Best of the Week
Most Popular
1. TESLA! Cathy Wood ARK Funds Bubble BURSTS! - 12th May 21
2.Stock Market Entering Early Summer Correction Trend Forecast - 10th May 21
3.GOLD GDX, HUI Stocks - Will Paradise Turn into a Dystopia? - 11th May 21
4.Crypto Bubble Bursts! Nicehash Suspends Coinbase Withdrawals, Bitcoin, Ethereum Bear Market Begins - 16th May 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.Cathy Wood Ark Invest Funds Bubble BURSTS! ARKK, ARKG, Tesla Entering Severe Bear Market - 13th May 21
7.Stock Market - Should You Be In Cash Right Now? - 17th May 21
8.Gold to Benefit from Mounting US Debt Pile - 14th May 21
9.Coronavius Covid-19 in Italy in August 2019! - 13th May 21
10.How to Invest in HIGH RISK Tech Stocks for 2021 and Beyond - Part 2 of 2 - 18th May 21
Last 7 days
USDT is 9-11 for Central Banks the Bitcoin Black Swan - Tether Un-Stable Coin Ponzi Schemes! - 30th Jul 21
Behavior of Inflation and US Treasury Bond Yields Seems… Contradictory - 30th Jul 21
Gold and Silver Precious Metals Technical Analysis - 30th Jul 21
The Inadvertent Debt/Inflation Trap – Is It Time for the Stock Market To Face The Music? - 30th Jul 21
Fed Stocks Nothingburger, Dollar Lower, Focus on GDP, PCE - 30th Jul 21
Reverse REPO Market Brewing Financial Crisis Black Swan Danger - 29th Jul 21
Next Time You See "4 Times as Many Stock Market Bulls as There Are Bears," Remember This - 29th Jul 21
USDX: More Sideways Trading Ahead? - 29th Jul 21
WEALTH INEQUALITY WASN'T BY HAPPENSTANCE! - 29th Jul 21
Waiting On Silver - 29th Jul 21
Showdown: Paper vs. Physical Markets - 29th Jul 21
New set of Priorities needed for Unstoppable Global Warming - 29th Jul 21
The US Dollar is the Driver of the Gold & Silver Sectors - 28th Jul 21
Fed: Murderer of Markets and the Middle Class - 28th Jul 21
Gold And Silver – Which Will Have An Explosive Price Rally And Which Will Have A Sustained One? - 28th Jul 21
I Guess The Stock Market Does Not Fear Covid - So Should You? - 28th Jul 21
Eight Do’s and Don’ts For Options Traders - 28th Jul 21
Chasing Value in Unloved by Markets Small Cap Biotech Stocks for the Long-run - 27th Jul 21
Inflation Pressures Persist Despite Biden Propaganda - 27th Jul 21
Gold Investors Wavering - 27th Jul 21
Bogdance - How Binance Scams Futures Traders With Fake Bitcoin Prices to Run Limits and Margin Calls - 27th Jul 21
SPX Going for the Major Stock Market Top? - 27th Jul 21
What Is HND and How It Will Help Your Career Growth? - 27th Jul 21
5 Mobile Apps Day Traders Should Know About - 27th Jul 21
Global Stock Market Investing: Here's the Message of Consumer "Overconfidence" - 25th Jul 21
Gold’s Behavior in Various Parallel Inflation Universes - 25th Jul 21
Indian Delta Variant INFECTED! How infectious, Deadly, Do Vaccines Work? Avoid the PCR Test? - 25th Jul 21
Bitcoin Stock to Flow Model to Infinity and Beyond Price Forecasts - 25th Jul 21
Bitcoin Black Swan - GOOGLE! - 24th Jul 21
Stock Market Stalling Signs? Taking a Look Under the Hood of US Equities - 24th Jul 21
Biden’s Dangerous Inflation Denials - 24th Jul 21
How does CFD trading work - 24th Jul 21
Junior Gold Miners: New Yearly Lows! Will We See a Further Drop? - 23rd Jul 21
Best Forex Strategy for Consistent Profits - 23rd Jul 21
Popular Forex Brokers That You Might Want to Check Out - 22nd Jul 21
Bitcoin Black Swan - Will Crypto Currencies Get Banned? - 22nd Jul 21
Bitcoin Price Enters Stage #4 Excess Phase Peak Breakdown – Where To Next? - 22nd Jul 21
Powell Gave Congress Dovish Signs. Will It Help Gold Price? - 22nd Jul 21
What’s Next For Gold Is Always About The US Dollar - 22nd Jul 21
URGENT! ALL Windows 10 Users Must Do this NOW! Windows Image Backup Before it is Too Late! - 22nd Jul 21
Bitcoin Price CRASH, How to SELL BTC at $40k! Real Analysis vs Shill Coin Pumper's and Clueless Newbs - 21st Jul 21
Emotional Stock Traders React To Recent Market Rotation – Are You Ready For What’s Next? - 21st Jul 21
Killing Driveway Weeds FAST with a Pressure Washer - 8 months Later - Did it work?- Block Paving Weeds - 21st Jul 21
Post-Covid Stimulus Payouts & The US Fed Push Global Investors Deeper Into US Value Bubble - 21st Jul 21
What is Social Trading - 21st Jul 21
Would Transparency Help Crypto? - 21st Jul 21
AI Predicts US Tech Stocks Price Valuations Three Years Ahead (ASVF) - 20th Jul 21
Gold Asks: Has Inflation Already Peaked? - 20th Jul 21
FREE PASS to Analysis and Trend forecasts of 50+ Global Markets by Elliott Wave International - 20th Jul 21
Nissan to Create 1000s of jobs with electric vehicle investment in UK - 20th Jul 21

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Bailed-out Big Bank's Bonuses Publicity Stunt Ahead of General Election

ElectionOracle / UK General Election Sep 30, 2009 - 12:46 PM GMT

By: Nadeem_Walayat

ElectionOracle

Best Financial Markets Analysis ArticleBritain's top 5 bankster's finally agree to abide by an FSA request earlier in the year for strict rules to apply to the payment of bonuses for 2009.


The rules belatedly hope to address the key cause of the credit crisis, namely bank officers banking billions in bonuses on non existant profits that left the banks they worked for hollow shells carrying huge liabilities that have subsequently sparked Britain's Great Depression and led to some £1.5 trillion of liabilities being dumped onto the tax payers that is expected to result in a real loss of £500 billion and has put Britain onto the path to bankruptcy in addition to the public sector deficit spending of £600 billion over 3 years in the lead up to the next election on which the country will have to pay interest which worsens the fiscal situation during each subsequent year hence the risk of an out of control debt spiral with associated risk to sterling.

Therefore we are looking at £600 billion of deficit spending PLUS £500 billion of bankrupt bank losses leading to a near tripling of Britians debt towards 120% of GDP, whilst total liabilities project to more than 350% of GDP.

Meanwhile the too little too late FSA rules are for bonuses to be paid in installments over 3 years with a provision to claw back awards if the bank performance suffers. Its not surprising that the banks are returning back to profit given the fact that every UK Tax Payer is subsidising them to the tune of £42,000 each!

Earlier in the week the Governor of the Bank of England, Mervyn King had called in ivory tower academic economists to discuss why Quantitative Easing of £175 billion had failed to work, despite the fact that it was the theoretical models that the governments and central banks relied on that led to the crisis on the first place, but still are yet again called on for answers to a crisis they never saw coming.

Though the answer is obvious to all but the academic economists, the reason why Quantitative Easing is failing to work because the bailed out bankrupt banks are have no incentive to lend the money out under the current artificial banking system as a consequence of tax payer bailouts. The bankster abuse of tax payer funds is not just limited to sitting on cash as when they do lend money it is far in excess of the interbank rate of 0.57%. In reality the real interest rate should vary between interbank rate plus 0.5% to 1%, depending on the customers credit rating. However the actual amount being charged to customers on the standard variable rates ranges from interbank rate PLUS 3% to 5%, far beyond that of how a competitive banking system operates as the below graph illustrates.

The UK Government, Bank of England, FSA and UK Treasury have a lot to answer for they have created a market for credit that in effect lets the banks systemically rob the tax payers and borrowers by charging interest rates that have no bearing on any conceivable normal banking market when one compares the rates charged against the rates borrowed at. It would have been far better for the banks to have been allowed to go bankrupt, restructured and then refloated as retail banks with a mandate to service retail customers without access to the interbank market, instead relying on customer deposits for funds. Instead the banks are operating on a business as usual basis with a view to maximising profits at both tax payer and borrower expense so as to enable huge bonuses to be paid out.

The Governor of the Bank of England, Mervyn King stepped out of this ivory tower recently to announce that he is not happy with the Bankster's for sitting on tax payer cash, which is a case of confirming that the authorities continue to have rings run around them by the bankster's.

“It is certainly true that it would be useful to think about ways to encourage banks individually to try to convert some of their reserves which would then reinforce the transmission mechanism of the direct assets purchases that we make.”

What this means is to force the banks to lend money out i.e. to take risks, the Bank of England may implement NEGATIVE interest rates for monies deposited as excess reserves at the BOE. Make no mistake about it, negative nominal interest rates would be a PANIC measure and be immediately reflected in a sharp drop in sterling.

However, the only option available to the British people to respond is to punish the inept, incompetent Labour government at the next general election for creating such a condition that allows the Bankster's to continue to rob the tax payers whilst the regulatory institutions drift from one panic measure to the next, all the while the unemployment count continues to rise as businesses are forced by the banks to go bust due to withdrawal of credit facilities.

Subscribe to my always free newsletter to receive my latest in depth analysis in your email box.

By Nadeem Walayat
http://www.marketoracle.co.uk

Copyright © 2005-09 Marketoracle.co.uk (Market Oracle Ltd). All rights reserved.

Nadeem Walayat has over 20 years experience of trading derivatives, portfolio management and analysing the financial markets, including one of few who both anticipated and Beat the 1987 Crash. Nadeem's forward looking analysis specialises on the housing market and interest rates. Nadeem is the Editor of The Market Oracle, a FREE Daily Financial Markets Analysis & Forecasting online publication. We present in-depth analysis from over 300 experienced analysts on a range of views of the probable direction of the financial markets. Thus enabling our readers to arrive at an informed opinion on future market direction. http://www.marketoracle.co.uk

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any trading losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors before engaging in any trading activities.

Nadeem Walayat Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Comments

Matt
30 Sep 09, 20:46
Who are you going to vote for?

Hi Nadeem,

I will love to see the Labour Party defeated at the next General Election, however, I just wondered who you would recommend to vote for? It seems to me the Tories are heading for a majority yet they wouldn't have managed very well either?

Would you say who you are going to vote for?

Matt


Nadeem_Walayat
30 Sep 09, 20:55
Labour or Conservative?

Neither of the parties are telling the truth to the electorate that are being sleep walked into a 10 year depression.

Its probably a case of which one do I dislike the least 6 months from now.

I will probably vote for the one I deem to be the most truthful at that time.


James
06 Dec 09, 17:28
Next Election

I wouldnt bet on either party winning, definitely not a majority. Most MPs are putting in time, hoping for defeat, so they can get their lump sums and pensions and leave. With the poverty, unemployment, failing NHS, failing schools, rising violent crime and their reputations in tatters over the expenses thefts, why would they want to stick around. Many of them havent been back to the constituencies since they were exposed for the cheats they are. Brown and Cameron shouldnt reward failure. If they lose their seats, they shouldnt be rewarded. Only if they win their seats for their parties then step down should they be allowed to bask with their ill gotten gains. Brown and Cameron dont thave the guts to do this, but this is the only way they will make any effort to sort out the economy between now and the next election. I predict the fring parties will make big inroads as this will be a very low turnout election. Fighting over the garbage more like.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in