I1L2T3 Posted November 25, 2012 Share Posted November 25, 2012 Oo, I think I know this one. Is it because Labour set up the Financial Services Authority and then told them to regulate with a light touch so they could borrow loads of money to buy votes? I agree the FSA debacle was a key moment but it was only lighting the fuse for a bomb that was already primed to go off. All the things that made the boom (then bust) happen were the result of processes that had been ongoing for 20 years or more at that point. Link to comment Share on other sites More sharing options...
I1L2T3 Posted November 25, 2012 Share Posted November 25, 2012 It’s only ridiculous when you assume incorrectly that I meant every penny that ever existed, and you must know that that is not what I was saying, right? I think we've agreed through this short discussion even though for some reason you don't think we have and that you somehow proved me wrong. The only thing we appear to disagree in is who should shoulder the most responsibility, Governments that set policy and banking regulations or banks that try to make money by following government policy. Clearly the banks got it wrong, many people got it wrong and the government got it wrong, yes they could have all done things differently but we elect governments in the hope they will prevent such disasters and prevent people borrowing more that they can afford to pay for houses that are being sold for more than they are worth and prevent banks from reckless lending, unfortunately Gordon Brown actually encouraged it even after he was warned about excessive debts. Most of the responsibility must fall on the governments that had the power to prevent it. It's not just governments that set banking regulation though. There are international frameworks for it too, e.g. Basel. I still think that few national governments or international bodies have the slightest idea how to effectively regulate what the global financial sector has become. Much of finance had basically gone feral, into the shadow system. The shadow system is globalised and massively interweaved with the mainstream banking sector. And if we do by some miracle manage to get some global economic stability for a time you can guarantee that some other city apart from London or whatever will be falling over themselves with a raft of bad regulation to welcome the bankers ready for them to wreak their next round of carnage. Link to comment Share on other sites More sharing options...
I1L2T3 Posted November 25, 2012 Share Posted November 25, 2012 This government is borrowing more but still kicking people in the teeth, how does that work? As discussed many times on here if you kill off jobs and don't promote growth to generate suitable replacement jobs then tax receipts go down and benefit spend increases. Precisely what we are seeing. It's a vicious downward spiral. We'll have our triple dip recession soon and then there will be more destruction of services like the NHS. Link to comment Share on other sites More sharing options...
I1L2T3 Posted November 25, 2012 Share Posted November 25, 2012 If we really want to attach blame fairly and squarely we must go right back to the time that the cancer first took hold. It was Thatcher who begun the chain of events that led to this situation, but nobody spotted the pandoras box that the evil witch opened. I think it was even before that, in the 1970s. This guy (Paul McCully from Pimco) makes a good case for placing the origins of shadow banking in the 70s http://web.archive.org/web/20100513013157/http://www.pimco.com/LeftNav/Featured+Market+Commentary/FF/2010/Global+Central+Bank+Focus+May+2010+After+the+Crisis+Planning+a+New+Financial+Structure.htm Link to comment Share on other sites More sharing options...
wednesday1 Posted November 25, 2012 Share Posted November 25, 2012 I agree the FSA debacle was a key moment but it was only lighting the fuse for a bomb that was already primed to go off. All the things that made the boom (then bust) happen were the result of processes that had been ongoing for 20 years or more at that point. I feel your comments will fall on stoney ground, our Tones' not keen on the truth! Link to comment Share on other sites More sharing options...
Thistledoo Posted November 25, 2012 Author Share Posted November 25, 2012 This government is borrowing more but still kicking people in the teeth, how does that work? They are grossly incompetent, that's how. Link to comment Share on other sites More sharing options...
maxmaximus Posted November 25, 2012 Share Posted November 25, 2012 It's not just governments that set banking regulation though. There are international frameworks for it too, e.g. Basel. I still think that few national governments or international bodies have the slightest idea how to effectively regulate what the global financial sector has become. Much of finance had basically gone feral, into the shadow system. The shadow system is globalised and massively interweaved with the mainstream banking sector. And if we do by some miracle manage to get some global economic stability for a time you can guarantee that some other city apart from London or whatever will be falling over themselves with a raft of bad regulation to welcome the bankers ready for them to wreak their next round of carnage. My understanding of the boom bust cycle is that it’s driven by consumer spending, and consumer spending is in some part facilitated by the banks. In the growth years of 2000-08, there was strong growth in consumer spending and consumer borrowing, driven mainly by the housing bubble. When the bubble got a puncture and house prices started to fall consumer spending and consumer confidence also fell. It has directly led to job losses in all sectors. The boom and bust in housing quite clearly played a key role in the current bust, if Gordon Brown hadn’t removed house prices from the inflation figures, inflation would have been much higher and the Bank of England would have reacted by increasing interest rates thereby raining in consumer spending, the bubble wouldn’t have inflated and the bust wouldn’t have happened. We would have had the stable economy with very little growth and a significantly reduced risk of bust. Link to comment Share on other sites More sharing options...
wednesday1 Posted November 25, 2012 Share Posted November 25, 2012 My understanding of the boom bust cycle is that it’s driven by consumer spending, and consumer spending is in some part facilitated by the banks. In the growth years of 2000-08, there was strong growth in consumer spending and consumer borrowing, driven mainly by the housing bubble. When the bubble got a puncture and house prices started to fall consumer spending and consumer confidence also fell. It has directly led to job losses in all sectors. The boom and bust in housing quite clearly played a key role in the current bust, if Gordon Brown hadn’t removed house prices from the inflation figures, inflation would have been much higher and the Bank of England would have reacted by increasing interest rates thereby raining in consumer spending, the bubble wouldn’t have inflated and the bust wouldn’t have happened. We would have had the stable economy with very little growth and a significantly reduced risk of bust. You made the same laboured point many times as Mr Smith. Link to comment Share on other sites More sharing options...
I1L2T3 Posted November 25, 2012 Share Posted November 25, 2012 My understanding of the boom bust cycle is that it’s driven by consumer spending, and consumer spending is in some part facilitated by the banks. In the growth years of 2000-08, there was strong growth in consumer spending and consumer borrowing, driven mainly by the housing bubble. When the bubble got a puncture and house prices started to fall consumer spending and consumer confidence also fell. It has directly led to job losses in all sectors. The boom and bust in housing quite clearly played a key role in the current bust, if Gordon Brown hadn’t removed house prices from the inflation figures, inflation would have been much higher and the Bank of England would have reacted by increasing interest rates thereby raining in consumer spending, the bubble wouldn’t have inflated and the bust wouldn’t have happened. We would have had the stable economy with very little growth and a significantly reduced risk of bust. Consumer spending is just one indicator. Link to comment Share on other sites More sharing options...
maxmaximus Posted November 25, 2012 Share Posted November 25, 2012 Consumer spending is just one indicator. Sorry one indicator for what? Link to comment Share on other sites More sharing options...
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