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Financial Crisis: We're Taking Our Money Back

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Jenny
750666.  Sat Oct 09, 2010 9:45 pm Reply with quote

Harry - we like to think of this website as the only place on the internet with people intelligent enough to discuss difficult issues without descending into flame wars. I hardly think calling somebody a liar is intelligent or indeed interesting.

If you have factual problems with what has been argued, then make them clear. But please refrain from ad hominems.

 
HarryAlffa
750839.  Sun Oct 10, 2010 11:36 am Reply with quote

Jenny - I did not call anyone a liar.

I would like to think that this is a place for intelligent and grown up, honest debate. Not (m)any of them on the web.


Hypothetical
If Andy Coulson was a member of this community, would you find yourself forced to say that no one could call him a liar?
I think it obvious that any intelligent and honest person would be forced to conclude that Coulson is a liar.

If you regard lies as poisonous to honest debate, and I think you must, then what defence do you have against the habitual liar?

Actuality
Jenny - after looking over my previous contribution you will see that it is true that I didn't actually call him a liar. So why did you give me such a warning?
An intelligent and honest person, having read everything I wrote, would have come to the conclusion that I thought Neo a liar, even before I reported my suspicion of profound dishonesty - and to be fair to myself, I coupled that with a sincere hope that I would be proved wrong.

I suspect that you would be compelled to defend Andy Coulson, and I wish that it were not so.

The same honesty and intelligence which is forced to conclude that Andy Coulson lied, and concludes that I think Neo a liar, must also conclude that Neo is intellectually dishonest. Why can't the same latitude of truth telling be allowed in all cases?

His first interaction with me is Blockheaded BBC News - Help!.

As for ad hominems;
Neotenic wrote:
I don't know who you think you are, but you're coming across like you think that anyone who dares disagree with you is an idiot. Are you really sure that's who you want to be?

That took the biscuit that did! It was a completely unjustified attack, do I have to list the dishonest implications held within this odious utterance? And precisely to avoid flame wars I ended the interaction with a quote from Monty Python's Argument Sketch.

Why did he get so hot under the collar about the BBC News misreporting? What was that all about? Was I not appealing? :)

To me, it was a strong indicator that Neo was pretty much a Troll.
Taking that thread and this together ... well you may deduce what I think of him. I haven't seen anything to derail my assessment, but I live in hope.

A theory is enforced when it makes predictions which come true.

A few days later I started this thread, guess who was first to turn up and be unpleasant. I fully expected him to turn up and disagree. I made a prediction of Trollishness, his responses fitted in that category.



President Jimmy Carter on the Daily Show said that Fox News gave a distorted picture of things. I'm a fan of the Daily Show, I like to hear the jokes and work backwards from there to get the news - it's just a bit of fun!
But I am struck by the dishonesty of the various American news networks, Republican and Democrat. Especially Fox & Friends!

I'm afraid that Neo does remind me of Fox News contributors, taking facts, and forcing upon them a conclusion which doesn't fit - I think any intelligent & honest person would describe Fox News as profoundly dishonest, or at least entertain the idea for a bit.




I had hoped that QI boards would be a place to exchange ideas, where you could think out loud, and not be subject to unpleasantness right from the off. I was wrong.
Neotenic wrote:
it is a forum for a comedy panel show, not a revolutionary intelligentsia

This? Because I said BBC News was wrong to say, "everyone can have an extra cheeseburger everyday". What the ..?
Then I'm
Neotenic wrote:
childishly simplistic

It is this continual shifting of place, illustrated by his antipodal ad hominens, which reminds me of the lying American, Republican, propagandist liars. He hates intelligentsia, like Palin -not Michael!- or Christine "The Palin is strong in this one" O'Donnell, yet he spelled the word correctly :)

You thought I called him a liar, which do you think he was telling the truth about what he thinks of me? A revolutionary intelligentsia or childishly simplistic?

What's to be done?

Peace and love to all.

 
Neotenic
750841.  Sun Oct 10, 2010 11:38 am Reply with quote

Methinks he doth protest too much.

Quote:
What's to be done?


You could have a stab at answering one of the questions I asked you.

 
Jenny
750951.  Sun Oct 10, 2010 9:20 pm Reply with quote

Perhaps I am viewing this too simplistically, but when I read

Harry Alffa wrote:
I suspect you are in fact a profoundly dishonest person


it bears a strong personal resemblance to calling somebody a liar.

Moreover

Neotenic wrote:
you're coming across like you think that anyone who dares disagree with you is an idiot


doesn't look to me like an attack but like a comment on the impression your post was making.

And you could indeed have a stab at answering some of the questions that were asked, but before that I do think you should follow Neo's suggestion and read our banking thread on the What Fresh Hell Is This forum, as it would save a certain amount of rehashing of ground that has already been well and truly gone over.

 
HarryAlffa
751053.  Mon Oct 11, 2010 7:32 am Reply with quote

Jenny - a "strong resemblance" of an attack is not something you can say of one thing and not the other.

"like a comment on the impression your post was making", is exactly my point. Everything about that comment is dishonest. An honest and intelligent person is not expecting this sort of outburst to be deceitful. If you read the other thread, you will see that the underlying assumptions which must be held to be true from that comment are in fact not true. Thus it is an attack, and a deciet.

You say re-read the What Fresh Hell Is This forum, "as it would save a certain amount of rehashing of ground that has already been well and truly gone over".
Exactly one of my points, Neo is rehashing old ground, not I.

I really would like an answer from you Jenny about the Andy Coulson question. Is it the rule that liars are protected or not?

 
Neotenic
751055.  Mon Oct 11, 2010 7:36 am Reply with quote

Quote:
Everything about that comment is dishonest. An honest and intelligent person is not expecting this sort of outburst to be deceitful. If you read the other thread, you will see that the underlying assumptions which must be held to be true from that comment are in fact not true. Thus it is an attack, and a deciet.


If that classes as an 'attack', then surely so does this;

Quote:
At best you are intellectually dishonest.


and this

Quote:
You put me in mind of an American (repeat the lie, repeat the lie), Republican (repeat the lie, repeat the lie), propagandist (repeat the lie, repeat the lie) liar.


and this

Quote:
you are in fact Quite Boring. Yes, Quite Boring. Quite Boring. Quite Boring. Quite Boring. Quite Boring. Quite Boring.


and this

Quote:
you are in a minority of the stupid or deliberately dishonest there.


So, how's about sucking it up like a big boy and playing nicely, hmm?

Perhaps one way to do that would be to show me the error of my ways with regard to how Northern Rock, RBS or HBOS - any of the three will do - came to require government assistance?

If I really am as stupid and dishonest as you make you, this should be a walk in the park, shouldn't it?

 
CB27
751076.  Mon Oct 11, 2010 8:48 am Reply with quote

Harry, no one's out to get you. You responded to a reply with a fairly personal one against another poster and that's prompted a comeback of sorts, but there was no need to be personal in the first place.

Sometimes people disagree on almost everything, sometimes it just some views, but the fact that Neo replied to two threads fairly quickly is more because he's fairly prolific and is more likely to answer before others do, not because of some personal vendetta against you.

How about starting over again, I actually think the bit you linked to in the OP is QI because it puts into perspective how large the debt really is if we compare to certain other numbers (in other words, we can replace the red bulb and lower the alert level). Your idea following that is your idea and opinion, so there are always going to be people who disagree with you (otherwise life would be boring) and you need to accept that as part of a debate.

 
busk31
751084.  Mon Oct 11, 2010 9:08 am Reply with quote

Prolific? He has more than 10.000 posts. He should either get paid or pay rent..

 
HarryAlffa
751087.  Mon Oct 11, 2010 9:22 am Reply with quote

CB27 - It's OK, I'm not paranoid! :)
I did realise that the prediction of conflict come true was not proof, I'm glad that someone was able to spot that - it was quite obvious after all - but it does lend weight. And the tone of Neo was the same, unpleasant from start to finish. Yes, I can see he is prolific.

The problem is naming ducks, if it walks ...

I don't think my comments were any more personal than Neo's "you think that anyone who dares disagree with you is an idiot" comment (and others) which is just not born out by anything I'd said.


I'm glad you think that the OP was QI. So did I!
It's been a kind of time-travel robbery - taxes for the next decade or more are effectively paying for the bonuses the bankers took. There's just no getting away from that. Even if you list other expenses.
A few poor people in the states not paying their mortgages should not have crashed the whole financial system. That only happened because the whole financial sector was taking the piss, and huge bonuses.

Some would have you believe that while "everyone" is to blame, you can't blame certain named financial institutions at all. I thought they would have greater awareness and expertise than "everyone", but evidently not!

If we take, "tough but fair" as our mantra ...
HarryAlffa wrote:
Tristram Hunt on This Week said (3min37secs) that a Bank of England report showed that if the banks had paid 20% less bonuses between 2000 - 2007, then the taxpayer would not have had to bail them out.

What do you think of the idea of reclaiming these bonuses? It must be fairly easy to look back at tax records to see who received this money.

I was thinking of 100% reclaim for years 2009 & 2008, then go back one year and drop 10%;
2007 - 90%
2006 - 80%
...
1998 - 10%

Sir Christopher Kelly decided to retrospectively change the rules, and charge the MPs for expenses they claimed.
I think an even stronger case can be made for the bonuses the bankers ripped off.

I've no idea what the totals would be for such an exercise, but it would scare the hell out of the bankers if it was only talked about.

Those who got huge bonuses should pay some of it back to the taxpayer. The apparent profitability was nothing of the kind, it was a Ponzi bubble.

I'd be interested in seeing the report Mr Hunt indicated, if anyone can find it. I emailed him at the time for a link, but got no reply.

 
Neotenic
751104.  Mon Oct 11, 2010 10:15 am Reply with quote

Quote:
I don't think my comments were any more personal than Neo's "you think that anyone who dares disagree with you is an idiot" comment (and others) which is just not born out by anything I'd said.


Other than explicitly calling me stupid, of course.

But anyhoo.

Quote:
Some would have you believe that while "everyone" is to blame, you can't blame certain named financial institutions at all.


Some people might, but not me.

I have been very clear to say that the banking industry must shoulder part of the blame - and that they have. But the blame is not theirs in it's entirety. All the other groups I mentioned previously have their parts to play, too - obviously, not all of them are equal, but they're all in the mix somewhere.

I don't think pointing fingers at any specific group and heaping all the shit up against their doors exclusively is particularly useful.

Not only that, but the banks that did get into difficulties had one mother of a purge during the crisis. Job security is a rare beast on the trading floors - I have a little difficulty in believing that the people who lost billions were the same people collecting bonuses when the markets picked up again, and not fresh blood.

But perhaps you have some evidence to disabuse me of that notion?

FWIW, I've also been over the BoE website looking for this 'latest report' that Hunt references. I can't find it either. I wouldn't be at all surprised if it didn't exist.

And I'm not sure about the basic premise either - It may work if one takes the total bonus payouts across the entire banking industry, but if we were looking to avoid any individual institution getting into difficulty, then we can only include the bonus payments made by that particular bank in the calculation.

So let's take RBS. here is their annual accounts for 2007.

They show that total staff costs (including bonuses) for their 233,600 staff was 7.5 billion pounds. It's on page 142 if you want to check.

The total government investment in RBS is 45 billion.

Pleasingly, that annual total salary bill is just under 19% of the total government investment. So 20% of just the bonuses would have been a drop in the ocean. This is especially the case when you see how much RBS' wages bill grew over the last couple of years - it was 6.7 billion in 2006, and just a smidge under 6 billion in 2005.

but then again, I'm stupid and dishonest - so perhaps someone can let me know where I'm going wrong?


Last edited by Neotenic on Mon Oct 11, 2010 10:21 am; edited 1 time in total

 
CB27
751106.  Mon Oct 11, 2010 10:21 am Reply with quote

Personally, I think everyone needs to take the blame, any bankers who actually took the risks knowing what they were (and I agree with neo that not all bankers are in the same boat, not even most), politicians around the world who allowed certain practices (like the bundling of debts), and the people who overstretched themselves by taking unaffordable mortgages for properties they were looking to make a profit on.

There's another event that's been overlooked, and that's the demutualisation fever that took hold a few short years ago, I think the understable greed of people, but the inexcusable misinformation by many of those involved at the time led to several institutions which weren't ready to take on the growth they took on.

 
PDR
751126.  Mon Oct 11, 2010 10:56 am Reply with quote

HarryAlffa wrote:
CB27 - It's OK, I'm not paranoid! :)
It's been a kind of time-travel robbery - taxes for the next decade or more are effectively paying for the bonuses the bankers took. There's just no getting away from that.


On a point of order - actually there is, because it's what lawyers technically refer to as "complete balderdash". The total amount paid in bonuses in the UK banking sector over the period 2006-2009 amounts to a few percent of the UK annual tax revenue. The amount dissappears in the noise - the treasury could put it on their corporate amex account an pay it off at the end of the month without worrying too much about it.

The thing the "taxes for the next decade or more" will actually be paying off is the rather large budget deficit which we as a country have run up over the last few years. This is a completely different, and seperate, issue. Unfortunately the tabloids can only focus on one thing at a time, so they combine the two when ranting, raving and dribbling at the mouth to sell papers and the less intellectually gifted of their readership swallow the resulting line without considering whether it sounds reasonable.

Quote:

A few poor people in the states not paying their mortgages should not have crashed the whole financial system.


This is true (meaning it is a statement of objectives with which I agree).

Quote:

That only happened because the whole financial sector was taking the piss, and huge bonuses.


This is not true - both as a matter of fact and as a statement of values. The ironic thing about the whole affair was that almost none of the much-cited "sub-prime" or "toxic" debt actually defaulted. Almost all of it comprised poor people who worked their collective asses off to pay their mortgages and prove their credibility. The collapse occured because for various reasons the lenders suddenly became aware of just how much risk they were carrying, and they bottled out (Neo will probably disagree with that - it's a deliberately simplistic and biased view). This sudden loss of *confidence* is what caused the collapse.

Finance is mostly about confidence, with a small bit that's based on real numbers. This sounds daft until you compare it to something real - look at insurance. People insure their houses against fire. ACME Insurance PLC might carry a potential liability for a million homes at 500,000 each*, for which they receive premium income of (say) 1Bn a year. At face value one billion income for a risk of five hundred billion sounds very low, but they have confidence that only (say) 0.1% of their customers will have a house fire each year. So the risk they are ACTUALLY carrying is only 1,000,000 * 0.1% * 300,000 per year - call it 300 million or so, giving an operating profit (or reserves) of 700 million per year. But if someone suddenly realised that 80% of their customers were smokers who had homes made of gun cotton then suddenly all confidence in this business model evaporates and the insurance market collapses. That's why building regulations were changed to p[rohibit gun-cotton-composite structures...

I digress. The point is that the bonuses had no material effect on the debt or the collapse as such. But the ever-pressing drive for expanding markets did. The drive for expanding markets came from the appetite for credit, low-cost credit and better returns on investments, and that came from THE PUBLIC.

Don't believe me, huh? OK, let's take one simple example. Look back over the last ten years and look at the home-finance websites, radio programemes, newspaper columns etc. Look at the shear number of "expert advice" coulumns/websites/programmes devoted to finding better mortgage and savings deals. The public made it VERY clear tha they would move their mortgage/savings for as little as 0.2% better interest rates. SO every lender/deposit-taker was under CONSTANT pressure to find ways to offer better headline rates - every month. Where do you think all those "0% on transfered balances" credit cards came from?

Oh, undoubtedly some people screwed up, others indulged in deliberate fraud, and others pushed the boundaries too far. But they weren't solely responsible - far from it.

"We have seen the enemy, and he is us"

PDR

*Because they're a southern company - ACME Insurance [Lancashire] PLC carries a liability for a million houses at 4.50 each and so has a simpler business model, although they'd assume a house fire rate of 60% per annum, naturally...

[/i]

 
Neotenic
751155.  Mon Oct 11, 2010 12:53 pm Reply with quote

Quote:
politicians around the world who allowed certain practices (like the bundling of debts),


It's probably worth pointing out that the entire mechanism for securitisation was concocted by the US Department of Housing and Urban Development, with the first being sold in 1970.

Quote:
There's another event that's been overlooked, and that's the demutualisation fever that took hold a few short years ago


I think this is particularly pertinent in the case of HBOS, given Halifax's demutualisation.

The fundamental problem Halifax had was not folks defaulting left, right or centre, but that it's share price stubbornly refused to stop sliding. This appeared to be driven by widespread rumours that it was in deep trouble and that evil-chaps-in-sharp-suits were short-selling the stock in vast quantities. Rumours that were subsequently proved to be poppycock.

But they did, ultimately become a self-fulfilling prophecy. But the only way that this is possible is if sell orders actually appear on the markets in greater volumes than buy orders. Supply. Demand.

I have an idle theory that part of the reason this was possible is because HBOS had, at the start of the crisis, the largest proportion of small shareholders of any firm in the FTSE 100 - largely inexperienced in finance and, for many, the only shares they own, having received them as windfalls from the demutualisation.

I think that it was, at least in part, these people keeping on selling their holdings at 'distressed' prices that allowed the price slide to continue.

As I've probably said before - I saw this myself when the markets re-opened in the immediate aftermath of 9/11 at half what they had been on 9/10. We did little that day except execute sale orders from customers. Within two weeks the market had recovered, and all those people that had sold in a panic had lost themselves half their money.

 
CB27
751185.  Mon Oct 11, 2010 2:52 pm Reply with quote

What happened between 9th October and 9th November? :)

 
PDR
751224.  Mon Oct 11, 2010 5:21 pm Reply with quote

A paradigm shift with a juddering clutch.

PDR

 

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