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ianrobo1

economic situation is dire

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And govenrments must never rescue banks. Never!

Would you feel the same way if you had retired and had £100,000 life savings in there?

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And govenrments must never rescue banks. Never!

They will keep on doing that until those "banks" go from "Too big to fail" to "Too big to save".

I think the market and regulators are already taking care of it. Investors refuse to invest in the big banks due to the complex structure, and regulators are demaning a bigger core capital, two things that will provoke a split up of the big banks.

"My gut says all these megabanks are worth more separately than combined," said Bill Black, managing partner of Consector Capital, a hedge fund that focuses on bank trading. Smaller, more focused banks could attract investors, satisfy regulators and increase depressed stock prices, he said.

"The bottom line is that they have to get smaller so they can manage better," said Roy Smith, a finance professor at New York University's Stern School of Business. "They have to give up the idea of being a universal bank holding company that jams together businesses that have nothing to do with each other."

"Nine out of the 10 biggest capital-markets banks in the world can't earn their cost-of-equity capital," said NYU's Smith, a former partner at Goldman Sachs. "If you sit around and bet on these guys because they are undervalued, your patience is running out."

Analysts, however, say their top institutional clients are increasingly reluctant to invest in any bank stocks. Last week prominent hedge fund manager Bill Ackman said his firm sold its big position in Citigroup, despite his general admiration for the bank's management, because the banking system has become too risky.

JPMorgan Chase & Co's almost $6 billion of derivative losses and the Libor interest-rate-fixing scandal in the last few months proved to be the "proverbial straw that broke this camel's back," Ackman wrote to his clients at Pershing Square Capital Management.

For months, JPMorgan Chief Executive Jamie Dimon had no idea of the size of the losses brewing inside his bank, signaling to many investors that major banks are too big and too complex to manage, investors said.

"If I don't think that even insiders have a great handle on what's going on, I'm certainly not comfortable about investing my capital there," said Consector Capital's Black.

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And govenrments must never rescue banks. Never!

Would you feel the same way if you had retired and had £100,000 life savings in there?

Most countries has a guarantee for the deposit up to a certain amount. In my country that guarantee is up to 200 000 pounds per person.

Other than protecting ordinary people's savings to prevent bank runs, I see no problem with letting the bank go bankrupt. What is wrong with letting the investors who has invested in risky stocks and bonds lose when they have done a mistake? Why the need to protect Deutsche Bank, BNP Paribas, JP Morgan from big losses?

Ireland did not have to have a lot of debt. They could just said "no" to the idea of guaranteeing the money that Deutsche Bank, Barclays, JP Morgan etc had invested in the big Irish banks. But the finance minister did something very stupid when he said that the Irish people should take the bill instead of the professional investors who did not do their homework and invested in the Irish bank.

Worst thing you can do is to privatize gains and socialise losses.

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And govenrments must never rescue banks. Never!

They will keep on doing that until those "banks" go from "Too big to fail" to "Too big to save".

I think the market and regulators are already taking care of it. Investors refuse to invest in the big banks due to the complex structure, and regulators are demaning a bigger core capital, two things that will provoke a split up of the big banks.

I hope so but think they are just riding out the storm. They will happily trade with each other and once the next big thing hits the media, it is back to spend big bucks on corrup..lobbying for deregulations.

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It's funny that Tony still holds on to the Deflection stance and policy that so many of "his" party are trying to force in the public. Unfortunately for him and them the public are becoming less and less interested in that particular stance and are seriously questioning the failed economic policies of Osborne. How come Tony - as usual - goes on to attack Labour when the reality is that when this Gvmt came into power the economy was actually in a period of growth. The Tory party and their cuckold allies in the parliamentary LibDems have to take accountability for failed policies. Tony says that the cuts are needed and I suspect he feels they are correct. Interestingly the few that subscribe to that flawed view now are the Tory party and a few of their supporters, probably typically those that are not affected in any way. When the IMF say the cuts are too severe and aimed at the wrong sectors you would think that the economic idiot that is Osbrne and his financial sector loving chum Cameron would listen, but no, they plough on regardless putting this country further and further into a recession that they claimed was short term.

As said the Olympics, Jubillee and the Royal Wedding deflect public opinion from being voice too loudly. They are running out of things they can hide behind. A guy on the radio from the Gvmt just was blaming the recession on an extra bank holiday in June just and the bad weather. They really have no clue.

Yes cuts were needed but as many said (not in the Tory party) they were needed to be phased in and should not have the massive negative effect that Osborne's plans had. This country has been in 7 recessions since the 1950's apparently - 5 of them under a Tory Gvmt according to some chappy on Twitter. I suspect that does show the impact that long held Tory views have on the country as a whole.

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Conservative parties in western democracies are generally favoured by the electorate in times of economic downturn.

In the US it is slightly different over recent presidencies however one may suggest that the choice between blue and red over there is more social choice than economic.

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5 live had some money man on the phone from America saying that money was dirt cheap to borrow , around 3% so we should be borrowing as much as we can get and investing it in projects that will show returns of 5% and solve all out problems

Isn't that how we got into this mess to start with ?

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5 live had some money man on the phone from America saying that money was dirt cheap to borrow , around 3% so we should be borrowing as much as we can get and investing it in projects that will show returns of 5% and solve all out problems

Isn't that how we got into this mess to start with ?

No the government did that by borrowing when it was expensive to do so.

Basically the UK government has been working against the grain for about 6-7 years now. Borrowing and spending big under Browns last term when the country was booming and the government should have been reigning in spending and paying down debt, then once the economy fell down the current government has been cutting left and right whilst the economy is in dire need of investment and that investment money is cheap to borrow.

If you can borrow at 3% and get returns of 5% you should be doing that all day long.

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5 live had some money man on the phone from America saying that money was dirt cheap to borrow , around 3% so we should be borrowing as much as we can get and investing it in projects that will show returns of 5% and solve all out problems

Isn't that how we got into this mess to start with ?

If the government chooses to "borrow" to fund spending (and it doesn't have to, but let that pass as a side issue), then doing so at a time of negative real interest rates is better than when money is dearer. So borrowing to fund necessary capital work which either replaces decaying infrastructure (sewers etc) or which creates improved facilities (new schools, rail replacement) or which adds new capacity (broadband), and which thereby creates direct and indirect employment and adds to the economic capacity of the country plainly makes sense.

Unfortunately, Osborne's latest apparent u-turn on this involves laundering the money through PFI, so that instead of saving billions, we pay through the nose to create rentier profits for his chums for doing nothing other than being pointless middlemen, creaming off profits at our expense.

Just another example of asset-stripping the state for the benefit of his allies, like the way the tories' biggest donor, Michael Ashcroft, makes millions leeching off the NHS, passing a percentage back into tory funds.

It would be far cheaper and more sensible for the state to spend this money direct, and cut the financiers out of the picture completely. They add nothing but waste and inefficiency.

The mess we got into wasn't about government borrowing, it was about the scary levels of private borrowing, much of which just fuelled asset-price bubbles instead of adding to real production of anything of lasting value. Though it seems Cameron wants to get back to that.

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It would be far cheaper and more sensible for the state to spend this money direct, and cut the financiers out of the picture completely. They add nothing but waste and inefficiency.

Yup... PFI wasn't great in the best times - but it got to a point in 2008 where the govt. was lending money to PFI firms - essentially paying capital investment without ever owning anything. Ridiculous.

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It would be far cheaper and more sensible for the state to spend this money direct, and cut the financiers out of the picture completely. They add nothing but waste and inefficiency.

Yup... PFI wasn't great in the best times - but it got to a point in 2008 where the govt. was lending money to PFI firms - essentially paying capital investment without ever owning anything. Ridiculous.

It was always shit. In that respect, I'm not sure that even the criminally incompetent Osborne is more to blame than his predecessors, for once in his miserable, wretched life. Possibly he was keener than Blair and Brown to kiss the seeping arses of the thieving scum who profit from it, but even that's a tough call.

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A nobel peace price for the EU for bringing

stability and democracy to the continent at a testing time for the 27-nation bloc.

what next a nobel prize for services to babysitting for Louise Woodward

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A nobel peace price for the EU for bringing

what next a nobel price for services to babysitting by Louise Woodward

Ridiculous but they gave one to Obama for a combination of 1) being black and, 2) not being George W. Bush.

The judges standards have been slipping for a while..

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Ridiculous but they gave one to Obama for a combination of 1) being black and, 2) not being George W. Bush.

The judges standards have been slipping for a while..

The Nobel Peace Prize winner with a "kill list". Irony seems to pass them by.

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A nobel peace price for the EU for bringing

stability and democracy to the continent at a testing time for the 27-nation bloc.

what next a nobel prize for services to babysitting for Louise Woodward

Nobel Prize for economics is announced on Monday.

What odds the EU gets that as well?

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Nobel Prize for economics is announced on Monday.

What odds the EU gets that as well?

A couple of Americans appear to be "favourite" for this one

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It's actually called 'Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel', it was invented in 1969. The Nobel family have for a long time campaigned against it.

It's not a legitimate award, it's pretty laughable really, economics is not a legit. science.

There's talk it could go to Robert Shiller or Ken Rogoff, both do pretty stellar work to be fair to them. Last year it hilariously went to Tom Sargent.

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So, it's estimated that George has cost us £76bn in lost growth. That's a mid-point estimate. Could be a lot more. A simple mistake, could happen to anyone.

But the OBR is due to report this week. Jonathan Portes picks up on the IMF miscalculation of the multiplier, and makes the link to the OBR, which has been basing its predictions (and the threadbare justification for Osborne's nonsense) on the figures which the IMF now agree are woefully inaccurate.

On this point, Portes concludes

the OBR's excessively optimistic forecasts were explicitly based on multipliers derived from IMF research. The IMF has now explicitly changed its mind; the OBR's position is no longer tenable. If it wants to retain its credibility as an economic forecaster independent of government, it needs to examine its assumptions and methodology, both retrospectively and prospectively, on the impact of fiscal consolidation on growth. The December OBR forecast should include at a minimum both a reassessment of its forecast record, in the light of the Fund's change of view, and an assessment going forward of the impact of different multiplier assumptions on growth.

Will the OBR fess up, or again tell us that the emperor has a nice set of clothes?

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