Hands up who's cynical about Gordy's new aid package for the banks?

[MrsThierryHenry]

here

Not so much that it won't do the trick, but that he's so far been woefully incompetent when it comes to helping Joe & Josephina Bloggs, but now that the banks are in trouble it's a different story?

Ohhhh, I think I'm probably rehashing an old thread from a couple of weeks ago. Age is clearly wearing my brain down to nowt.

Hear hear, Saintly one! Despite being very good at my job, I (along with many women that I know) was made redundant because I had the temerity to go off and get pregnant. And yet no matter how badly they screw up the country these cigar-puffing fat cats will go on raking in the money. Are you seriously telling me that a woman on mat leave is a bigger danger than these egomaniacal bankers?

Saint Riven of Mumsnet, I don't want them to resign, I want them in prison for running a massive billion pound fraud.

If they can't be sent to prison then I would make them forcibly move to the shittest housing estate in the country and they can send their DCs to Scumbag comp instead of Eton. They will have to shop at Nettos until their dying day.

Drowning not waving.

Too little, too late, and am incensed that GB is trying to buy votes for the by-lection with OUR money. Since gvt has no money, they have to take it either in tax from minimum wage-earners, pensioners etc ( 'cos there aren't enough billionaires to pay it ALL), or cur services to those who need them most ( NOT the billionasires who don't use 'em).
Today I heard several tales of 'woe' from greedy & stupid depositors in IceSave who expect to be rescued by 'the gvt'. They were greedy in investing to get high returns elsewhere, regardless of the risk and utterly plain stupid when even the Liberal Democrats have been saying for over a year that Iceland is dodgy. One guy had 93k n Icesave and another had remortfaged his house to purchase some buy to lets which had fallen thru and put the spare 180k into Icesave . How many taxpayers have that dort of dosh sloshing about? So should the poorest in this country be subsidising greedy incompetent fools like that?

So what are they supposed to do because if even one of the big four go down the economy will be well and truely buggered! Everyone will lose out from the men at the top to the guy who sells the newspapers at the station in the morning - there will not be a section of society not touched by this.

Yes there are poeple in the city who are chavs in suits but there are people who are normal - our husbands who are woprking bloody hard with their arses on the line at the moment.

And to say your mattress is the safest place for your money is just fucking rideculous - you will undermine the banking sector even more by taking cash out and things will get worse quickly!

'So what are they supposed to do because if even one of the big four go down the economy will be well and truely buggered! Everyone will lose out from the men at the top to the guy who sells the newspapers at the station in the morning - there will not be a section of society not touched by this.'

That's what they want you to believe.

But there's no proof that will happen anymore than there is any guarantee that throwing all this money at these banks will have much of an effect at all.

I mean, look at hte markets since the $700bn rescue package was announced in the US.

It's still going down the pan.

It already is.

I agree with MrsGuy, too little, too late.

And we'll still get stuck with the bill for this attempt.

MadameCastafiore, I understand your anger, since your husband is a banker and this thread probably feels like a personal attack on him. And you're right to say that the catastrophe will be far worse if one of the big banks falls.

However the fact remains that this current crisis has been caused by people taking risks to an excessive extreme - in other words doing their jobs badly. If I did my job badly I'd be sacked. But at least the consequences of my failure would be limited. In the case of the banking fiasco, the consequences affect all of us. So we do have a right to be pissed off, to vent our spleens, etc etc. Especially at the head honchos, who have overseen this bloody mess from the comfort of their well-furnished offices.

As for the chav/ mattress quips - I think your anger has blinded you a little. They were only meant to jokes.

it sucks to lose your job. been there, done that!

but why should their jobs be bailed out and not other industries which are taking a pounding right now?

they're seen as more special, above regulation, let off with absolutely no accountability on a bill our grandchildren will be paying.

all in the name of capitalisism and free market, by whose very tennents are failed business is just that - and left to fail according to market forces.

that is why people are angry.

they were not consulted about the bailout and they're the ones paying the price for banks to loan each other and them their own money for interest.

You are looking at the wrong place Expat. This is not about stocks and shares, although serious sustained drops in value will cause knock on effects to people's pensions etc. The place were there is a problem is the funding markets, because even banks who have perfectly good balance sheets are being affected, and if banks can't raise money then they can't give it to people who need it for all sorts of things, such as paying their staff. People will struggle to get mortgages and other loans. If things go really wrong for the banks (as they are doing world wide) then they go really wrong for everyone.

They have no choice. The reason we didn't bail out steelworkers, miners and dockers is because hte whole of our economy wasn't based on those industries (and because those in charge didn't like them anyway). They cannot let banks go under or we will see a depression like the one in 1929. No one actually actively wants that, except a few mad marxists who think it might precipite another bolshevik revolution, bless 'em.

'If things go really wrong for the banks (as they are doing world wide) then they go really wrong for everyone.'

thing is, nooka, there is no guarantee they won't still go wrong.

or still be long and painful.

most economic cycles are, especially when they're continually diddled with by ineffective politicians, or not diddled with enough.

'They cannot let banks go under or we will see a depression like the one in 1929.'

That's extremely unlikely. There were a number of circumstances occuring in history at that time that caused that to happen. The wheels were set in motion for that crash long before it occurred.

Just as every recession and depression has a particular set of historical circumstances surrounding it that are unique to them.

There are additionally many factors surrounding all downturns in economic cycles that are beyond anyone's control or prediction.

Hence, why in retrospect bailouts and the like often fail, are only modestly effective (especially in view of price) or even ineffective.

'Another bolshevik revolution'?? God help us all!

There are large profitable multinational companies who are struggling to get the cash to meet their payroll - only because the banks won't lend to them in the way that they always have done. This isn't about fatcats (and in general there are fewer fatcats in the retail banks anyway). It is about the fact that most companies (and many individuals) have assumed that they will be loaned money if they are a good credit risk. If we are entering the possibility of being in a world where nobody can be trusted to be able to pay anyone else, that is indeed a scary new world.

MrsGuyOfGisbourne - do you take financial advice from the Lib Dems then?

People used Icesave because it was instant access and a good rate. Those with balances under £16K will be screwed if the Icelandic lot don't cover their guarantee

LOL. The idea of a Bolshevik revolution coming about in a society as self-absorbed, self-indulgent and lacking in collective responsibility or consciousness as this one (and the US's, I might add).

'There are large profitable multinational companies who are struggling to get the cash to meet their payroll - only because the banks won't lend to them in the way that they always have done. '

If they are profitable why are they relying on loaned money to pay the staff that is making them money?

Sometimes corrections happen because a paradigm is no longer sustainable.

Because not everyone works on prepayment. There is usually a time-lag between delivering goods or services and getting paid for them. And in the meantime you have to pay for your stock and your staff.

LadyMuck, the point about the fat cats being to blame is that the banks no longer have money to lend because of their own bad business practices. Greed has led to risk-taking on a silly scale (primarily through bad lending policies), which has led to this credit situation that we and the mulitinationals you mention are stuck in.

it's a moot point now. package has been approved and we'll all pay for it no matter what.

just have to wait and see what effect it has.

I think that the difficulty lies in trying to isolate the fatcats to being just in the companies that are having capital injections via the US and UK bailouts plans. I'd love to be able to name and shame a group of say 50 odd senior finance staff and say "this is all your fault", but that would be rather simplistic.

But the problem is that good businesses are as badly affected as good businesses. The worst lending happened in the US, but the effects are being seen world over. This is not just some wide boys getting into trouble now, it's the entire banking sector, and the businesses that depend on the banking sector (most of them). As to whether the current actions are the right ones and the scale of the threat (ie is it a Great Depression, or just a market correction) that's not really possible to tell at this point. However the British plan is to buy into the banks, where this has happened before (Sweden) this has actually brought a profit into government, so it is not necessarily an poor use of taxpayers money (in any case it is governemt borrowing, rather than raising money directly from us, as it were).

Well, it's somebody's fault, isn't it? It might seem simplistic, but at the end of the day there is a group of somebodys somewhere, who decided that it would be a great idea to run huge credit risks. Why shouldn't they be held to account?

This money is a loan to banks not a donation. It is bad news for bank employees and shareholders not good.

And we're supposed to reap the benefit when we sell the shares back to them when an upturn comes...

Although it does always seem to be that they take the profits, we take the losses. That's the "free" market for ya.