Bank bail out!

How can the government justify bailing out banks with tax payers money (£2000 per person) so the banks can start lending money to us again to earn intrest on loans etc! why not just give us the £2k each then we wouldn't need to get loans etc! i know i'm going on a bit but everyone i have spoken to feels the same why give banks OUR money so they can earn more money from US? Out of order imo! Plus i have heard that the banking fat cats wont lose bonuses etc! :mad::mad::mad::mad:

What's the alternative, then?

What's the alternative, then?

Scrap money as we know it and run the world on favours!

Seriously though they could at least scrap the bonuses and payouts to the bank bosses ! What else i dont know!

Seriously though they could at least scrap the bonuses and payouts to the bank bosses ! What else i dont know!

I do believe that's the intention. I'd be disappointed if it wasn't.

I think there's a bit of hysteria, stoked by the media, about the risk the taxpayer is exposed to. It's just as likely that the taxpayer will profit from the moves made today, not immediately but eventually.

The alternative would have been a complete meltdown of the economy and the impact of that on the taxpayer would have been too dreadful to contemplate and certainly worse than the quoted £1,600 we've all chipped in.

It's not like we're being asked to contribute a further £1,600 - we've already paid it.

Fingers crossed eh?

I'm intrigued as to how the bailout in this country is a bugger load more than the similar bailout in the US, considering the collapse of Lehman Brothers and the nationalisation of Fannie Mae and Freddie Mac are considerably bigger than the single nationalisation of Northern Rock.

The only explanation I can think of steve is that the "billion" referred to both times is the imperial version and not an american billion.

How can the government justify bailing out banks with tax payers money (£2000 per person) so the banks can start lending money to us again to earn intrest on loans etc! why not just give us the £2k each then we wouldn't need to get loans etc! i know i'm going on a bit but everyone i have spoken to feels the same why give banks OUR money so they can earn more money from US? Out of order imo! Plus i have heard that the banking fat cats wont lose bonuses etc! :mad::mad::mad::mad:

Well, because if we did that then the economy would completely fail very quickly. Without wanting to write an essay, and just to address one problem, to explain how this wouldnt work, its not the people that are bust its the lending system. So if you went to a bank tomorrow for a mortgage (based on your idea) they still wouldnt have any money to lend. Would you giving me £20 and then me giving it your right back leave you better of or just the same?

Of course, the other upshot of a mass injection in the population of money they didnt earn (if you're suggest the government should just print the money instead of take it from our taxes) is rocketing inflation and a devalulation of our currency.

Economics is not my strong point, and it's something I've only very recently taken a keen interest in, ironically just before all this kicked off, but I would urge anyone who doesnt already understand to research how a countries economic system is run, ruined and stabalised. I dont claim to even know half of it, but I know enough to understand that we really REALLY are in the ****, and that this is not even the tip of the iceberg of a VERY long journey...

I'm intrigued as to how the bailout in this country is a bugger load more than the similar bailout in the US, considering the collapse of Lehman Brothers and the nationalisation of Fannie Mae and Freddie Mac are considerably bigger than the single nationalisation of Northern Rock.

different kind of bail outs. over there, they have bought the toxic assets to remove them from the company's balance sheets. over here, we have simply pumped in loads of money in an attmept to increase liquidity and unblock the system, whcih may not have the desired effect, as banks may still be unwilling to lend to each other, as they still dont know the extent of the toxic assets being held

different kind of bail outs. over there, they have bought the toxic assets to remove them from the company's balance sheets. over here, we have simply pumped in loads of money in an attmept to increase liquidity and unblock the system, whcih may not have the desired effect, as banks may still be unwilling to lend to each other, as they still dont know the extent of the toxic assets being held

But we know who is holding them, hence HBOS's shares dropping whilst others aren't, to the same degree.

But we know who is holding them, hence HBOS's shares dropping whilst others aren't, to the same degree.

no not really. it isnt that hbos had toxic debts that was the problem, it was that their funding model relied on accessing money via the money markets (rather than what building societies used to do which was take deposits. this is what did for northern rock as well). these markets have dried up, therefore they are finding its almost impossible to obtain the funds they need to meet their commitments

If you've got half an hour to spare, this is the best assessment of how this mess has happened, and what we should do about it. It's not easy reading, but Will Hutton's analysis is usually spot on, and certainly clarified for me how a lot of the current turmoil came to be, including a relatively non-technical explanation of what

securitisation and hedge funds actually are.

There have certainly been some very dodgy practices in the City in recent years.

Best read in order.

http://www.guardian.co.uk/business/2008/oct/05/creditcrunch.marketturmoil1

http://www.guardian.co.uk/business/2008/oct/05/banks.marketturmoil

Scrap the bonuses for the banks and use them instead as a 'Windfall tax' - simple. We're starting to see (finally) that capitalism just does not work.

I don't think that they should scrap the bonus's. If someone make a company £x million, why should they not be thanked for their hard work with a cash bonus? If it was any other sort of company and they made a hell of a lot of money, then they would be thanked, so why not in the banking world?

I don't think that they should scrap the bonus's. If someone make a company £x million, why should they not be thanked for their hard work with a cash bonus? If it was any other sort of company and they made a hell of a lot of money, then they would be thanked, so why not in the banking world?

Most of us get 'thanked for our hard work' in the form of a weekly / monthly paycheque. Why should bankers be any different?

Are you implying that they wouldn't work as hard if they didn't get their megabucks bonuses? Then sack 'em!

I don't think that they should scrap the bonus's. If someone make a company £x million, why should they not be thanked for their hard work with a cash bonus? If it was any other sort of company and they made a hell of a lot of money, then they would be thanked, so why not in the banking world?

But in the banking world, it's entirely possible that a transaction may make the company £x million over the current financial period, but then cost the company ten times that amount in the future. That is why so much of a fuss is being made about banker bonuses, because they gambled on the sub-prime market remaining relatively stable for long enough that they would qualify for a bonus big enough to retire on safe in the knowledge that they wouldn't have to face the pressure of recovering the situation when it all went tits-up.

Most of us get 'thanked for our hard work' in the form of a weekly / monthly paycheque. Why should bankers be any different?

 

Are you implying that they wouldn't work as hard if they didn't get their megabucks bonuses? Then sack 'em!

I agree BTF. Having worked for a bank it used to get to me that we were working our butts off day in day out for my monthly pay, selling loans etc to customers just to boost profits, and it wasnt me or my collegues that saw the fruits of our labour, it was the bosses sat in their high rise office in the city raking it in grrrrr.

When I started at the bank, over 20 years ago, a cashier was just that, deposited your money or paid it out to you. No questions etc. When I finally left 13 years later, a cashier had targets of how many sales they could make in a day / week. I even bumped into an old collegue last year who said that they were now calling themselves 'shops'!

If we refused or did not meet our targets then there was the threat of your job. (I was lucky worked in the back office and had little contact with customers so no target). And they wonder why i never went back after my career break!

I even bumped into an old collegue last year who said that they were now calling themselves 'shops'!

No real surprise there - it is called "retail banking" for a reason

I saw an advert on TV for a banks 'January Sales' back in January (Obviously) Made me laugh.

IMO, if this bail out did not go ahead the the turmoil which would insue would be far more expensive. Think if you bank went bust, who will pay the compensation for your savings? The gov't. So if the bail out doesnt happen, you will end up paying a lot more in taxes to cover the money the gov't forked out for everyones compensation.

The bail out is by far the lesser of two evils.

The bail out is by far the lesser of two evils.

Am I right in saying that the bailout is basically a complicated loan agreement between the Treasury and the banks, whereby the banks will have to pay the money back when they have recovered sufficiently? If so, the actual exposure to the taxpayer should, assuming the financial sector does recover sufficiently, actually be nil in the long-term and in fact may even generate a profit for the Treasury.

Pretty sure that's the plan in the US bailout anyway, I noticed both Bush and Obama have made comments along the lines of they hope it'll actually turn a profit eventually rather than costing the countrry anything.

Am I right in saying that the bailout is basically a complicated loan agreement between the Treasury and the banks, whereby the banks will have to pay the money back when they have recovered sufficiently? If so, the actual exposure to the taxpayer should, assuming the financial sector does recover sufficiently, actually be nil in the long-term and in fact may even generate a profit for the Treasury.

This was exactly the point made my alistair darling yesterday, that in the long run the public would be better off, both from stability and financially...

This was exactly the point made my alistair darling yesterday

Does Mrs Darling know about this? :smt050

HBOS up approx 30% today, nice little profit if you purchased yesterday just before close.

Am I right in saying that the bailout is basically a complicated loan agreement between the Treasury and the banks, whereby the banks will have to pay the money back when they have recovered sufficiently? If so, the actual exposure to the taxpayer should, assuming the financial sector does recover sufficiently, actually be nil in the long-term and in fact may even generate a profit for the Treasury.

 

Pretty sure that's the plan in the US bailout anyway, I noticed both Bush and Obama have made comments along the lines of they hope it'll actually turn a profit eventually rather than costing the countrry anything.

I think there is a difference between 'our' bail-out and the US one in that the US govt. has 'bought' the toxic assetts whereas our govt. hasn't.

I'm trying so hard to understand all this (and failing miserably) but as someone pointed out earlier, Will Hutton in the Guardian writes some good stuff.

http://www.guardian.co.uk/commentisfree/2008/oct/09/economy.economics

I also found this quite interesting chart, showing how very low interest rates are these days, even though they've risen recently (until yesterday). I remember the days when they were 15%

http://www.guardian.co.uk/business/interactive/2008/oct/07/interestrates.creditcrunch

Lehman Brothers employees stage a protest by blockading the entrance to the Bank's Headquarters

Easy - Make more money

:smt039 Hello Mr Mugabe!

Easy - Make more money

I'll give you the benefit of the doubt and assume that's sarcasm.

no seriously why don't they just print more money?

no seriously why don't they just print more money?

Rather then giving you more to spend it'll just de-value the money that is already in circulation.

(e.g. If there are 10 coins in circulation and the bank mints another 10, then all the money that was there already would be worth half what it did, as there are 2 x the number of coins compared to what there was.)

thanks

The Italians had a crap economy for years but they have better weather than we do. I say let the economy crash get some shades and put your shorts on.

Rather then giving you more to spend it'll just de-value the money that is already in circulation.

 

(e.g. If there are 10 coins in circulation and the bank mints another 10, then all the money that was there already would be worth half what it did, as there are 2 x the number of coins compared to what there was.)

What if we put 5 of the new coins in my piggy bank? Will that sort out this global problem?

Question-

Could big-time investors be dumping their shares at rock-bottom prices, then buy them back in order to show their losses in their tax-returns?

What I don't get is that I heard "an expert" say that the government money being injected would have to be borrowed!!!!!!!!!!!!

From who?

We have all seen the lists of councils and public bodies who have lost millions in Icelandic banks, but what of football clubs. Some of them besides WHAM must have had exposure and lost millions - maybe Pompey!!