The Big Bailout of the Eurozone (Another crisis coming? - Seriously)

[pintsofguinness]

I'm sick of the Bank of England cutting rates, I dont understand how it's helping.  The banks arent passing on the whole rate cut so aren't they making more and more money out of it? It's f**king the pound, isn't it? People with savings or trying to save are suffering while the greedy and stupid taking out mortgages they couldnt afford or being bailed out, with the banks.  I am sick to the teeth of the very people who caused this mess getting bailed out while those who were sensible and responsible are being screwed. 

[orangeman]

I'm sick of the Bank of England cutting rates, I dont understand how it's helping.  The banks arent passing on the whole rate cut so aren't they making more and more money out of it? It's f**king the pound, isn't it? People with savings or trying to save are suffering while the greedy and stupid taking out mortgages they couldnt afford or being bailed out, with the banks.  I am sick to the teeth of the very people who caused this mess getting bailed out while those who were sensible and responsible are being screwed. 

If Iceland's interest rate is 17%, then their savings rate must be good as well

[Puckoon]

US cap

Lord Mandelson's comments come one day after US President Barack Obama announced a $500,000 (£355,000) limit on executive pay at US firms that need fresh government aid.

Wall Street paid $18.4bn (£12.7bn) in bonuses in 2008 and $32.9bn (£22.7bn) in 2007.

BBC business editor Robert Peston said the move in the US will inevitably put pressure on the UK government to introduce a similar cap on British banks that have received state support.

This limit was voted on on CNN last night as I was making the spuds. In 15 minutes the polls were open the American public voted yes for this exectutive pay cap 99.3% against 0.7%.

[Donagh]

I'm sick of the Bank of England cutting rates, I dont understand how it's helping.  The banks arent passing on the whole rate cut so aren't they making more and more money out of it? It's f**king the pound, isn't it? People with savings or trying to save are suffering while the greedy and stupid taking out mortgages they couldnt afford or being bailed out, with the banks.  I am sick to the teeth of the very people who caused this mess getting bailed out while those who were sensible and responsible are being screwed. 

Tell me about it 

[muppet]

This article was written by Clarkson in April 2006 before the 1st signs of the subprime mortgage crisis/credit crunch.

http://www.timesonline.co.uk/tol/comment/columnists/jeremy_clarkson/article708187.ece

I have no idea what a hedge fund is, but after a day trip to Mustique last week I think I need to plant one.

At first I couldn't quite work out whether this privately owned island in the Caribbean is heaven on earth or a small piece of hell. Certainly it's the first country I've ever been to which is completed mowed, from end to end, in nice neat strips. Honestly, I've been to dirtier, messier nuclear laboratories.

It seems sanitised somehow, but then I thought, what's wrong with that? A lot of very rich people have come here and built a world where there is no crime, no disease and no unpleasant working-class people on the beaches. Not unless they're in an apron and they're toiling over a barbecue, roasting yams.

After a day drinking wine, and swimming in the preposterously turquoise sea, going back to Barbados felt like going back to Birmingham. As our little plane took off from the freshly mowed airfield, I looked back and thought: "No. Mustique is more than all right. It's living, breathing proof that the resurrection's a load of nonsense."

Because if Jesus really had come back from the dead, he'd still be alive today. And if he were still alive, it's sensible to assume he'd be living in the best place on earth. So he'd be in Mustique. And he wasn't.

Of course, some of the 90 or so houses that sit like big wedding cakes on the newly mown hillsides belong to high-profile stars such as Mick Jagger, Tommy Hilfiger and Stewart Copeland — the second of only two policemen on the island. But the vast majority belong, it seems, to hedge fund managers.

Now I can describe these people to you very easily. They are all quite young, and they all appear to be super-fit. None smokes. Few drink. All have swept-back hair and dazzling teeth, and all, you imagine, would quite like to murder someone, to see what it's like. You're thinking Bret Easton Ellis. So am I.

They are also lip-slobberingly rich. There are estimated to be 9,000 funds worldwide which, between them, have assets of $1,500 billion. So they're not really hedges at all. They're bloody great leylandii.

What's more, a whopping 78% of all the hedges in Europe are grown and nurtured in London. That's $255 billion. And that's great, but before we get too excited, we must first of all try to work out what a hedge fund is.

According to a friend in the City, they're brilliant because whether the stock market goes up or down, you still make pots of money. Great. Sounds like my kind of gambling. But what are they exactly?

"Ah well," she said. "You rent shares from someone who has a lot of them and then you sell what you've rented." Now this, so far as I can tell, is actually called "theft". Small wonder they've all got houses on Mustique. They're all burglars.

"No," said my friend, "because you always pay back the person you've rented them from, plus interest." I see, so you rent some shares, sell them, and then give the profit (if you've made any) to the person from whom you did the renting. That seems like a lot of effort and risk for no gain at all.

My friend became exasperated and told me to stop thinking so literally because the money never actually exists. "It's like a house of straw then?" I asked. "No," she tutted. "It's like a house of straw that's a hologram. It isn't there."

On the world wide internet, a hedge fund is described thus: "A fund, usually used by wealthy individuals and institutions, which is allowed to use aggressive strategies that are unavailable to mutual funds, including selling short, leverage, programme trading, swaps, arbitrage, and derivatives."

Gibberish. And galling, too, because I'm not a stupid man. I'm able to grasp the most complicated concepts, especially if it means I can walk away from the table six years later with £100 billion in my back pocket, a Gulfstream V and a house on Mustique. But this hedge fund business was eluding me.

One thing I did note was that hedge funds are not regulated like normal share dealings. I'm not surprised. How could a flat-footed policeman possibly be expected to investigate a house of straw that doesn't exist? And there's something else. While hedge funds operate outside the law, don't exist, and always make money whether the market rises or falls, 85% fail. How's that possible? That would be like losing money at the races whether your horse came in first, third, or in a big tube of Evo-Stik.

To find out, I turned to a publication called Money Week which, in a lengthy and indescribably boring article, explained why hedges are starting to crumble. There are many reasons, apparently, none of which I could understand. But all of which are wrong.

I've given it a moment's thought and I know exactly why the business is in trouble. It's obvious. In order to function, hedge funds need wealthy investors. But as my recent trip to Mustique demonstrated, all the world's richest people these days are hedge fund managers. This, then, has become a business that can only invest in itself.

Soon these guys are going to have to forget about the super-rich and chase down those who are simply well off. That'd be me, and that's great. Lend me your house on Mustique for two weeks next Easter, and we'll talk

[bingobus]

I'm sick of the Bank of England cutting rates, I dont understand how it's helping.  The banks arent passing on the whole rate cut so aren't they making more and more money out of it? It's f**king the pound, isn't it? People with savings or trying to save are suffering while the greedy and stupid taking out mortgages they couldnt afford or being bailed out, with the banks.  I am sick to the teeth of the very people who caused this mess getting bailed out while those who were sensible and responsible are being screwed. 

Tell me about it 

Isn't part of th idea to make people spend and stimulate rather than save and keep money out of circulation. Also, as inflation is so low and possibly heading to deflation, isn't your money appreciating in value as in real terms you can buy more with it regardless of the interest it earned. Still, its always nice to see interest been earned but shop around and there is good enough rates to be had.

[passedit]

I'm sick of the Bank of England cutting rates, I dont understand how it's helping.  The banks arent passing on the whole rate cut so aren't they making more and more money out of it? It's f**king the pound, isn't it? People with savings or trying to save are suffering while the greedy and stupid taking out mortgages they couldnt afford or being bailed out, with the banks.  I am sick to the teeth of the very people who caused this mess getting bailed out while those who were sensible and responsible are being screwed. 

Tell me about it 

Isn't part of th idea to make people spend and stimulate rather than save and keep money out of circulation. Also, as inflation is so low and possibly heading to deflation, isn't your money appreciating in value as in real terms you can buy more with it regardless of the interest it earned. Still, its always nice to see interest been earned but shop around and there is good enough rates to be had.

Spot on Bimgobus, IIRC Donagh is saving to buy a house so in real terms you could say he's had a 35% return on his cash in the last year. (That's the sum i'm consoling myself with any way.)

[orangeman]

I'm sick of the Bank of England cutting rates, I dont understand how it's helping.  The banks arent passing on the whole rate cut so aren't they making more and more money out of it? It's f**king the pound, isn't it? People with savings or trying to save are suffering while the greedy and stupid taking out mortgages they couldnt afford or being bailed out, with the banks.  I am sick to the teeth of the very people who caused this mess getting bailed out while those who were sensible and responsible are being screwed. 

Tell me about it 

Isn't part of th idea to make people spend and stimulate rather than save and keep money out of circulation. Also, as inflation is so low and possibly heading to deflation, isn't your money appreciating in value as in real terms you can buy more with it regardless of the interest it earned. Still, its always nice to see interest been earned but shop around and there is good enough rates to be had.

Looks like you can get savings interest at 2% tops but buying money will as usual cost at least 5% even if you can find someone who will lend.

[bingobus]

I'm sick of the Bank of England cutting rates, I dont understand how it's helping.  The banks arent passing on the whole rate cut so aren't they making more and more money out of it? It's f**king the pound, isn't it? People with savings or trying to save are suffering while the greedy and stupid taking out mortgages they couldnt afford or being bailed out, with the banks.  I am sick to the teeth of the very people who caused this mess getting bailed out while those who were sensible and responsible are being screwed. 

Tell me about it 

Isn't part of th idea to make people spend and stimulate rather than save and keep money out of circulation. Also, as inflation is so low and possibly heading to deflation, isn't your money appreciating in value as in real terms you can buy more with it regardless of the interest it earned. Still, its always nice to see interest been earned but shop around and there is good enough rates to be had.

Looks like you can get savings interest at 2% tops but buying money will as usual cost at least 5% even if you can find someone who will lend.

Investec (Monaghan's new sponsors) have fixed 5.5% pa for six months, not sure if you'll get it for the next six months though but its not bad. Minimum €20,000 though. Ulster Bank regular saver is about 4.7% at present.

[pintsofguinness]

I'm sick of the Bank of England cutting rates, I dont understand how it's helping.  The banks arent passing on the whole rate cut so aren't they making more and more money out of it? It's f**king the pound, isn't it? People with savings or trying to save are suffering while the greedy and stupid taking out mortgages they couldnt afford or being bailed out, with the banks.  I am sick to the teeth of the very people who caused this mess getting bailed out while those who were sensible and responsible are being screwed. 

Tell me about it 

Isn't part of th idea to make people spend and stimulate rather than save and keep money out of circulation. Also, as inflation is so low and possibly heading to deflation, isn't your money appreciating in value as in real terms you can buy more with it regardless of the interest it earned. Still, its always nice to see interest been earned but shop around and there is good enough rates to be had.

I dont see many prices down.  A weeks shopping is still costing the same as it did 6 months ago, maybe if I went out and bouguht a wide screen tv I'd notice a saving but since I could lose my job anyday I won't be doing that.  The interest rates cut are doing more harm than good and the people who are helped most by it are the banks and those with mortgages or loans they can't afford. 
Once again, the greedy in society are being bailed out.

[muppet]

Bank of Ireland Staff get 3.5% pay increase

Let me see if I got this right. Cowan freezes pay increases and increases pension contributions from the public sector, fair enough. It needs to be more efficient. The money from the National Pension Reserve will be used to bail out (recapitalise) the Irish banks, which is fair enough as we need to have banks.

But one of the banks benefiting from the bail-out, gives its staff the same pay rises that the public sector (and most of the private sector) have had frozen.

Do these people have any nous at all?

 

[Declan]

This just gets better:

UK's biggest mortgage lender HBOS fired manger who warned of excessive risk in 2005; Paul Moore was then subjected to a gagging order
By Finfacts Team
Feb 10, 2009 - 2:59:07 PM   Email this article
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HBOS Plc, the UK biggest mortgage lender, which was taken over by Lloyds Banking Group Plc, in a government sponsored rescue late last year, was reported today to have conducted an independent investigation into allegations by its head of regulatory compliance that the bank was taking too many risks, former Chairman Dennis Stevenson told the House of Commons Treasury Select Committee today. Head of compliance Paul Moore was fired and subjected to a gagging order.

HBOS, which owned Bank of Scotland (Ireland) and its Irish mortgage operation Halifax, carried out a nine-month inquiry in 2005 into allegations which were "taken very seriously," Stevenson said. The bank's documents on the issue could be made available to Parliament, he added.
George Mudie, a Labour MPP on the Committee old Stevenson and former HBOS Chief Executive Officer Andy Hornby that Paul Moore, former head of group regulatory risk, had been dismissed and that the bank then issued a "gagging order."
"When I was head of group risk I certainly knew that the bank was going too fast and told them," Moore said in written evidence to the Committee released today. The bank's behavior "was a serious risk to financial stability and consumer protection."
"My team and I experienced threatening behavior by executives when carrying out its legitimate role in overseeing their compliance,"with Financial Services Authority regulations, Moore added. In response to questioning, Hornby denied that threats were made.

"The one thing I can assure, there was no denial, anything to do with risk is taken very seriously by the board," Stevenson said."That is a fact."
George Mudie said HBOS sacked Moore for raising the issue of excessive risks that the bank was taking. "He took you to an industrial tribunal and he won," Mudie said.
"You paid him undisclosed damages and put a gagging order on him. You didn't want anybody being blunt with you about the risks you were running."
"At the end of the day you sacked your group risk fellow. Now four years later it turns out he was right and you were wrong," Mudie said.
Mudie said the head of regulatory risk at the bank between 2002 and 2004, was replaced by someone with no risk experience.

[orangeman]

US unveils new $1.5 trillion plan 
Timothy Geithner's three steps to recovery
US Treasury Secretary Timothy Geithner has unveiled a comprehensive $1.5 trillion (£1.02 trillion) bank bail-out plan to beat the financial crisis.

Under the plan, the size of a key Federal Reserve lending program will be expanded to $1 trillion from $200bn.

In addition, a public-private investment fund of $500bn will be created to absorb banks' toxic assets.

"Right now critical parts of our financial system are damaged," Mr Geithner said.
"Instead of catalyzing recovery, the financial system is working against recovery, and that's the dangerous dynamic we need to change," he added.

Leading US stock indexes fell after Mr Geithner started his speech on the new plan.

Transparency and accountability

Mr Geithner said the new plan should unfreeze the credit market, strengthen banks and "provide critical aid for homeowners and for small businesses".

"And as we do each of these things, we will impose new higher standards for transparency and accountability," he added.

He said that the public-private investment fund to buy up risky assets will be seeded with government money and could be expanded to $1 trillion.

The expanded Federal Reserve lending program will support lending to small businesses and consumers, including credit card lending and student loans, and also cover the troubled commercial real estate market.

The government also will give banks access to additional capital from the Treasury's original $700bn bail-out fund "as a bridge to private capital".

But that will come with strict terms, including full disclosure and limits on executive pay.

"This assistance will come with terms that should encourage the institutions to replace public assistance with private capital as soon as that is possible," said Mr Geithner.

Crisis 'not over'


  We don't know yet if we'll need additional money, or how much

President Obama
Q&A : Bank bail-out plan


President Obama said on Monday that Mr Geithner's plan would be a template for "restoring market confidence".

"The credit crisis is real, and it's not over," added the president.

President Obama has so far said it is too early to say whether the $700bn bank bail-out scheme, officially called the Troubled Asset Relief Program (Tarp), will need more funds.

"We don't know yet if we'll need additional money, or how much additional money we'll need," he said.

Tarp was passed by President Bush in October, whose administration spent the first $350bn.

Meanwhile, President Obama's wider economic stimulus plan is facing a crucial vote in the Senate. This is expected to cost an additional $800bn.

[Declan]

http://www.irishtimes.com/newspaper/frontpage/2009/0211/1233867932122.html

Christ Almighty what does it take for people to realise that our whole financial sector is rotten to the core?
We're going down the toilet and these bastards are falsifying accounts and misleading shareholders and nothing happens:(-

[Hardy]

Nothing happens? They get paid. They get bonuses. They get to NEGOTIATE with the representatives of the taxpayers, who are giving them OUR money, about the terms on which they will accept it - including their own pay and whether they should get bonuses! And they get to stay out of jail.

Of all the sources of outrage that have piled upon each other in the last six months, the government's soft-shoe-shuffle with the banks while putting their hands in workers' pockets is the one that will bring the people onto the streets.

Have they never heard of Marie Antoinette?