Ducati Sporting Club UK
Idle Chat
Still needs to be clean and of value to the club.
 
 
Thread Tools Display Modes
  #1  
Old 14-Feb-2009, 18:12
Paul James's Avatar
DSC Member Paul James Paul James is offline
Founder Member
Ducati Meccanica
 
Posts: 2,994
Join Date: May 2001
Seriously uncomfortable questions!!!

I guess quite a few of you have been following the fortunes of various global economies and asking how our answers here in the UK shape up in comparison with other countries. I know I have as I'm seriously concerned about the effects this depression is going to have not just on us now but on the generations to come who have the backwash of this tragedy to pay off.

So a few questions that it would be interesting to hear your comments on:

Why, given that people in the street were expressing concerns over the ludicrous extension of all forms of credit from years back didn't the government foresee this inevitable crash?

If as they keep suggesting there was no way that they could have forseen it doesn't it present the frightening prospect that the government is totally economically inept?

Why were the banks allowed to go unregulated for so long? Will it not now be essential to regulate how they function in the future?

Why were £billions thrown recklessly at the banks, particularly RBS which we now own around 70% of without any insistence on executive powers being given?

Is it right given how RBS has been funded that its employees are being given £billions in bonuses? Admitedly there are some contractual considerations but in these unprecedented circumstances, where regulation can be relaxed to allow the tragic merger of 2 banks against current legislation can't/shouldn't those contracts be revised?

How much further do you believe the banks will need to be baled out using our money?

Is the horrendous credit situation entirely the fault of the banks for encouraging the lending or does blame in part fall on those who took on the credit knowing in all honesty that they could never pay it back?

How will rapidly declining numbers of people in work be able to fund the welfare state to cater for those not working? Without increasing taxes is this possible? If increasing taxes on the higher earners does that encourage them to be innovative and earn more just to pay it all back in tax?

Is the concept of established businesses relying heavilly on credit to be able to function fundamentally flawed?

Is it fair that those who have lived responsibly and invested hard earned savings are getting such poor levels of interest having played no part in the financial meltdown?

Does anyone believe that the £50,000 government guarantee on your bank deposit is likely to be viable should a bank go pop?

How do we justify forcing the banks to start lending again when irresponsible lending/borrowing has been the root cause of our situation? Doesn't it potentially just restart the same cycle?

Do you believe that this will be the biggest financial depression in history?

How can we encourage people, particularly the younger generations, to return to a savings ethos rather than a massively credit based one? Isn't it imperative that this happens?

What will the true unemployment figure be at the trough of this depression? Is 3 million a conservative estimate? Should we include in the figures people who are in further education on courses that will never fit them for wark afterwards?

Is it right in the current employment crisis that a contract for new railway equipment went to a Japanese company rather than being used to protect jobs and cashflow in the UK by using a UK contractor?

Just a few of many, so what do you think? What other issues concern you in these worrying times?

Paul


http://www.multirole-eng.com

http://www.audicator.com Check out our simple to fit, potentially life saving turn signal alert system.
Quote+Reply
  #2  
Old 14-Feb-2009, 18:40
Dementor's Avatar
DSC Region Organiser Dementor Dementor is offline
Ducati in my Blood
Bikes: 848 Evo Corse SE, Evoluzione 2 ....
 
Posts: 4,073
Join Date: Sep 2004
Mood: Dementor hunted by Foggy :)
Quote:
Originally Posted by Paul James
Does anyone believe that the £50,000 government guarantee on your bank deposit is likely to be viable should a bank go pop?


Will be for me, spent all mine on the 848


Hants - Meet Popham Airfield every 2nd Sunday of the Month @ 1pm

Ducati Snells of Alton : >>
848 Corse SE Evoluzione 2 : >>
Dementor Site :>>
Sponsor of DD Riders
Quote+Reply
  #3  
Old 14-Feb-2009, 19:07
YMFB's Avatar
YMFB YMFB is offline
Registered Forum User
Ducati Meccanica
Bikes: R1200RT F800GS. Hopefully another Ducati soon
 
Posts: 2,526
Join Date: Apr 2005
Im ok I have mine in HBOS/Lloyds surely Brown wont let them go bust now !!
Quote+Reply
  #4  
Old 14-Feb-2009, 19:09
Fordie's Avatar
Fordie Fordie is offline
Regional Organiser - BHCN
Ducati Corse
 
Posts: 3,276
Join Date: Aug 2001
Mood: Raring to Ride
Interesting points Paul. In one word that will answer most points GREED
One thing my father taught me was, it you cannot afford it you dont have it. I have no debts and what I have is mine. Its all so easy to to have what you can afford Buy now pay later get in as much debt as you can a Live today Die Tommorrow attitude.
I hope to think that the new youth of today will take heed of events that have unfolded and like the drink driver scoured upon for there stupidity and selfish behaviour.
What we need is a Goverment with a bit of backbone and start to get to grips with the true state of this country. Sure we should have British jobs for British workers but many British workers are working in the EU now ?
Does it really pay to have money and savings in this country it seems the less you have the more you get.
Nationalize the banks and the railways. Ban the word profit and put shareholders down the mines and see them earn a living, not make it on the sweat of other. Dont pay Dole money out unless its earned and stop paying Scroungers from outside Britain or only those with a NI number and have at least contributed some thing.
As you say its going to get worse before it gets better and only the MT ooops sorry Goverment with a big stick will get us out of it,but then all we will hear is the do gooders and Human Rights brigade bleating
You can't win Ill just get back under me rock 4D
Quote+Reply
  #5  
Old 14-Feb-2009, 20:10
Tonio600's Avatar
Tonio600 Tonio600 is offline
Registered Forum User
Ducati in my Blood
 
Posts: 4,379
Join Date: Dec 2004
Mood: What a wonderful world.
As Fordie says. If you can't afford it, don't buy. The good thing is that you will not be any sadder without it.
Quote+Reply
  #6  
Old 14-Feb-2009, 20:38
Scooter916's Avatar
Scooter916 Scooter916 is offline
Registered Forum User
Big Twin
 
Posts: 1,291
Join Date: Feb 2005
Mood: Hmmm Conference season
Quote:
Originally Posted by Paul James
Is the concept of established businesses relying heavilly on credit to be able to function fundamentally flawed?
Paul


I Asked my bank manager this very question last week, Like most small Companies We have this thing called Profit, We put it into a bank to-
A. Buy new stock to make even more Profit
B, Save it for a period when times are a little more difficult.
C, Pay ourselves a wage.
Apparently the companies that rely on Credit to Operate have this the wrong way around, and the Likes Of RBS are quite happy to let them do it....
I'm Glad Im with Barclays.
Quote+Reply
  #7  
Old 14-Feb-2009, 21:08
bradders's Avatar
bradders bradders is offline
Registered Forum User
MotoGP God
Bikes: 848, M620 DD bike
 
Posts: 11,913
Join Date: Aug 2003
Mood: waiting...
private equity is far worse
Quote+Reply
  #8  
Old 14-Feb-2009, 21:39
Gilps's Avatar
Gilps Gilps is offline
Registered Forum User
888 at Last !!!
 
Posts: 967
Join Date: Aug 2006
Mood: Glad to be here
Quote:
Originally Posted by Paul James
I guess quite a few of you have been following the fortunes of various global economies and asking how our answers here in the UK shape up in comparison with other countries. I know I have as I'm seriously concerned about the effects this depression is going to have not just on us now but on the generations to come who have the backwash of this tragedy to pay off.

So a few questions that it would be interesting to hear your comments on:

Why, given that people in the street were expressing concerns over the ludicrous extension of all forms of credit from years back didn't the government foresee this inevitable crash?
Because Gordon Brown didn't want to scare of the wealthy investors. They've been pulling his strings for years and he's been scared stiff of them taking their money abroad. The tax incentives given to the mega rich over the past few years are disgraceful.

Quote:
Originally Posted by Paul James
If as they keep suggesting there was no way that they could have forseen it doesn't it present the frightening prospect that the government is totally economically inept?

Totally. Whilst much of this crisis is global, much of GB's policies have led to the problems being worsened for the UK.

Quote:
Originally Posted by Paul James
Why were the banks allowed to go unregulated for so long? Will it not now be essential to regulate how they function in the future?
They've gone unregulated becuase of the huge sums of money they were playing with. GB has seen private equity investment as being the cornerstone of UK growth and hasn't wanted to do anything to cause that investment to go elsewhere. Now that the bubble has burst I think he'll have no choice but to introduce regulation.

Quote:
Originally Posted by Paul James
Why were £billions thrown recklessly at the banks, particularly RBS which we now own around 70% of without any insistence on executive powers being given?
I reckon history will prove this to have been a disastrous mistake. It was an ill-thought out knee jerk reaction. GB missed a golden opportunity to force the financial institutions to fall in line. It became apparent when the BoE reduced interest rates by 1.5% and Darling had to summon the heads of the banks to Downing Street to ask them nicely to drop the mortgage rates. It was all spin. Has he done it since following further rate cuts? No he hasn't because they'll tell him to sod off. A few have dropped a bit but not one of them has passed on all the reductions, especially Northern Rock who we apparently own in entirety.

Quote:
Originally Posted by Paul James
How much further do you believe the banks will need to be baled out using our money?
Quite a bit I reckon. I don't think the full scale of the problem has been identified yet. The banks are blaming the problems on lending to the home owners but the real problem lies with the billions that were lent recklessly to the private equity markets, and as share prices collapse and companies go to the wall, the banks' exposure could be massive.

Quote:
Originally Posted by Paul James
Is the horrendous credit situation entirely the fault of the banks for encouraging the lending or does blame in part fall on those who took on the credit knowing in all honesty that they could never pay it back?
I think that the banks' problems are down entirely to the banks. They've got involved in areas they didn't understand, they've packaged and marketed dodgy loans as securities, and then conned themselves by passing these toxic securities around as investments. They've got so wrapped up in making ludicrous amounts of money that they've lost sight of reality. Nobody forced the banks to lend the money.

Quote:
Originally Posted by Paul James
Is the concept of established businesses relying heavily on credit to be able to function fundamentally flawed?
Yes and no. Before Christmas my company needed to extend it's overdraft. Not because I had managed anything badly but because a couple of customers fell behind settling invoices. The amount owed amounted to over £30k. This was over and above our normal £60k of trade debt. Without I could not pay suppliers and could not continue trading. The bank didn't have to extend their lending to me, it was their choice. They chose not to. If they had then we could have traded through the problem.

Quote:
Originally Posted by Paul James
Is it fair that those who have lived responsibly and invested hard earned savings are getting such poor levels of interest having played no part in the financial meltdown?

To answer this then you need to remember how banks make their money. They earn interest from LENDING money to borrowers, charged as interest. To get the money to lend out, they have to get investors to lend it to them. The only way they can do that is by paying them interest, which they do at a lower rate than they lend it out. The difference is the profit. Ultimately they don't really care what the interest rate is as long as the difference between the lending and borrowing rates remain the same. They still make the same amount of profit if the gap remains at 2% if the rates go up or down.
And that's banking in it's simplest form. The problems for the banks have not come from the high street activities of borrowing to lend, but form the greedy investment parts of the banks to earn a fast buck.

Quote:
Originally Posted by Paul James
How do we justify forcing the banks to start lending again when irresponsible lending/borrowing has been the root cause of our situation? Doesn't it potentially just restart the same cycle?
It wasn't lending to UK mortgages that has been the root of the problem, but the lack of lending to mortgage borrowers is now impacting the UK economy.

Quote:
Originally Posted by Paul James
Do you believe that this will be the biggest financial depression in history?
Yes

Quote:
Originally Posted by Paul James
How can we encourage people, particularly the younger generations, to return to a savings ethos rather than a massively credit based one? Isn't it imperative that this happens?
I don't think so. As long as the loan and the interest gets repaid then what's the problem. A mortgage is just a secured extended loan. We don't tell people to save for 18 years before buying their first home.

Quote:
Originally Posted by Paul James
What will the true unemployment figure be at the trough of this depression? Is 3 million a conservative estimate? Should we include in the figures people who are in further education on courses that will never fit them for wark afterwards?
A few months ago I forecast 2 million for then end of 2008. I was right. I can easily see this getting to 3 million by the end of this year.

Quote:
Originally Posted by Paul James
Is it right in the current employment crisis that a contract for new railway equipment went to a Japanese company rather than being used to protect jobs and cashflow in the UK by using a UK contractor?
UK contractors were invited to tender for the contract. The Japanese bid was more attractive. We have to accept that we now operate in a global economy.


I try hard not to just blindly accept what is put out on the news and in the press. I think after all this is over and the post mortem is carried out, it will not be as cut and dried as it appears at the moment. I really do hope that all the facts come out and that those responsible for this mess are held to account, although I somehow doubt it.
Quote+Reply
  #9  
Old 14-Feb-2009, 22:16
PeteB's Avatar
PeteB PeteB is offline
Registered Forum User
GTL
 
Posts: 403
Join Date: Jun 2001
Mood: ten, nine, eight oh bu**er lets go!
In short, no one wants to ***** a bubble! be they politicians, bankers, brokers, financial pundits et al, one pricked however, the media have done a fine job in re-inforcing the financial and mental depression of the nation!
Quote+Reply
  #10  
Old 14-Feb-2009, 22:19
bradders's Avatar
bradders bradders is offline
Registered Forum User
MotoGP God
Bikes: 848, M620 DD bike
 
Posts: 11,913
Join Date: Aug 2003
Mood: waiting...
Quote:
Originally Posted by PeteB
In short, no one wants to ***** a bubble! be they politicians, bankers, brokers, financial pundits et al, one pricked however, the media have done a fine job in re-inforcing the financial and mental depression of the nation!

oh for the days of quill, chalk and slate board eh pete
Quote+Reply
Reply
  
Thread Tools
Display Modes
Postbit Selector
Switch to Vertical postbit Use Vertical Postbit

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

vB code is On
Smilies are On
[IMG] code is On
HTML code is Off

Recent Posts - Contact Us - DSC Home - Archive - Top
Powered by vBulletin 3.5.4 - Copyright © 2000 - 2024, Jelsoft Enterprises Ltd. - © Ducati Sporting Club UK - All times are GMT +1. The time now is 12:06.