The Big Banks

[ColdInsomnia]

I've not got a story to share this time because I'm sure you've all seen the news lately, and I wanted to bring this into discussion with you lot.

Big Banks.

Right. I'll admit, I have no degree in economics, nor do I have any experience in stocks, or anything like that. The only 'qualification' I possess is a fleeting interest which has recently become 'inflated' (lol) due to the downturn of the economy.

Long story short, banks are making money, everyone's happy, Gordon Brown is an economic genius, bank CEO's walk away with their pockets full.

Banks start losing money, everyone's worried, Gordon Brown is the most hated man in the country, bank CEO's walk away with their pockets full because the tax-payer bails them out.

I was dubious at the thought originally, but wow. We really are all slaves to the bankers. If someone could explain to me how we are not, please do so. This is not a challenge - this is a plea, for I do not like to think I am wallowing in my own ignorance.

[Kickstart]

Hi

Most things need money. The job of banks is largely to connect those with money to loan with those who need to borrow money.A perfectly reasonable business.

Problem appears to be that the banks have loaned to those who cannot pay it back, while pretending the loans they are making are safe to those who have money (often other banks).

Now the loans are going bad the banks are in deep trouble. Not only those who had the dodgy lending practices but also those who tried to be responsible but were effectively lied to by the other banks in whome they invested in supposedly safe schemes.

Or look at it this way. You can invest in 2 things. One is 100% safe and gives you a 10% return. One is 50% safe and gives you a 20% return. What the dodgy banks have done is invest in the 50% safe things, while selling on the risk as though it was a 100% safe investment and pocketing the difference between the small expected profit and the actual far larger short term profit. Works well while things are going well hence they made massive short term profits, but now things are going wrong they are going pop.

All the best

Keith
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[igiyf]

[ColdInsomnia]

Well explained, thanks for that Kickstart.

I never thought I'd see myself saying it but I'm starting to believe that a free economy is a bad thing. The same way you don't give a small child a packet of crayons and leave them alone in a room. Walk away for five minutes and they'll have written all over the walls.

Banks aren't run by idiots. In fact, I'd go as far to say that banks are run by some of the smartest men on the planet. They must have surely known what would happen? Let's face it, of course they did. Morality means nothing to these folk. Of course, morality literally means nothing (but that's a seperate discussion), these guys know that the point in being alive is for #1 and #1 only.

I mean, christ, some of us in the public have seen this coming for some time. Leaving the economy unregulated is just allowing the bankers to not only steal our wallets, but bend us over and steal every ounce of wealth from the depths of our bowels, and they do not even care to put a glove on.
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"Our society is run by insane people for insane objectives. I think we're being run by maniacs for maniacal ends and I think I'm liable to be put away as insane for expressing that. That's what's insane about it."
John Lennon

[colin1]

Free market but with checks and balances is the way to go.

There has to be someone steering the ship.
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colin1 is officially faster than god

[Kickstart]

[Paivi]

The problem is the short term view taken by banks, as they are rewarding traders who make money in the short term (less than a year). It encourages traders to make very risky decisions, knowing that they'll get a multi-million dollar bonus in February, after which they'll change jobs. The fact that those trades they made then end up bankrupting the bank five years later if of no interest to them.

There have been suggestions by some bank management and central bank staff about making bonuses more long term, say three years, so the traders would have to take a more long-term view. They'd all have to do this though, as otherwise the only banks that have this would be struggling to get the best staff.

The other problem, specifically with Lehman's was that the CEO, Dick Fuld, had been at the helm for fifteen years. He'd started to think of the bank as his own and couldn't let go of the control by selling it just a few months ago when it was still possible. Still, he'll be fine, his exit package is about $60m. Yes, sixty million dollars. Others are let go without even their salaries being paid for the last month.
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My other bike's a Monster...

[ColdInsomnia]

[colin1]

You could argue that we are slaves to the rich and powerful. They own everything, we have to work in order to live in their world.

Many people can work their whole lives and have very little to show for it at the end of it and have just made someone else richer.

But the system works quite well. Valuable resources are generally controlled and managed by people who have an interest in doing a good job as they pocket the profits.

Those without power and vast amounts of money, do ok out of the system as they get enough to live on.

So we shouldnt reject the system, we should just tweak it a bit so it runs a bit more efficiently.

The banks themselves have lost out by emphasis on short term profit, so i think they will be bringing in their own checks and balances to try to reduce this sort of thing happening in the future.
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colin1 is officially faster than god

[Alex-RS]

Kickstart, do you know something about everything? I thought I had good general knowledge but my brain is a child's alphabet book compared to your encyclopedia of a mind.

[Skudd]

[bazza]

[fortknoq]

My cousin works for Lehman Brothers and lost his job today so sucks really.

I'm lucky my bank is so important to Switzerland (and Europe) that they'd just bail it out if required but mine has also suffered too with many job cuts.

And of course, the little man suffers. The people who are really hit by losing their jobs aren't the ones who are making their millions a year. Hell, the people who are doing the hard work, who are the ones who suffer.

Fight the Power

[Itchy]

[Itchy]

[igiyf]

yea lucky russia has not got any natural resources and america only wants to start a war with them because they defended them selves against Georgia

[Itchy]

[Kris]

Money Masters is a good vid to watch on YouTube.

Keith as ever misses the big scam which is fractional reserve banking and private companies (Fed reserve and Bank of England) being in control of a country's currency. Recipe for absolute disaster there. The banking families are quite open about their desire for world monopolies regarding wealth.

Basically the Central Banks have the ideal scam. Print and lend money that doesn't exist (ie. created from nothing) to everyone until most are leveraged beyond their means. (i.e. creation of a debt bubble) Smaller banks go into freefall when the music stops playing and some are left holding the bag. Debt can only be passed around so much. The taxpayer ends up with the bill for the bailout of the banks whilst Joe Public loses homes, loans etc and default on mortgages.

The smaller banks that merely package debts etc reported earlier this year that the Central Banks were suddenly refusing to buy debts anymore. This was the first indicator of the beginning of teh collapse.

The Central Banks and bankers own this country. We are merely guests and soon we will probably be asked to leave.
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www.prisonplanet.com

[Kickstart]

[igiyf]

[Kickstart]

[Itchy]

[Kris]

[Itchy]

[igiyf]

create money out of thin air and charge interest on it