I hate banks

[Clkrichard]

Sorry that was meant for Dryce !
I dont actually disagree with everything you are saying but it is the UK government not allowing the banks to fail and it is the management of those banks who are incentivising out performance via bonuses - like every other business can do. I have been careful to highlight "out performance" . No one doing the job they are paid to do deserves a bonus. If you outlaw all bonuses then most UK workers in a sales environment will promptly starve and all performance related pay structures will crumble.
As for the conspiracy theorists who claim this is all some sort of plot that I am unable to recognise just show me the evidence and I will be the first to apologise !
I am not a banker but I am partly remunerated on performance so declare a vested interested in "bonuses" not being outlawed. It is up to me to generate the business that results in me being paid more so I guess that makes me a " talentless greedy barsteward". As far as I know I am none of those !
The self employed and business owners typically earn more the more successful they are ..... We really should have a mechanism to prevent that shouldnt we ?
Sorry but the British disease of trying to discourage success is very disappointing at times. As I have said on here before an English youth sees a guy driving an MB and thinks " he doesnt deserve that as I cant afford one so how can I vandalise it or steal it ". An American youth thinks " one day that will be me in one of those".
Anyway I am happy to live in a country where we can all have different views and can freely express then on open forums like this. Long may that continue and please dont be affronted guys if my views differ from yours ?

 

[Clkrichard]

Dryce my friend please tell me how to manufacture money and I will rush out and do just that ! Mind you if its that easy I suspect a lot of non banking clever people will be in our way in the stampede.
Investment bankers gamble with real money and for every winner there are losers.
Making a profit by winning your bet doesnt actually manufacure money it just moves it from A to B.
Oddly enough its exactly what the sales folk at your local MB dealership do albeit on a smaller scale.
Where the problem lies for many is that the gambling bankers are using your and my money to play with. But then we have the government not allowing us to directly lose when the bankers do so. Its always been like that as historically bankers over centuries have chosen where to utilise our money. Its a funny old world isnt it !

 

[Dryce]

Sorry but the British disease of trying to discourage success is very disappointing at times.

So we have this huge financial centre in the UK.

How much does it invest in the UK?

Well from personal experience the major investment interest in companies I have worked for or similar companies I know of is non-British.

If I was seeking equity investment in a small UK company with a good idea I'd bet it would be less than 50:50 that any significantly investment we'd raise would be UK sourced. (That's not to say that smaller investment amounts wouldn't be UK based - but the big stuff? As likely as not non-UK).

On other evidence? Well Jaguar-LR is now Indian. Our electricity and water infrastructure seems to be non-British owned these days. UK is quite a successful car manufacturer but it's non-UK companies operating the factories.

The government is trying to kick-start a nuclear energy programme? Any UK companies in the running? It's EDF that gets the mentions.

At the core of that 'British disease' is the financial and government culture.

 

[Dryce]

Investment bankers gamble

'Nuff said.

(Sorry for being so selective in the editing but it is exactly my point!)

 

[Dryce]

Its always been like that as historically bankers over centuries have chosen where to utilise our money. Its a funny old world isnt it !

Technically things are different than they have been historically.

There have been some interesting shifts over the decades and centuries.

• ability to move money without capital controls.
• floating / openly traded currencies
• ability to 'move' money by telegraph/telecoms and then electronically.
• trading systems - and then automated trading systems
• very fast trading / arbitrage
• overnight markets
• light regulation and fractional banking
• derivatives (not entirely new - but ever more variations)

There is a point where the financial sector has taken on a life of its own. Moved from acting a service to the economy to something that seems to exist in its own right and seems to overshadow everything else.

 

[Clkrichard]

Dryce I agree but bankers still decide where to utilise our money, its just the way they do that that has changed. The other change is the reduction in our manufacturing capability that has caused financial services to eclipse that sector. In an ideal world we would have equal measures of both.
I too worry about over concentration in " my " sector as the potential impact of negativity by the public, the press, the rest of the media, politicians, and Brussels could drive our past success away from this country with its consequential effect on the economy and thus all of us.
Like it or not the City is the jewel in our crown and is much envied by the Germans, French, Belgians, Americans and most others. We let it slip through our fingers at our peril and they are all keen to take it from us.

 

[Dryce]

Like it or not the City is the jewel in our crown and is much envied by the Germans, French, Belgians, Americans and most others. We let it slip through our fingers at our peril and they are all keen to take it from us.

Accepted wisdom in an economy that has been limping for years while German and US economies probably have greater underlying strength.

Maybe if the City hadn't become so dominant we'd be driving UK made premium cars and using UK branded smartphones and buyign our energy from British companies and fertting about our economy having to bail out weaker ones ....

I don't think the City is the jewel in the crown. It's a fat shiny heavy headpiece that looks good but possibly comes at a horrific net cost to UK PLC that is not fully understood. It seems to make its money while the rest of us are expected to carry the liability.

 

[Clkrichard]

Dryce the service sector contributes 77% of our GDP and financial services contribute most of that. I used the phrase "City" to refer to that but if you see a 77% contribution to the economy as being a burden then frankly I give up !
You seem determined to "diss" the financial services sector and no amount of logic or facts from me appears to be going to change that .......

 

[Palfrem]

I opened this thread with the bank taking money out of my account 24 hours before the date shown on my statement. Other money that normally goes IN on the 24th didn't arrive until today!

..other reasons I despise Financial Services

Endowment Mortgages
Equitable Life fiasco
Pension fund pot "value" vs Transfer value
1.75% interest on my money vs 8.9% if I want a loan
The endless bloody security questions when I phone them with just a simple question
The green-wash of "why not do away with paper statements?"
The way loyal customers get ripped off on insurance renewals, etc. unless they constantly compare the market
PPI
LIBOR integrity


...pass me a dried frog pill someone

 

[Clkrichard]

No such thing as an "endowment mortgage" its " an interest only loan".
An endowment policy is one of the vehicles chosen to repay such a loan.
Which do you have a problem with ? Paying interest on a loan or having a savings and insurance plan to repay it at maturity or on premature death ?
I dont really care much about knee jerk criticism I just wish it was informed .....

 

[Palfrem]

No such thing as an "endowment mortgage" its " an interest only loan".
An endowment policy is one of the vehicles chosen to repay such a loan.
Which do you have a problem with ? Paying interest on a loan or having a savings and insurance plan to repay it at maturity or on premature death ?
I dont really care much about knee jerk criticism I just wish it was informed .....

BBC News - Endowment mortgages: Legacy of a scandal

Ours didn't mature with enough funds to repay the loan

 

[Clkrichard]

Just because the media, including the BBC use incorrect terminology doesnt change the fact that its an interest only loan. According to that article the borrower doesnt know if her endowment policy will or wont cover the outstanding debt. I wonder why ? It wouldnt be much of an article if it would now would it ?
The borrower will have received annual statements of the progress of the plan and would have known whether or not it was on track. If it wasnt did she contribute more or reduce the debt ? Sounds like she reduced the debt.
Now for my favourite hobby horse which is a real killer at dinner parties !
People sign up to the cost of servicing a debt like this knowing the monthly cost. Then they celebrate when interest rates go down and the cost of that to them reduces. Do they use the surplus to reduce the debt or increase their savings . Do they heck ! Does it occur to them that the growth on the savings vehicle might also go down as the market deflates ? Nope ! Do they take advice on the investment each year from a qualified adviser ? Nope ! Do they complain after decades of irresponsible complacency and neglect of an important part of their finances ? You bet! Does the media seize on this and report only on the fact that stock market performance goes up and down and growth is now expected to be less than was predicted 25 years ago . Yep !
Sorry mate but its just more ill informed media hype ....

 

[mika]

i still dont like banks
think i'll put it under the mattress until the safe is built

 

[Clkrichard]

Mika thats probably the most sensible comment on here !
If people hate banks why do they use them ?
I hate clubs, or soccer matches, or opera so I go to none of them .....
We all have freedom of choice

 

[mika]

Clkrichard

im not that sensible
but it is a major frustration to be pursued by banks the moment they get a whiff of some savings with " you really ought to put that somewhere where it can work for you "

erm yes at palfrems 1.75% (if we are lucky ) and with restricted access

hence the comment about the safe

its secure, you can get at it when ever you want ( key or code permitting )
and the interest you dont collect is next to nothing anyway

the other thing thats mildly amusing is the offer of financial advice at every other lampost

i think we should be giving the financial advice ...like get your interest rates sorted out....(and breathe)

 

[Clkrichard]

The stats on the number of complaints to the FSA about bank advice versus IFA advice make interesting reading ! Needless to say the bank numbers are a multiple if the IFA figure. They are confined to the products of their employing bank, often poorly trained, and too target driven to give truly unbiased advice.
Savings rate comparisons are freely available on the net so you dont really need a bank adviser to tell you where to invest cash.

 

[Dryce]

Dryce the service sector contributes 77% of our GDP and financial services contribute most of that. I used the phrase "City" to refer to that but if you see a 77% contribution to the economy as being a burden then frankly I give up !
You seem determined to "diss" the financial services sector and no amount of logic or facts from me appears to be going to change that .......

I don't perceive 'the City' to be general services but financial services. The 'service sector' as such is much more widely based than just London and encompasses a lot more than just finance.

The problem I have with the financial sector is not finance either. Finance is critically important to the economy as a whole. The problem with the UK financial sector - focused on London and the City - is that it doesn't actually serve the wider economy but has taken on a life of its own.

Ovcer the 90s and into the 2000's the sector was indulged. Massive profits were genearted and taxed. Nobody seemed to ask the fundamental question as to how you can generate so much 'profit' and business from a tertiary industry. By itself the finance sector produces nothing. It's an enabler. But what we have seen is that it appears to produce more than the primary sectors of the economy. How can that possibly be unless there is some strange invention going on? And that's down to public delusion combined with asset and propert valuations combined with fractional banking combined with derivatives.

I'm just a simple engineer. I like to understand the substance of things. It disturbs me that I can discern so little substance in the banks and related financial sector - and yet the numbers of £££ or $$$ swilling appears so huge.

Where's the beef?

 

[Dryce]

Savings rate comparisons are freely available on the net so you dont really need a bank adviser to tell you where to invest cash.

But the retail banks insist on only providing access to some products via their own advisers. They won't do the business over the counter - you have to 'speak with an advisor'. Somewhat irritating.

 

[Clkrichard]

Dryce I think we probably do now need to agree to disagree as I am not here to fall out with anyone. That the financial services sector contributes the major portion of the 77% that the services sector contributes to GDP suggests to me that they do help the wider economy. I think what you are saying is that their activity doesnt necessarily directly involve UK businesses and that is true. The same accusation can be leveled however at the FTSE 100 companies all of whom are multinational in their operation. If they generate revenue for UK plc I am not about to tell them to become insular in their business activities if that reduces their contribution to the national pot.
I suspect you are far from simple and I have huge respect for engineers. I envy that you make or design things and can look at a tangible product at the end of the process. Thats something we money guys cant do !

 

[Scott_F]

Mika thats probably the most sensible comment on here !
If people hate banks why do they use them ?
I hate clubs, or soccer matches, or opera so I go to none of them .....
We all have freedom of choice

They use them because:

1. Employers no longer pay by cash or cheque
2. Utility providers charge you more if you don't pay by direct debit
3. Your council bullies you into paying your Council Tax in the same way
4. You have no chance of accessing any sort of credit without one
5. More and more state benefits require a bank account rather than being paid in cash

And a whole host of other reasons................