England is bankrupt

[thalbergmad]

Today in my once great Country, some Scottish git and a panda gave 500 billion squids to help out the Banks.

I am not politically astute to make a judgement if this is the correct thing to do, but as a taxpayer i object strongly.

Since the last crash, UK banks have systematically force fed their customers with lending products without proper checks to see if they can actually repay. Anyone between the ages of 18-65 will have been inundated with offers through the post, pounced on if they dare to go into their bank and rung up late at night, to be encouraged to borrow. In addition, they would have been burdened with expensive insurance whether they wanted it or not.

Now that a large proportion of the Country is saddled with debt and is struggling to pay it back, in steps our moron Prime Minister with an obscene amount of tax payers money (that he will have to borrow) to come to the rescue. In the meantime, the average lowly paid bank worker will probably lose their jobs whilst top management who are responsible for this mess, will still be awarding themselves bonuses secure in the knowledge that they can continue to abuse the system/fail miserably and get paid for it. I believe Brown gave a veiled guarantee that this would not happen, but this is probably bollox.

Anyone with even a small amount of financial awareness would realise that eventually the credit bubble would burst and when you are lending people 6 x their annual salary for a mortgage, when the rates go up, a lot will have problems.

I do not know when or if this nightmare will end, but i have a feeling that it is the beginning of another vicious circle.

End of rant.

Thal

 

[morningstar]

It's just like what will happen with the US banks. Yes they've decided to bail the banks out-again, but the banks cannot hope to pay back the figure they have to pay now, which is somewhere in the low trillions. So while struggling to pay back this debt they run short again then vrash and the government has to bail them out again...cycle continues.

[rc]

I think the same way, what is mysterious to me is how enough people think it's a good idea to allow it.

Well, that's not entirely true.  So far as I understand the logic of it: if people can't borrow money and the markets crash, people won't be spending money, so businesses will suffer -> jobs suffer.

But I'm not certain that throwing more money into the system would work in the longterm.  Seems to me that the problem is in the current way of doing things and that we really DON'T need to maintain the status quo...  But, which businesses suffer?  methinks the ones that aren't necessary.  I'm sure people will still open their wallets for toilet paper and food.  How many jobs are based on convincing people to buy crap they don't need?

Well, I've seen stats that say the majority of people are irresponsible with their money, so I guess it's in the interests of most people to keep things flowing.  For my part, I'm all about less taxes, being self-employed I get to see how 1/3 of my income goes to taxes.  Of course we can't have NO taxes, but I like to dream of seeing the country buckle down and get rid of the national debt.  Imagine how much less taxes that would mean for everybody, how much further our work would take us...

[richard black]

I don't in the least mind paying taxes: I'm glad to be part of a system where I pay a proportion of my income to make things happen - things like roads, health service, institutionalised disability benefit etc. etc. But I do mind what I pay my taxes FOR. Bailing out bankers who have dug themselves into a hole and, seeing trouble ahead, carried on digging at accelerating speed, is not my idea of what tax should be for. I would however be happy enough to see a few very senior executives of banks stripped of their wealth to prop the system up - them and quite a few auditors, politicians and others who assisted in getting us all into this mess in the first place. I asked them - trusted them - to look after my money, not gamble it like some drunk in a bookmaker's with a found £20 note.

[thalbergmad]

Well said Sir.

I was amazed at the "Iceland" story today. Brown has been having a go at the Icelandic Premier, when it was actually his government that suggested that Local Authorities invest in the very bank that has crashed.

What a tosser.

Thal

[elspeth]

I worked in banking for year or so, some years back, and left because I couldn't bear to sit behind the counter and try to persuade people to get into debt that I knew they couldn't afford. 'Running short of money this month? Why not have one of our credit cards to tide you over till pay day...' I just couldn't do it, I knew it was an obscenity. But unless you did it, and got your x-number of sales leads every week, you couldn't get promoted - not even into an admin job rather than a customer-facing one.

The irony is that I really enjoyed banking in its proper sense - helping the customer to make the real best use of their money to achieve their goals - it was the sales pitch and the theory that debt was better than saving that I loathed. Don't save for five years and have the thing you want then, have a loan and buy the thing now and pay it back over five years, plus interest and charges. Live beyond your means, it'll all be fine, you can pay us back... until we've lent to too many people and run out of money and we have to call your debt in and you still can't afford it. It was all about instant gratification - selling people the idea that they can have everything they want and they can have it now, not in a few years' time when, with careful financial management, they'll be able to afford it.

If you approach banking as a service industry rather than a retail one - as the banks of fifty years ago were, when you went to the branch manager on your knees to beg for a mortgage and he would refuse unless he was absolutely certain you could afford it, and made a personal decision, knowing you and your bank account rather than letting a computer do his thinking for him - that's what we're all wishing for now as 'responsible' banking. Banks have to make money like everybody else in business, but because the products they make money on are their customers' debts, they have incredible power to do harm.

It seems that debt is necessary to the way the world works at the moment, which is unfortunate but I don't see it changing any time soon.

[ronde_des_sylphes]

It is hard to disagree with what has been said here. However, I think Alistair Darling is a badger, not a panda

I suspect that the banks knew all along that a large percentage of the dodgy loans they were handing out would end up being defaulted upon, but didn't care, because they assumed that house prices would just keep rising, so it didn't matter. Brown's behaviour is a disgrace - it's quite exceptional chutzpah for someone who, as Chancellor, made a speciality of introducing stealth taxation and "off-the-balance-book" financial transactions to then go on and criticise banks for not having transparent finances.

[Bob]

If housing and easy credit can ripple out like that from the US, imagine what oil would do.

[rc]

Wow that's how you were made to do your job Elspeth?  At least you can claim integrity for not going along with such a bogus business.

When I went asking about a mortgage (Canada), they basically calculated what I could afford based on the average of the last 2 years income.  My stepmom has all kinds of stories about having to deal with people who get angry when the bank denied them a mortgage.  

But, I'm not sure if that's how all banks work here.  A coworker tells me that his brother was somehow able to get a mortgage 6 months after filing bankruptcy.  Also the credit cards seek us out.  Apparently they set up a booth to give credit cards to first year university students - try and get 'em early, when they have very little income, before they know what they're getting into.  Strangely, I had to put a downpayment and get a cosigner to get my credit card.

[thalbergmad]

I worked in banking for year or so, some years back, and left because I couldn't bear to sit behind the counter and try to persuade people to get into debt that I knew they couldn't afford.

Same here Elspeth.

I worked in banking from 1983 to 2003 and it changed so much. The last 5 years were simply trying to lend as much money as possilbe. Even if you knew that a customer could not repay, you could not override an absurd computer generated decision.

I was instructed to approach every single customer that came in the branch and was heavily targeted to do so. If what I and you had to do was multiplied by all the bank clerks in the Country, imagine how many people were encouraged to borrow beyond their means.

The people that instucted us to do so are safe and will still award themselves millions whilst the tax payer picks up the bill for years of pressure selling.

Something needs to change.

Thal

[thalberg]

Today in my once great Country, some Scottish git and a panda gave 500 billion squids to help out the Banks.

I am not politically astute to make a judgement if this is the correct thing to do, but as a taxpayer i object strongly.

Since the last crash, UK banks have systematically force fed their customers with lending products without proper checks to see if they can actually repay. Anyone between the ages of 18-65 will have been inundated with offers through the post, pounced on if they dare to go into their bank and rung up late at night, to be encouraged to borrow. In addition, they would have been burdened with expensive insurance whether they wanted it or not.

Now that a large proportion of the Country is saddled with debt and is struggling to pay it back, in steps our moron Prime Minister with an obscene amount of tax payers money (that he will have to borrow) to come to the rescue. In the meantime, the average lowly paid bank worker will probably lose their jobs whilst top management who are responsible for this mess, will still be awarding themselves bonuses secure in the knowledge that they can continue to abuse the system/fail miserably and get paid for it. I believe Brown gave a veiled guarantee that this would not happen, but this is probably bollox.

Anyone with even a small amount of financial awareness would realise that eventually the credit bubble would burst and when you are lending people 6 x their annual salary for a mortgage, when the rates go up, a lot will have problems.

I do not know when or if this nightmare will end, but i have a feeling that it is the beginning of another vicious circle.

End of rant.

Thal

 

I did not read any posts beyond this point.

But I must say, Thalbergmad, that your post cheered me up a bit, because America is bankrupt and now I know we're not alone.  Why is it that when we have a problem, we are so happy to meet someone else who has the same problem? 

I have family members and friends who have lost 10 years or more of savings because of the financial crisis.  For once, I'm glad I have so little to lose.

[morningstar]

I did not read any posts beyond this point.
But I must say, Thalbergmad, that your post cheered me up a bit, because America is bankrupt and now I know we're not alone.  Why is it that when we have a problem, we are so happy to meet someone else who has the same problem? 
I have family members and friends who have lost 10 years or more of savings because of the financial crisis.  For once, I'm glad I have so little to lose.

Wow guess the situation is really serious then! Maybe just to know that you're not alone and others are in the same boat comforts us . We have ha problems here also but nowhere near as dire I would think. One of the major banks seems to be falling and all the others are moving in for the kill but that seems to be the extent of the problems on the banking side. I do foresee a regression of sorts in the future, though not as severe as the one coming to the US.

[rebby]

sorry i am really bored
so HI THAL im back
i got bored so i came back on
great to see you again
rebby
x

[thalbergmad]

Greetings and welcome back.

Time to chuck some more nuts at Hinty.

Thal