The Last One
Comments
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The debt owed to the taxpayer (government) is an 'asset' ?!seanoconn - gruagach craic!0
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It's accountant speak for making things sound better than they are.The debt owed to the taxpayer (government) is an 'asset' ?!
I'd quite happily be a massive asset for the Government.The above may be fact, or fiction, I may be serious, I may be jesting.
I am not sure. You have no chance.Veronese68 wrote:PB is the most sensible person on here.0 -
Isn't there an irony to the Tories hating the British state and industrial sectors and presiding over more closures whilst cosying up to the French and Chinese state sectors to build stuff here? Why do they hate us so much but hold the openly socialist governments in such high esteem? Is it because their models have produced the cash and know how to be able to do things that our laissez faire system didn't?0
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Yes. Ask any accounting type. As long as you have a reasonable probability of converting it into cash/money in your account in future, it is an asset on the balance sheet. It is only a cost in the profit & loss if it can't be recovered.The debt owed to the taxpayer (government) is an 'asset' ?!
Here''s another example. When a bank lends to a customer, that''s an asset for the bank because they should get the money back. It only becomes and expense (I. e.. a cost) if it is clear it won't be repaid, in other words a bad debt. Same principle for companies selling things on credit.
The shareholdings in the banks is a no brainer because the govt controls when it sells the shares back to back to the private sector: the only question is the timing which is likely to be driven by the share price. The loans have a reasonable expectation of being repaid otherwise they would have to write off/write down the bad ones. I don't have enough info on what makes up the loans but they typically have fixed repayment schedules/dates. What we are talking about here is the timing of conversion into cash.
Think about it another way - if banks or companies treated every loan or credit transaction as a cost, almost every business that gives any format of credit would never make a profit.
That''s how the report I linked above can correctly claim that the ultimate cost of the bailouts should be close to zero. It is looking at the end result of everything paid out vs everything received."I spent most of my money on birds, booze and fast cars: the rest of it I just squandered." [George Best]0 -
I wouldn't want George Osbourne to be my financial adviser.
http://www.theguardian.com/business/2015/aug/03/uk-government-starts-royal-bank-of-scotland-sell-off-rbsThe above may be fact, or fiction, I may be serious, I may be jesting.
I am not sure. You have no chance.Veronese68 wrote:PB is the most sensible person on here.0 -
As a nation,not a household, balancing the books is all important the nation ends up producing nowt so we all (well the masses) end up in the sh1t and with fark all.Tail end Charlie
The above post may contain traces of sarcasm or/and bullsh*t.0 -
Yes. Ask any accounting type. As long as you have a reasonable probability of converting it into cash/money in your account in future, it is an asset on the balance sheet. It is only a cost in the profit & loss if it can't be recovered.The debt owed to the taxpayer (government) is an 'asset' ?!
Here''s another example. When a bank lends to a customer, that''s an asset for the bank because they should get the money back. It only becomes and expense (I. e.. a cost) if it is clear it won't be repaid, in other words a bad debt. Same principle for companies selling things on credit.
The shareholdings in the banks is a no brainer because the govt controls when it sells the shares back to back to the private sector: the only question is the timing which is likely to be driven by the share price. The loans have a reasonable expectation of being repaid otherwise they would have to write off/write down the bad ones. I don't have enough info on what makes up the loans but they typically have fixed repayment schedules/dates. What we are talking about here is the timing of conversion into cash.
Think about it another way - if banks or companies treated every loan or credit transaction as a cost, almost every business that gives any format of credit would never make a profit.
That''s how the report I linked above can correctly claim that the ultimate cost of the bailouts should be close to zero. It is looking at the end result of everything paid out vs everything received.
but lets not forget the problem was that the banks were showing a pile of bad debt as an asset, and it was when that bad debt was unable to be repaid banks ran out of money and the government had to supply money to keep them going. Now, given that the very model of banking was to borrow short term and lend long term it was obviously either a business model that did not work, or if it did work, run by people who were incapable of doing it properly. The markets said no more lending to banks and they collapsed. However the government decided the market was wrong and invested regardless. That is why the special case irks so much - it is not applied to other failed industries.
I just hope you are right about the bank loans being an asset, with such a large trade deficit and upcoming referendum the interest rate shocks that might be needed to defend the pound could very much change that perception.0 -
Yes. Ask any accounting type. As long as you have a reasonable probability of converting it into cash/money in your account in future, it is an asset on the balance sheet. It is only a cost in the profit & loss if it can't be recovered.The debt owed to the taxpayer (government) is an 'asset' ?!
Here''s another example. When a bank lends to a customer, that''s an asset for the bank because they should get the money back. It only becomes and expense (I. e.. a cost) if it is clear it won't be repaid, in other words a bad debt. Same principle for companies selling things on credit.
The shareholdings in the banks is a no brainer because the govt controls when it sells the shares back to back to the private sector: the only question is the timing which is likely to be driven by the share price. The loans have a reasonable expectation of being repaid otherwise they would have to write off/write down the bad ones. I don't have enough info on what makes up the loans but they typically have fixed repayment schedules/dates. What we are talking about here is the timing of conversion into cash.
Think about it another way - if banks or companies treated every loan or credit transaction as a cost, almost every business that gives any format of credit would never make a profit.
That''s how the report I linked above can correctly claim that the ultimate cost of the bailouts should be close to zero. It is looking at the end result of everything paid out vs everything received.
but lets not forget the problem was that the banks were showing a pile of bad debt as an asset, and it was when that bad debt was unable to be repaid banks ran out of money and the government had to supply money to keep them going. Now, given that the very model of banking was to borrow short term and lend long term it was obviously either a business model that did not work, or if it did work, run by people who were incapable of doing it properly. The markets said no more lending to banks and they collapsed. However the government decided the market was wrong and invested regardless. That is why the special case irks so much - it is not applied to other failed industries.
I just hope you are right about the bank loans being an asset, with such a large trade deficit and upcoming referendum the interest rate shocks that might be needed to defend the pound could very much change that perception.
The reason being, it was vital that we retained a viable banking industry. Coal, steel, shipbuilding etc were not vital everyone's interests at the time. These industries were failing and producing a product that nobody wanted.
A bank collapses and every saver becomes a creditor chasing their money. Every borrower sees their loan sold off to whoever and the resultant upwards pressure on interest rates.0 -
It would have been cheaper for the Government to simply give every saver every penny in cash.A bank collapses and every saver becomes a creditor chasing their money. Every borrower sees their loan sold off to whoever and the resultant upwards pressure on interest rates.
What would the outcome be if the banks folded and the debts written off?
I assume that there would be losers but I cannot figure out whom.The above may be fact, or fiction, I may be serious, I may be jesting.
I am not sure. You have no chance.Veronese68 wrote:PB is the most sensible person on here.0 -
It would have been cheaper for the Government to simply give every saver every penny in cash.A bank collapses and every saver becomes a creditor chasing their money. Every borrower sees their loan sold off to whoever and the resultant upwards pressure on interest rates.
What would the outcome be if the banks folded and the debts written off?
I assume that there would be losers but I cannot figure out whom.
The debts were a money making asset, so to write them off you are giving assets away. Assets that could be sold to recompense the savers.
Just because a business folds, it doesn't mean that people that owe it money are absolved of their responsibility to repay it. The debts would have been sold to clawback whatever possible to repay creditors.
If your mortgage provider goes tits-up it doesn't mean that your house becomes yours does it?
For those of you that are incredulous that debts are an asset, debts actually make banks money. The fact that a debt can be bought and sold also suggests that they are assets. After all, nobody would buy anything if it held no value would they?0 -
i agree the banks needed to be protected as our whole financial and eco system is based on debt.
the problem here was that the banks took the pee with uncontrolled lending to people who had zero chance of repaying, re selling debt to people who didnt know or care about the final repayement, safe in the knowledge that there would be the bank of you and i to save them0 -
That has still not answered the question.
It would have been cheaper for the Government to simply give every saver every penny in cash.A bank collapses and every saver becomes a creditor chasing their money. Every borrower sees their loan sold off to whoever and the resultant upwards pressure on interest rates.
What would the outcome be if the banks folded and the debts written off?
I assume that there would be losers but I cannot figure out whom.
The debts were a money making asset, so to write them off you are giving assets away. Assets that could be sold to recompense the savers.
Just because a business folds, it doesn't mean that people that owe it money are absolved of their responsibility to repay it. The debts would have been sold to clawback whatever possible to repay creditors.
If your mortgage provider goes tits-up it doesn't mean that your house becomes yours does it?
For those of you that are incredulous that debts are an asset, debts actually make banks money. The fact that a debt can be bought and sold also suggests that they are assets. After all, nobody would buy anything if it held no value would they?
If the Government paid off the savers, it would have been cheaper and they would be happy.
If a bank goes burst who loses money if the investors are covered?
Debts being cleared would have been a major boost to the economy.
I doubt it can be that simple so please, tell me who would lose apart from bank employees?The above may be fact, or fiction, I may be serious, I may be jesting.
I am not sure. You have no chance.Veronese68 wrote:PB is the most sensible person on here.0 -
That has still not answered the question.
It would have been cheaper for the Government to simply give every saver every penny in cash.A bank collapses and every saver becomes a creditor chasing their money. Every borrower sees their loan sold off to whoever and the resultant upwards pressure on interest rates.
What would the outcome be if the banks folded and the debts written off?
I assume that there would be losers but I cannot figure out whom.
The debts were a money making asset, so to write them off you are giving assets away. Assets that could be sold to recompense the savers.
Just because a business folds, it doesn't mean that people that owe it money are absolved of their responsibility to repay it. The debts would have been sold to clawback whatever possible to repay creditors.
If your mortgage provider goes tits-up it doesn't mean that your house becomes yours does it?
For those of you that are incredulous that debts are an asset, debts actually make banks money. The fact that a debt can be bought and sold also suggests that they are assets. After all, nobody would buy anything if it held no value would they?
If the Government paid off the savers, it would have been cheaper and they would be happy.
If a bank goes burst who loses money if the investors are covered?
Debts being cleared would have been a major boost to the economy.
I doubt it can be that simple so please, tell me who would lose apart from bank employees?
The obvious ones would be the tax payers. Giving away billions and writing off billions more with no prospect of getting back a penny.
Guaranteeing loans and buying shares which can and will be sold, gives the taxpayer an opportunity to recoup the maximum amount.
If your idea is so brilliant, the banks would be nationalised and all debts written off, thereby giving the economy a major boost. What could possibly go wrong? :roll:0 -
Ah, but as is being proven with the RBS, the maximum amount is not the same as the original amount.The obvious ones would be the tax payers. Giving away billions and writing off billions more with no prospect of getting back a penny.
Guaranteeing loans and buying shares which can and will be sold, gives the taxpayer an opportunity to recoup the maximum amount.
If your idea is so brilliant, the banks would be nationalised and all debts written off, thereby giving the economy a major boost. What could possibly go wrong? :roll:
And most taxpayers would benefit from less debt.
We are all in it together*, this austerity mire but I have yet to see a foolproof positive plan.
*Well, most of us. We will find out what could go wrong with the current plan in the next 12 months.The above may be fact, or fiction, I may be serious, I may be jesting.
I am not sure. You have no chance.Veronese68 wrote:PB is the most sensible person on here.0 -
I very much doubt the banks thought that their actions would cause the impact that they did, or thought ahead in terms of assuming a bail out.i agree the banks needed to be protected as our whole financial and eco system is based on debt.
the problem here was that the banks took the pee with uncontrolled lending to people who had zero chance of repaying, re selling debt to people who didnt know or care about the final repayement, safe in the knowledge that there would be the bank of you and i to save them
Anyway, as my link above shows, the overall cost should be neutral when everythng is settled. So you and I overall will be pretty much evens. Which is probably way better than the alternative path that Brown could have taken."I spent most of my money on birds, booze and fast cars: the rest of it I just squandered." [George Best]0 -
I very much doubt the banks thought that their actions would cause the impact that they did, or thought ahead in terms of assuming a bail out.i agree the banks needed to be protected as our whole financial and eco system is based on debt.
the problem here was that the banks took the pee with uncontrolled lending to people who had zero chance of repaying, re selling debt to people who didnt know or care about the final repayement, safe in the knowledge that there would be the bank of you and i to save them
Anyway, as my link above shows, the overall cost should be neutral when everythng is settled. So you and I overall will be pretty much evens. Which is probably way better than the alternative path that Brown could have taken.
So, you're giving credit to the Brown?seanoconn - gruagach craic!0 -
Yep, as mentioned previously he did two good things. This, and keeping us out of the Euro.
I very much doubt the banks thought that their actions would cause the impact that they did, or thought ahead in terms of assuming a bail out.i agree the banks needed to be protected as our whole financial and eco system is based on debt.
the problem here was that the banks took the pee with uncontrolled lending to people who had zero chance of repaying, re selling debt to people who didnt know or care about the final repayement, safe in the knowledge that there would be the bank of you and i to save them
Anyway, as my link above shows, the overall cost should be neutral when everythng is settled. So you and I overall will be pretty much evens. Which is probably way better than the alternative path that Brown could have taken.
So, you're giving credit to the Brown?"I spent most of my money on birds, booze and fast cars: the rest of it I just squandered." [George Best]0 -
I very much doubt the banks thought that their actions would cause the impact that they did, or thought ahead in terms of assuming a bail out.i agree the banks needed to be protected as our whole financial and eco system is based on debt.
the problem here was that the banks took the pee with uncontrolled lending to people who had zero chance of repaying, re selling debt to people who didnt know or care about the final repayement, safe in the knowledge that there would be the bank of you and i to save them
Anyway, as my link above shows, the overall cost should be neutral when everythng is settled. So you and I overall will be pretty much evens. Which is probably way better than the alternative path that Brown could have taken.
Are you sure about that?
In our industries we are dead if companies fail to be prudent, knowing the state will always bail you out leads to a cavalier mindset, a bit like public sector waste of old.
Also, there is still no criminal sanction in place.0 -
...and they have shelved plans for more regulation, preferring to deal with financial institutions on a "case by case basis". Whatever tf that means. Cheers Mr Osborne.seanoconn - gruagach craic!0
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You said they knew they would get bailed - are you sure? Any evidence?
I very much doubt the banks thought that their actions would cause the impact that they did, or thought ahead in terms of assuming a bail out.i agree the banks needed to be protected as our whole financial and eco system is based on debt.
the problem here was that the banks took the pee with uncontrolled lending to people who had zero chance of repaying, re selling debt to people who didnt know or care about the final repayement, safe in the knowledge that there would be the bank of you and i to save them
Anyway, as my link above shows, the overall cost should be neutral when everythng is settled. So you and I overall will be pretty much evens. Which is probably way better than the alternative path that Brown could have taken.
Are you sure about that?
In our industries we are dead if companies fail to be prudent, knowing the state will always bail you out leads to a cavalier mindset, a bit like public sector waste of old.
Also, there is still no criminal sanction in place."I spent most of my money on birds, booze and fast cars: the rest of it I just squandered." [George Best]0 -
Working with banks as a part of my job, it's clear to me that the level of bank regulation is very high, to the point where it acts as a barrier to doing business efficiently and no doubt increasing the cost of financial transactions. You can regulate an industry till the cows come home but without a crystal ball a lot of it just adds cost and complexity....and they have shelved plans for more regulation, preferring to deal with financial institutions on a "case by case basis". Whatever tf that means. Cheers Mr Osborne.
What exactly would you regulate that hasn't already been addressed?"I spent most of my money on birds, booze and fast cars: the rest of it I just squandered." [George Best]0 -
Working with banks as a part of my job, it's clear to me that the level of bank regulation is very high, to the point where it acts as a barrier to doing business efficiently and no doubt increasing the cost of financial transactions. You can regulate an industry till the cows come home but without a crystal ball a lot of it just adds cost and complexity....and they have shelved plans for more regulation, preferring to deal with financial institutions on a "case by case basis". Whatever tf that means. Cheers Mr Osborne.
What exactly would you regulate that hasn't already been addressed?
for a start we are talking about the GFC not the future but i would like to see criminal law being applied to bank CEO etc seeing the likes of Goodwin keep his millions whilst he helped ruin the global economy, is that right?
Seems that retrospective criminal charges can be bought against our soldiers serving their country long after the evnt in Iraq....
even MOD forming a special investigations unit to find them all..... double standards me thinks.
as for evidence if or not the banks knew before hand.....
https://en.wikipedia.org/wiki/Too_big_to_fail
Not since the 1920's have banks been allowed to collapse and believe me i dont think they should either, but it seems the IMF dont beleive current regulation is enough either.0 -
That's a link to an economic theory, not evidence theory.
Working with banks as a part of my job, it's clear to me that the level of bank regulation is very high, to the point where it acts as a barrier to doing business efficiently and no doubt increasing the cost of financial transactions. You can regulate an industry till the cows come home but without a crystal ball a lot of it just adds cost and complexity....and they have shelved plans for more regulation, preferring to deal with financial institutions on a "case by case basis". Whatever tf that means. Cheers Mr Osborne.
What exactly would you regulate that hasn't already been addressed?
for a start we are talking about the GFC not the future but i would like to see criminal law being applied to bank CEO etc seeing the likes of Goodwin keep his millions whilst he helped ruin the global economy, is that right?
Seems that retrospective criminal charges can be bought against our soldiers serving their country long after the evnt in Iraq.... even MOD forming a special investigations unit to find them all..... double standards me thinks.
as for evidence if or not the banks knew before hand.....
https://en.wikipedia.org/wiki/Too_big_to_fail
Not since the 1920's have banks been allowed to collapse and believe me i dont think they should either, but it seems the IMF dont beleive current regulation is enough either.
Totally agree that our troops should not be retrospectively charged for criminal offences in anything other than exceptional circumstances. As for the likes of Goodwin etc, I dont see what hownour current laws dont cover the ,ain possibilities. What would you charge them with exactly?
As for regulation, I've already said what I think earlier on, based on my professional experience. If you want more, don't moan when the cost of banking goes up."I spent most of my money on birds, booze and fast cars: the rest of it I just squandered." [George Best]0 -
You only have to look at the EA, paying themselves 1000's in bonuses, whilst northern britian is flooded... why? because they can....... because they know they cant go bust, just like the banks really.
as for fred goodwin, so long as people like him can bankrupt a bank (liabilities of £2.2tn) with v poor business decisions (ABN) and face no sanction then there is nothing in the current regulations to stop it happening again, the fact that you say these regs are pushing up banking costs etc, doesnt mean they are the right regulations does it?0 -
Good point. Government agencies know they cant go bust. If its such a problem for the banks, surely its also a problem for the govt agencies, so something needs to be done about thatYou only have to look at the EA, paying themselves 1000's in bonuses, whilst northern britian is flooded... why? because they can....... because they know they cant go bust, just like the banks really.
as for fred goodwin, so long as people like him can bankrupt a bank (liabilities of £2.2tn) with v poor business decisions (ABN) and face no sanction then there is nothing in the current regulations to stop it happening again, the fact that you say these regs are pushing up banking costs etc, doesnt mean they are the right regulations does it?
So you think that making bad business decisions should be a criminal offence? Really? What do you think that will do to the behaviour and actions of businesses, entrepreneurs and risk takers...."I spent most of my money on birds, booze and fast cars: the rest of it I just squandered." [George Best]0 -
Good point. Government agencies know they cant go bust. If its such a problem for the banks, surely its also a problem for the govt agencies, so something needs to be done about thatYou only have to look at the EA, paying themselves 1000's in bonuses, whilst northern britian is flooded... why? because they can....... because they know they cant go bust, just like the banks really.
as for fred goodwin, so long as people like him can bankrupt a bank (liabilities of £2.2tn) with v poor business decisions (ABN) and face no sanction then there is nothing in the current regulations to stop it happening again, the fact that you say these regs are pushing up banking costs etc, doesnt mean they are the right regulations does it?
So you think that making bad business decisions should be a criminal offence? Really? What do you think that will do to the behaviour and actions of businesses, entrepreneurs and risk takers....
tories have been in power for 6 years, you should ask them why they ve not curbed the exceses of the env agency and other public bodies who award bonuses for failure.
whilst your there, you can ask why they ve spent so far, £57m on chasing upto 1500 war crimes in Iraq...... or is that Corbyns fault or maybe those miners too?
Great, fight for your country and Cameron will award you with a court marshall
Are you saying that a too big to fail bank should behave like a risk taking entrepreneur? oh they did!
would explain why we are in this mess 0 -
Risk taking is fine as long as it is okay with the shareholders and is part of an accepted culture but not at the expense of the general public or the wider economy.
[off topic]
Send soldiers off to a questionable and undemocratic war in Iraq and Afghanistan exposing them to IED's, suicide bombers, hostile natives and then court Marshall them - great.
Is it that the government are so reliant on the corporations and the people who hold the real power and the key to financial stability, not only are they complicit but are powerless and unwilling to actually do something? Osborne's hard talk about punishment and regulation was just lip service.seanoconn - gruagach craic!0 -
On your point about curbing excesses of public bodies, couldnt agree more. Thats our money.
Good point. Government agencies know they cant go bust. If its such a problem for the banks, surely its also a problem for the govt agencies, so something needs to be done about thatYou only have to look at the EA, paying themselves 1000's in bonuses, whilst northern britian is flooded... why? because they can....... because they know they cant go bust, just like the banks really.
as for fred goodwin, so long as people like him can bankrupt a bank (liabilities of £2.2tn) with v poor business decisions (ABN) and face no sanction then there is nothing in the current regulations to stop it happening again, the fact that you say these regs are pushing up banking costs etc, doesnt mean they are the right regulations does it?
So you think that making bad business decisions should be a criminal offence? Really? What do you think that will do to the behaviour and actions of businesses, entrepreneurs and risk takers....
tories have been in power for 6 years, you should ask them why they ve not curbed the exceses of the env agency and other public bodies who award bonuses for failure.
whilst your there, you can ask why they ve spent so far, £57m on chasing upto 1500 war crimes in Iraq...... or is that Corbyns fault or maybe those miners too?
Great, fight for your country and Cameron will award you with a court marshall
Are you saying that a too big to fail bank should behave like a risk taking entrepreneur? oh they did!
would explain why we are in this mess
On the second point, you are misinterpreting what I said. You know or at least should know fine well that business is all about taking some degree of risk. Its far too simplistic to say that should or should not take risks, it is a question of degree and of risk management. I refer you back to my original link on the BoE stress tests which sets out the risk profiles of the banks and how they are reducing their risk profiles in some detail. Try reading it.
As for your claim that 'this is what got us into this mess', I already showed you how tbe net overall cost will be clsoe to nil, but yet again, you are just ignoring the evidence and carrying on with the same tired old mantra that it is all the banks fault. I said before, this is just lazy leftie banker bashing."I spent most of my money on birds, booze and fast cars: the rest of it I just squandered." [George Best]0 -
On your point about curbing excesses of public bodies, couldnt agree more. Thats our money.
On the second point, you are misinterpreting what I said. You know or at least should know fine well that business is all about taking some degree of risk. Its far too simplistic to say that should or should not take risks, it is a question of degree and of risk management. I refer you back to my original link on the BoE stress tests which sets out the risk profiles of the banks and how they are reducing their risk profiles in some detail. Try reading it.
As for your claim that 'this is what got us into this mess', I already showed you how tbe net overall cost will be clsoe to nil, but yet again, you are just ignoring the evidence and carrying on with the same tired old mantra that it is all the banks fault. I said before, this is just lazy leftie banker bashing.
Yes steve0 i ve deliberately done that because you ve misinterpreted about what i ve said about goodwin and calvalier business decisions, not nice is it
But i can read, its that i ve drawn a different conclusion from you.
You seem to think that the GFC has had little or no effect on the world and hence our economies and that we ll even make profit from it all.... eh?
the 2007/8 crash will go down as perhaps one of the biggest financial disasters that has befallen world economies, it led to a collapse in tax take and private/public investment and exposed us all to trillions in bank debt, reduced our credit rating (rising interest rates on borrowing) and has led directly or indirectly to austerity, we ve also been in one of the longest recessions in history! and as i ve said before, they all pretty much escaped any sanction let alone criminal charges.
so yes it is the fault of the bankers but it was also regulators/politicians, who became so beguiled by the financial industry and their demands for a light touch regulatory system, world wide.0 -
All governments rely on business because this is ultimately where the money comes from. And here lies the great leftie conundrum. They dislike business but the more intelligent ones realise that business is the goose that lays the golden egg. The hard left treat business as an enemy and try to punish it. Now that really is stupid because it is biting the hand that feeds you.Is it that the government are so reliant on the corporations and the people who hold the real power and the key to financial stability, not only are they complicit but are powerless and unwilling to actually do something? Osborne's hard talk about punishment and regulation was just lip service."I spent most of my money on birds, booze and fast cars: the rest of it I just squandered." [George Best]0
