Tuesday, 29 April 2008

Burn Baby Burn

News of a second bank in as many weeks running around with it's head up its own backside in panic as the Halifax Bank of Scotland goes off to round up £4b to keep it afloat. Last week it was the Royal Bank of Scotland going cap in hand to its investors to ask for £12b.
Things seem to be going from bad to worse for the money lenders and my initial cackling of "burn you bastards, burn" was on reflection a tad hasty.
Everyone who has ever been charged £35 for a letter to tell you that you have overdrawn on your overdraft or have had to pay at a cashpoint machine to withdraw your own money may be rejoicing also at the thought of their bank undergoing some karmic style financial suffering.
I would like to see the banking system collapse into some unpredictable bloody carnage as much as the next person who has spent far too many lunchtimes queuing and listening to god-awful bank music but of course, if the banks do fail it will not be the top people who will suffer. They will be OK.
There does seem to be a rumour that if your bank goes to the wall your mortgage, loan or debit card debt will be written off which of course is not true. It will just be taken over by another lender and the only difference you will see is another name at the top of your letters.
With only the first £31,000 of your savings guaranteed, anyone with savings over that amount could well be downsizing that retirement dream home in Spain to a one bedroom flat in Grimsby.
Yes, we want to see the banks and their pompous little managers getting a good old kicking in the goolies for how they have treated us and i have no sympathy for them so if you hear news that the place that you bank with is in trouble, you are OK if you have under £31,000 in your account. Alternatively, you can withdraw your money and start a run on the bank and really make it sweat because they have not the slightest compunction in looking out for number one and they would hang you out to dry in a second so don't feel sorry for the snivelling little swindlers.
Serves them right but remember the redundancies will be from the lower order, not the big earners who made such a hash of the situation in the first place.

12 comments:

Noah "Nog" M. said...

Lucy,
I could go into a long one on how interest rates and banks and government credit cycles (a.k.a. business cycles) are caused by government control of the money supply, currency, and banking and credit industries.

I could also go into a long tirade on how over history governments have always taken over banking and monetary systems in times of war to run up debts without getting into trouble. I'm actually better read on the history of the British monetary situation than the American monetary situation, primarily because of the many excellent British writers on the subjects of history and economics. To give but the briefest snippet, the Bank of England was a private company until a time of war and the Bank of England first refused to redeem sterling notes during the Napoleonic Wars because they didn't have the silver to back it, because they had spent it all (causing lots of inflation and market instability).

In any case, failing banks will fall (or something else larger in their place) whether or not governments try to prop them up. The "poor debtors" argument is used here in the States as well. I'm rather impressed that many folks, like you it seems, aren't falling for it.

Trying to prop the banks up would go down sort of like Michael Jackson's face. All of the money and surgery in the world hasn't been able to make Michael's face sensible and all of the money in the world isn't going to make him immortal unless you count plugging needles into a pitiful faceless vegetable at $40,000 a day as life.

-Nog

Anonymous said...

Lucy,

So, you're saying "banks suck"... right?

Are you just grumbling or are you suggesting that it would be better if the government ran all the banks?

On another blog you said you were liberal. I thought liberal and government were mutually exclusive...

Q

Lucy said...

I don't recall ever labelling myself as a liberal Q. I have called myself a hippy a few times though.
I am saying that after years of being bullied by banks, there are many people revelling in their present financial discomfort.

effay said...

http://www.newstex.com/products/search.php?search=Falling+on+a+Bruise

Don't know if you're responsible for the description or not, but...

effay said...

Never mind that last comment, I guess "left wing" and "liberal" are different.

Cheezy said...

"I guess "left wing" and "liberal" are different."

In the US I gather that 'liberal' and 'left wing' are often used synonymously. But that's certainly not the case here, where they refer to two very distinct philosophies. Indeed a 'market liberal' is in many ways the opposite of a traditional left winger.

effay said...

Ya, I had a little mind lapse there for a sec.

Noah "Nog" M. said...

I'll swear, political terminology gets so ambiguous at times. To clear this stuff up, there awt'ta be a law...

Anonymous said...

Lucy/Cheese,

By liberal I meant someone who supports freedom and human rights.

Q

Lucy said...

US and British English leads to many confusions. As i said on Nogs blog, keep it to left wing and right wing, so much simplier.

Dismal Soyanz said...

I am always surprsied by how un-user friendly the UK banking system is. I've not been to the UK for around a decade now but from what I hear, it isn't much improved.

Us Kiwis have it pretty good. By international standards we are overbanked and service is pretty good compared to that I've experienced in other countries. I reckon we still outdo the Aussies in that department - and they own the vast majority of our banks!

Not to say tat there isn't room for improvement but I empathise with those who have to put up with the crap service in the UK, knowing that much better levels of service are quite possible to achieve.

Cheezy said...

"I've not been to the UK for around a decade now but from what I hear, it isn't much improved."

I was in the UK in 1993/94 and I thought that my bank (Midland) was absolutely woeful. Coming back 10 years later - both as a customer and as someone whose job involves working with some of the major banks - I've found that they're much, much better now.

New Zealand banks have often been a bit of a guinea pig for new technologies and methodologies, so they've frequently been ahead of the game in many respects. But I'd put the HSBC (for e.g.) internet banking system up against anything else I've seen, in terms of functionality and ease of use.