Could or should the city be sacrificed for good brexit deal??
Discussion
powerstroke said:
Yes just keep making fun of the economy and people who make and mend things
it is a really sad thing, pathetic how some people think its clever to look down their noses
at the people who keep the wheels of the country turning....
I'll suggest that most of 'look down their noses' is actually in your head. it is a really sad thing, pathetic how some people think its clever to look down their noses
at the people who keep the wheels of the country turning....
Just look at the title of this thread, and you'll see that.
(I'm of course joking, there is no chance that you'll see that)
Guys, I feel I'm ill equipped to explain the whole BofE post brexit comments ( with a lowly degree in economics) but let's have a look at this please with regard to liquidity. Can the other brighter city guys ( whom I wish I was among rather than a lowly IT guy) fill in the gaps.
Other questioners on liquidity refer M0 to M3 and the BofE as the "lender of last resort"
https://en.m.wikipedia.org/wiki/Money_supply
Other questioners on liquidity refer M0 to M3 and the BofE as the "lender of last resort"
https://en.m.wikipedia.org/wiki/Money_supply
m3jappa said:
I wonder if the remaindem crew will be as negative when a deal is struck with Europe, multiple deals with other nations are struck corporation tax is lowered, economy becomes stronger and more jobs are created.
Because that's what it's looking like to me at the moment, the remaindem massif are literally going round in circles of doom.
Do you actually believe that?! Any evidence of this whatsoever? Looks like up to 120k jobs may be lost in the construction industry. What will those people do?Because that's what it's looking like to me at the moment, the remaindem massif are literally going round in circles of doom.
powerstroke said:
///ajd said:
no need, just be a fisherman, more lucrative innit
Yes just keep making fun of the economy and people who make and mend thingsit is a really sad thing, pathetic how some people think its clever to look down their noses
at the people who keep the wheels of the country turning....
Anyway i drive a Toyota so it's yet to go wrong after 16 years...
SidewaysSi said:
m3jappa said:
I wonder if the remaindem crew will be as negative when a deal is struck with Europe, multiple deals with other nations are struck corporation tax is lowered, economy becomes stronger and more jobs are created.
Because that's what it's looking like to me at the moment, the remaindem massif are literally going round in circles of doom.
Do you actually believe that?! Any evidence of this whatsoever? Looks like up to 120k jobs may be lost in the construction industry. What will those people do?Because that's what it's looking like to me at the moment, the remaindem massif are literally going round in circles of doom.
Was with a construction manager today and his fears were around the real skills shortage in the construction industry ...
it was hard to recruit good staff he said ....this was in Manchester.....
Mr Whippy said:
RYH64E said:
Mr Whippy said:
It's not preconceived notions of evil, it's just a critical standpoint.
They're a business just like any other, they manage all my wealth. I can't accumulate or store wealth without using their system. They have somewhat of a monopoly.
If I tried to use all cash then government think I'm a terrorist or a tax avoider/evader, or something else unsavoury.
It's reasonable to be critical of banks motives rather than just assuming they do everything in my own best interests.
I might be wrong, but it appears to me that what you think of as 'The Banks' isn't the part of financial services that makes money, nor is it the part that's under threat if/when we leave the EU.They're a business just like any other, they manage all my wealth. I can't accumulate or store wealth without using their system. They have somewhat of a monopoly.
If I tried to use all cash then government think I'm a terrorist or a tax avoider/evader, or something else unsavoury.
It's reasonable to be critical of banks motives rather than just assuming they do everything in my own best interests.
So where does the money that the City makes from financial services come from?
If I had a clear answer then I could alter my opinion, but so far there is no basis for an altered view. I just feel like I'm reading half arguments from people possibly defending their position on a protectionist gravy train.
Dave
Banks trading against each other in same OTC and exchange traded markets on a global scale
Mergers and Acquisition depts of banks taking a cut for putting deals together (like the recent ARM deal Im sure)
kurt535 said:
powerstroke said:
///ajd said:
no need, just be a fisherman, more lucrative innit
Yes just keep making fun of the economy and people who make and mend thingsit is a really sad thing, pathetic how some people think its clever to look down their noses
at the people who keep the wheels of the country turning....
Anyway i drive a Toyota so it's yet to go wrong after 16 years...
powerstroke said:
SidewaysSi said:
m3jappa said:
I wonder if the remaindem crew will be as negative when a deal is struck with Europe, multiple deals with other nations are struck corporation tax is lowered, economy becomes stronger and more jobs are created.
Because that's what it's looking like to me at the moment, the remaindem massif are literally going round in circles of doom.
Do you actually believe that?! Any evidence of this whatsoever? Looks like up to 120k jobs may be lost in the construction industry. What will those people do?Because that's what it's looking like to me at the moment, the remaindem massif are literally going round in circles of doom.
Was with a construction manager today and his fears were around the real skills shortage in the construction industry ...
it was hard to recruit good staff he said ....this was in Manchester.....
ts' - not my words but those of two mature blokes who paid to go to college and get their L2 PD this year who just painted my house.kurt535 said:
thats because majority of teenagers attending the building construction course at college are normally identified as challenging kids so easier to offload them to a local FE or private trg provider. most are poor from the outset and by the time they leave school at 16 don't apply to college full time cos they have been there for 2 years already. painting decorating course is a classic course at an FE 'rammed with 90% tts' - not my words but those of two mature blokes who paid to go to college and get their L2 PD this year who just painted my house.
This is so wrong isn't it ?? in a way its good they are trying to help the less fortunate but it should ts' - not my words but those of two mature blokes who paid to go to college and get their L2 PD this year who just painted my house.be put forward as a worthwhile career choice not a last chance saloon ....
powerstroke said:
kurt535 said:
thats because majority of teenagers attending the building construction course at college are normally identified as challenging kids so easier to offload them to a local FE or private trg provider. most are poor from the outset and by the time they leave school at 16 don't apply to college full time cos they have been there for 2 years already. painting decorating course is a classic course at an FE 'rammed with 90% tts' - not my words but those of two mature blokes who paid to go to college and get their L2 PD this year who just painted my house.
This is so wrong isn't it ?? in a way its good they are trying to help the less fortunate but it should ts' - not my words but those of two mature blokes who paid to go to college and get their L2 PD this year who just painted my house.be put forward as a worthwhile career choice not a last chance saloon ....
k around at school get more money/resources chucked at them than a child that gets their head down and tries to work towards decent gcse's a levels and uni.when children get really really bad, they get sent to schools such as roman fields in hertfordshire; private cab to and from home and then frequently 1:1 teachers for up to and including year 11 education. Cost per annum to tax payer is more than if the kid went to Eton.waste of money.
typical courses challenging kids get sent on at fe college one/two days a week include vehicle mechanics/building and pd because they aren't taxing and are 'kinaesthetic'.
SidewaysSi said:
m3jappa said:
I wonder if the remaindem crew will be as negative when a deal is struck with Europe, multiple deals with other nations are struck corporation tax is lowered, economy becomes stronger and more jobs are created.
Because that's what it's looking like to me at the moment, the remaindem massif are literally going round in circles of doom.
Do you actually believe that?! Any evidence of this whatsoever? Looks like up to 120k jobs may be lost in the construction industry. What will those people do?Because that's what it's looking like to me at the moment, the remaindem massif are literally going round in circles of doom.
I could say do you really believe the government will trigger article 50 if it will actually cause total economic meltdown? I don't believe they will. I've said it several times on here.
Construction industry is a potential problem yes I'll agree along with other areas, but I do not think it will be long term at all.
m3jappa said:
I do believe that. Without quoting lots of things I've read (a lot of which is gloom, or potential gloom) things appear to have a positive outcome eventually.
I could say do you really believe the government will trigger article 50 if it will actually cause total economic meltdown? I don't believe they will. I've said it several times on here.
Construction industry is a potential problem yes I'll agree along with other areas, but I do not think it will be long term at all.
I don't think that govt will know the effects of triggering a50 until it triggers a50. I suppose a lot of the effects will depend on what option they chose to pursue. Construction is a always first to go, either way, afaik. But, we are where we are, so in couple of months, we'll know more. I could say do you really believe the government will trigger article 50 if it will actually cause total economic meltdown? I don't believe they will. I've said it several times on here.
Construction industry is a potential problem yes I'll agree along with other areas, but I do not think it will be long term at all.
sidicks said:
Mr Whippy said:
Yes the CofE provides liquidity. So why did they provide liquidity on Brexit result day?
The BofE (CofE is quite different!) made a statement (to calm the markets) that additional liquidity would be available, if required. Once again, this is how the system is intended to work.Mr Whippy said:
Don't banks and other financial institutions have enough liquidity to compensate for a shock in the system?
How big a shock were you expecting?Do you think that banks should hold sufficient cash to be able to pay out all deposit holders the next day? Do you have the faintest idea about how banks actually work?
Mr Whippy said:
Why can't those who need liquidity just do what those property investment funds did and stop anyone taking their money in/out/paying out/trading or whatever exposure or liabilities they have on their books?
So no-one could access their money, pay bills etc and the whole financial system grinds to a halt? An instant access account with no access?
At least you're confirming my claim that you don't understand the first thing about banking!
Mr Whippy said:
I'm genuinely interested in why liquidity was available for one thing, but not another.
You genuinely don't understand the difference between the liquidity of a current account and an investment in property?That's scary.
What makes up those liabilities? Is the liquidity provided just to shore up current accounts and bill paying? Ie, high street banking?
Is that all the liquidity boost was offered to cover as you allude to?
m3jappa said:
SidewaysSi said:
m3jappa said:
I wonder if the remaindem crew will be as negative when a deal is struck with Europe, multiple deals with other nations are struck corporation tax is lowered, economy becomes stronger and more jobs are created.
Because that's what it's looking like to me at the moment, the remaindem massif are literally going round in circles of doom.
Do you actually believe that?! Any evidence of this whatsoever? Looks like up to 120k jobs may be lost in the construction industry. What will those people do?Because that's what it's looking like to me at the moment, the remaindem massif are literally going round in circles of doom.
I could say do you really believe the government will trigger article 50 if it will actually cause total economic meltdown? I don't believe they will. I've said it several times on here.
Construction industry is a potential problem yes I'll agree along with other areas, but I do not think it will be long term at all.
It is all a bit early to talk about potential deals with other countries to be honest. Having a few chats is all well and good but insufficient to think too positively about.
Mr Whippy said:
So an offering of liquidity is provided by the central bank at any time that a shock is expected and banks may have demands upon their liabilities which is beyond normal banking operations.
What makes up those liabilities? Is the liquidity provided just to shore up current accounts and bill paying? Ie, high street banking?
Is that all the liquidity boost was offered to cover as you allude to?
I’m probably wasting my time here, given the prejudice displayed…. But here goes (I’ve made it simple).What makes up those liabilities? Is the liquidity provided just to shore up current accounts and bill paying? Ie, high street banking?
Is that all the liquidity boost was offered to cover as you allude to?
Banks have a “balance sheet”, liabilities and assets need to be within balance or range of each other. Liabilities being where a bank borrows money (deposits, loans, bond issuance, borrowing from central banks - often collateralised etc) and where it lends it (debt being one of the ways to fuel growth in the economy – Monetary policy)
To understand the need for central bank money, means you have to understand how banks work / make money.
Bank revenue is largely driven from:
1. Extension of balance sheet – lending money
2. Maturity Transformation (e.g. deposit accounts turned into mortgages)
3. Fee based income – trading (you can monetise stock markets up or down / movement based so almost money our of thin air – certainly volatility can encourage these fees)
4. Proprietary trading activities (taking positions in stocks – now largely frowned upon and being undone by Volcker Rule, Turner etc etc)
5. Advisory
Items 1&2 are the main activities of banks, and the liquidity injection by the BoE is to allow normal course of operations. Although their assets and liabilities are broadly in line; the maturity profiles are not Matched (at its simplest - you would need to have your deposit account on a 25yr call basis as the bank lend the money into Mortgages). This Maturity Transformation activity is increasingly expensive as it requires hedging against runs, interest rate fluctuations, time value of money, market risks etc etc (XVA etc blah blah de blah), regulations make banks hold increasingly expensive capital or solvency buffer against these risks. The longer you borrow money for, the more expensive it becomes (probability of default increases).
Ideally the banks don’t hold onto the Central Bank money (low to -‘ve interest rates encourage it not coming back), they create assets or push it out the door (whether it makes it to the real economy is a different matter but you can probably blame Govt & regulators for that given risk cost loading and arbitrage potential given an unlevel playing field) – what do you think is fuelling the “asset bubble in Equity, property, cars etc etc etc)?
Economic policies of governments REQUIRE banks to run huge balance sheets. Even if post 2007/8 its seemed logical to reduce balance sheet, the need for growth requires Central Bank money to have an on / off ramp into the economy (bank balance sheet). Further more G20 actions (BASELIII) require banks to hold HUGE quantities of sovereign debt as liquidity buffer); so in reality the banks are funding Govt debt burden. It’s a circle jerk of epic proportions.
Of course the facts are easily distorted by The Express, Daily Mail etc. Even the nonsense on “Bank Bail-in” posted. It’s not for Govts to bail out banks anymore (unless their Italian, Spanish, German etc its coming when LLP goes through the roof); but the actual bond holders get bailed in (or loose the principal notional on the debt – they become equity holders). The level of understanding (lackof) is shocking in the extreme.
Given the complexity of Finance and basis in English law, the likely impact of Brexit is quite exaggerated (I voted remain FWIW, so the only b
hing appears to be from Brexiters displaying significant levels of ignorance). “Passporting” hasn’t been given up yet, and we could still go for equivalence. The biggest win the City has in or out is English law, followed by intelligence. The increasing regulatory costs of NOT being passported are tiny compared to rebasing the entire documentation basis of Finance. Something the French will never get.As for the rest of the economy. Can’t blame the City for that. In equal measure, the feckless / lazy, trade unions, polarised politics and incorrect (lackof) of fiscal policy killed UK industrial base
Edited by stongle on Thursday 21st July 09:47
Mr Whippy said:
ATG said:
Dave, you're asking a lot of entirely reasonable questions given a position of entirely understandably limited knowledge, but they do seem to be overlaid with some preconceived notions that there's evil lurking out there somewhere.
It's not preconceived notions of evil, it's just a critical standpoint.They're a business just like any other, they manage all my wealth. I can't accumulate or store wealth without using their system. They have somewhat of a monopoly.
If I tried to use all cash then government think I'm a terrorist or a tax avoider/evader, or something else unsavoury.
It's reasonable to be critical of banks motives rather than just assuming they do everything in my own best interests.
powerstroke said:
///ajd said:
no need, just be a fisherman, more lucrative innit
Yes just keep making fun of the economy and people who make and mend thingsit is a really sad thing, pathetic how some people think its clever to look down their noses
at the people who keep the wheels of the country turning....
The City doesn't look down its nose at industry because they're our customers and indeed our PARTNERS in loads of our business.
Here's an example. Amongst a zillion other things that we do, my bank buys and sells fuel and electricity. We'll sell a power station all the fuel it needs and buy all the electricity it can generate for some period of time so they can concentrate on running their business as efficiently as possible without having to worry about how gas prices and wholesale electricity prices are going to fluctuate. We might then offset the risk we've just taken on by either hedging in the derivatives markets or by packaging the risk up and selling it as a "virtual powerstation" to an investor.
If a business wants to expand, they may come to us for advice on how they can raise money to fund the expansion. We might lend them money ourselves. We might buy a stake in their business. We might help then find investors who want to loan them money or by a stake.
Helping companies raise capital, helping companies manage price risk, helping investors to invest and to manage their risk are our key activities.
Dave asked how we make our money. Well, there are some examples above. We'll either charge fees for those services or negotiate a small discount or premium on the price of things we're trading to give us the expectation of a profit when we offset the risk through some other transactions. On any one transaction our profit margin is usually tiny; a small fraction of a percent. We do a lot of these transactions; that's how we end up being profitable.
It's entirely understandable that must of the public don't know much about what we do. Why should they? It's not very exciting and they're not directly involved. But if you're going to hold and express a strong opinion about banks and the City, you'd better have some idea what you're taking about, otherwise you're just being prejudiced.
Is it mean of me to post this here? :
http://www.abc.net.au/news/2016-07-21/hsbc-currenc...
"US authorities have charged two senior currency traders from global bank, HSBC, with conspiracy to defraud a client by orchestrating a multi-million-dollar "front running" scheme which involved a $US3.5 billion currency transaction.
HSBC's global head of foreign exchange cash trading, Mark Johnson (50), and the bank's former head of currency trading in Europe, Middle East and Africa, Stuart Scott (43), were both arrested."
This is the sort of thing that gives banks a bad name.
http://www.abc.net.au/news/2016-07-21/hsbc-currenc...
"US authorities have charged two senior currency traders from global bank, HSBC, with conspiracy to defraud a client by orchestrating a multi-million-dollar "front running" scheme which involved a $US3.5 billion currency transaction.
HSBC's global head of foreign exchange cash trading, Mark Johnson (50), and the bank's former head of currency trading in Europe, Middle East and Africa, Stuart Scott (43), were both arrested."
This is the sort of thing that gives banks a bad name.
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