Occupy London protest: the debate from St Paul's

Actually very impressed overall with the video and quality of interviews. Almost managed to stay away from the mainstream media diartribe that it's just anti capitalists without meaning or purpose.

One must remember that the very premise of a bail out for banks is anti capatalism, those who take risks too large must fail for the those with the best, most efficient business models to take their place. This is what makes capitalism great and in not following through with the principles, capitalism has failed and is likely to take down the entire Western way of life with it.

Also, don't be distracted by the word sovereign in all of this.... All that bail out money being sent to Greece is going straight into the banks who shouldn't have lent the money in the first place. It's a win win for the big banks as they hoover up state assets at fire sale prices, paid for by taxpayers. Perverse doesn't quite say it.

I wish all the occupyers around the world the best of luck. Sadly with governments and their henchmen already paid off and I'm sure the anticipation of protests, I don't expect those at the top to be perterbed in the slightest. Business as usual.

I actually wonder just how many of those there are drawing benefit and by being there they make themselves unavailable for work, so should lose their benefits.

It is not that I do not have some, but only some, sympathy, with the demonstrators, but it is a matter for our corrupt politicians who should also order the police to to fully investigate the expense MP fraudsters and those covering for them and that would include Red Ed who was part of the corrupt administration that precluded the proper investigation and prosecution, apart from a few token dispensable politicians.

Clearly fit for the hardship of cold October nights, but not for working up anything like a sweat to earn a crust for their keep.

And for that I would approve of a few more nitpicking snoopers, it would scare a far larger number to forego their fraudulent benefit claiming activities.

And for them I would heartily approve of and encourage the bringing back of chain gangs, long sentences of course.

With rigour!

I was interested to read Mag 1's comment. To my mind bashing "the bankers" is an easy option for the media, politicians and the rest of us. I'm not in any way defending Fred the shred and would have great difficulty summoning the pity to empty my full bladder on Eric Daniels if I was lucky enough to see him on fire.

However, the billions of pounds in bail-outs has not gone to the banks - it has actually gone to the people the banks lent to. Be they an unemployed mid West American who was persuaded to buy a house with his benefit income, a 50year old Greek civil servant enjoying his first week of retirement on a full pension, or one of 3 deputy fire officers working in a 60 strong department of health, safety and clinical governance at your local hospital (yes, such things do really exist).

Whilst the greed of the bankers who slosh the vast sums of money around is certainly not to be lauded, their bloated salaries are but a small sand castle on the beach compared to the ocean of debt that has been racked up by Western Society for which, like it or not, most of us share at least some responsibility.

1. A bank is just another business.

2. Businesses have to make money, or they fail and close down.

3. One of the main ways banks make money is by lending money and charging interest on the loan.

4. Some banks may have made unwise loans in the past.

5. The real culprits here are those individuals or businesses who have taken those loans from the banks in the full knowledge they stood little chance of repaying them.

6. Everyone knows this, deep down, but the banks are a highly visible target, and the individuals and businesses are not.

7. The St Paul's protesters have made their point. They are now damaging St Paul's. There is a very nice indoor space at the Turbine Hall in the Tate Modern just over the river.

You have to understand that because I have all the capital, which in reality are ticks in a computer, no gold, I can do what I want. You have to come and work for me directly or indirectly, so that I can make more money, I'll pay you but for every pound you earn I'll give you 25p. The rest will go to keep me & my croneys in the style to which we have become accustomed.

No good kicking against this because I own all the media, I can get things done, I can "lobby" MPs, I can pay bent accountants so I don't pay any tax, my mates are at the top in the police, the army and judiciary.

My wealth has been handed down from generations of land grabbers, racketeers, slave traders, and cruel people we don't really want to talk about. Our lot sided with the king at the right time and got suitably rewarded in the 15th, 16th,17th centuries so here we are with all the loot...it was never really ours, it belongs to the poor sods who created it, but we've got used to thinking it's ours and we're keeping it.

Of course these "little people" can have their say, but they shouldn't try to get their working class hands on our money.

I went to the first two hours of the demo - I went home for tea when the kettling started. There were an odd assortment of protesters when I was there - some guy demanding the return of his gold rather than "fiat money" - presumably a fan of the Max Keiser show on Russia Today. Also some trade unionists from up north. And a load of masked people who seemed to have either Italian or Irish accents.

I am agree with the aims of the protesters. What is unfortunate is that there is no intellectual coherence to it - no latter day Keynes to diagnose and prescribe remedies for the current malaise. The only likely candidate - St Vince - is currently marooned and castrated in the Department of Trade.

Crosstalk on RT this evening had a discussion between a right-wing TeaParty activist working in Paris vs a couple of left leaning academics, one from Philadelphia and one from Sacramento.

I was shocked to learn that US student loans carry a rate of 7% interest. No wonder their students are revolting - ours are having a cushy time (for the moment). It was also said that the TRUE rate of unemployment in the US is 23% which would be worse than ours even allowing for supposedly spurious Incapacity Benefit claims.

I think we need a post-Keynesian genius to work out how to reform a free market capitalism which was supposed to set us free. People can't buy a house now until late middle age, and their education now saddles them with a potential lifetime debt.

"Britons NEVER NEVER will be slaves" we sing at the Proms. But we certainly will be WAGE SLAVE until this is all sorted out!

These people are demonstrating against GREED

they are simply correct

the amounts earned by top earners in finance are totally dis-proportionate to the risk and/or effort expended

The great difficulty for me is clearly it makes sense that after a huge financial crash, many steps including refinancing broke banks is the right thing to do.

Then someone says - "Well you know that means refinancing RBS again?"

At which point I'm very much with the protestors.

We should be abolishing these failed uncreditworthy banks, and setting up new ones untainted by the management styles of the old.

The new ones are around now - Virgin Money, Aldermore. new bank Shawbrookes, Metro Bank, Tesco. NBNK too if they get the Lloyds 600 branches. Give them the bust portfolios and new cash and close down the failed ones.

Why are the banks in so much trouble?

Is it because-: Share values dropped severely ,other countries failed to pay back loans,businesses went bust owing large sums of money or maybe the amount taken out by management.

Who can we blame for this situation?

I think the big financiers manufactured it to get better returns on their investments and to make production more profitable.

Maybe some good will come out of these mass demonstrations ,rocking the sinking ship might not be the right thing to do.

The fact that the elitist clergy at St. Paul's have closed their doors does not suprise me in the least......part of the old pals act with the Tories who are very probably itching for another pointless fight with 'middle England' who appear to be holding up this protest. The Church always have gone with the right wing tendency in whichever country you care to mention. I listened to the Radio 4 interview this morning with the rep (can't remember his name) from St Paul's and talk about evasive........couldn't really justify their action at all which just says it all......another agenda entirely!

VAT at 20% we are supposed to accept this as the norm?

Politicians still protecting the banks not the people

We have a failed democracy and failed capitalism a bad combination methinks.

Our governments and banks deserve nothing better than having their heads chopped off. After all that is their approach now, send in a Drone and blow up the next schmuck. Viva La Revolution, meet the new boss, same as the old boss. I'm alright Jack, keep your hands off my stash. Trouble is coming your way Mr. MP and Mr Banker! Who do you serve??? and the saying says "ask not what your country can do for you", what a crock of sh*t. Clearly Politicians and bankers ask what their country can do for them (personally)! Shame on you all.

I am one of the 99% . The point has to made that during the last twenty years, the ownership of real wealth has skewed dangerously in favour of the establishment (1%)

The causes of this imbalance can be broken down into various categories, BUT: (IMO), the most important cause is: Inherited wealth. If you make a study of this category you reach the indisputable conclusion that: In percentage terms, regarding the possession of land, nothing much has changed since Feudal times.

We have reached the point where the system of land title is essentially rigged. Millions of people have been conned into thinking that they could acquire a piece of real estate by taking out a mortgage to buy a lease contract on a flat in a high rise block, but in reality many leaseholders will never own a stone, and to add insult to injury they will be saddled with ground rent and service charges until the lease expires.

On the other side of the coin, the aristocracy and astute property developers have employed legal manipulators to ensure that their vast wealth will be passed on to futher generations.

Just think about this example for a moment: Paul Raymond acquired the freehold title to all the real estate in Soho London. Yes; all 50 acres of it, by selling porn. His story is worthy of research, and underscores the point that entrepreneurial endeavour does not involve fairness and mutual wellbeing. Human existence is absurd, exploitable, and tragic, for many.

I am not a university professor, and would not pretend to know the answers, but it seems to me that the occupy movement will never gain traction just by a$$ sitting. They have to develop a coherent thesis to prove by statistical analysis and hard facts that the present system of land distribution must be changed to give everyone who is prepared to make the effort a fairer chance to acquire their little bit, exclusively for their use, during their lifetime.

VAT at 20% we are supposed to accept this as the norm?

Politicians still protecting the banks not the people

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Very simple. Don't use a bank .You don't have to.

However, when 50% of your income is disappearing into the government pit, and it still has debts that exceed the greeks you have to think.

Is it the banks that's the problem or the government?

So lets look at the cost of the bank bailout. 70 bn in nationalisation. That's socialism for you, not capitalism. Capitalism means letting them go to the wall. Bankrupting them. Clearing the decks so we can have competition.

Now for the government. In an audacious plan, worthy of Bernard Maddoff, they have hidden their debts off the books. They owe millions of people a state pension, as just one example. Not on the books. By their accounts they don't owe you a penny. They have no assets to back it up, bar that of making you a slave, and lots on the left are proposing this. You have to work for the state for nowt.

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They have to develop a coherent thesis to prove by statistical analysis and hard facts that the present system of land distribution must be changed to give everyone who is prepared to make the effort a fairer chance to acquire their little bit, exclusively for their use, during their lifetime.

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That means having excess earnings over expenditure, so you can save.

When 50% of your money disappears to the government, extorted with threats, its not surprising the poor can't save.

Maverick says:

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4. Some banks may have made unwise loans in the past.

5. The real culprits here are those individuals or businesses who have taken those loans from the banks in the full knowledge they stood little chance of repaying them.

6. Everyone knows this, deep down, but the banks are a highly visible target, and the individuals and businesses are not.

<

A *lot* of banks *have* made *very* unwise loans. It was their responsibility to maintain prudent lending criteria. Their responsibility was greater than the responsibility on those who took the loans, simply because they were responsible for the money! So, when you imply the opposite... no, everyone does not know that deep down. Deep down we are very sceptical of people who take this line because they are, on the one hand, apparently so very naive and yet, on the other, so very very wealthy.

leobramble's comment on the C of E is inaccurate. Maggie Thatcher thought they were a thorn in her side with their "Faith in the City" - a left leaning thesis about Inner City life produced by church activists. Quite possibly the Bishop of London has Tory links, but the point made by the St Pauls spokesman was that the C of E has to treat its historic monuments as profit centres because the church has to pay for their maintenance. I suggest leobramble visits Paris. The cathedral of Notre Dame is run by the French government as a museum. Obviously you can get in free to attend church services, but otherwise you pay an entrance fee (used to be 11 Euros ten years ago). This is to pay for the government's maintenance of the building.

The first commentator Mag1 is wrong about where the money goes in Greece.

The cash that the IMF, Germany and so on send to the Government goes to pay public sector workers salaries and pensions and other Government spending.

Admittedly some goes to pay the interest on Government borrowing from banks but if they unilaterally stop paying interest they will never be able to borrow from the private sector again.

Fundamental changes in society call for profound shifts in mindset, in our basic frame of reference. When the Divine Right of kings to rule held sway any act to overthrow a monarch was not just an act against the hierarchical order of society but against God, against Heaven. Nonetheless the French Revolution happened once the monarchy was percieved as stand in the way of the greater good.

The maining beneficiaries of modern capitalist societies - ie. the ruling elites, financial, political, mediaand others inculcate similar myths about the inviolable status of the system amongst its citizens. These range from short-term agendas of vested interests such as :

We can't have any radical change while there is a crisis on ( despite the fact that it is the mainstream of the system that it is in crisis and causing further crisis, and not just at the margins.

The Divine Right of inequitable access of a few to the surplus value created by every working person is the main myth - the sacrosanct nature of private ownership not just of the physical means of production but of the means of how society replicates itself.

There is even recognition in modern social thought that this is not even good for those who are the supposed beneficiaries of privileged access to the wealth and the levers of society. Greed is not good, not simply on moral grounds but because it is existentially a hollow and addictive way of living.

So any movement or initiative that starts to open up these big questions is both necessary and to be applauded. I would argue that it is not only seeking a fairer way for society as a whole to progress but is also saving the power-hungry political classes and the greedy bankers from themselves - not that they will be the first to recognise, let alone applaud, this. This makes it potentially different from any previous 'us and them' movement in history.

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The lack of a clear agenda and the absence of demands - ie. activity purely within the old terms of reference - is to my mind a clear indicator that this movement signifies part of a profound change in society, not just trying to rearrange the deckchairs on the Titanic.

Still cannot see why these people are not working, they have the same chance as everyone else to get a job and work and be with their families, is it a case of its easier to pitch a tent and protest than to work 8-10hours a day 5-6 days a week to earn a living.

I note the distinct change in the attitude of church leaders at St Paul towards the anti capitalist camping out on on their doorstep. Has this been brought about by the realisation that the church is loosing cash revenues thatwould under normal circumstances be donated by tourists, et al?

The London Police should give the campers an ultimatum of "move by this weekend, or face having fire hoses being turned on them". This action could perhaps be justified by using the laws governing deliberate and unnecessary obstruction of the highway.

I am pleased that the protestors are parked in St Pauls Cathedral - I was also pleased that the church authorities allow them to stay, peacefully. It is about time that the Church made a stand against greed and inequality.

With regard to loss of income I would be glad to send them a donation especially if a National appeal was made.

I am not anti capitalism i.e. people with their own capital backing business or ventures with some risk of loss or gain. This is a far cry from where we are now!

Come on St Paul's - dont let the silent majority down.

stan

Hotrod, a blinkered over simplistic outlook.

Many of the old landed gentry have been reduced to near penury by 40% tax on their estates, less for farming and woodlands, on each death.

Those that worked hard probably were able to rebuild some of the wealth stolen and squandered by the respective regimes be they blue, red or pink and if the greens were in they would probably hike the theft rates.

Now for those that started with nothing more than the clothes on their backs and have built up assets, are they too to be robbed?

As for the protestors, many there are anarchists and benefit spongers, for which you and I are paying. They have little or no respect for the rights of those working or the Church. St Paul's is very expensive to run and maintain so the protestors should be compensating the church for their interference and obstruction, and if the cannot pay, chain them and set them to work (the dirtier and fouler the better) wherever until they have paid due compensation.

I'm astonished at the contributors to this site who are asking to see a peaceful protest disbanded with force. It's like you want to live in a fascist state. Just keep reading The Sun and thinking what Rupert Murdoch wants you to. (Either that or try to get an education...if you can still afford to.)

I sympathise with those that say that the protesters need a more coherent message but they are not a political party. Revolutions very rarely have a coherent message. They are born out of anger and frustration. It's very difficult to have a coherent message when any intelligent scan of the news reveals so many things fundamentally wrong with the world. I'm currently travelling in South America and have just read that Argentina has just found oil shale deposits. Unfortunately it's too dry a country already so consideration is being given to melting its remaining glaciers to create enough water to pump into the earth. Insane. Capitalism is so fundamentally out of control. The world is starting to crack up under the strain of the ludicrous 'constant growth' dogma. A child could see that a bunch of organisms consuming resources in a closed system whilst growing population exponentially will eventually die out. Socialism doesn't work. Capitalism doesn't work. The future has to involve finding a sustainable equilibrium. Millions of people worldwide can see that but they can't get anyone in power to start that discussion because they are controlled by large corporations with no long term interest in the future of humanity. If coming out and sitting in the streets is the only way left to register that sense of helplessness then we should all be out there.

Tom Bayley - I'm certainly not "very, very wealthy"! So you imply that it's OK to take out a loan you know you cannot repay, because the responsibility falls on the bank and not on you? Which parallel universe are you living in?

Exactly the same situation applied in 1989 when I took out a low-start mortgage to buy a house. Despite being in negative equity for three years, the market recovered and the house is now worth a good deal more than I paid for it. My bank then (Lloyds) could well be seen, with the benefit of hindsight, as guilty of making an imprudent loan, but it came good and they have taken a great deal of mortgage interest from me. Fair enough.

Everyone is responsible for his own actions. You can't shuffle off responsibility on to the bank because they were imprudent enough to lend you the money. I insist that deep down everyone knows this.

I suspect that when people say that capitalism is out of control they really mean that they are not getting enough out of it. I can understand that, but they also need to understand that in this world there is no such thing as free ride and that everything has to be paid for by someone.

I am spend my days and often evenings at work, paying taxes, and keeping my family, not making a bloody nuisance of my self in central London. They seem happy to sit on their asses taking the tax money I work so hard to earn

Thus said, this sort of thing is to be expected with the bone idle useless bunch of wasters we have breed and encouraged in this country that seem to feel that the world owes them a living. For this I blame government since WW2 and a benefit system that gives those who have done all the paying next too nothing, yet encourages this useless lot and their ilk.

Dodays, well said.

These kids are our future. If you're ground down by a disfunctional system don't take it out on them. They're trying to do something fundamental about it even if they are still in the process of finding out what it would take.

Sound like a mixed but coherent bunch. Localism at its best beginning to challenge globalism.

These protestors are going to have as much effect as the guy who camped on the green outside parliament (for how many years ?) protesting against the war in Iraq.

i.e. exactly NONE.

All we hear are "we're against x, we're against y, we're against z", absolutely nothing in terms of "here's a specific, better idea...". If they've got an idea, let's here it. (Though I expect a deafening silence)

All I see are a bunch of people who want a bigger slice of the pie without lifting a single finger to get it, apart from saying "it's not fair" (over and over and over again).

Did not realise that 99% were on benefits?

Snoeki and Maverick and Dodays are obviously lucky enough to be in full employment, possibly in the city. With unemployment hovering around 10% and higher in some of UK's trading partners, its rather arrogant to call a protest movement benefit scroungers. Most things get changed by a peaceful movement for change and I admire the bravery and determination of those few who start them. You are obviously content with the way things are which your prerogative. Maverick, credit booms and busts are started by reckless borrowing or lending? Don't governments and banks play a role in it by easing credit, encouraging house buying, consumerism on credit? What causes a housing bubble? We are now in the bust phase where banks have gone back to strict lending, suffocating small businesses and those wanting to start a business.

You really need to question if the capitalism and free market model based on the need to grow has been that beneficial

Do not blame the young for problems we have created, in any case they did not choose to come into this world.

Open debate is useful, as nothing is perfect. improvements can be made.

The capitalist system with onus on economic growth and profit growth has shown up serious deficiencies, which everyone recognizes need to be addressed.

The 1% are mainly responsibnle for the mess we are in, thay have and have had the power.

On the banking/financial side, you cannot blame people for appying for mortgages/credit in various forms, when almost daily they were offered new Cards etc.

In the final analysis it is the banks and financial people who made the decision to give or not to give loans etc. They through knowledge and experience should have known better. It should be noted by contrast that some banks like the Coop and HSBC, did not get themselves into the mess that some others, did especially under Fred the Shred did.

It comes down to individuals and individual institutes.

Blame the people responsible, not the young.

As regards benefits no doubt they have had an impact on population growth, but controlling population growth is no easy task.

What control systems do some of you suggest to match supply and demand for people?

Dogdays hit several nails right on the the head.

The anti capital protesters are no longer kids and god forbid that anyone should even think that they represent our future; they don't. These people have nothing better to do in their lives than at best make a nuisance of themselves in areas carefully chosen so to avoid police intervention. They are in effect no better than house squatters who abuse the democratic process and yet I suspect never bother to vote to influence it. No doubt some of these people are university graduates, but with degrees that are no good to man or beast in today's world. They are so devoid of personal qualities the only way they believe they can justify their existence is to band together with like minded people to protest on an issue that most do not even understand. I also suspect the parents of many of these protesters are throwing their hands up in horror when they discover that their offspring are repaying the sacrifices made for them, by leading such a feckless life. That said, no doubt many parents are thinking(if not saying) well the good thing about this protest is that we don't have put up with our shiftless offspring at home, laying about the house and sponging off us, with no end in sight.

Snoekie, and Clive B, you are behind the curve. The OWS & OSX movement has only just started. My prediction is that it will dominate political debate for at least a year. What has become abundantly clear during the past twelve months is that: Autocratic, dictatorial socialism is not acceptable. That is at the heart of the Arab Spring uprisings.

Western democracies, and UK in particular, face a different set of injustices, which are equally important and must be addressed. Immoral capitalism cannot be allowed to continue unchecked.

The media have picked up the baton from the protestors are beginning to run with it. In America there are daily stories in the WSJ, WP, Bloomberg, etc. and what I find interesting is that these news sources have used statisical data to publish graphic representations to illustrate just how unequal and broken American society really is. Barry Ritholtz who is a Wall Street commentator is sympathetic, and is doing an amazing job in collating all this information for easy reference on his blog, "The Big Picture"

I hope Citywire will continue to perform a similar function to cover developments in the UK.

I am not a socialist, I do not live on handouts, I have gained a certain amount of independence mainly by sheer hard work and spotting opportunities, but I realise that the youth of today face even greater challenges if they are to get anywhere. It's time to radically rethink the economic model. I mean, China, Russia, and even Cuba, and South Vietnam are not doing so badly.

Why don't we just deport them all to Australia.

Oh, I forgot - many of them are already going there voluntariliy as there are currently so few opportunities for them here.

Maverick - I certainly do not imply it's OK to take out a loan you cannot repay. That's a straw man if ever I saw one! Deep down, we all know that many of those who wish to borrow money are over ambitious, unrealistic, untutored in the risks and responsibilities, or just plain desperate. And, yes, a few of them may be intentionally irresponsible. So it is THE MAIN responsibility of the lender to weed that lot out! Which planet do YOU live on?!

GD_C

I found the persons interviewd had interesting and intelligent points to make. You must have a very shallow opinion of youth today or worse still their parents. Speaking from personal experience perhaps?

Hotrod

You said "I mean, China, Russia, and even Cuba, and South Vietnam are not doing so badly"

You're right there. That's because their people work far harder, in far worse conditions and for far less reward, than these protestors (or most of us) have/will ever work. Plus, those countries don't give you benefits for sitting on your backside, contributing nothing. (I doubt either whether those countries would tolerate such a protest).

As to being 99% or young - if there's 500 of them, they are less than 0.001% of the population and a lot of them are anything but young (simply professional protestors, as we saw with the Dale farm incident recently).

Interesting that you mention the Arab spring. That was about people NOT having the vote, rather than having it and not liking the outcome (that's called democracy).

Most people on this forum still don't get it, there needs to be a fundamental change, a new way of thinking for the economy and our well being. Some jobs have been lost for ever, how do we learn to live with low or no growth and still have reasonable lives? Having the vote is no use if all you do is switch from parties if their policies don't change radically. Don't pre-judge, with enough people protesting you might actually get a change of policies or even a new party.

Snoekie, and Clive B, you are behind the curve. The OWS & OSX movement has only just started. My prediction is that it will dominate political debate for at least a year

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Certainly at the Left wing BBC. Pravda would be proud.

However, you're wrong as to it having any effect.

Take the EU. Politicians won't allow anyone a vote. Why? They would vote to come out and politicians know this. So they are prepared to walk all over the democratic wishes of the electorate. That's not democracy, its dictatorship.

The response to any dictatorship is the same. You as a citizen are not responsible for what politicians do.

So back to the real issue, and its the same here as Europe. It's government debts. Ever wonder why the uK government introduced student fees on the Heads they win (you fund), tails you lose (they tax you more if it works) basis? Very simply, they have run out of cash and mugs to tax.

GDP to debt in the UK is the same as Greece (latest ONS figures). Deficit to GDP is the same as Greece. At least in Greece that has a simple explanation. Tax avoidance and evasion. That doesn't explain the UK's mess. That is Bernie Maddoff accounting.

So on a true accounting basis, the UK debt is 7,000 bn.

The original cost of the bank bailout was 25 bn. It's now up to 70 bn. That's Gordon Brown buying banking shares with your money. Just like his gold sales at the low, he bought banks at a high to their current price.

So if you pay tax, you're in it for 225,000 (with interest on top).

So in part the protesters are right, they in the proverbial creek. They are completely wrong as to the cause. However, if you're protesting on benefits, would you point out that you're benefits, and that you aren't working, is one of the major causes of the mess? Certainly not. Far better to 'blame the banks'. Ignore those who over borrowed.

Most people on this forum still don't get it, there needs to be a fundamental change, a new way of thinking for the economy and our well being

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There can be growth. However, there won't be growth when the government is spending 30% more than it receives in taxes, and has debts of 12-14 times its tax revenues. Even that ignores bailing out the feckless and the poor who haven't or couldn't save for their retirement.

I 'm not completely sure that the young realize they are going to get screwed, but particularly the 40+ group don't realize that they aren't going to get a pension either.

Both are going to be angry .

Pertan - I am retired, living on drawdown from my SIPP and other non-pension investments. I work one day a week, but only because one of my ex-clients fell out with the guy who took over from me and asked me to carry on till he retired.

Tom Bayley - What I object to is the principle that someone else is always to blame for your misfortune. Fortunately in this country a burglar who falls through the skylight in your roof cannot sue you (he can in most states of the USA!), as our common law has a principle - volenti non fit injuria - that someone who takes something on willingly cannot complain if it goes pear-shaped. The banks don't bolt people to the floor and force them to take out a loan - the people do it willingly. With the benefit of hindsight the people shouldn't have taken out the loan, and the bank shouldn't have lent the money, but the bank is not 100% to blame. Probably not even 50% to blame. The greed everyone is complaining (quite rightly) about is not just the greed of the bankers. It is also the greed of the borrowers who want what they cannot afford.

I see people are now complaining that the banks have stopped lending. For heaven's sake, what did you expect?!!?!

"I 'm not completely sure that the young realize they are going to get screwed, but particularly the 40+ group don't realize that they aren't going to get a pension either."

Nicle: Have you bought up a monoply stake of thoughts. They do know, and a lot of people are already angry. It's just that most prefer to keep a low profile and carry on regardless.

How things will eventually pan out, I don't know. but I do know that the protestors are on to something when they say, the top 1% are the only ones who could get us out of this mess. Even Warren Buffett agrees with them. He has told Barak Obama, "tax me more"

Unless and untill the top 1% or even the top .01% realise that they have sucked the orange dry, the pips are going to start squeeking. There is still time for them to a make pre-emptive move. Mob rule would be very unpleasant.

Maverick, banks should not lend to people who are not worthy of the credit. Lending criteria became far, far too lax. That surely is the source of the problem, rather than the fact that consumers took advantage. To take it to the extreme, if you left £1000 on a park bench overnight you can't really complain if it's missing the next morning - the blame has to be almost entirely yours! And BTW I am one of the prudent ones too (I have never been in credit card debt and I have 60% equity in my house) so I have no need to look for scapegoats.

I agree that consumers went bonkers - I first started thinking that about the housing market 10 years ago. Anyone with half a financial brain knew that borrowing was becoming far too easy. Unfortunately I know plenty of people who evidently have less than half a brain, and who were quite honestly suckered. I myself even started wondering if we were entering some new 'paradigm'! How else to explain the madness? But the 'professionals' in the banking industry are supposed to be the experts. They are paid to sit there and work it out, that 7 times earnings is not feasible and that self-cert is not a good idea. So that is where I put the blame. Not on the consumers who by-and-large are told what they can afford and take what they are offered.

Hotrod

"Even Warren Buffett agrees with them. He has told Barak Obama, "tax me more""

Nobody is stopping Buffett making a voluntary contribution to the US government. He says he'd like to contribute more. Fine, shut up and do it.

"the top 1% are the only ones who could get us out of this mess"

Convenient, popular, but untrue. Massively reducing state benefits/pensions and increasing taxes on all also gets us out of this mess. Problem is - just like bank loans gone wrong - people always want to blame anybody/everybody but themselves.

The government (all persuasions) ran up the national debt giving us things we hadn't earnt. We've been over-rewarding (pensions/benefits/wages) ourselves for decades. That's a lot of the reason why we lost mass-employment industries (e.g. textiles) abroad. We weren't adding enough value to justify the wages. Same with pensions, we're not paying enough in or for long enough to justify the amount we want back.

Few hundred, even a few hundred thousand, saying "it's not fair, I don't want to pay, I want "them" (e.g. bankers, richest 1%) to pay it all" isn't going to change a single thing.

Why shouldn't ordinary people feel they deserve a bigger slice of the pie, or at least some of the pie? The bankers did worse than nothing to get the ~=200 Billion or so free handouts financed by the working people and without their consent. Thats equivalent to £3200 for every person in the country assuming a population of 62.5 million. Many thousands of those people now unemployed and struggling to find a job were employed by the banks. I would agree that the government very much supports jobs in and around London and will quite happily hang the rest of the country out to dry, even as it fails to cut public spending. In the end the banks will consume themselves.

The banks don't bolt people to the floor and force them to take out a loan - the people do it willingly

=============

However the government does force you to pay for their loans.

The government does force you to invest your pension with them.

The government hides the fact it owes you that pension (not on the books)

The government doesn't invest that money

The government spends that money.

For a median wage earner, if they had invested that money in the FTSE, their pension would be 21K a year, not 5K (RPI, joint life for the investment route, rather than CPI, not fully joint life)

Quite right on Buffet, or anyone who wants to do the same, just send a check to HMRC offering to pay extra tax. Nothing stopping you.

The top 1% can't get us out of this mess. It's too big. 225,000 per taxpayer (30 million of them). That's 9K a year in interest, and its linked to inflation.

Median wage is 26K a year. So you have to take off 9K. Then you have to pay for the service part of government. That doesn't reduce the debt. It's going to have to be people poorer than 26K who also pay a heavy price.

So lets see how it goes with the rich. Lets start off with Richard Branson. 2.6 bn according to the Sunday times. The UK deficit is 150 bn a year. So here's the plan. We confiscate Branson's assets. We sell them to an overseas investor, so that its new money. If we sold to a UK investor, that just moves money around, and so would have no effect. Now the government spends it. That money is gone after 6 days. Spent. Gone. No investment. No return. No payback. That's on top of taxation.

OK, so now we look around for another rich person. Confiscate, sell off to the Chinese. How long does that money last? Not long either. Now what happens? The rich have worked out the game. They are off. That money is gone and the incentive to invest and make a return is gone.

What's needed is real growth, and that needs capital spending on something that produces a positive return. So you can rule out HS2 where the ticket sales will never cover the interest, let alone the running costs. It rules out government investments.

A bit late to this thread so please forgive if my point has already been made : The lack of an "agenda" or a lack of a coherence to the aims of the protestors is missing the point. These people are where they are economically at the hands of something they don't or are not meant not understand (ie fuzzy logic financial trading instruments wielded by self styled Masters of the Universe). If a crime is committed there is, hopefully, a trail of evidence to a culprit but this is different. A crime has been committed but the only clue they have is that it is something in the City and this thing in the "City" has made them a victim of a crime they don't understand and it has cost them their job/home/car whatever. The City is the only tangible facet of this mercurial beast that has impoverished them. They are coming back at a perpetrator that government has failed to bring to book but in the hall of financial mirrors they don't know where exactly to aim or exactly who to aim at for but they know roughly where the perpetrators hang out. What they may come up with eventually is the three root causes of the credit crunch: (3) Sales Targets; (2) Growth Targets; (1) All other corporate targets layered on year after year with no thought given for the cost of achieving them in social terms. I love St. Paul's and wish it would end and when the spray paint starts I will shed a tear.

The bankers did worse than nothing to get the ~=200 Billion or so free handouts financed by the working people and without their consent.

===============

I'm sorry that's wrong. You're numbers are made up.

There are two current sources of the losses.

1. Share trading .Gordon Brown bought shares with your money. He has lost a packet there.

Out of interest, do you own shares? If so you must be guilty too. After all you're taring all bankers as to being to blame, when it was a small number of retail (not casino) banks that went bust. Why not direct your wrath, rightly, on them?

[What should have happened is that they should have been bankrupted, and sent to the wall]

2. Guarantees. Just like an insurance company selling insurance after the building has burnt down, Brown sold insurance to the bust banks, after the event.

The first is around 45 bn, the second 25 bn. That's 70 bn losses, most of which were avoidable if Brown hadn't thought he could make a profit on buying the banks and selling them later for a profit. It's not as if he has a track record on it. Look as his gold trading.

So when you're angry about what is 1,200 pounds per person, why aren't you worried about 225,000 per person? That's the real extent of the government debts you have to pay. Makes 1,200 look cheap.

OK then, the Buffett tax is a non-starter, so what do the 1% do with there hard earned wages, (which will be up to 500 times more than their lowest paid employees)

They could have a few nights out drinking vintage champagne @ £1000 per bottle. but the novelty would soon wear off, and it wouldn't make much of dent in their multi-million pound salary.

They could of course book a flight on Richard Branson's galactic spacebus. Now that enterprise really is going to save the world??

Well that's why I said ~=. I took the figure from an article from the Guardian

http://www.guardian.co.uk/business/2011/oct/06/what-is-quantitative-easing.

So my numbers weren't made up even if they may be somewhat wrong? Perhaps Phillip Inman, the Guardian's economics correspondent makes his numbers up?

According to the BBC, http://www.bbc.co.uk/news/business-15196078

its 200 + 75 = 275 Billion

The point made was more important than the figures anyway.

Clearly my issue is with the bankers and the politicians too.

I also get fed up with people blaming the poor and unemployed. Having lived through the Thatcher years in the Midlands I know exactly what it is like not to be able to get a job, no matter how hard you try! It's only when you lose a job, you discover what it means in such times. Sure some people are scroungers, which the media love to focus on, but the majority are just clinging on to survival. How about blaming all the millions of people allowed into this country by our governments over the last few years, that have never contributed to the system and are overburdening our services?

Yes the Banks should have been sent to the wall and we all would have shouldered the responsibilities anyway, but it would have been better in the long run. I have no doubt that Iceland's economy will regenerate and be healthier far quicker than ours will be for a long long time.

Indeed The national debt: http://www.debtbombshell.com/ is equally if not of greater concern.

Its certainly no good worrying about it all, the future will happen and I think we can rely on our government to make a bigger mess of things in the not too distant future.

I am reminded that a million people went into London to protest over the Iraq war and the government's attitude was/is that they don't respond to that kind of thing. If we have a system that is constantly at loggerheads with the people, then things can only end in disaster for all of us.

Ultimately the responsibility lies with the government. The whole mess is the fault of poor judgement or deliberate sabotage and directly linked with the pandering to the banks. With the removal of the Glass Steagall act in the US and equivalent lack of regulation here in the UK, the way was paved for this collapse to happen. I find it hard to believe that the consequences of these malicious actions were not fully understood at the time they were made? To remove safeguards that were put in place as a result of catastrophic econmic collapse previously, goes far beyond negligence. It is the economic equivalent of a war crime. It would seem that the whole dire and developing situation we are facing now, was actually engineered. Whether this was by design, stupidity or some other reason still remains to be seen?

One thing for sure, is that they do not seem to be acting in the best interests of the people, although that seems like nothing new. For all the lip-service our leaders keep giving us and for all the financial solutions they continue to keep trying to make, the reality is. we are sinking fast and the more they do, the worse it gets. There is without a doubt far greater pain to come....

Own shares at this time? If I lose all my money on shares, I don't get bailed out, that is a big difference and that is how it is supposed to work. I prefer an unloaded deck of cards? The Euro Fix will most likely be pushed as a real solution to the problem, which may bouy the markets for a while. For one, Lehman Brothers was certainly not a retail bank. The retail and investment banks should be split up as a matter of course and perform their own specific functions. It is wrong that the government has shifted their liability to the people. The greedy actions of a few are being paid for greatly by the many.

Responsible lending, borrowing and spending is and was always the key to stability.

Pertan

Like the supposedly educated, polite but inadequate groups with their liberal sprinkling of illiterates and anarchists) protesting against university fees, the squatters in front of St Paul's and elswhere in their posh 'gap year' tents, upon whom my views are focused, could not hold even a candle to my own life's experiences,which has resulted in my hard earned reasonable lifestyle of today. No silverspoon, drug indulging, swinging from a flag at the Cenotaph startin life for me or my parents. There are countless young men and women in this country today whom I admire-those in the armed forces,the police, nurses and doctors etc, who are getting on with their own lives instead of wasting it obstructing others.

These people are where they are economically at the hands of something they don't or are not meant not understand

==============

Well if they don't understand that you can only better your position in life by working, then they are beyond help.

Where I have sympathy, is that if you don't have control or a say in something, then you have no responsibility for the outcome. That's an issue with government. What they don't realise is that they are poor (I doubt it, I suspect a lot are trustafarians) because the government is taxing them 50%. However, since the source of their income may well be benefits, attacking those that are handing the cash out isn't in their interest.

===============

Ultimately the responsibility lies with the government. The whole mess is the fault of poor judgement or deliberate sabotage and directly linked with the pandering to the banks.

===============

Complete Twaddle.

Bank bailouts (they should have been bankrupted, instead we had socialism not capitalism) 70 bn. Responsibiluty of Gordon Brown.

Government debts, 7,000 bn

100 times larger.

GD_C

You obviously have an aversion to intellectuals who are just as important to the society as all the others you admire. Infact the jobs of these others you admire are in danger as a result of overindulgence on credit (if not by individuals then by governments) and someone needs to rise above all the old practices to create a new model. Right now they are discussing printing more money to bail out bankrupt nations. Letting system banks go bankrupt as suggested by some would lead to a collapse of the financial system, due to all those complex inter bank transactions and loans. There is no magic wand solution this time, a radical change will be necessary, we are going through a transition period of adjustment to much leaner times. Over supply of products and services need to adjust to lower demand levels.

Letting system banks go bankrupt as suggested by some would lead to a collapse of the financial system, due to all those complex inter bank transactions and loans

===========

Hold on a second. It's the governments that are defaulting, not the banks.

The fact is that the Conservative Party is bankrolled by banking/financial services, plus related lobbies like right wing. That is why it will and has erred on the side of banking/finance. Part of the billions paid in bonuses finds its way into the Conservative Party funds.

At best the governmanet looks at banking/finance through blue tinted glasses.

Hold on a second. It's the governments that are defaulting, not the banks.

The banks had to be bailed out in 2008 before the Greek crisis remember? Ofcourse now that the banks have been saved, they may have to be saved again due to government defaults on loans.

nickle

The banks and financial institutions are lending their money to governments at an agreed interest rate and period for repayment. If the relevant goverment is unable for whatever reason to repay the loan/s when due, then yes it will be in default, but its those who loaned the money who will take the financial hit and be at risk of defaulting themselves on their own committments.This in turn could result in banks calling in loans, stopping lending,unable to borrow money in the financial markets and ultimately end up doing a Lehman Bros.

Or you let the banks go under.

Don't forget the government in the UK has already started defaulting.

1. One year extra before you can claim the state pension - 5% default.

2. CPI not RPI is another 10-15% off your state pension.

3. Plans are in place to default on the state second pension in similar ways.

It will work its way round to gilts eventually. That hits at banks and also at people who are annuitants. ie. Who've saved.

Now you also seem to be blaming the banks if the governments default. Why should that be the case?

People are forced to use NI for part or all of their pension.

Banks are forced to loan to governments. Where do you think QE money has ended up.

Post Maxwell people who have annuities have been forced to have their money in Gilts.

Since its governments that have forced people to do this, why should banks, their clients, people who have retired, people aiming to retire, have to take the hit for a government default caused by governments spending what they didn't have.

ie. Running a Ponzi, and fraudulently cooking the books to hide it.

Nickle wrote

Now you also seem to be blaming the banks if the governments default. Why should that be the case

Are you working in the banking industry or what?

Banks have been borrowing cheaply (at 0.5%) from the Bank of England or other Central Banks and buying government paper yielding 2 -3 %. instead of lending it to businesses or individuals. If they do lend its at much higher rates, but why should they when they get risk free returns so easily . Thats opportunism for you. Stop being so kind to the banks. They have a one way ticket until something changes

You can't blame the government for a greying population where the number of pensioners is increasing and living longer and the young population decreasing or having no prospect for jobs. Its got to be paid from somewhere. Thats what happens when you have unfunded pension plans which most western governments have

Banks have been borrowing cheaply (at 0.5%) from the Bank of England or other Central Banks and buying government paper yielding 2 -3 %. instead of lending it to businesses or individuals

============

Correct.

However, you've missed off the bit about why they are lending to governments. It's because idiots like Vince Cable say

1. You have to increase your capital.

2. You have to have your capital in Gilts.

In otherwords, the government has forced them to loan the QE money back to them, so they can spend it.

Why not cut out the middle man? Just print the money and spend it rather than launder it through the banks so they take a cut?

=========

Thats what happens when you have unfunded pension plans which most western governments have

=========

So why can't I blame governments for running unfunded pensions schemes, or Ponzis as they are known.

Why can I blame them for omitting the liability side off their accounts?

Why can't I blame them for taking 75% of a median worker's pension? Very simply, if a median worker (26K a year) had put their NI in the FTSE over 40 years, they would have a joint life, RPI pension, at 65 of 21K a year. Instead they have a not quite joint life, CPI not RPI, pension of 5K a year.

The government gave them no choice, took the money and spent it. As a result the lost all the compound interest, and that's the majority of the return. That's why they are poor. Pensions had no choice, the government forced them. Why can't I blame the government?

And then why are people poor? Perhaps its has something to do with the government taking 50%, directly or indirectly, of what they earn.

Or its paying people 104,000 a year in housing benefit so they can live in Westminister, or all the other things governments do.

The difference between banks and governments is that you don't have to use a bank. However you are forced to pay for governments and their little frauds.

The banks are most certainly to blame for the toxic debt crisis which forced the government to prop them up with billions of taxpayers money. They did not give a hoot whether borrowers could repay there mortgages, because they were earning millions in commission and selling on these 'debts' parcelled up and disguised by sound business transactions.

At the same time, and equally to blame, Chancellor Gordon Brown, Ed Milband and Ed Balls did not give a hoot about what was going on right under their noses because the Treasury was receiving billions of pounds in tax receipts from the 'city'. The trio then proceeded(despite the warnings) to squandered billions on buying votes from a horde of workshy scumbags who had rarely if ever worked in their lives, were breeding like rabbits and receiving far more money in benfits than the hard working taxpayers who were funding their lifestyles.

That said, anyone who thinks they are going to bring about change by sitting in a tent in front of St Paul's, is living in cuckoo land. No new party is going to arise without their being voted for in a democratically held General Election.

The 'squatters' would be far better employed by getting off their backsides and visiting hospitals to volunteer their services - feeding patients who are unable to feed themselves and talk to others who rarely if ever, receive a visitor. Not much to ask, is it?

Perhaps,(if only to serve their own ends), they could volunteer to help out in Charity Soup Kitchens helping to feed the really unfortunate, including homeless servicemen who having given their all in service of their country, have ended up as a major proportion of those sleeping rough on the streets of London. Hey who knows, as winter starts to bite, the protesters(if they are still there) might even be willing to share their posh tents with a few of them and learn what it is really like to be hard up and against the wall.

The banks are most certainly to blame for the toxic debt crisis which forced the government to prop them up with billions of taxpayers money

===========

Some banks. Most didn't need a bailout.

However, the government choose to bail out the failures, rather than let them go to the wall. There was no force, it was a choice. What should have happened is that the banks that needed the bailout should have been sent to the wall. All the workers there fired.

However you are still missing the point. Even the cost of the bank bailout is peanuts compared to the elephant in the room, government debts.

The rest of your analysis is pretty much spot on.

They would do more for the UK, if they started working, creating a business and making wealth, rather than sitting their sipping their starbucks (corporate), in their posh tents (bought at Blacks (corporate) next to the protest), tweeting (corporate) on their blackberries or ipads. Corporates again.

Nickle

I don't think you quite understand what a collapse of the financial system means. All you do is blame the government, which one? what does that solve? Isn't it time for some radical thinking and changes? where is it so great these days? Is there somewhere we could emigrate to?

GD_C

Most radical changes have to start somewhere, usually from small beginnings. I thought one first needs to create a new party with a radical programme before you can democratically elect it. Yes they could help the needy and homeless, but that doesn't solve the root problem, any suggestions for doing that?

Yorkshire Building society provides one of the better rates of annual interest at 3.5% and what does Barclaycard charge on their credit card? 19.9% pa. and 27.9% pa for cash. Hey surely not, how can this be justified?

Banks were bailed out with public money because they made reckless loans. Then the banks lend ship loads of money back to governments. Who gets to pay the interest for all this? Yes Joe public once again.

Banking debts transferred to sovereign debts and the whole lot still goes down the swanny river, except the bankers who were bankrupt stay rich and the majority of the people are made poorer to very poor indeed.

To add to this we see our currency trashed and prices of everything sky rocket (which hasn't fully happened yet).

Who holds all the debts of the other countries? Is it not mostly the banks? who charges interest on that debt, yes once again the banks.

The whole system is on the verge of collapse and all the spin that they give us will not stop it from doing so.

Even Mr Cameron said it, "you cannot solve a debt problem by adding more debt" and that is precisely what they are all still doing. Public spending is still out of control and at the highest levels ever.

Greed is the problem we are seeing, crossed with power, and it is greed at any cost.

No truer words than: The love of money is the route of all kinds of evils.

The majority of the people don't know how they've been screwed, they just know they have been. I congratulate them for standing up for something they believe in, which is more that most people dare do even within their own places of employment. Stick your head above the parapit and you get shot with a hollowpoint. These people can't be that lazy or they wouldn't have bothered to have gone there in the first place!

Back to Bartering methinks.

The problem you're not facing up to is that the cause of the banking mess is not the same as the cause of the current mess. You're making the assumption that they are one and the same. Another banking crisis. It's not got the same cause.

The first had the following causes.

1. People defaulting on their loans. The primary cause.

2. Inprudent lending? Yep, I would include that.

3. Bad risk management, in particular liquidity. Direct issue at Northern rock.

4. Governments insisting on more lending to poor people. Made law in the US, and Brown was berating banks here for not loaning more to people with poor credit.

5. Bad or no regulation.

So what about the solution put in place by government?

That was compounded by nationalising the banks and offering insurance after the event. It also means now that the good banks will profiteer at the public's expenses. There is no more lending because the government insists it gets it all. QE has all gone to the government.

So what's the current problem? Governments who were profligate in their spending and have run up massive debts. In the UK, 100 times the cost of the bailout. So large they will never pay those debts. Since the majority of those debts are pensions, its your retirement that will be hit.

So what solutions are needed?

1. Full disclosure of the debts. It's possible with FOI to nibble away here.

2. Statements to everyone as to their share. That's the catalyst for change. Quite why the Tories haven't done it now, and blame brown and labour for it is surprising. It would destroy the left.

3. As an individual, its harder. First don't use pensions. You're a sitting duck for a big tax raid, (to help society). Likewise, be careful about property. Unless you've a caravan, you can't move it. Look at Greece and their property tax. Look at assets outside the reach of the UK government, and not in countries with massive debts. Canada and New Zealand are good examples of low debt countries. Then, at the end of the day, you can always emigrate, but you get to keep your assets.

The alternative is to buy land and shotguns, but that's not a particularly attractive option.

Nickle,

With all those complex derivative products that banks have invented such as mortgage backed securities and credit default swaps which go around the world, its hard to figure out where the ultimate liability and loss lies. Thats what your banks have got us into. Also your main point is becoming rhetorical,

Question: do banks need governments to bail them out or do government need banks to bail them out? I'm afraid its getting fuzzy and the result in both is the same, except that a banking failure in one country can lead to a global banking meltdown..

In the midst of all the financial guff that occupies your site, no one has given a thought to the hard conditions that the protestors have let themselves in for.

The need for water and sanitaiton - what have they - the inniiators of this movement - done about this - some of the most basic of human needs ?

I sympatise particularly with the young (deluded) women.

Yorkshire Building society provides one of the better rates of annual interest at 3.5% and what does Barclaycard charge on their credit card? 19.9% pa. and 27.9% pa for cash. Hey surely not, how can this be justified?

============

Very simple. It's to do with default and your comparison. You're comparing a savings rate with a borrowing rate for a starter.

Why should a bank offer a lending rate that is higher than its borrowing rate? I'd then borrow from them, and lend it back at a higher rate, and that's free money.

Now lets look at the default. Roughly 10% of credit cards bills are never repaid. On top it costs quite a bit to run the network for transactions. Lets ignore that bit.

So if you're a credit card company, what rate do you need to charge to break even on that basis.

So you lend 100 pounds. 10% is lost to people defaulting. It costs them 5% to borrow the money. So they need the 90% to pay them back 105 pounds at the end of the year.

So the rate is 105/90 -1 = 16.7%

This assumes no costs at all. You need to add those on top.

It's quite shocking that if you're a good risk, that you end up paying for all the people who are bad risks.

Same as the banking crisis. You're paying the bill for the people who borrowed money and never repaid it.

Who holds all the debts of the other countries? Is it not mostly the banks? who charges interest on that debt, yes once again the banks.

============

Not really.

Most banks are forced to hold their own governments debts as capital. Not other countries debts.

The exceptions are the central banks. Yep, the government again.

The other big holder of Gilts are pensions funds when they run an annuity business. The ultimate owner here is the annuitant

Interestingly, the BoE pension fund is long Gilts, but only inflation linked gilts. They sold out of the rest. For some reason they bet against their own success in holding down inflation. The conclusion is that they are planning on creating inflation.

http://www.lordsoftheblag.net/2011/10/more-rip-offs.html

Is a graph of how well they have controlled prices.

With all those complex derivative products that banks have invented such as mortgage backed securities and credit default swaps which go around the world, its hard to figure out where the ultimate liability and loss lies.

=================

OK. here are the issues.

1. Northern Rock. They went bust because they didn't do enough MBS. If NR had securitised and sold off their mortgages such that they were not reliant on the interbank market, they would have been OK. ie. They were guilty on not managing their liquidity risk. The FSA has admitted to not monitoring liquidity risk either.

NR and the regulator (government) at fault.

2. Conflicts of interest. Namely liar loans. If you incentivise people to sell to fraudsters, and lend them lots of money, then don't be surprised when they do. That's the banks that went bust and governments who were telling banks to do this. Now, if you then bundle that up, and sell it on, saying its high quality, when its junk, then that's fraud. The right area for this is the courts. Note that regulation was missing here. Why? The governments wanted the loans made.

3. Not paying your debts.

Given this is now bundled up, and there is nothing wrong with this, the fault for the defaults goes back to people who didn't repay the money they have borrowed. Unlike other things, they had a choice as to borrowing or not. The choose too, and they triggered the bankruptcy by not paying back the money.

What people talking about the banks in general do, is to omit governments and the borrowers from the list, and then bundle the good banks with the bad ones. That's wrong.

There's nothing wrong with MBS. It is part of the solution to the banking mess. Get the liabilities off the banks books, and allow the banks more capital to lend. It's what's going to happen as a result of the Euro mess. Split bankrupt banks into good bank, bad bank. That effectively securitises the bad bank, allowing the good to carry on lending.

if you think CDOs are bad, just remember that a bank is effectively a lot of government bonds and a large CDO^n

Who holds all the debts of the other countries? Is it not mostly the banks? who charges interest on that debt, yes once again the banks.

============

Not really.

Most banks are forced to hold their own governments debts as capital. Not other countries debts.

You know this isn't strictly true, just tot up the bank exposure to Greek government debt across Europe (maybe excludes GB) and what about UK bank exposure to Irish debt?

Nickle come clean and own up. You really must be involved in some way with the banking industry and hell bent on absolving them. The biggest mistake was allowing retail banking to merge with investment banking and you know it

The biggest mistake was allowing retail banking to merge with investment banking and you know it

===========

Tell us which UK banks failed and if they are retail or investment banks?

[Lehmans was a US bank]

Most banks are forced to hold their own governments debts as capital. Not other countries debts.

You know this isn't strictly true, just tot up the bank exposure to Greek government debt across Europe (maybe excludes GB) and what about UK bank exposure to Irish debt?

=============

You're making a basic error.

1. They are forced to hold their national debts as capital.

2. They can choose to invest in other national debts. Peversely the regulator says that this is zero risk, so no capital is needed to hold these debts. Government error again there.

3. They along with a lot of other people were lied to about government accounts. Straightforward fraud. See Greece and what it did to get into the Euro.

So because they choose to invest in other countries debts, doesn't mean that they don't have to hold their national governments debts as capital.

I'll state it again. The retail banks that failed and needed bailing out should have gone to the wall, and the people working for them sacked. Chief executive down to the office cleaner.

Tell us which UK banks failed and if they are retail or investment banks?

RBS didn't fail because of a bail out so whats your point? All retail banks have been allowed to create invesrment banking operations when they should have been kept separate so that speculative risk taking activities would be funded by shareholders and allowed to go banrupt if it fails, thus keeping the lending and borrowing retail banking intact.

nickle

"compounded by nationlising the banks", which ones were they?

The argument that the origins of the debt crisis facing the UK and Greece/EU, being different is entirely irrelevant, because the consequences are the same,which the decent honest taxpayers are learning to their great personal cost.

Financial institutions in the U.S., UK and the E.U. lent money to governments and individuals without carrying out due diligence on their ability to replay their loans.

In the case of the U.S.,had interest rates not been at an all time low, farmers, small businesses and those low income individuals and families would have never been given loans/mortgages because of their 'very high risk' status'. At the same time institutions and their agents(who were raking in millions in commisions et al, deliberately avoided warning the borrowers that interst rates would very likely rise, unemployment coud rise sharply, etc and thereby make it impossible for them to meet their mothly repayments; which is exactly what happened. This led to the crash of the U.S. housing industry which previously accounted for 40% of the U.S. workforce. These mountains of bad debts were often disguised and sold on, which led to the contagion of bad debt, which threatened the viability of the institutions themselves and their customers/savers etc.

In the case of loans to national governments, the financial institutions miscalculated their ability to pay, thus creating another debt crisis all of its own and threatening major European finacial institutions. In the event of Italy and Spain defaulting on their debts they would most likely threaten the continuing existence of the EU itself.

Fortunately for us, unlike the Liberal Party, the Tories resisted the calls for the UK to joing the euro, thus saving British banks from yet another severe financial mauling.

The solution for the UK (unpalatable as it is), is for the government to slash spending in order to reduce its debt and levels of borrowings, in order to convince the rest of the world that UK PLC is a fit and proper institution to do business with.

The euro members of the never audited and most corrupt of western institutions the EU, controlled by unelected faceless individuals in the finacial Directorate aided and abetted by a egotistical fanatical leadership, with its one size fits all interest rate, will have to eat the mess of porridge they have created.

RBS didn't fail because of a bail out so whats your point?

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RBS failed because its retail side lent money on mortgages that defaulted.

Same as Northern rock.

Same as Bradford and Bingley.

....

All retail banks.

It was the retail banks that failed, not the investment banks.

So to the point for those that think its all a banking problem.

How much does the government owe in borrowings?

Ditto for the state pension

Ditto for PFI

Ditto for civil service pensions

Nuclear decommissioning

State second pension

Expected losses on its guarantees

Any other liabilities it has run up?

What's the present value, and which interest rates are these liabilities linked to.

For them does the government own any assets that it can use to pay them off, and if so what are they worth.

Lastly, what's the government 'income'.

Nickle has a vested interest in the banking sector and is obviously in denial. He conveniently omits losses suffered by the banks on mortgage based securities and derivative trading, and taking losses on voluntary investments in government debt. Further he seems to focus only on their UK activities and omits their international activities which are mainly part of their investment banking. Yes reckless lending and other credit card activities were responsible too. The point is that the total balance sheet values of these banks had become larger than some countries national economies and you don't need to be a rocket scientist to work out that this can't be right. They failed to carry out their own stress tests in their exuberance for never ending growth and greed. The governments are equally to blame for allowing it but banks are getting away with too much and their arrogance on top of it

Nickle has a vested interest in the banking sector and is obviously in denial. He conveniently omits losses suffered by the banks on mortgage based securities and derivative trading, and taking losses on voluntary investments in government debt. F

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Far from it.

I'll repeat, I acknowledge the losses on voluntary 'investments/punts' in government debt.

It was in a reply to a comment that said banks are not forced to invest in government bonds. They are. They have to invest their capital in their government's bonds.

I'm not in disagreement with the other parts of your post either. Bar the fact you've left off the people who didn't pay back their loans. Have you got a vested interest there?

No, the real problem is one of scale.

The government debts are 2 orders of magnitude, 100 times bigger, than the problems at the banks. Banks are an irrelevance compared to that.

You're complaining about a mosquito bite, but failing to notice that you are directly under a falling elephant.

Look at the mosquito you keep shouting. Look up, there's an elephant being mine.

In very simplistic terms...if the rich are getting richer, does that not simply mean the wealth is gradually making its way to the top? If the rich want to get even richer then obviously the money stays at the top and they will not spend. How can people spend from the bottom up if those at the top do not spend back into the bottom of the system? Perhaps it may help if those at the top start spending and put money back down to the lower end? It's like a board game...a few have ended up with all the pieces in the game. Maybe it's time to clear the board and reset?

Nickle states "The government debts are 2 orders of magnitude, 100 times bigger, than the problems at the banks. Banks are an irrelevance compared to tha"

I'm sure you are not suggesting that all government debt is wrong. Its perfectly reasonable to borrow for long-term investments and infrastructure projects which are repaid from future revenues. It is wrong to borrow continuously for annual outgoings for benefits, health, security and defense expenditures which should be mainly met from current revenues. Also temporary borrowings to stimulate the economy are acceptable provided the additional money injected into the economy is withdrawn within a reasonable time. This is clearly not the case since the economy has hardly responded and the stimulus funds are not ending up with the public and businesses but used by banks to build their balance sheets.

You are a clever person indeed if you can figure out which part of the government borrowings are excessive considering that we are trying to avoid another recession.

@Ryan McC

I quite agree, that's precisely the point that the protestors are trying to make.

What is frustrating for them is that they are young, without life experience; their knowledge is basically academic, and their vision of the future is conceptual in nature.

What they don't fully understand is that we are governed by an elitist hierarchial society, some of whom use unfair tactics to keep their place at the top of heap. It's like the philosopher Bertram Russell said: "The world is a horrible place: Once you understand that, you can begin to make progress.

The protestors are not concerned with the minutiae of running the country, or managing the banks. They want to change the conceptual model. What is of concern to them; is the fact that the distribution of wealth is so enormously unequal and bears no relationship to contributions made.

The danger which they see forthcoming is of a situation developing similar to that which existed in France before the revolution.

Some people in high places can see that danger too. Warren Buffett was summoned to the White House to offer his advice of how to emeliorate the crisis. His proposal was to increase taxes on the super rich (like him)

Barak Obama told him he thought it was a very good idea but the problem was, he could never sell it (the plan) to the republicans.

When interviewed about his views later, he was asked. "So you think the under-privileged are losing out?" He replied, sarcastically to make his point. "Sure there losing out, and we're winning, and it gets better, we're killing them. What he meant was that that once someone in America becomes unemployed it doesn't take much to put them on a downward spiral to poverty, and literally speaking if medicare benefits are reduced it will mean more people dying on the streets.

The situation in the UK is not that dire (yet) but the super rich should be seriously considering their position.

I am afraid there is more at play here than simply the super rich and the rest. There are major global shifts occurring whereby some jobs have disappeared due to technology gains or permanently gone abroad to low cost producing countries, it would be silly to attempt to get those back, we cannot compete with those countries. New skills and jobs with value adding attributes need to be created. There is no going back to the good old days when almost everyone was climbing the wealth ladder, a temporary state as it transpires since it was all built on credit. I fully agree with@Ryan and Hotrod that the conceptual or economic model needs to rethought, however,its not simply a question of redistribution of wealth, its how we create wealth for the nation in the future .

With that I retire from this forum, its certainly been thought provoking.

There are major global shifts occurring whereby some jobs have disappeared due to technology gains or permanently gone abroad to low cost producing countries, it would be silly to attempt to get those back, we cannot compete with those countries

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I agree we need to rebuild wealth. However, that isn't going to happen whilst the government is consuming so much money and spending it. It isn't doing investment.

However, I wouldn't be so hasty about low cost production. There are vast numbers of people with low skills. What's going to happen to them? Write them off, and rely on the generosity of others to work for them, with no concept of a thank you? It won't work and isn't working.

In addition, we need to stop pulling in low skilled migrants. High skilled migrants - yes. Low skilled migrants - no .

That way the young get a foot on the work ladder, and the badly educated also get a chance of working.

So I sympathize with the protesters in several ways. First they have no control, no say, and the conclusion then is that you have no responsibility. Look at the referenda vote today. It's about MPs dictating to the majority what to do, when the majority want otherwise.

They have to compete against large numbers of low skilled migrants, and they are better educated, without the debts, and so will win out.

Then you have the dead weight of government debts and regulation dragging every one down.

When all roads lead to rome, its rome that's the problem. It's now governments and their frauds.

Interesting discussing with you anyway, even if you haven't yet tweaked as to the above! :-)