Daniel Hannan | Occupy Wall Street Debate | Oxford Union

[superfrank]

10 mins of common sense... http://youtu.be/7ZpJeHN0_gw

[giulio2010]

10 mins of common sense... http://youtu.be/7ZpJeHN0_gw

LIKE...
Your government has not asked for permission to use taxpayer money to bail out banks, but have they lied about it?
Mario Monti a year ago introduced the house tax IMU, he said it was necessary to save Italy and Europe asked us this huge sacrifice. Last week, we have found out that the third installment of the fee (3.9 BL euros)went to the Monti dei paschi di Siena (MPS) .. One of oldest bank in the world and do you know why? They invested the stock market and lost money savers on derivatives.
Ok they lied us to save the bank and pensioners money, how is it possible that they found 10BL to buy the antonveneta bank which the santander group paid 6 months earlier 6BL .Did the Antonveneta bank increased 4BL value in just 3-6? The MPS riceved 3.9 BL of bailouts when the loss of derivatives was 750M .... I think between these transaction there were tangents to pay and the bailout was not just for the loss on derivates but also to recover the 3-4BL extra which the bank paid to the santander group or is there something more we cannot see or understand?

[Iron]

I liked Hannan's arguments on the whole, but I disagree with him on the bank bailouts. Had the banks been allowed to fail, the result could have been complete financial and social meltdown.

Jeff

10 mins of common sense... http://youtu.be/7ZpJeHN0_gw

[superfrank]

I liked Hannan's arguments on the whole, but I disagree with him on the bank bailouts. Had the banks been allowed to fail, the result could have been complete financial and social meltdown.

Jeff

10 mins of common sense... http://youtu.be/7ZpJeHN0_gw

that wouldn't have happened and is just spin put out by the mainstream media on behalf of the banks (and those hoodwinked into bailing them out).

bad banks would have failed, but their assets would have been bought at fair value by more solvent financial organisations. that's capitalism.

why should banks be treated differently from any other failed business? as Hannan says, they were only bailed out because they had the ear of, and powerful influence with, politicians (who didn't have a clue what to do).

[Iron]

why should banks be treated differently from any other failed business?

If a bank takes an unsustainable hit on its 'casino' side, then might that not result in millions of ordinary depositors on the retail side not being able to access their money?

Jeff

[superfrank]

why should banks be treated differently from any other failed business?

If a bank takes an unsustainable hit on its 'casino' side, then might that not result in millions of ordinary depositors on the retail side not being able to access their money?

Jeff

the bank's retail business could have been sold off; the "investment" banking division would have died. shareholders and "investors" would have lost their shirts, but that's the risk they accepted when they "invested".

the problem is that the most wealthy and powerful people are the ones who would have taken the hit, and they just couldn't stomach that and so got gullible governments to get ordinary taxpayers (and future generations) to foot the bill instead.

[giulio2010]

why should banks be treated differently from any other failed business?

If a bank takes an unsustainable hit on its 'casino' side, then might that not result in millions of ordinary depositors on the retail side not being able to access their money?

Jeff

The new trend of the bail-out will lead to a financial disaster larger than what we have just experienced. Some countrys are asking for bail outs, and no one knows how the money is distributed. Banks smoke crack, gamble on the stock market with our money (not just money that we have decided to invest, but also money deposited on some savings accounts) and are then saved with 4-5 times the money they have lost and then no one saying how they were distributed. Is there a governament who told the banks simply being a bank and not a gambler? The risk is that this mechanism will be repeated so many times that by 2030 there will be a bubble that no one else will be able bail out or marginalize simple because we are losing resources..

[superfrank]

agree giulio,

the problem is that the sheep all watch CNBC, and the like, and believe all the crap about talented bankers and that if we'd only saved Lehman too then everything would have been Ok!

the fractional reserve banking system is literally a licence to print money for banks, but the are too greedy to take consistent, guaranteed profits over time and so blow up bubbles to make huge short-term gains while governments and populations get screwed over and over.

[Iron]

If a bank fails, I don't see how it's a certainty that ordinary savers won't get hit. If a black swan comes along and wipes out a huge chunk of the money that the bank has invested, is it not possible that the bank simply won't have the money available to let people withdraw their savings if there's a rush on the bank? Or to put it another way, if my bank has invested all of the money that savers have lent to it, and those investments have been obliterated, where is the money going to come from when I go to the cash machine to make a withdrawl?

OK, in theory you are covered for savings of up to (I think) £75,000 in this country, but in practice I question whether the government could afford to compensate savers if a giant like RBS or Barclays were to bite the dust.

Jeff

[superfrank]

the traditional banking model is that banks get savers money and then lend it to businesses and individuals at a higher rate of interest and get to pocket the difference. they use leverage to lend more than the deposits (which is ok within reason) under the fractional reserve system.

you didn't see the Nationwide BS needing a bailout - because they stick to the simple model.

banks are too greedy though and aren't interested in lending to real businesses because the returns aren't enough for them. they prefer bubbles (e.g. property) and extreme leverage for bets because the potential for larger (short-term) gains is much greater.

[giulio2010]

Ferru123, what about a simple regulation from the governaments in question that will not just tell the immorality story of the banks but make that particular practice ILLEGAL?
Ps. here a nice link about a swedesh bank which I think will be the example to follow in the future...
http://en.wikipedia.org/wiki/JAK_Members_Bank

If a bank fails, I don't see how it's a certainty that ordinary savers won't get hit. If a black swan comes along and wipes out a huge chunk of the money that the bank has invested, is it not possible that the bank simply won't have the money available to let people withdraw their savings if there's a rush on the bank? Or to put it another way, if my bank has invested all of the money that savers have lent to it, and those investments have been obliterated, where is the money going to come from when I go to the cash machine to make a withdrawl?

OK, in theory you are covered for savings of up to (I think) £75,000 in this country, but in practice I question whether the government could afford to compensate savers if a giant like RBS or Barclays were to bite the dust.

Jeff

[CaerMyrddin]

I fully agree with Frank on this one and think capitalism has to be enforced!

Instead of capitalizing banks it would be fairer to ensure deposits and short term lending to companies to keep the system working. Goverments had to take action, but there were different ways of using the huge amount of capital they had to deal with the crisis. What we've found out is that the burden of paying all these bailouts is asfixiating the real economy and we'll be carrying it for long time.

Jeff, if governments had the money to put in banks, wouldn't they have the money to keep ATMs running?

[Iron]

Probably, but with a bank bailout you can insist on the money being repaid and attach conditions to the loan. If the government refunds me directly because my bank collapses, then that money is lost to the taxpayer forever.

Jeff

Jeff, if governments had the money to put in banks, wouldn't they have the money to keep ATMs running?

[superfrank]

Probably, but with a bank bailout you can insist on the money being repaid and attach conditions to the loan. If the government refunds me directly because my bank collapses, then that money is lost to the taxpayer forever.

Jeff

why should we throw money at those t0ssers in the hope they'll turn things round (while they keep trousering bonuses in the process)?! it's a bit like the govt. throwing money at Leyland DAF in the 70s.

failed businesses should be allowed to fail and the assets and viable parts of the business sold to someone who can do a better job.

if you do anything else then it's socialism (champagne socialism in this case).

[Iron]

failed businesses should be allowed to fail and the assets and viable parts of the business sold to someone who can do a better job.

Normally, I'd agree with you, but in this instance that would have run the risk of a total financial meltdown. You can't blame politicians for wanting to avoid at all costs the slightest possibility of that outcome.

Jeff