cannot invest money? What is the point of a bank trader who cannot trade?
 
http://www.cnbc.com/id/29735469/AIG_039Retention039_Bonus_Paid_To_Execs_Who_Already_Left" rel="nofollow - So called retention bonuses don't work when they are paid to employees who have already left the company .
Originally posted by Easy Livin

There's a great lack of understanding or heads in the sand here about how things actually work. As I've said before, I don't seek to justify the way things are, but let's live in the real world. I notice too that no one has refuted the notion that it is our own greed that is at the root of the issue.
What is there to refute? The purpose of investing in a bank is to get a return on your money, without that incentive you may just as well store your cash under the matress, if saving money with a return that barely keep track of inflation motivated by greed then so be it.

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


If you cannot be wise, pretend to be someone who is wise and then just behave like they would - Neil Gaiman


Posted By: Blacksword
Date Posted: March 05 2013 at 06:57
With the greatest of respect to EL, this situation is actually fairly clear cut, and it is you who appears not to understand how things work.

Bonuses are often paid to traders even when their respective banks are showing losses, and in some cases ahave been bailed out and even put at least in part, in public ownership. It wouldn't be acceptable in any other private sector areas ( andcertainly not the public sector) to pay out millions in bonuses when the business is going down the swannie. It is morally repugnant to raid the public public purse to bail out private corporations only for those corporations to be - in some cases - exempt from corporation tax and to be awarding their crooked staff vast amounts of money for gambling.

Re; "What is the point of bank trader who can't trade? Who says they can't trade? The issue is what they are trading and the level of risk ascociated to the investment, not to mention the moral arguments of trading food stocks, among other commodities, as derivatives; deliberately and irresponsibily inflating huge debt bubbles to make a fast buck, knowing full well that bubbles burst and it is then the rest of us who pay the price. The banks have been able to do this with impunity because there has always been the promise of government bail outs. If this promise was removed the trading would not be so reckless. It may be less profitable in the short term, but it would likely be more stable in the long term. I fail to hear any coherant arguments as to why the fabric of our civilization should be in the hands of five or six mega banks. No one seems bothered by this. they either invest their energies in berating the poor for drawing benefits, or the middle class for having the audacity to own a house. People need to wake the f*** up!

Re; our own greed. Is this the greed that has been agressively encouraged by successive governments? It's easy to say people have minds of their own and should be capable of making the decision to avoid debt without help, but the problem is most don't and consequently can't. If you take a single parent on benefits, who can't afford to buy new clothes for their child, and you give them a credit card, what do you think they're going to do? Cut it up and throw it away? No, they're going to do what every good parent tries to do, and privide for their child. Over the last 20 years the benefit class has been able to borrow through banks and credit card companies. Government has not intervened to discourage or even educate about rhe conseqeunces of debt, because they know that living on the never never creates an illusion of wealth which can score electoral points for them. The psychology of debt is well understood by lenders and politicians alike and is exploited fully.

-------------
Ultimately bored by endless ecstasy!


Posted By: chopper
Date Posted: March 05 2013 at 07:42
Originally posted by fusionfreak

Originally posted by rogerthat

Yeah, prices of everything has gone up at least by 100% if not more in just the last 5-6 years here.   It's ok for the middle class but I really wonder how the poor can possibly cope with such monstrous inflation.
I can tell you it's not very easy all the time for the have nots,everything seems so expensive!But one can't forget that middle classes are also suffering a lot.Bonuses should be diminished and top bankers such as Jamie Dimon or Stephen Hester should be punished because they went dangerously wrong.Every government should separate deposit  from trading in the banks.By the way Jolly Banker by Woody Guthrie is a very good song.
To be fair most of RBS' problems pre-date Stephen Hester. Blame them all on Sir Fred Goodwin.

-------------
http://www.last.fm/user/chopper777/?chartstyle=basicrt10" rel="nofollow">


Posted By: rogerthat
Date Posted: March 05 2013 at 08:40
Originally posted by Easy Livin


There's a great lack of understanding or heads in the sand here about how things actually work. As I've said before, I don't seek to justify the way things are, but let's live in the real world. I notice too that no one has refuted the notion that it is our own greed that is at the root of the issue.

I'd suggest you speak for yourself there.  Do you know how conservative - and expensive - retail lending is in countries like India?  I am a qualified accounting professional and work for a large company but when I approached the bank for a home loan, I was only eligible to a loan of about 60% of my take-home pay (though I sought less anyway) and a still smaller percentage of my gross.  But what is the point of prudence, I wonder, if credit is built up like a pack of cards elsewhere in the world and upsets the best calculations.   I'd also like to point out that credit growth was fuelled very largely by an errant Federal Reserve that drove interest rates down to an all time low and then quadrupled it in a matter of a few quarters. If that is not the perfect recipe for financial disaster, I wonder what is.  As I said earlier, I'd not single out the bankers alone for blame because govts, rating agencies were all in it together.   It's a gigantic scam and its perpetrators still live in furious denial of the truth.


Posted By: King of Loss
Date Posted: March 05 2013 at 10:21
It's quite hilarious that Ben Bernanke is being promoted as a good central bankerOuchConfusedI mean, it's because of his direct monetary policies we have close to double digit inflation and a hugely inflated stock market that's going to crash at any time when the bankers think they can profit off of the next crisis.


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


Zizou 1988-2006


Posted By: The Doctor
Date Posted: March 05 2013 at 10:26
I don't know about hung as I do not really believe in the death penalty, but they should be forced to work the rest of their lives digging ditches or flipping burgers for sub-minimum wage.  I think $2.00/hour sounds about right.  And obviously, they should be stripped of their wealth.

-------------
I can understand your anger at me, but what did the horse I rode in on ever do to you?


Posted By: Padraic
Date Posted: March 05 2013 at 12:31
Originally posted by King of Loss

 hugely inflated stock market that's going to crash at any time 

I still have a lot of cash on the sideline because I also think this is the case, but sometimes I think I'm wrong.


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


Posted By: Easy Livin
Date Posted: March 05 2013 at 13:01
Sorry, I still think there is a lot of misinformation here. I think it's convenient to jump on a bandwagon to criticise  the "system" without accepting responsibility for it. As I explained previously, bonuses are the "at risk" portion of a person's salary. If you simply paid them the higher salary without any incentive to earn it, would that really be better? A company may be making loses and still need to pay contractual bonuses (to current and former employees). The fact is that if they have met or exceeded the targets they were set to generate in terms of income for the company, they get the contractually agreed bonus. Those who failed and caused the loses don't. As I also explained, sometimes reducing losses is actually meeting an agreed target. That is the real world.

Oh and as for blaming the government. Lets remember that the government is a reflection of the people. The party in power got the most votes and were democratically elected by you and me. The "I didn't vote for them" excuse doesn't wash as the problem emanate from all sides. If you didn't vote at all but could have, you are even more culpable. If you think you could do better, stand for election and persuade the electorate that your way is better.

As I probably have already said too often, I don't seek to condone or justify the way things are, but I do get irritated by those who seek to blame others for the issues without accepting their own share of the responsibility.


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


Posted By: lazland
Date Posted: March 05 2013 at 13:55
Originally posted by Easy Livin

Sorry, I still think there is a lot of misinformation here. I think it's convenient to jump on a bandwagon to criticise  the "system" without accepting responsibility for it. As I explained previously, bonuses are the "at risk" portion of a person's salary. If you simply paid them the higher salary without any incentive to earn it, would that really be better? A company may be making loses and still need to pay contractual bonuses (to current and former employees). The fact is that if they have met or exceeded the targets they were set to generate in terms of income for the company, they get the contractually agreed bonus. Those who failed and caused the loses don't. As I also explained, sometimes reducing losses is actually meeting an agreed target. That is the real world.

Oh and as for blaming the government. Lets remember that the government is a reflection of the people. The party in power got the most votes and were democratically elected by you and me. The "I didn't vote for them" excuse doesn't wash as the problem emanate from all sides. If you didn't vote at all but could have, you are even more culpable. If you think you could do better, stand for election and persuade the electorate that your way is better.

As I probably have already said too often, I don't seek to condone or justify the way things are, but I do get irritated by those who seek to blame others for the issues without accepting their own share of the responsibility.

And I wholeheartedly agree with you. An important point - they had to have people to lend to in the first place. That was us, on a credit binge which would "never end". 

Years of political activism taught me one thing above all others. You can fool most of the people most of the time.

God, I'm getting cynical in my approaching dotageUnhappy


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


In Lazland, life is transient. Prog is permanent.


Posted By: Finnforest
Date Posted: March 05 2013 at 14:42
Well said, Bob

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




Posted By: akamaisondufromage
Date Posted: March 05 2013 at 14:50
Well apparently Bankers jobs are so dull that we have to pay them shed loads of cash and then pay them shed loads more just in case they go and work somewhere else.  Why is this job so bad?  Everybody else is content to live on a wage and they do their best without having a bonus.  Bankers are not a limited commodity you can train up plenty of people to do this job.  They are not like footballers, theres only one Maradona (luckily) or one Rooney or whatever you can't train people to do what they do (on the whole).
 
Having said that , the EUs answer of limiting Bonuses is not the answer as they will just up the wages which doesn't depend on performance at all.  So it will be worse. 
 
From a UK perspective it is really very sad that we have become so dependent on the banking sector.  I blame it on that B*tch Thatcher who thought we could get everything from the service sector.  Ans successive governments have carried on asi.  We have been sold short. 


-------------
Help me I'm falling!


Posted By: Blacksword
Date Posted: March 05 2013 at 15:40
Originally posted by Easy Livin

Sorry, I still think there is a lot of misinformation here. I think it's convenient to jump on a bandwagon to criticise  the "system" without accepting responsibility for it. As I explained previously, bonuses are the "at risk" portion of a person's salary. If you simply paid them the higher salary without any incentive to earn it, would that really be better? A company may be making loses and still need to pay contractual bonuses (to current and former employees). The fact is that if they have met or exceeded the targets they were set to generate in terms of income for the company, they get the contractually agreed bonus. Those who failed and caused the loses don't. As I also explained, sometimes reducing losses is actually meeting an agreed target. That is the real world.
Oh and as for blaming the government. Lets remember that the government is a reflection of the people. The party in power got the most votes and were democratically elected by you and me. The "I didn't vote for them" excuse doesn't wash as the problem emanate from all sides. If you didn't vote at all but could have, you are even more culpable. If you think you could do better, stand for election and persuade the electorate that your way is better.
As I probably have already said too often, I don't seek to condone or justify the way things are, but I do get irritated by those who seek to blame others for the issues without accepting their own share of the responsibility.


Probably worth remembering that all the main parties on the ballot paper are supporters of the system, so the electorate has little choice. They could of course form their own political parties and challenge the status quo. How successful do you think that would be?

-------------
Ultimately bored by endless ecstasy!


Posted By: rogerthat
Date Posted: March 05 2013 at 18:53
Originally posted by Easy Livin

Sorry, I still think there is a lot of misinformation here. I think it's convenient to jump on a bandwagon to criticise  the "system" without accepting responsibility for it. As I explained previously, bonuses are the "at risk" portion of a person's salary. If you simply paid them the higher salary without any incentive to earn it, would that really be better? A company may be making loses and still need to pay contractual bonuses (to current and former employees). The fact is that if they have met or exceeded the targets they were set to generate in terms of income for the company, they get the contractually agreed bonus. Those who failed and caused the loses don't. As I also explained, sometimes reducing losses is actually meeting an agreed target. That is the real world.


Actually, the whole point of the credit boom was bankers, stock markets and rating agencies pretending and telling everyone in the world that the "fundamentals had never been so good".  Do I not know it, listening to them regurgitate that nonsense almost everyday around 2005-06 - when some more farsighted people had already begun to warn of the coming crisis - and reflecting wryly on their empty words once the meltdown set in.    So by building this bubble, they could make believe that bankers weren't really taking any risks at all and all their growth was risk free.   That is the point, there was no counterweight for the cost of risks in their reward structure.  They were rewarded for generating growth in the short term through risky strategies.  As I already said before, this is not empty rhetoric if you'd like to believe that is the case; IMF published a paper to this effect, warning of the possible problems arising out of this skewed reward structure. 

 A few lower level employees did pay the price after 2008 (and it is not at all clear that this was due to their involvement in this rather than simply being a 'rightsizing' activity) but the banks were handed out massive bailouts as America opened the ta(r)ps.  Largely the only top level executives who have borne the brunt are the ones who got implicated in corruption investigations by govt depts.   The banks themselves have not acted on it internally and nothing so far demonstrates that they won't return to their bad old ways given the chance (they probably have!) as they unrepentantly defend more and more de-regulation and decry govt 'interference'. 
Originally posted by Easy Livin

Oh and as for blaming the government. Lets remember that the government is a reflection of the people. The party in power got the most votes and were democratically elected by you and me. The "I didn't vote for them" excuse doesn't wash as the problem emanate from all sides. If you didn't vote at all but could have, you are even more culpable. If you think you could do better, stand for election and persuade the electorate that your way is better.


It remains to be seen who the American people will vote for to bring about change.  They probably thought they were doing so by voting Obama who wrote a book about all these amazing changes as part of his presidential campaign and got the Nobel Prize for it.  Except, they simply voted in one Wall Street Govt to replace the other.   Reagan and Clinton both backed Greenspan and so did Bush.  Bernanke was a Bush appointee and continues admirably with his task of note-printing well into Obama's second term.   Are the American people then to blame for not somehow voting the Libertarian party to power, which has only a 1% share of vote today?   It's been a long time since adult franchise truly reflected the will of the people.   That system was corrupted long ago and bought over by the wealthy.  

Ultimately a system exists to further the power of the ruling class and increase their hold over the middle and working class.   Democracy is a beautifully stable way to achieve it without incurring their wrath (perhaps, until now, when distrust of govts may just have hit an inexorable nadir).   If the people are responsible for the govts they vote to power, why is the President or the Senate given sweeping executive powers?  Shouldn't there be a public referendum for important decisions (like whether Citigroup deserves a bailout)?  And surely that is not even as tough to administer as before with the advancements of the internet.  This is a power struggle, that's what it is, and being the only sections that were really affected by the crisis, the middle and lower classes are rightly protesting it. 


Posted By: thellama73
Date Posted: March 05 2013 at 19:23
I challenge the premise of the question.

It's not for me to decide how much bankers should make just like it's not for me to decide how much hot dog vendors or florists or manicurists make. They should make whatever people are willing to pay them.

What I do object to is banks getting bailed out by the government because they are "too big to fail". I imagine bonuses would go down a bit if bankers knew that they would have to suffer the consequences of their business decisions.


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


Posted By: rogerthat
Date Posted: March 05 2013 at 19:43
Originally posted by thellama73



What I do object to is banks getting bailed out by the government because they are "too big to fail". I imagine bonuses would go down a bit if bankers knew that they would have to suffer the consequences of their business decisions.

I completely agree, the too big to fail theory goes against their free market rhetoric.  But then, they never really believed in free markets as an ideology, only in doing whatever was necessary to further their self interest.  


Posted By: Easy Livin
Date Posted: March 06 2013 at 02:52
But imagine the situation if they had not been bailed out. If a bank such as RBS/NATWest or HBOS/Lloyds/TSB had been allowed to fail, everyone in the country would have suffered. Bear in mind what happens when a company goes bust. Those with deposits in the bank could potentially have lost their money, those borrowing money would have found their loans and mortgages being called up. Wages could not be paid as the payment system could not operate properly. And it would not have been just the bank going bust that would have suffered. The whole banking system nationally and potentially internationally would have been at threat. It's a real house of cards situation. 

Like them or loathe them (and who actually likes them!?) banks are a cornerstone of our society. What is needed is tighter regulation of speculative activities (including commodities trading) globally. 


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


Posted By: Dean
Date Posted: March 06 2013 at 03:20
^ to invest so much in a house of cards doesn't seem to be the wisest thing to do then. When a company goes bust the assets are sold off - loans and mortgages are assets and they would not be called-in, they would be sold (transfered) to another bank.

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


If you cannot be wise, pretend to be someone who is wise and then just behave like they would - Neil Gaiman


Posted By: rogerthat
Date Posted: March 06 2013 at 08:09
Originally posted by Easy Livin

But imagine the situation if they had not been bailed out. If a bank such as RBS/NATWest or HBOS/Lloyds/TSB had been allowed to fail, everyone in the country would have suffered. Bear in mind what happens when a company goes bust. Those with deposits in the bank could potentially have lost their money, those borrowing money would have found their loans and mortgages being called up. Wages could not be paid as the payment system could not operate properly. And it would not have been just the bank going bust that would have suffered. The whole banking system nationally and potentially internationally would have been at threat. It's a real house of cards situation. 

Like them or loathe them (and who actually likes them!?) banks are a cornerstone of our society. What is needed is tighter regulation of speculative activities (including commodities trading) globally. 

I am aware of the potential consequences of not bailing them out.  But that would have been a more just solution when what was happening was not just market failure but financial fraud.  Weren't Enron, Arthur Andersen, Merck allowed to die?  If the market was supposed to take care of itself, they should have had more faith in its ability to do so than press the panic button. 

By the way, the meltdown happened because they let Lehmann Bros bankruptcy go through anyway which sent ripples through the global financial system.  So they neither averted the crisis nor saved taxpayer money, made a fairly equal mess of both.  Both consequences could have been avoided if only the Fed hadn't tightened so drastically.   Cooling off a loose monetary policy has to be a calibrated process, or the consequences will tend to be drastic.  


Posted By: ExittheLemming
Date Posted: March 06 2013 at 08:39
At the risk of sounding glib, why do we merely mutter curses when our chosen horse pulls up lame but strike heroic moral poses when our pension funds go teats skywards in the marketplace?

All investments are speculative and subject to the performance of any underlying stock at any moment in time.

Most of the comments to date in this thread consist of those faintly risible protestations to the effect that 'my continued investment is guaranteed but only if the market conditions are favourable but if they are not, I blame the traders and professional financiers for this unfavorable climate'

Contrary to popular belief, your savings and investments are insured by banks (to which you pay squat)

Let's allow all who invest our money go to the wall and attempt to extract our losses from zero shall we?




-------------
http://s312.photobucket.com/user/exitthelemming/media/SignaturePic2.jpg.html" rel="nofollow">


Posted By: rogerthat
Date Posted: March 06 2013 at 09:44
Originally posted by ExittheLemming

At the risk of sounding glib, why do we merely mutter curses when our chosen horse pulls up lame but strike heroic moral poses when our pension funds go teats skywards in the marketplace?

All investments are speculative and subject to the performance of any underlying stock at any moment in time.

Most of the comments to date in this thread consist of those faintly risible protestations to the effect that 'my continued investment is guaranteed but only if the market conditions are favourable but if they are not, I blame the traders and professional financiers for this unfavorable climate'

Contrary to popular belief, your savings and investments are insured by banks (to which you pay squat)

Let's allow all who invest our money go to the wall and attempt to extract our losses from zero shall we?




I'd agree with all of what you said if it were true that everybody who was affected by the events of 2008 had tried to ride the tide of dirt cheap credit, hoping to get rich the easy way.  But nothing could be further from the truth.  I am not sure how much you appreciate the level of interdependence in the world economy today.   All the more reason that govts should be prudent and contain risk to a minimum instead of fuelling more risk taking by speculators with easy money. 

Coming to my own case, I predicted the stock market crash of 2008 even though I was not aware of the magnitude of the financial crisis yet because I saw penny stocks going for crazy valuations and knew the market was headed for a steep fall.   My colleagues didn't listen to me and they lost money when their investments dropped from a cliff.   So far so good (or bad, however you put it).   But the impact also extended to widespread fall of demand and economic growth.  It so happened that I had just finished my apprenticeship and was looking for a job in the industry then and much to my dismay, I found the going very hard.   At least I was fortunate not to have been one of those engineers who had been offered a job in campus by IT majors only for their employment to be kept on hold for months, if not more than a year or so.   How am I or those engineers supposed to be only owning responsibility for excessive speculation or investment risk?   How are we supposed to be taking up hypocritical positions?  I don't see, at all.  The crisis affected many who had absolutely nothing to do with it and continues to because there is next to no political will to come up with any meaningful solutions.


Posted By: Dean
Date Posted: March 06 2013 at 10:12
Are people in this thread whining about the value of their investments? I'm not. I'm questioning the validity sanity of paying bonuses in the current economic climate based upon the questionable justifications that have been put forward for continuing to pay them. If I am partially to blame for the ills of the banking world then I am perfectly entitled to complain about their subsequent behaviour.

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


If you cannot be wise, pretend to be someone who is wise and then just behave like they would - Neil Gaiman


Posted By: Padraic
Date Posted: March 06 2013 at 11:36
I'm still trying to sort out how I'm personally to blame for a global financial crisis.

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


Posted By: The T
Date Posted: March 06 2013 at 11:44
^But Pat, all evidence points towards you. YOU are responsible for the crisis.

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


Posted By: Finnforest
Date Posted: March 06 2013 at 12:00

That's what I found too.  I did several months of research on this a while back and found it was not some secretive group of bankers.  It was indeed Pat.

Tongue


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




Posted By: The T
Date Posted: March 06 2013 at 13:00
Hang that b*****d

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


Posted By: Padraic
Date Posted: March 06 2013 at 13:06
Originally posted by The T

^But Pat, all evidence points towards you. YOU are responsible for the crisis.

Funny, still haven't received my bonus check in the mail.  Wink


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


Posted By: Gerinski
Date Posted: March 06 2013 at 20:22
Originally posted by Easy Livin

But imagine the situation if they had not been bailed out. If a bank such as RBS/NATWest or HBOS/Lloyds/TSB had been allowed to fail, everyone in the country would have suffered. Bear in mind what happens when a company goes bust. Those with deposits in the bank could potentially have lost their money, those borrowing money would have found their loans and mortgages being called up. Wages could not be paid as the payment system could not operate properly. And it would not have been just the bank going bust that would have suffered. The whole banking system nationally and potentially internationally would have been at threat. It's a real house of cards situation. 

Like them or loathe them (and who actually likes them!?) banks are a cornerstone of our society. What is needed is tighter regulation of speculative activities (including commodities trading) globally. 
The insurance business has a common practice called re-insurance, which basically means that the risk of the insurance company is itself insured. Let's say a certain insurance company A operates in region X, if there's an earthquake in region X it is most likely that the insurance company A will not be able to cover all the damages it has insured and would go bankrupt. By re-insurance the damages will be covered by other insurance companies B, C and D, and A can survive. Conversely A is re-insurer of B, C and D so they will pay a part of the costs if the same would happen to B, C or D.

A similar principle should be mandatory for banks so if they do something wrong their customers do not loose their savings and they do not need to be bailed out by yours and my money.


Posted By: Dean
Date Posted: March 07 2013 at 03:24
Originally posted by Gerinski


A similar principle should be mandatory for banks so if they do something wrong their customers do not loose their savings and they do not need to be bailed out by yours and my money.
This already exists - in the USA it is the FDIC, in the UK it is the FSCS, Belgium and all the other EU countries have their own systems. These are funded by the banks.

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


If you cannot be wise, pretend to be someone who is wise and then just behave like they would - Neil Gaiman


Posted By: Gerinski
Date Posted: March 07 2013 at 07:16
Originally posted by Dean

Originally posted by Gerinski


A similar principle should be mandatory for banks so if they do something wrong their customers do not loose their savings and they do not need to be bailed out by yours and my money.
This already exists - in the USA it is the FDIC, in the UK it is the FSCS, Belgium and all the other EU countries have their own systems. These are funded by the banks.
It did not work well enough when it was needed, the EU Central Bank has had to inject 40 billion euro into the Spanish banking sector to keep it from bankrupcy.


Posted By: Dean
Date Posted: March 07 2013 at 07:21
Originally posted by Gerinski

Originally posted by Dean

Originally posted by Gerinski


A similar principle should be mandatory for banks so if they do something wrong their customers do not loose their savings and they do not need to be bailed out by yours and my money.
This already exists - in the USA it is the FDIC, in the UK it is the FSCS, Belgium and all the other EU countries have their own systems. These are funded by the banks.
It did not work well enough when it was needed, the EU Central Bank has had to inject 40 billion euro into the Spanish banking sector to keep it from bankrupcy.
Well, quite - that's a bail-out. The "insurance" schemes only kick-in to protect investors money after the bank goes bust. The bail-out was not to save customer's savings, it was to save the banks.

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


If you cannot be wise, pretend to be someone who is wise and then just behave like they would - Neil Gaiman


Posted By: Gerinski
Date Posted: March 07 2013 at 07:38
Originally posted by Dean

Originally posted by Gerinski

Originally posted by Dean

Originally posted by Gerinski


A similar principle should be mandatory for banks so if they do something wrong their customers do not loose their savings and they do not need to be bailed out by yours and my money.
This already exists - in the USA it is the FDIC, in the UK it is the FSCS, Belgium and all the other EU countries have their own systems. These are funded by the banks.
It did not work well enough when it was needed, the EU Central Bank has had to inject 40 billion euro into the Spanish banking sector to keep it from bankrupcy.
Well, quite - that's a bail-out. The "insurance" schemes only kick-in to protect investors money after the bank goes bust. The bail-out was not to save customer's savings, it was to save the banks.
Yeah that's what I mean, these schemes provide some protection to the bank's customers (often not enough, you may read about the recent case of the 'preferentes' by the big Spanish bank Bankia where a lot of people have lost their savings, my father among them) but they do not really add responsibility to the banks behaviour.
These are funds collected by the government from the banks by the hard way (by law). In a 're-insurance scheme' on the other hand, the re-insurer will carefully judge the risk it is taking, and will not allow excessive risks being taken by the insured party. It provides a more self-regulating mechanism.


Posted By: Dean
Date Posted: March 07 2013 at 08:13
Originally posted by Gerinski

 In a 're-insurance scheme' on the other hand, the re-insurer will carefully judge the risk it is taking, and will not allow excessive risks being taken by the insured party. It provides a more self-regulating mechanism.
I'm no expert but isn't this how banks work anyway - unlike the simplistic view presented in Frank Capra's It's A Wonderful Life, no bank has deposited funds equal to the loans they give out - they loan out more money than they hold in deposits. This is exactly what you are proposing - spreading the risks (ie loans) to other banks - they borrow the money they lend, the repayments on the first loan funds their repayments on their subsequent loans, all they have to ensure is their interest rates to the customer are higher than the interest rates they get charged. This is why the LIBOR rates are so important to the banks, this is why toxic assets are so bad for them. 
 
Banks function because money moves, if money stops moving they simply cannot operate because they don't hold sufficient fixed deposits to pay their loans. Bank 'A' lends the money to customer 'B' and then borrows the same mount from bank 'C', 'B' uses the loan to buy from 'D', 'D' deposits that money with bank 'A', 'C', or even 'E'  - within the system of 'A', 'C' and 'E' there is now a sufficient deposit to cover the loan. All the need to do is ensure that 'A' funds that movement of money by charging 'A' interest on the loan so that 'B', 'C', 'D' and 'E' can all make money.


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


If you cannot be wise, pretend to be someone who is wise and then just behave like they would - Neil Gaiman


Posted By: Gerinski
Date Posted: March 07 2013 at 10:46
Originally posted by Dean

 This is exactly what you are proposing - spreading the risks (ie loans) to other banks
No, there's a big difference, a loan needs to be paid back, an insurance does not (sure you need to pay the premium but not the amount of the eventual damage). What I'm saying is that banks should be compulsorily insured against the risks they take.


Posted By: Jim Garten
Date Posted: March 07 2013 at 11:17
Originally posted by Padraic


Originally posted by The T

^But Pat, all evidence points towards you. YOU are responsible for the crisis.

Funny, still haven't received my bonus check in the mail.  Wink


You won't - I think the standard form of payment is a bag containing 30 pieces of silver.

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

Jon Lord 1941 - 2012


Posted By: Dean
Date Posted: March 07 2013 at 11:43
Originally posted by Gerinski

Originally posted by Dean

 This is exactly what you are proposing - spreading the risks (ie loans) to other banks
No, there's a big difference, a loan needs to be paid back, an insurance does not (sure you need to pay the premium but not the amount of the eventual damage). What I'm saying is that banks should be compulsorily insured against the risks they take.
I think we are talking in circles here, because that's what the FDIC, FSCS and all those other "insurance" schemes are currently doing. The bank can always foreclose on a bad loan, it cannot magic-up a lost deposit. Since protecting the loan has the same net effect as protecting the deposit then it doesn't matter which you pay the insurance premium on - however, from the insurers perspective the deposits are a lower risk so the premiums for the banks will be lower.


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


If you cannot be wise, pretend to be someone who is wise and then just behave like they would - Neil Gaiman


Posted By: Gerinski
Date Posted: March 07 2013 at 14:08
I'm not an expert either, but I don't think we're talking in circles that much. With re-insurance, an insurance company faced with an in principle bankrupt threat such as a major disaster affecting most of its insured customers can survive without needing support from the government, from my money, or without screwing its customers.
This is not the case with banks, when they screw it they screw it and regardless of such schemes, they often take along their customers with them (for example the protection scheme in Belgium covers only up to 100.000 euro, any further amounts are not insured and you just loose them), and then it's nice for them having the government backup with the motivation that 'they are too big to let them fail'.
Banks have needed our money to be rescued from the excessive risks they took, that is a fact, therefore I don't see it the same as the re-insurance case, as far as I know not one of my euro-cents has been used to rescue insurance companies.



Posted By: rogerthat
Date Posted: March 07 2013 at 19:10
^^  In short, are you arguing for a way to re-insure the deposits of customers of a failed bank?   A good idea, there should be some recourse for a customer to claim his lost deposit.   It is the fear of losing deposits that triggers bank runs and, eventually, a financial crisis.  Banks routinely write off loans on which they have no further scope of recovering money because they've gone bad.  It's the risk they undertake, like any other entrepreneurial activity.  It is also a heavily regulated industry and there are norms on what percentage of your assets can be NPAs, your reserves and how they are maintained.   The problem is in the 2008 crisis banks were saddled with loans that had been identified as good but were really NPAs. 

If you've watched the documentary Inside Job, even economists managed violent conflict of interest at that time, receiving huge sums of money from the chamber of commerce of countries on which they would write favourable opinions.   If the integrity of regulatory and academic institutions is compromised so seriously, there is no hope of averting a future crisis....we can only hope the next one is at least a decade away. 


Posted By: Dean
Date Posted: March 08 2013 at 02:18
Originally posted by Gerinski

I'm not an expert either, but I don't think we're talking in circles that much. With re-insurance, an insurance company faced with an in principle bankrupt threat such as a major disaster affecting most of its insured customers can survive without needing support from the government, from my money, or without screwing its customers.
This is not the case with banks, when they screw it they screw it and regardless of such schemes, they often take along their customers with them (for example the protection scheme in Belgium covers only up to 100.000 euro, any further amounts are not insured and you just loose them), and then it's nice for them having the government backup with the motivation that 'they are too big to let them fail'.
Banks have needed our money to be rescued from the excessive risks they took, that is a fact, therefore I don't see it the same as the re-insurance case, as far as I know not one of my euro-cents has been used to rescue insurance companies.

I absolutely agree with everything you have said. BUT they will not adopt your re-insurance idea while the existing methods are in place because it costs money.
 
Insurance companies are not saved or bailed-out, their assets and liabilities are transfered to other insurance companies, all the consumer sees is a change in the name on letterhead. Insurance companies are not squeaky clean - anyone with a private pension, life insurance or endowment policy on their mortgage will know they are just as capable of taking stupid risks with other peoples money


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


If you cannot be wise, pretend to be someone who is wise and then just behave like they would - Neil Gaiman



Print Page | Close Window

Bulletin Board Software by Web Wiz Forums® version 9.69 - http://www.webwizforums.com
Copyright ©2001-2010 Web Wiz - http://www.webwiz.co.uk