Mervyn King - The right to be angry
Discussion
NoelWatson said:
Nor overleveraged borrowers. So why are they angry at the banks?
lots of defaults are good for the people who've behaved sensibly.i would regulate to make sure that retail banks, which the general population relies on, cannot easily fail (i.e. they do not take large risks). Investment banks (and arms) should be allowed to fail.
no harm in separating the investment side of thing from the retail side.
and if this means that banking becomes more expensive, then it an accurate reflection of reality, because really we were putting off paying the fees until the banking crisis arrived and now we are all paying them with tax.
anonymous said:
[redacted]
I recall the Endowment Mortgage Policy product when it was launched upon a naive and unsuspecting public. This was happening at a time when household P.C.s were almost unheard of never mind owned. There was no benefit then of searching the web to glean information. You could read the newspaper or financial magazine (like I did) but the word was that the endowment plans were a sound and good investment and you would be silly not to take advantage of such a cracking good product. Of course the salesperson would endorse all this what we now know was nonsense. These Companies heavily promoted the so called warranty on these products, they were extremely deceitful in their sales tactics offering all sorts of promises which, as it transpired, were never going to happen in reality. Not only that but mortgage holders also received endorsements from Building Societies also, they were taking a rake off too.So you see people who wished to prosper by saving and investing as greedy then? you hate Socialists, is there anyone other than yourself and your likeness that you don't dismiss I wonder.
You mention that the Companies that mis-sold these products gave adequate warnings of impending settlement shortfalls, we can only thank the Regulators for that information, the Companies hated giving out such information to policyholders, stating that it was highly damaging to the Company - bloody parasites the lot of them. Only complete financially backward people would further invest into a failing product and yet these Companies tried to flog off even more rubbish saying it would help pay off that shortfall that they had caused in the original policy product - quite incredible gall.
How do you come to the impression that most Endowment plans were for only small mortgages?
The mortgage market was certainly not 'set up' for endowment policy plans, mortgages were always paid down by pre-agreed monthly instalments which were agreed at the inception of the mortgage. The monthly payment was typically over a 25 year period and the monthly payment only adjusted up/down as the market base rates dictated.
crankedup said:
NoelWatson said:
Why not?
Cos the market is currently flooded with properties which cannot be sold unless they are priced so far below current value (whatever that is) that its a bargain for somebody. Of course if the new home could be purchased for a 'bargain' price all would be well.anonymous said:
[redacted]
I think the way the conversation goes is more 'Merv, I know we say that inflation is your only target, and that interest rates are pretty much your only tool to control it, and of course you are completely independent of government control.... but make sure don't do anything silly like let the base rate increase until we tell you to...'.Edited by RYH64E on Saturday 5th March 18:39
crankedup said:
I recall the Endowment Mortgage Policy product when it was launched upon a naive and unsuspecting public. This was happening at a time when household P.C.s were almost unheard of never mind owned. There was no benefit then of searching the web to glean information. You could read the newspaper or financial magazine (like I did) but the word was that the endowment plans were a sound and good investment and you would be silly not to take advantage of such a cracking good product. Of course the salesperson would endorse all this what we now know was nonsense. These Companies heavily promoted the so called warranty on these products, they were extremely deceitful in their sales tactics offering all sorts of promises which, as it transpired, were never going to happen in reality. Not only that but mortgage holders also received endorsements from Building Societies also, they were taking a rake off too.
So you see people who wished to prosper by saving and investing as greedy then? you hate Socialists, is there anyone other than yourself and your likeness that you don't dismiss I wonder.
You mention that the Companies that mis-sold these products gave adequate warnings of impending settlement shortfalls, we can only thank the Regulators for that information, the Companies hated giving out such information to policyholders, stating that it was highly damaging to the Company - bloody parasites the lot of them. Only complete financially backward people would further invest into a failing product and yet these Companies tried to flog off even more rubbish saying it would help pay off that shortfall that they had caused in the original policy product - quite incredible gall.
How do you come to the impression that most Endowment plans were for only small mortgages?
The mortgage market was certainly not 'set up' for endowment policy plans, mortgages were always paid down by pre-agreed monthly instalments which were agreed at the inception of the mortgage. The monthly payment was typically over a 25 year period and the monthly payment only adjusted up/down as the market base rates dictated.
Interesting. 50% of my mortgage was endowment. When I paid it off, the endowment bit showed a profit. Not as big as predicted, sure, but better than I was expecting. Endowment wasn't all bad, assuming you weren't greedy or thinking short term.So you see people who wished to prosper by saving and investing as greedy then? you hate Socialists, is there anyone other than yourself and your likeness that you don't dismiss I wonder.
You mention that the Companies that mis-sold these products gave adequate warnings of impending settlement shortfalls, we can only thank the Regulators for that information, the Companies hated giving out such information to policyholders, stating that it was highly damaging to the Company - bloody parasites the lot of them. Only complete financially backward people would further invest into a failing product and yet these Companies tried to flog off even more rubbish saying it would help pay off that shortfall that they had caused in the original policy product - quite incredible gall.
How do you come to the impression that most Endowment plans were for only small mortgages?
The mortgage market was certainly not 'set up' for endowment policy plans, mortgages were always paid down by pre-agreed monthly instalments which were agreed at the inception of the mortgage. The monthly payment was typically over a 25 year period and the monthly payment only adjusted up/down as the market base rates dictated.
ks up it should fall over.eldar said:
crankedup said:
I recall the Endowment Mortgage Policy product when it was launched upon a naive and unsuspecting public. This was happening at a time when household P.C.s were almost unheard of never mind owned. There was no benefit then of searching the web to glean information. You could read the newspaper or financial magazine (like I did) but the word was that the endowment plans were a sound and good investment and you would be silly not to take advantage of such a cracking good product. Of course the salesperson would endorse all this what we now know was nonsense. These Companies heavily promoted the so called warranty on these products, they were extremely deceitful in their sales tactics offering all sorts of promises which, as it transpired, were never going to happen in reality. Not only that but mortgage holders also received endorsements from Building Societies also, they were taking a rake off too.
So you see people who wished to prosper by saving and investing as greedy then? you hate Socialists, is there anyone other than yourself and your likeness that you don't dismiss I wonder.
You mention that the Companies that mis-sold these products gave adequate warnings of impending settlement shortfalls, we can only thank the Regulators for that information, the Companies hated giving out such information to policyholders, stating that it was highly damaging to the Company - bloody parasites the lot of them. Only complete financially backward people would further invest into a failing product and yet these Companies tried to flog off even more rubbish saying it would help pay off that shortfall that they had caused in the original policy product - quite incredible gall.
How do you come to the impression that most Endowment plans were for only small mortgages?
The mortgage market was certainly not 'set up' for endowment policy plans, mortgages were always paid down by pre-agreed monthly instalments which were agreed at the inception of the mortgage. The monthly payment was typically over a 25 year period and the monthly payment only adjusted up/down as the market base rates dictated.
Interesting. 50% of my mortgage was endowment. When I paid it off, the endowment bit showed a profit. Not as big as predicted, sure, but better than I was expecting. Endowment wasn't all bad, assuming you weren't greedy or thinking short term.So you see people who wished to prosper by saving and investing as greedy then? you hate Socialists, is there anyone other than yourself and your likeness that you don't dismiss I wonder.
You mention that the Companies that mis-sold these products gave adequate warnings of impending settlement shortfalls, we can only thank the Regulators for that information, the Companies hated giving out such information to policyholders, stating that it was highly damaging to the Company - bloody parasites the lot of them. Only complete financially backward people would further invest into a failing product and yet these Companies tried to flog off even more rubbish saying it would help pay off that shortfall that they had caused in the original policy product - quite incredible gall.
How do you come to the impression that most Endowment plans were for only small mortgages?
The mortgage market was certainly not 'set up' for endowment policy plans, mortgages were always paid down by pre-agreed monthly instalments which were agreed at the inception of the mortgage. The monthly payment was typically over a 25 year period and the monthly payment only adjusted up/down as the market base rates dictated.
I have around 5 endowments, 23/25 years and they're worth between 50-75% of their target value. The snake-oil salespeople who sold them said they'd be worth 120-150% of target value. I didn't need life insurance when I took them out, but that wasn't taken into account.
Back on topic, he's writing a book. The working title is 'how I helped Gordon shaft financially sensible people'...
Back on topic, he's writing a book. The working title is 'how I helped Gordon shaft financially sensible people'...
crankedup said:
This was happening at a time when household P.C.s were almost unheard of never mind owned. There was no benefit then of searching the web to glean information.
Fair point. Here was a discussion on the Icelandics, when IIRC, they were being recommended by one of the popular websites. http://www.pistonheads.co.uk/gassing/topic.asp?h=0...
Hopefully if there were another enodwment type thing at least some on here willl be knowledgeable enough to give an opinion - of course, you don't have to heed opinion, but at least it is there.
I think Mervyn King may just be the catalyst needed to sort this mess out,
IF IN FACT IT CAN BE SORTED.
Over the last thirty years the Financial Services industry has become more and more self serving and less and less interested in the customers and the economy. Classic example of talking a good job whilst feathering their own nest. A bit like our modern politicians.
If the Banks go on as they are the economy will nosedive into recession for many years to come. We have to find a way to resurrect industrial effort and manufacturing output.
Putting the entire assets of a bank on the 3.30 at Kempton may be a gamble that pays off BUT IT IS NOT CONSIDERED BUSINESS. It is NOT Banking.
The commodity traders and investment traders CANNOT be supported by Banks.
This is simple gambling and may result in huge profits but it is not real business that can sustain an industrial economy. Buying (or pretending to buy by using a complex financial instrument unintelligible to most people) a commodity, holding it for a while, doing nothing to it and hoping the market will rise is NOT business.
The banks should be out of this completely.
Unfortunately the likes of George Osbourne and David Cameron (and Nick Clegg and Edward (Ed!!) Milliband) are all too pally with the Bankers. All our politicians come from the same public schools universities and backgrounds as the Bankers.
We need a fundamental reform of our Banking system. Or else!
The current one allowed Northern Rock to be ruined in 5 years of utter madness and over lending on an unsupportable mortgage base after 150 years of unblemished trading.
UNFORTUNATELY the individuals in charge of Northern Rock made HUGE sums from this and RETAINED THOSE PROFITS retired on massive pensions. They have lost nothing and gained everything at the taxpayers ultimate expense.
Who are the fools? The Taxpayers. US.
The system REMAINS UNCHANGED. THERE HAVE AS YET BEEN NO WORTHWHILE CHANGES.
I fear there will be a second banking collapse unless major changes are made. AND AS YET THERE HAVE BEEN NO MAJOR CHANGES.
IF IN FACT IT CAN BE SORTED.
Over the last thirty years the Financial Services industry has become more and more self serving and less and less interested in the customers and the economy. Classic example of talking a good job whilst feathering their own nest. A bit like our modern politicians.
If the Banks go on as they are the economy will nosedive into recession for many years to come. We have to find a way to resurrect industrial effort and manufacturing output.
Putting the entire assets of a bank on the 3.30 at Kempton may be a gamble that pays off BUT IT IS NOT CONSIDERED BUSINESS. It is NOT Banking.
The commodity traders and investment traders CANNOT be supported by Banks.
This is simple gambling and may result in huge profits but it is not real business that can sustain an industrial economy. Buying (or pretending to buy by using a complex financial instrument unintelligible to most people) a commodity, holding it for a while, doing nothing to it and hoping the market will rise is NOT business.
The banks should be out of this completely.
Unfortunately the likes of George Osbourne and David Cameron (and Nick Clegg and Edward (Ed!!) Milliband) are all too pally with the Bankers. All our politicians come from the same public schools universities and backgrounds as the Bankers.
We need a fundamental reform of our Banking system. Or else!
The current one allowed Northern Rock to be ruined in 5 years of utter madness and over lending on an unsupportable mortgage base after 150 years of unblemished trading.
UNFORTUNATELY the individuals in charge of Northern Rock made HUGE sums from this and RETAINED THOSE PROFITS retired on massive pensions. They have lost nothing and gained everything at the taxpayers ultimate expense.
Who are the fools? The Taxpayers. US.
The system REMAINS UNCHANGED. THERE HAVE AS YET BEEN NO WORTHWHILE CHANGES.
I fear there will be a second banking collapse unless major changes are made. AND AS YET THERE HAVE BEEN NO MAJOR CHANGES.
Steffan said:
Over the last thirty years the Financial Services industry has become more and more self serving and less and less interested in the customers and the economy.
AgreedSteffan said:
If the Banks go on as they are the economy will nosedive into recession for many years to come. We have to find a way to resurrect industrial effort and manufacturing output.
Agreed. The problem may have begun 30 years ago but it will only get fixed through structural change in workers attitudes, the benefits system and bank participation. Steffan said:
Putting the entire assets of a bank on the 3.30 at Kempton may be a gamble that pays off BUT IT IS NOT CONSIDERED BUSINESS. It is NOT Banking.
Absolutely agreed. Some have lost sight of the fact that although both involve "risk", investment and gambling are NOT the same thing.Steffan said:
The commodity traders and investment traders CANNOT be supported by Banks.
Agreed, and I expect there will be changes on the way to ring-fence the activities. There is no need to break up the banks to achieve this.Steffan said:
Buying a commodity, holding it for a while, doing nothing to it and hoping the market will rise is NOT business.
Hmmm. I think it is business but isn't investment. Steffan said:
The banks should be out of this completely.
Hmmm. I don't see why - so long as such activity is ring-fenced away from "banking".Steffan said:
Unfortunately the likes of George Osbourne and David Cameron (and Nick Clegg and Edward (Ed!!) Milliband) are all too pally with the Bankers.
Agreed. but regrettably "financial services" is the only game in town for UK right now. Re-establishment of manufacturing is a dream at the moment. And bear in mind the global competitive environment.Steffan said:
We need a fundamental reform of our Banking system. The current one allowed Northern Rock to be ruined in 5 years of utter madness and over lending on an unsupportable mortgage base after 150 years of unblemished trading.
Agreed. The NR situation was simply mind-boggling stupidity. Greed in a bubble.Steffan said:
They have lost nothing and gained everything at the taxpayers ultimate expense.
More particularly, at the expense of savers. The taxpayer will probably get his money back in due course.Steffan said:
Who are the fools?
The banks (and Blair/Brown)Steffan said:
I fear there will be a second banking collapse unless major changes are made. AND AS YET THERE HAVE BEEN NO MAJOR CHANGES.
Don't panic; there will be changes; collapse is very, very unlikely IMO. More likely the banks will continue to write back their bad and doubtful debts and congratulate themselves on how well they are doing. All thanks to the taxpayer (and the raped savers).anonymous said:
[redacted]
Frankly I am a bit bemused by the sweeping assumptions being made by a city lawyer and a banker.I honestly would have thought your skills of debating were better than assuming ALL pensioners are the same, all have retired at 50, all have final salary pensions, all have been burnt on retirement properties in the Costa del Sol.
Seems you are trying to deal with a complicated issue with a very very broad brush.
Steffan said:
The current one allowed Northern Rock to be ruined in 5 years of utter madness and over lending on an unsupportable mortgage base after 150 years of unblemished trading.
UNFORTUNATELY the individuals in charge of Northern Rock made HUGE sums from this and RETAINED THOSE PROFITS retired on massive pensions. They have lost nothing and gained everything at the taxpayers ultimate expense.
Agreed. Northern Rock did not have an investment banking arm. This would support the case for a universal banking model (with both retail and investment arms combined). UNFORTUNATELY the individuals in charge of Northern Rock made HUGE sums from this and RETAINED THOSE PROFITS retired on massive pensions. They have lost nothing and gained everything at the taxpayers ultimate expense.
Also in the news today .. rumours that HSBC are relocating out of London ..
http://www.bbc.co.uk/news/business-12658880
johnfm said:
Frankly I am a bit bemused by the sweeping assumptions being made by a city lawyer and a banker.
I honestly would have thought your skills of debating were better than assuming ALL pensioners are the same, all have retired at 50, all have final salary pensions, all have been burnt on retirement properties in the Costa del Sol.
Seems you are trying to deal with a complicated issue with a very very broad brush.
To be fair to tonker though, saying "investment banking is bad", "all they do is gamble", and "the banks are to blame" is just as broad a brush...I honestly would have thought your skills of debating were better than assuming ALL pensioners are the same, all have retired at 50, all have final salary pensions, all have been burnt on retirement properties in the Costa del Sol.
Seems you are trying to deal with a complicated issue with a very very broad brush.
I think there is a fundamental question regarding reality of believing that the Treasury the Bank of England the FSA and the Government are capable of sorting this out. Are you sure??
All the activities of the Banks and lenders were monitored on a daily basis by these august bodies, AT THE TIME OF THESE DOSASTERS OCCURRING.
If the same individuals now operating with a different job title can actually sort this out who on earth did they not see this coming.
The financial instruments that Northern Rock, Mortgage Express and other were using were so complex no one understood them properly.
This should not have been allowed to happen in the first place.
If this can happen once it will happen again particularly if we are playing musical chairs with the same individuals in control.
I hope Mervyn King can sort this out but whilst the cosy relationship at the highest levels of government continue with the Bankers I cannot see it.
All the activities of the Banks and lenders were monitored on a daily basis by these august bodies, AT THE TIME OF THESE DOSASTERS OCCURRING.
If the same individuals now operating with a different job title can actually sort this out who on earth did they not see this coming.
The financial instruments that Northern Rock, Mortgage Express and other were using were so complex no one understood them properly.
This should not have been allowed to happen in the first place.
If this can happen once it will happen again particularly if we are playing musical chairs with the same individuals in control.
I hope Mervyn King can sort this out but whilst the cosy relationship at the highest levels of government continue with the Bankers I cannot see it.
Dangerous2 said:
erm... don't all properties sell by definition at their current value?
No! because it seems nobody has a true recognition of what current value actually is at the moment. So you may see my point that 'current value' is merely based upon what somebody may perceive to be a bargain. True or accurate current value, for me, is based upon an historical pattern to sales prices of similar products, in this case houses. So I would look at comparable houses sold within the previous 12 months within the same geographical area as our target house. At the moment not enough sales are generated to provide a meaningful 'current value' analysis.Gassing Station | News, Politics & Economics | Top of Page | What's New | My Stuff