[Closed] Idiot Unions!

more likely an air strike

Although mother nature in the form of an Icelandic volcano did a better job. Useless unions.

Druidh what point are you trying to make here? Did we bale the sector out or not? What is the point debating how many hundreds of billions it has costs so far and how many oit may costs overall . Can we just agree it was a lot -at least the size of the defecit so far?

junkyard - druids point is it hasnt cost much at all. The big numbers bandied about are only security figures - ie guarntees. They do not represent cash cost to the tax payer unless they are called upon. And as it unwinds the rate of default is turning out relatively modest all things considered. The actual cost to the taxpayer is a very small fraction of the numbers that are talked about. In the case of RBS, the work out will actually deliver a profit to the taxpayer.

The best way of doing that would be to allow them to get on and generate the sort of profits they were generating before?

You mean until the next crash happens?

Also, saying 'it hasn't cost us much at all' is a bit disingenuous. It shouldn't have cost us a penny, and hasn't the damage to the economy cost us?

I agree - I dont think there should have been any bank share purchases by the governement. But Im a "swivel eyed capitalist"* apparently so what do I know?

* according to the all knowing TJ

druids point is it hasnt cost much at all

Will save that quote for when we spend a few quid on benefits. So £100 billion is not that much? The fact we may one day make a profit on RBS.....is that an argument for nationlising industry from you 😉
How much would it have cost to rescue mining, the steel industry etc.
One rule for us one rule for them clearly. Why did we have to pay for the banks but not for manufacturing?

Junkyard - all the governemnt have done is swap one asset (the capcity to issue £100bn of debt in the future) with another asset £100+bn of shares in banks that are currenlty worth somewhat more. It has "cost" nothing unless the asset value of the shares falls below the original purchase price - which given they were toilet when the govt bough tthem shoul dbe pretty unlikely, esp as both banks are returning to profitability and better valuation methodology.

... And as it unwinds the rate of default is turning out relatively modest all things considered.

see, that's what confuses me most about all this - crashing stock markets, disappearing corporations, not because they've suddenly become so worthless but because a few thousand people in banks react like a flock of starlings to any stimulus. Massive swings that serve no purpose that I can see other than to allow their own buying and selling to make margins.

so we did not actually pay for the shares then no money changed hands tell me more. How can I invest in a company like this - that is without it costing me anything.
EDIT?: it is disingenious in the extreme to suggest that the banking crisis has cost us very little. Clearly it has brought the country to its knees it is why we need to cut public services etc

One of the reasons for the basle III capital adequacy requirements is to creat a buffer of liquid capital to prevent asset markets getting bound up which in turn increases the volatility of pricing.

Its worth remembering that at some point its quite feasible to have a spike fall in a a share price where as little as £100 of shares were traded but in theory can wipe £bns off the "valuation" of the company until another trade at a more reasonble price comes along.

It works in the other direction too - when Porsche suddenly became the most valuable company in the world - twas very funny.
http://www.spiegel.de/international/business/0,1518,587247,00.html

JY - the government bought shares. They now own shares greater in value than the amount spent on them. The taxpayer now owns assets greater than the value of the obligation to pay interest on the loans the govenrment will have taken to acquire the shares. It has "cost" us nothing in terms of national wealth. The government also underwrote some assets held by other banks - unless those assets cristalise in value at a loss (some will but by no means 100% of the asset value being guaranteed as some of the papers would make you believe by the way they write about it) that too wont cost us a great deal as capital values recover over the medium term - utterly toxic assets were not guarnateed. Finally the government issued bonds at a depressed value to assist in liquidity, that arguable too wont have cost us anything as it was a money supply issue not a government expenditure one. I dont see why you need to be so obtuse about it. The structural deficit which really is an ongoing cost to the government is a much bigger problem.

The structural deficit which really is an ongoing cost to the government is a much bigger problem.

Isn't the structural deficit suddenly much more of a problem because of the recession caused by the banking crisis affecting government revenue?

You seem to be suggesting the banks haven't really done anything wrong or caused any problems at all. 😕

grum - not at all, theres plenty the banks have got wrong - specifically the mis-valuation of some assets. Shareholders should take the hit for losses in revaluation, and to a great extent they did. Illiquidity also ads to valuation problems (if you cant sell something, becuase there's no buyers with cash, the price continues to fall) so there's an issue with capital adequacy (internationally, not just UK) which needs to be addressed by Basle III.

The structural deficit explained for you:

Is it sturdy?

The budget deficit measures the gap between tax receipts and public spending. This must be bridged through borrowing, which the Treasury predicts will hit £163bn this year.

The structural deficit is a more elusive concept, however.

It is the share of the budget deficit that would remain even after the economy recovers to its normal levels of output.

One big reason why the UK has seen such dramatic budget blowouts is we have seen a 6% crash in gross domestic product.

This hammers tax revenues and pushes up welfare payments.

In theory some of this deficit should disappear when the recession ends. But there is likely to be a residual, structural element that is driven by basic government profligacy.

Public spending commitments are simply outstripping the country's tax revenue-generating potential - even in good times.

The Treasury estimates the structural deficit will be 7.3% of GDP this year - out of a total deficit of 11.1%.

(the point about the structural deficit is that it's not a recession issue, but a permanent disjoint between revenue and planned expenditure)

I am being obtuse? You seem to be suggesting none of this is the banks fault and that we did not actually "DO" or pay anything to help them out at all. That we have made money out the banking crisis [ should we be thanking the bankers?
[url= http://www.****/news/article-1312241/Bank-chief-Mervyn-King-tells-TUC-We-let-economy-slip.html ]Here have an article from the Dail Mail with the schair of the B of E speaking about it That right wing enough for you?[/url]
EDIT I dont think anyone is arguing you can spend more than you earn ad infinitium but your figure show the recession,caused by the banks hit us at 7 % GDP and the other spending was fiscal stimulus in response to the downturn? It seems clear the banks are to blame now we are in this position we have to do somehting. The banks, now in profit, should help out. Does this seem reasonable to you ?Should we just make the public sector workers pay via unemployment?

You seem to be suggesting none of this is the banks fault

No I dont.
And if that's the level of your argument then Im not playing anymore.

Stoner - is there any future plan for the government to 'cash in' the public shares and assets? I assume at some point in the future UK plc should be due a giant payback.

Stoner, I agree about the VW story. When I heard about it I thought it was funny too, or more specifically, laughable.

Doesn't it seem pathetic to you that such blatantly ludicrous outcomes can result from a day's buying and selling (or more specifically some <unfair insult> gambling badly on price fluctuations and getting caught out)?

How can that system possibly help business (aside from it's own activities)?

I don't pretend to understand the markets but, to a large extent, I see the way they currently operate as an offensive joke. Shame it can't be regulated "properly".

Im not playing anymore

😆

That's probbly the most mature thing anyone's said on this thread!

yes - there's certainly no tory appetite to hold bank shares any longer than neccessary. They wont want to dump the shares in massive volumes on the open market with prior announcement, unlike some idiot did with our gold reserves. BUT Osborne has suggested releasing the shares to the public by subuscription at a discount. A review of banking and bank structures though means that it wont happen for a year or so now anyway. But id expect the UK govt to be disinvested of both holdings by the end of 2012.

Doesn't it seem pathetic to you that such blatantly ludicrous outcomes can result from a day's buying and selling

day to day volatility in market pricing of investments shouldnt be anything that actually concerns the vast majority of people. The fact it happens isnt actually a problem. In fact tax on share trades (stamp duty) and profits is what has kept the exchequer ticking over. Tobin tax takes it a step further.

Crashes though are different and inevitable no matter, again, what rubbish some idiot from north of Hadrian's wall spouted.

banking reform wont even solve boom and bust either - every bust is followed by regulation designed to fix [i]that[/i] bust, not the next one which is inevitably unforeseen and almost by design cant be defined before the event.

ok, thanks.

can i ask another...

Why arn't banks forced to split high street & investment arms. That way if the high risk stuff went wrong the investment bank could be allowed to fall?

thats one of the options that the review is considering.

Some of the big banks though are threatening to take their investment arms off shore rather than have to sell off their retail activities though which would be a massive blow to the exchequer.

Couple of questions then Stoner, if I may ?

What proportion of sales is actually taxed?: These are terms I barely understand but... short-selling, derivatives, baskets rather than single stocks, direct trading between banks outside the stock markets etc ?

Could "they" calculate a variable levy based on volume of sales for a given stock (or market sector) to discourage bandwagonning whenever things start to move ?

..And why not have a Tobin tax (now I "know" what it is)?

On lunch pint, scared. Back in a bit

scaredy

No idea on volume of taxable trades - hmrc site may help you, but Stamp Duty is payable on share transactions. The thing is most city trades arent shares, but instead other investment types or contracts which arent covered - but would be by a Tobin Tax.

taxing by volume would be a very very bad thing. You dont want to make the market less liquid. Its bad enough with SDLT.

as I always sasy in these threads, if anyone is interested in undertanding a bit more about the money markets I highly recommend
http://www.amazon.co.uk/Money-Machine-How-City-Works/dp/0141042893/ref=sr_1_fkmr0_1?ie=UTF8&qid=1285686109&sr=8-1-fkmr0

[img] [/img]

Ive bought and lost it three times lending it to other people 😉

Very readable, kept up to date and gives a jargon free introduction to the machinations of financial markets.

Sad fact is the unions dont make the British economy anything. Big business etc etc helps drive the economy.

Why don't the Unions start thinking 'how can we help the country grow again'?

That isn't striking at BA either.

yes no company needs it employees recruitment is your calling I believe Hora 🙄

I find it highly amusing that Ed. Milliband only won the leadership contest because he's the darling of the paymasters of the Labour party - the unions.

Stoner - Member

But Im a "swivel eyed capitalist"* apparently so what do I know?

* according to the all knowing TJ

Not just TJ.

When I met you Stoner, I was struck by how remarkably simular you looked to this guy :

[img] [/img]

Whilst your bowler hat and business suit inspired an air of confidence, trustworthiness, and firm authority,
I couldn't help but feel a tinge of uncertainty when I looked into your eyes.

The correct phrase is "swivel eyed right wing loon" Think John Redwood

One of the banks who were taken over ( can't remember details) the investment arm made some billions profit. The few hundred folk who worked there wanted more than half as bonuses. - thats millions each.

That is one area that needs to be dealt with

iwas looking for the idiots union and now I found them

Some of the big banks though are threatening to take their investment arms off shore rather than have to sell off their retail activities though which would be a massive blow to the exchequer.

massive blow or not, if they want to go, let them. No more being held to ransom.

gives a jargon free introduction to the machinations of financial markets.

Hasn't helped you with your posts though 😉

Don't[banks already pay duty to her majesty on every trade?

Duty on every trade,
Liz is already paid.
Squeezing the banks?
Not too much, thanks,
I'm a capitalist pal, I'm afraid.

Yours,
D. Belstein

Find myself largely agreeing with you Stoner - I hope this doesn't make me a Tory!

Can't agree that Osborne won't find a way to completely screw up the sale of the various stakes though - I suspect that he will give them away to some tax-exiled drinking chums or something similar.

no idea orange, since Im not a tory either 😯

Im not a tory either

See what I mean Stoner ? .........you can't even be trusted to be a Tory.

It's them eyes........dead giveaway. Shifty.

as I always say in these threads, if anyone is interested in undertanding a bit more about the money markets I highly recommend Money-Machine-How-City-Works

(Fred/Ernie, those eyes do seem to be leaning toward the left a bit)

Thank you Stoner for your eloquent explanations. Perhaps a few on this forum have now been educated beyond what the tabloid writers would have us all believe.

So, what did the Banks do wrong? Well, in essence, they were trading debt as if it were an asset. This was good for them. It made them look rich and strong and inflated their value so they could grow and grow, eating up smaller Banks as they went. Successive governments were delighted by this. Profitable Banks boosted the economy. They generated lots of income for HMG in the form of various taxes. They employed lots of people, all of whom were paying income tax. Unemployment numbers were reduced, minimising benefits. And of course we were all happy to go along with this. We all wanted a share in the dream.. Hell, how easy was it to get rich? All you had to do was buy a crappy flat somewhere, paint it, put up some nice curtains, and suddenly you were a property developer.

Did the Banks cause the recession? Well, probably yes. But it was all set off by a general slowdown anyway. As soon as there was any doubt around, those "assets" in the form of traded debt suddenly looked a bit thin. And so the whole house of cards came crashing down on a massive lack of confidence.

So, where [i]did[/i] all the money go? Well, there aren't thousand of bankers going around with a split of the £900Bn UK debt shared amongst them. Mostly it never existed in the first place. We were all just happy to spend beyond our means, happy to turn a blind eye to the fact that we weren't really earning it. From those at the top who were (and still are) happy to cream off what they can, to those at the bottom, who were (and still are) happy to believe that they can live on state handouts and/or a massive public sector. Councils, corporations, Quangos and governments all living beyond their means on the never-never, and all of us complicit in the convenient lie.

My apologies Stoner - I must have confused you with another Stone-related username, no idea who though!

(Shuffles off in old-aged confusion).