Financial fuckery thread

[Doktor Howl]

Wow, european finance minsters are dicks...

Yeah, maybe.  But anyone who takes advice from Geithner is an idiot.

Maybe, but most of them aren't much better. Their policy of trying to fill the money black hole with endless bailouts is reaching its expected conclusion with Italy.

Have any of them colluded in causing and worsening the black hole in the first place?

Because Geithner did, to line his friends' pockets over at G/S.

[Cain]

Harder to say.  A lot of them are lower profile, privacy laws tend to be stronger here and you're looking over several different jurisdictions, with a lot more banks.

In some ways, the US press is much better at picking up the activities of their various officials, even in this day and age.  A lot more of your covert ops get into the press, and so do your corporate-political links.

[Anna Mae Bollocks]

There was a guy who wrote a book about school shootings a couple of years ago who said everybody has it all wrong with all this zero tolerance for shit like black clothing and metal music and empty threats. He said these kids are always raised in very conservative families and when the illusion of the Reagan Christ Way starts to wear thin and their whole reality is threatened and they see that they have no future, they flip. I can't remember the guy's name, dammit, maybe somebody here knows? It might have even been Cain who posted about it originally.

Artists who paint burning banks don't have Reagan bubbles to burst, I would think.

Although you'd then have cause to wonder why children of hippies don't have the same bubble pop explosion of rage and despair.

Simple. They've had weed in their system since the fetal stage.

[Scribbly]

The FT is reporting this morning that the (UK) government is performing worse than expected in cutting the deficit, and that an additional £12 billion loss has been found when they ran the numbers themselves. Not going to quote the article, because doing so brings up a warning not to post on the internet. If you want to register to see it though, it is here: http://www.ft.com/cms/s/0/f5981c68-dee0-11e0-9130-00144feabdc0.html#axzz1YOBXuNEw

The number which leapt out at me was that in order to fix the deficit, they'd need to raise VAT from 20% to 22.5%. That's almost one quarter of the cost of nearly everything spent, going into the government on top of other 'stealth' taxes (like fuel duty), and regular taxation. At the same time, retailers have been dying off because they simply can't make money. ANOTHER rise of 2.5% (though I think that was just said for comparison, and nobody is suggesting it yet) would tank that even further.

At the same time, minimum wage hasn't been rising, people are working less hours on average, inflation stands at 5.1% with more 'quantitative easing' en route to bump that up further...

Our transport infrastructure is a joke, and we're going to waste billions on a high speed rail line to chew up vast areas of green belt land and shave 30 minutes off the journey from London to Birmingham. Not that you'll be able to move in London next year anyway; we're hosting the Olympic games (which is also costing us billions) and what passes for public transport is going to simply collapse, given that whole sections of the underground fail every other day already.

Even after all these 'tough decisions' and austerity measures, we're still fucked.

Oh... yeah. £12 billion is roughly one quarter of the total deficit. Last week, I forget if I mentioned this, but:

"The ICB puts the annual cost to banks around £6bn. This is modest as a share of banks' assets (0.1 per cent)."

So if the government seized one per cent of the banks' assets, banks that we largely own and have bailed out, we could simply wash all this away and have billions left to spare to assist with things like transport, education, healthcare, pensions... we could even cut some of our ridiculous levels of taxation! Hey, seize TEN per cent! We bailed them out, why can't they bail us out?

Not that I expect anyone to even ask.

[Triple Zero]

So if the government seized one per cent of the banks' assets, banks that we largely own and have bailed out, we could simply wash all this away and have billions left to spare to assist with things like transport, education, healthcare, pensions... we could even cut some of our ridiculous levels of taxation! Hey, seize TEN per cent! We bailed them out, why can't they bail us out?

Not that I expect anyone to even ask.

I support this idea.

There's probably a reason why it couldn't work.

But let's do it anyway.

[Scribbly]

The problem with doing it seriously is twofold.

The first is that it is an ongoing cost. A one-time alleviation would probably help a lot in the short term, but say you go ahead and take one per cent to fund your cost this year... next year, you're still in the same position. Unless your 12 billion in tax cuts has suddenly made your economy the most awesome in the world, you're going to need to do it again.

The second is that it wouldn't help the economy. Seizing control of the banks assets, even a small fraction of them rather than 'all of them', would destroy the financial services sector, and probably the banking system as businesses fled. We're still pretty reliant on financial services, even if the sector has taken some major hits, so overall taxable income may be reduced. I imagine if you seized everything you could, and you managed to get it all, that would help, but you aren't going to be able to restructure the entire economy using that, and maintain employment, services etc.

It'd sure be cathartic though.

[Cain]

Surely as majority stakeholders in HBOS and the Bank of Scotland, we actually have even more latitude for action than just outright seizing funds. 

[Scribbly]

Yeah, but HBOS and Bank of Scotland would probably suffer much more for that money; I believe the 0.1% figure was taking the entire banking industry in the UK as a whole.

... I'm going to be honest though, I don't really know. My dad has been working on a project to unite two major high street banks for the past year, and from the stories he's been sharing with me, they don't really know what assets they have. The data he was working with had something like a 1/1000 error rate; roughly one out of every thousand entries was critically flawed in some way. Each entry being a loan, mortgage, or in some cases actual bank accounts.

I suspect this is tied into things like swiss banks suddenly finding one man has cost them $2 billion. I don't think any group really has an accurate picture of who owns what.

[Cain]

Sounds entirely plausible.  That is, after all, at the roots of the subprime crisis - no-one knows who actually owns the toxic loans, and so banks are not keen to lend.  It could turn out a ton of banks own much less than they are lending, and so easily fall to any kind of economic crisis.

[Scribbly]

The more I think about it, the more convinced I become that the only way to actually solve the crisis, which is going to be necessary if we're going to crawl out of recession, is to work towards a debt amnesty. I think you wrote about it a few months ago, Cain. Call it quits, let the banks collapse if they can't keep going when their debts are written off, and start all over again. I suspect that the majority of individuals would benefit in the long run, although the short term could be chaotic and painful.

I'm also fairly certain that it isn't in the interests of anyone in the current establishment, politician, banker or corporation, to allow the crisis to be solved. The longer they allow it to drag on, the longer they have to personally profit. In the case of banks and corporations, a debt amnesty is a direct threat to their position, in the case of politicians, it'd require going up against the interests of the other two.

On the other hand, the recession isn't pleasant for any of these groups, but the elites in charge are somewhat insulated from the actual pain of it. They likely believe that sooner or later, the whole thing will turn around anyway if they just keep on the same track.

[Cain]

When you have unsustainable levels of debt, an amnesty is the only viable option.

The third world has been kept in debt for generations, paying off the loans of dictators.  That's an economic dead weight on the global economy.  If we follow the same route, we'll be stuck in much the same position.  Paying off loans is not economically productive activity.  It doesn't make the economy grow, it doesn't create jobs, it actually has the opposite effect and is a drain on society as a whole.  Debt stops people spending money, from being able to hire more people, from being able to fund new and innovative ventures.

Basically, debt sucks.  But we, as humans, invented debt.  It's not a natural law, written into the nature of the Universe.  We can cancel it, and we should, when it becomes unreasonable to expect payment, when trying to do so damages too much.

Anything else is simply lining the pockets of rentiers.

[Elder Iptuous]

i encountered some folks a couple years ago online that were part of some effort to promote a general debt amnesty under the auspices of 'Jubilee' as described in the Leviticus, where all debts are forgiven. (these folks weren't pushing for the forgiveness and pardoning of criminals, however  )

i haven't heard hide nor hair of their attempts since then, so they were obviously unsuccessful in spreading the meme, but I wonder if the time is ripe to spread this notion through the religious right?  What would the republican leaders do if it became a statement of christian faith to support a debt amnesty as prescribed in the good book?

[Telarus]

I recently signed a petition to forgive student loans. Not that I expect that will happen, what with the Fed Gov suing other banks on behalf of Fannie Mae and Freddie Mac.....


Great idea, tho.

[Cramulus]

Dear Coke Talk - On occupying wall street.

Coquette, I need to hear your take on the occupy wall street shit going on right now.


Please. It's just a bunch of fuzzy-headed antiglobalization dorks loitering around lower Manhattan confusing their own vegan farts for a whiff of revolution.

Those ineffectual douchenozzles wouldn't know how to jam culture if Robespierre's ghost showed up at Goldman Sachs with a guillotine.

Call me when there's blood in the streets and investment bankers are fleeing the country in exile. Until then, don't bore me with freshman bullshit.

[Disco Pickle]

god I love her.

Am IN love with her.

I need a woman like that in my life.