No free market "truths" for the Banks.

[Guest Stephen Turner]

in plans unveiled over the Week-end, the Bank of England will swap 50 billion in Government (Taxpayers) Bonds for British banks mortgages, even though the debt owed by mortgage payers may never be realised.

The LABOUR Goverment faces accusations that it is effectively bailing out the Banking system at the taxpayers expence. Further, City economists warned that 50 billion will not be enough, and that a 100 billion, or MORE will be required.

Now do you see how the Capitalist free market works, the rich get to privatise their profits whilst Nationalising their debts.

Edited April 21, 2008 by Stephen Turner

[John Simkin]

in plans unveiled over the Week-end, the Bank of England will swap 50 billion in Government (Taxpayers) Bonds for British banks mortgages, even though the debt owed by mortgage payers may never be realised.

The LABOUR Goverment faces accusations that it is effectively bailing out the Banking system at the taxpayers expence. Further, City economists warned that 50 billion will not be enough, and that a 100 billion, or MORE will be required.

Now do you see how the Capitalist free market works, the rich get to privatise their profits whilst Nationalising their debts.

So true. This will really hurt the Labour Party in the May elections.

[Guest Gary Loughran]

I know that the word Banks in the topic title of this thread will attract David in here. Because of his background in banking I'd like to him (amongst others of course) to comment on -

What would happen (to them and us) if the £50+bn was not made available (to them from us)?

ON EDIT - I understand this is a 'swap' for dodgy mortgage debt. However, 50 x 1 million x 1 million = 50 billion (in UK not US). So how much mortgage debt exists in the UK. By my reckoning thats 50 million buildings at £1 million a piece. Why not give all the taxpayers half a million each. They could then service their mortgage debt, thus giving the banks liquididty and put the rest extravagantly back into the High Street - salvaging the economy.

Edited April 21, 2008 by Gary Loughran

[Guest David Guyatt]

I know that the word Banks in the topic title of this thread will attract David in here. Because of his background in banking I'd like to him (amongst others of course) to comment on -

What would happen (to them and us) if the £50+bn was not made available (to them from us)?

Since conspiracy theories are germane to this board, I will offer one here. Supposing you have made hay for 15 long years, piling up the supreme amonts of profits,using shady and wildly unsafe practices, that you were enabled to do this because your political pawns had earlier scotched any meaningful government regulation -- and that the day of reckoning was approaching.

What would you plan to do to transfer the price of your collective recklessness with other peoples money?

How about collectively agreeing to dry up the interbank market, followed by crocodile tears and public hand-wringing.

Brown, Darling and co are absolute twats.

They've either been suckered so badly that they can never, ever admit it, or are simply paid pawns in the game.

[Guest Gary Loughran]

I know that the word Banks in the topic title of this thread will attract David in here. Because of his background in banking I'd like to him (amongst others of course) to comment on -

What would happen (to them and us) if the £50+bn was not made available (to them from us)?

Since conspiracy theories are germane to this board, I will offer one here. Supposing you have made hay for 15 long years, piling up the supreme amonts of profits,using shady and wildly unsafe practices, that you were enabled to do this because your political pawns had earlier scotched any meaningful government regulation -- and that the day of reckoning was approaching.

What would you plan to do to transfer the price of your collective recklessness with other peoples money?

How about collectively agreeing to dry up the interbank market, followed by crocodile tears and public hand-wringing.

Brown, Darling and co are absolute twats.

They've either been suckered so badly that they can never, ever admit it, or are simply paid pawns in the game.

Aye, but if this 'bailout' doesn't happen...what happens economically to us plebs and to them there bankers.

[John Simkin]

An important factor of this deal is that banks are not named if they get help from the government. This will stop a "northern Rock" type run on that bank. That is the real reason why the deal has been done. This has upset those banks who have been careful in not giving out unsecured loans.

[Guest David Guyatt]

Aye, but if this 'bailout' doesn't happen...what happens economically to us plebs and to them there bankers.

Gary, the reality is that it was always going to happen.

Th day was lost when Thatchler and her crew pushed for deregulation and turned the UK into a City based "service" nation and got it. Once that took place there was no way to turn back the clocks. Even in Brown and co stamped their feet and pulled their hair and screamed for the need for immediate strict regulation, the bankers would just play their usual card and threaten to move to another European centre, leaving London and Blighty truly buggered. I saw this threat deployed once, on HM Revenue, and it is very effective.

Very sad and I don't like it anymore than anyone else.

The only hope would be for G7 to operate together and impose the strictest possible regulatory system across the board to safeguard the future. A most unlikely scenario imo.