Bank failures - why it matters to you and me

[toppstuff]

The collapse of Lehman and the merger of Merrill Lynch is simply huge news. This is a truly awful time.

But why would anyone care about a bunch of overpaid bankers anyway?

Remember that the income tax and NI paid by UK based bankers is simply huge ! Remember - they are all on PAYE, so the taxes paid by London based banks and their staff is a disproportionate chunk of total tax revenue.

If more of these institutions fail or post losses , the reduction in tax revenues effectively pulls the funding for thousands of nurses, and teachers. This money will have to be found from somewhere else.

This is bad, bad news for the world economy. I think we should remember this rather than give in to the schadenfreude that many are tempted to indulge in.

And it all happened, essentially, because too much money was given to people of the kind who make up the audience of the Jerry Springer show , with little chance of getting it back.

You could'nt make it up.

It's going to be a tough winter. Hold tight, everyone and good luck.

[Brabus Jord]

Top Stuff!

[jamoor]

Lets hope they have to cut down on the non essentials like troops in Iraq and Afghanistan.

[$nake eye$]

How much will the FTSE drop once the markets open..

Edited by $nake eye$ on Monday 15th September 08:20

[spikeyhead]

If those being paid the huge salaries that they're paying so much tax and NI on had been doing sensible risk assessments then they wouldn't be in this state.

[Nick.w]

[quote=$nake eye$]How much will the FTSE drop once the markest open..
[/quote]



Batten down the hatches i think team!

[Nick.w]

Nick.w said:

[quote=$nake eye$]How much will the FTSE drop once the markest open..

Batten down the hatches i think team!

Lets hope the exchange doesnt go down like it did last week stopping trading!

[fieldl]

One of the UK's largest employers and London's largest is the financial services sector. So losses here are felt across the economy. Go to Docklands which has it's own microconomy with the financial services business and the service businesses supporting it, the restaurants, IT businesses, retailers, printers etc etc etc. All of these will feel the pinch of reduced business which in turn will lead to them making lay offs of their own. Most of these people have mortgages and debt repayments to pay further adding to the situation. At the same time lending tightens up and multiples reduce to lower risk to the banks. House prices drop as a general rule.

Who is affected by the trouble at the banks just about everyone in some shape or form.

[toppstuff]

spikeyhead said:

If those being paid the huge salaries that they're paying so much tax and NI on had been doing sensible risk assessments then they wouldn't be in this state.

That may or may not be true.

But my point is this:

If you take the average pay of someone at Goldman Sachs for example, the income tax from one person covers the salary of a ward full of nurses or a Warrior full of soldiers.

If that tax revenue falters, we are all in a bit of a fix...

[Fer]

Nick.w said:

Lets hope the exchange doesnt go down like it did last week stopping trading!

True, that was a slight problem. So many people throught they should be able to goto Turquoise instead, but it wasn't that simple.

[buddhabelly]

Ah but lets not forget the good news about ML and BoA.

LB is a big scalp and everyone will be checking to see whose next, it's time to root out the weak and for the rest to restructure. On contagion, I'm still watching those unemployment figures..

[spikeyhead]

toppstuff said:

spikeyhead said:

If those being paid the huge salaries that they're paying so much tax and NI on had been doing sensible risk assessments then they wouldn't be in this state.

That may or may not be true.

But my point is this:

If you take the average pay of someone at Goldman Sachs for example, the income tax from one person covers the salary of a ward full of nurses or a Warrior full of soldiers.

If that tax revenue falters, we are all in a bit of a fix...

I'm more critical of the government that has allowed public spending to grow out of control over the last few years, especially the PPF and public sector pension stuff that's going to cost so much in the future and isn't sitting clearly on the balance sheet. Failing to store during seven years of plenty (actually its been more than seven years but it buggers the biblical analogy) has been a very major failure of a very greedy society. We won't have the reserves to see us through the seven years of famine (and I hope that it won't last as long as seven years).

[maix27]

Fer said:

Nick.w said:

Lets hope the exchange doesnt go down like it did last week stopping trading!

True, that was a slight problem. So many people throught they should be able to goto Turquoise instead, but it wasn't that simple.

Who's software does the LSE use anyway? I know there have been roumers about it being a hardware problem? Any truth to that?

[Hub]

fieldl said:

One of the UK's largest employers and London's largest is the financial services sector. So losses here are felt across the economy. Go to Docklands which has it's own microconomy with the financial services business and the service businesses supporting it, the restaurants, IT businesses, retailers, printers etc etc etc. All of these will feel the pinch of reduced business which in turn will lead to them making lay offs of their own. Most of these people have mortgages and debt repayments to pay further adding to the situation. At the same time lending tightens up and multiples reduce to lower risk to the banks. House prices drop as a general rule.

Who is affected by the trouble at the banks just about everyone in some shape or form.

Plus the incessant doom and gloom in the media leads to falling consumer confidence, making everything worse still!

[Nick.w]

maix27 said:

Fer said:

Nick.w said:

Lets hope the exchange doesnt go down like it did last week stopping trading!

True, that was a slight problem. So many people throught they should be able to goto Turquoise instead, but it wasn't that simple.

Who's software does the LSE use anyway? I know there have been roumers about it being a hardware problem? Any truth to that?

Its a Windows shop mainly.
You will struggle to find out what happened, i believe the LSE are still investigating as to what happened..

[Guybrush]

spikeyhead said:

toppstuff said:

spikeyhead said:

If those being paid the huge salaries that they're paying so much tax and NI on had been doing sensible risk assessments then they wouldn't be in this state.

That may or may not be true.

But my point is this:

If you take the average pay of someone at Goldman Sachs for example, the income tax from one person covers the salary of a ward full of nurses or a Warrior full of soldiers.

If that tax revenue falters, we are all in a bit of a fix...

I'm more critical of the government that has allowed public spending to grow out of control over the last few years, especially the PPF and public sector pension stuff that's going to cost so much in the future and isn't sitting clearly on the balance sheet. Failing to store during seven years of plenty (actually its been more than seven years but it buggers the biblical analogy) has been a very major failure of a very greedy society. We won't have the reserves to see us through the seven years of famine (and I hope that it won't last as long as seven years).

Quite so. If all countries were to experience the same conditions, there will be those who stored up a cash pile or those who blew it all on classic left wing-style spending during the era of low interest rates and consumer-led boom who will suffer. Of course, under Bottler Brown both as chancellor and now as PM, we fall in to the latter camp.

[speedy_thrills]

Hub said:

Plus the incessant doom and gloom in the media leads to falling consumer confidence, making everything worse still! Adjusting consumer spending to a more reasonable and sustainable level.

Edited by speedy_thrills on Monday 15th September 08:49

[Fivepercent]

toppstuff said:

The collapse of Lehman and the merger of Merrill Lynch is simply huge news. This is a truly awful time.

But why would anyone care about a bunch of overpaid bankers anyway?

Remember that the income tax and NI paid by UK based bankers is simply huge ! Remember - they are all on PAYE, so the taxes paid by London based banks and their staff is a disproportionate chunk of total tax revenue.

If more of these institutions fail or post losses , the reduction in tax revenues effectively pulls the funding for thousands of nurses, and teachers. This money will have to be found from somewhere else.

This is bad, bad news for the world economy. I think we should remember this rather than give in to the schadenfreude that many are tempted to indulge in.

And it all happened, essentially, because too much money was given to people of the kind who make up the audience of the Jerry Springer show , with little chance of getting it back.

You could'nt make it up.

It's going to be a tough winter. Hold tight, everyone and good luck.

What about all the tax NIC etc paid by the workers in manufacturing when that went down the grid?

I find your Jerry Springer reference offensive and wrong. This is patently not the case. Money was loaned mainly to hard working people who could easily service it and pay it back and who used it to improve their quality of life.

[ChristianZS]

I wonder if I'm going to get some cheap dollars today?

Least of the worries I suppose!

[gjc10212]

So there are two main players left: Goldman's & Morgan Stanley. Where do the employess from Lehman's and earlier this year, Bear Stearns go...? Surely there aren't the jobs about for (? emoloyees?) Do they get fat pay-off's - redundancy, or is it a case of turn up today and clear your desk?

All very sad tbh!