Darling to Throw More of our money at the banks

[Scooby Do]

news.bbc.co.uk/1/hi/business/7836782.stm



This looks to many as desperation on the part of a Govenment that is sinking ever deeper in the mire.

[justmyopinion]

It is starting to look as if the Banks, despite the amount of public money that they have received, either directly or in the form of guarantees, are not reacting in any way that helps the crisis that we are facing. Increasing financial support at the public expense is likely to make little difference in my view. The only thing that will break this cycle oif recession is lending and investment - this is not happening.

It is clearly the case that the banks, in the form of their boards, are failing to act in the national interest, perhaps even acting against the national interest.

An individual acting against the national interest would be liable to a charge of treason: is there an equivalent corporate condition or might the board members be liable if this continues?

[yord]

"failing to act in the national interest" ? What by lending our money to those with little means of ever repaying it ? Yeah great idea. The banks are right. Any government thats throwing money at banks is absolutely mad , or would be if it was their money they were chucking about.

[justmyopinion]

Jan 19, 2009 8:34:31 GMT yord said:

"failing to act in the national interest" ? What by lending our money to those with little means of ever repaying it ? Yeah great idea. The banks are right. Any government thats throwing money at banks is absolutely mad , or would be if it was their money they were chucking about.

No, I mean lending and investing in small to medium businesses that employ people whose confidence, ultimately, will start the consumer economy again eg house buying.

It is only the banks that have the mass organisation to lend to non governmental organisations, ie the priovate sector which is the basis of our economy, like it or not.

Giving them the money and letting them keep it in a safe in the ground your alternative? All constructive ideas gratefully received.

[yord]

I know what you mean and it isnt the solution at all or in any way

[yord]

the banks will be nationised now, otherwise those that do still have jobs might aswell forget all about turning up for work and find a hole in the ground to live in

[reverend]

so is this confirmation of Browns financial policy being a failure?

[yord]

its a confirmation that the systems we operate under have collapsed

[jonren]

"so is this confirmation of Browns financial policy being a failure? " - - - -Reverend


Yes it is and continually repeating "This is a global problem" is misleading at best and barefaced lying at worse. The global problem is not responsible for the UK's record National Debt. That is down to Brown's mismanagement as chancellor. He bathed in glory when overseeing the biggest boom in history and failed to consider the bust that followed, despite boasting that the era of boom and bust" was over. He saved nothing for 'a rainy day'. Well now it's pouring down and we all suffer. He knows that an election is called for but lacks the guts to call it.

[mids]

God, I hate Brown. He really should be tried for treason and locked up in the Tower forever.

[yord]

"He bathed in glory when overseeing the biggest boom in history"

The only boom was totaly credit based , illusionary.Without the introduction of credit it would never have happened regardless.

[flatandy]

What I really, fundamentally, don't understand here, is why the government doesn't just start lending.

At the moment they are making a loss and making sure the banks are making a profit.

But there is no national interest in making sure the banks make a profit. There is an interest in making sure the banks don't act the utter twat again. So it would make sense to make sure they take the hit for their moronic behaviour over the past few years. But no, instead they want the taxpayer to take the hit. and banks to make even more obscene billions.

I mean, you see the loss figures for the banks here - £2bn here, £5bn there. If you remember their profits in the previous couple of years you know they can perfectly well take a few billion quid of losses, and they deserve to. And if they go bust, tough. The government can then just nationalise the loans and accounts.

Much easier, instead, to have the government lend direct, at whatever they think a suitable rate is. And then the banks can either say "well, that's way unreasonable, you can take all the hits. Mr Darling" or they can see "oh, they're taking all our potential future profits away, we'd better lend at competetive rates."

This insurance, though, is stupid. Stupid, stupid, stupid. Just allows the banks a free-rein to have been stupid goons in the past and continue to be profiteering shits now.

And does nothing to stimulate lending at competetive rates. All it does is insures the banks against the past and allows them to still lend at stupidly high rates.

[yord]

"What I really, fundamentally, don't understand here, is why the government doesn't just start lending."

It couldnt be that the people wanting to borrow cant repay could it ?

[yord]

and of course if the government lent it out instead of the banks youd see immediately just what a crock of sh*t theyve been telling us

[yord]

Why the feck do you think you cant set yourself up as a bank ?? To protect the public ?

[minge tightly]

I'd side with yord on this one. The system has collapsed and this further bail-out is another desperate measure to prop up a failed system. It has been failed for a while now with credit used to prop it up for the past few decades, but now that crutch has been kicked away, it would be better if attention were focused on the system we'll be living under in the future rather than wasting energy on this failed one, even if it is painful to do so.

[sushimo]

Is there any other country in as big a mess as we are? That's a serious question I would like answered honestly. I despise Brown and all he has done, but this latest gem amounts to total insanity. If you can't manage without borrowing - it 'aint working!!!!

[flatandy]

The system has failed? Are you sure? This is the system that's driven massive advances in everyone's standard of living and is really only a bit screwed right now because some Masters of the Universe got to sure of their own brilliance and constructed bizarre insanely leveraged products to boost their own wealth.

Get rid of the stupid leverage and the system works fine, still. It would even have worked with all the bad sub-prime mortgages.

Regulated capitalism driven in part on the basis of credit and lending, driving economic groiwth, innovation and increasing prosperity and improved standards of living is perfectly functional still.

The problem is only that the government is effectively insuring the banking system against their own stupidity, which is utterly counter to how the capitalist and market system should work, and the better way to use public money is to offer competition to the banks and see whether they think they can offer a better product at a better price.

Like a market system should be.

[flatandy]

Jan 19, 2009 11:09:49 GMT sushimo said:

Is there any other country in as big a mess as we are?

Yes. Most western countries in one way or another.

They just aren't so bloody depressingly miserable about it, spending all their time telling everyone they know that we're all Dooooooooooomed.

[peakman]

Jan 19, 2009 11:08:26 GMT minge tightly said:

I'd side with yord on this one. The system has collapsed and this further bail-out is another desperate measure to prop up a failed system. It has been failed for a while now with credit used to prop it up for the past few decades, but now that crutch has been kicked away, it would be better if attention were focused on the system we'll be living under in the future rather than wasting energy on this failed one, even if it is painful to do so.

Yes, just let it go. Start again, but first of all, let it go.