The Money Thread - Public Bank ownership expands (RBS@70%)

[SC]

This is what I meant in the other thread when I talked about political and economically conservative-thinking individuals mis-interpreting what men like Milton Friedman and Friedrich Hayek were saying. Money-men simply became overwhelmed with greed; pushing both illegal and economically unsound conservative-led practices. When conservative philosophers wax lyrical about free markets, they failed to emphasise the need for nothing more than basic common sense. Yes, it is okay to believe free markets equate to social freedom, but that is only if private individuals' behaviour is both reasonable and respecting of long-term prudence.

All we have here are politicians taking a literal stance on the "markets know best" mantra. The markets have decided that these companies must go under, and therefore that is the way it must be. Unfortunately because of the globalised world we live in however this is a different case, and we all must suffer when financial institutions suffer the consequences of their decisions. Funny how to some the state is no longer an evil 'Leviathan' when Gordon Gecko becomes Oliver. If a lot of people are not sent down for this to set an example, then this situation becomes all the more unjust for us all.

Another dilemma here also is this - where do we draw the line now? The balance between the state and private markets is complicated at best; so where else should the state now step in when other, non-related companies begin to flounder?

[Yorkcityknight]

So basically the government would be giving the Banks money for "Toxic assets" which to me, does not sound good.

Potentially bad yes. But potentially the government could get back what it paid for them over time, but it massively increases the banks liquid assets at this point.

The process has had some success in the past. Didn't the Japanese government bail out their banking system with around 100 billion in 2002 and then the ensuing recovery enabled them to sell their stake at profit for the taxpayer a few years later ?

[Hexx]

So basically the government would be giving the Banks money for "Toxic assets" which to me, does not sound good.

Potentially bad yes. But potentially the government could get back what it paid for them over time, but it massively increases the banks liquid assets at this point.

The process has had some success in the past. Didn't the Japanese government bail out their banking system with around 100 billion in 2002 and then the ensuing recovery enabled them to sell their stake at profit for the taxpayer a few years later ?

No idea.

I was 16 in 2002. I wasn't paying attention

[Alvin Flummux]

Can someone post a summary of what happened today? I've been hearing the DOW Jones is down 800 points and so on, but it's all a bit confusing.

[Hexx]

Can someone post a summary of what happened today? I've been hearing the DOW Jones is down 800 points and so on, but it's all a bit confusing.

2nd UK Bank (B&B) basically Nationalised - UK strawberry floated.

US Bail Out Plan didn't pass. - US Stock/Shares plument - no idea what next for the US banks.

[Cal]

What a fascinating evening of TV news it's been! At first I was a bit confused as to why it is that the reason the bail-out plan failed was down to Republicans not voting for it, but slowly it's become a little clearer.

It's apparently all to do with ideologies. A belief, in America, that failing institutions should actually be allowed to fail, rather than allow governments to step in and impose regulation. It is, if you like, the very essence of a western capitalist ideal. While we saw a large Democratic vote actually in favour of the President's bill (a Republican President, remember) his own people, right-wing Capitalists to the core, just couldn't stomach the implications of all that state intervention in their precious (and woefully under-regulated) banking systems. So they simply voted against it - not for the good of the average American taxpayer, but because, fundamentally, to vote for it would be to rein in the gloriously unregulated banking system and bring about and end to the catastrophic free-for-all, for many decades to come, as American financial institutions would finally have to operate under the constant jurisdiction of federal oversight and, well, you know, actually not be permitted to act like greedy f*ckers on the make.

Nice to know that when the chips are down, those American senators are not watching out for the interests of the common man, but - rather predictably - the financial interests of their friends in big business.

Gotta laugh.

[Alvin Flummux]

I want to see a graph for today's events. The Guardian has one for its front cover tomorrow.

[Midtown]

I wouldn't simply brand those who voted against the bail out package as ideologues.

If we desire to reform the banking system, with a far greater emphasis on prudence, then we cannot simply shore up the system in it's current state. In fact moral hazard could arguably have led to further risk taking and irresponsibility.

American concerns about the impact on the dollar and the potential for devaluation are also legitimate.

[new*allusion]

Here are the front pages:
Sky News

Shocking stuff. Especially for Daily Star readers...

Also, a lot of this:

[Skarjo]

Here are the front pages:
Sky News

Shocking stuff. Especially for Daily Star readers...

Also, a lot of this:

Professional comedians couldn't have predicted the Star's...'alternative' headline.

[Ecno]

Here are the front pages:
Sky News

Shocking stuff. Especially for Daily Star readers...

Also, a lot of this:

Professional comedians couldn't have predicted the Star's...'alternative' headline.

Hey it's one way to beat a recession.

I'm confused I thought Cal didn't want the government bailing out the banks?

[Skarjo]

Here are the front pages:
Sky News

Shocking stuff. Especially for Daily Star readers...

Also, a lot of this:

Professional comedians couldn't have predicted the Star's...'alternative' headline.

Hey it's one way to beat a recession.

I'm confused I thought Cal didn't want the government bailing out the banks?

Cal objects to whatever is actually happening.

When the banks were getting bailed out it was sheer profit-mongering.

When the banks are not it's sheer profit-mongering.

If I have another glass of wine it's sheer profit-mongering.

Repeat until you just want stab yourself in the eyes.

[Extralife]

It's apparently all to do with ideologies. A belief, in America, that failing institutions should actually be allowed to fail, rather than allow governments to step in and impose regulation. It is, if you like, the very essence of a western capitalist ideal. While we saw a large Democratic vote actually in favour of the President's bill (a Republican President, remember) his own people, right-wing Capitalists to the core, just couldn't stomach the implications of all that state intervention in their precious (and woefully under-regulated) banking systems. So they simply voted against it - not for the good of the average American taxpayer, but because, fundamentally, to vote for it would be to rein in the gloriously unregulated banking system and bring about and end to the catastrophic free-for-all...

You're not happy when they decide to prop up the banks and now your not happy they have decided not to; what exactly is your problem?

You seem to have an irrational hatered for the right. I'm a social liberal and firmly in the mid left ground but I am reasonable enough not to dismiss those on the right wing of simply being greedy capitalists. I soundly believe that the magority of votes against this bill were entirely made in the intended interest of citizens. Both democrats and republicans in the no camp were united in their anger at what they saw as social injustice. They probably believe that by letting them fail it will create a historical message that such behaviour is not in the best interests of companies; therefore meaning that more regulation would not be nessicary. I don't agree with it but it's a decent arguement.

[SC]

For all the commentary and debates about the voting on this issue, I think the key point at the end of the day is this: should the so-called 'bailout' fail to materialise, will the market consequently react to such a degree that private individuals stand to lose far more than ~£3,500 / ~£4,000 that the necessary tax burden will impose? The whole economic sphere; from the economic benefits of public service spending all the way to retirement saving pools.

I know it sounds simple and patronising, but that's pretty much what it comes down to. I don't like the morals behind the bailout any more than anyone else, nor do I like the resulting tax-burden on some good, honest and reliable people. However, if it comes to deciding on my moral conscience, then I'm sure protecting peoples' (and what will include all our families here) hard-worked retirement sums would take precedent over pulling those responsible on Wall Street and elsewhere to safety - who may well have pulled us all down to the gutter.

[Alvin Flummux]

The family of somebody I know online has lost $75,000 (thus far) as a result of yesterday.

[Cal]

You're not happy when they decide to prop up the banks and now your not happy they have decided not to; what exactly is your problem?

I don't have a 'problem' (it's not mine to have). Of course I'm not in favour of ordinary people - the same ordinary people so many of you think are somehow to blame for this financial catastrophe - having to pay up to bail-out profiteering pirates in the financial institutions for their mistakes, their criminal greed and their sheer recklessness with other people's money. The observation I was simply making is that I find it wholly unsurprising that even when disaster is right on their doorstep, many of these Senators, so wedded to their friends in big business (who do you think funds those massive election campaigns?), cannot bring themselves to put the immediate good of their country (and ordinary citizens) ahead of their protectionism of big business interests.

I soundly believe that the magority of votes against this bill were entirely made in the intended interest of citizens. Both democrats and republicans in the no camp were united in their anger at what they saw as social injustice.

Stop being so naive. This is a political crisis as much as it is a financial catastrophe.

They probably believe that by letting them fail it will create a historical message that such behaviour is not in the best interests of companies; therefore meaning that more regulation would not be nessicary. I don't agree with it but it's a decent arguement.

The way the Republican Senators voted yesterday wasn't an argument - it was statement of intent.

[Fatal Exception]

$1Trillion has been wiped off the US Stock Market. I can't even comprehend that much money, never mind it just vanishing because of bad news.

[Hexx]

I did promise Skarjo he could demolish this one, but...really? That's your argument (now)?

Cal: 5 days ago

I don't share his religious beliefs, but I can't help but agree with his dim view of the proposed 'bail-out' for the criminal investment banks, which have all but brought the world's money markets to the tipping point. It's immoral, it sends totally the wrong message ('we will reward bad behaviour') and it offers no help whatsoever to the victims of one of the greatest heists in the entire history of banking.

Cal today

The observation I was simply making is that I find it wholly unsurprising that even when disaster is right on their doorstep, many of these Senators, so wedded to their friends in big business (who do you think funds those massive election campaigns?), cannot bring themselves to put the immediate good of their country (and ordinary citizens) ahead of their protectionism of big business interests.

And you don't see the lies, hypocrisy and general stupidity of your two statements? When the vote was proposed you thought it was all about rewarding big business and screwing the common man, when the vote was rejected it was all about rewarding big business and screwing the common man. Do you want to me to post more?

Cal. Seriously. Get over youself and strawberry float off. You offer nothing of value to any thread on this topic, which was actually a reasonable discussion with different informed points of view.

Go make a thread on how all policemen are dangerous drivers who kill innocent girls or something.

[Hexx]

The family of somebody I know online has lost $75,000 (thus far) as a result of yesterday.

The people are feel most sorry for are those depositors who got shares when the building societies demutualised. (e.g. Halifax).

I think the Halifax shares became HBOS on the merge - and those will have been wiped out (from about £11 to £1 in a year).

Stupid building societies getting greedy...only Nationwide is the big one left

[Mr Thropwimp]

I actually thought America would've learned about the dangers of unfettered capitalism after the Wall Street Crash in 1929. To leave something as important as the banking system by and large unregulated is bordering on sheer idiocy.

Just read The Guardian's take on the ordeal, interesting stuff.

I have a thought though, and it might be an incorrect one, but surely injecting $700 billion into the economy would completely undervalue the currency? That money would have come from international as well as domestic borrowing, so would we have seen an even weaker dollar if the plan went through?

Apparently the buyout of Bradford & Bingley would've "drawn a line" under the crisis over here in Britain. That seemed like a pretty naïve, if not overly optimistic, opinion. Heh.