Model Boat Mayhem

Mess Deck: General Section => Chit-Chat => Topic started by: Colin Bishop on September 29, 2008, 08:44:22 PM

Title: Financial Meltdown
Post by: Colin Bishop on September 29, 2008, 08:44:22 PM
Anybody else been following today's events with horrified fascination?

I'm not sure who deserves the most blame, the greedy and incompetent bankers who precipitated the situation or the ineffectual and incompetent politicans who allowed it to happen and appear to be unable to sort the mess out.

One thing's for certain, we are all of us going to suffer one way or another.  >:(

Colin
Title: Re: Financial Meltdown
Post by: Martin [Admin] on September 29, 2008, 08:55:38 PM

I find it simply amazing that the 'government' can magic up or have that much money on hand so quickly... or are they doing lots of overtime at the mint!?!  :(
Title: Re: Financial Meltdown
Post by: omra85 on September 29, 2008, 09:01:59 PM
Colin, I can understand the USA where they have more houses than are required for the population, so a slump has taken place, which has led to the collapse fo the "mortgage" companies, but why are we following them into the mire?  Where has all the money gone? Are the "billions" being wiped off the Stock Exchange real, or is it "monopoly" money?
I'm (un)happily paying my mortgage as, I assume, everyone else still is ..... so who's took it all?
I wish they could explain (in the usual "dumbing-down" they do for everything else), exactly what is happening with the economy.
I don't suppose it's anything to do with the fact that we, as a nation, don't really produce anything any more?  Or am I just naive?
Crikey - what if I'm the only one still paying my mortgage??  Have you lot been lying about it  :o :o
Danny
Title: Re: Financial Meltdown
Post by: Proteus on September 29, 2008, 09:53:54 PM
I wonder what happend to Browns bit on the side  " Prudance" I heard he had heir shipped of to Guantanamo bay as a terrorist.. {-) 

Proteus


 :'(  :'(  :'(
Title: Re: Financial Meltdown
Post by: Peter Fitness on September 29, 2008, 11:34:58 PM
America, as the self appointed "Leader of the Free World", has a lot to answer for. Any country whose two bigger financial institutions were called Freddy Mac and Fanny Mae would have to be regarded with some incredulity. Financial institutions in the USA have been lending money to anyone who wanted it without any guarantee that the money could be repaid, so-called Prime mortgages, known as Low Doc(umentation) loans here in Australia. These institutions are now paying the price of their stupidity, and are dragging the rest of us down with them, as can be seen with the situation in the UK. Fortunately, so we are told, Australia seems to be in a somewhat better position to weather the crisis, as there is no indication of any weakness in our banking system. Time will tell.

Peter.
Title: Re: Financial Meltdown
Post by: toesupwa on September 29, 2008, 11:40:44 PM
I still have monies in a (big) UK bank.... but live in the USA....

Perhaps i am better off... or not... possibly...

One thing is for sure, we will all end up paying for someone else's mistakes... sounds kinda familiar eh?..  >>:-(
Title: Re: Financial Meltdown
Post by: BlazingPenguin on September 29, 2008, 11:54:53 PM
Its nothing new...they did it already back in the 20's or so, some research ont'internet will wake you up!

The USA are looking to the 'Federal Reserve' to get things on track...LOL...what a laugh, its the fed what dug the 'ole! ROFL Dont believe me?...look it up!
Did you know theres nothing actually 'Federal' about the FED? Its about as 'Fed' as Federal express, dont believe me? Look it up!

This is in a country where the payment of income tax by the common working man is illegal, that was also snuck through in dead of night and was never legally ratified.
You are not required to pay tax on the efforts of your labours, company profits and income from share dealing etc, YES, but anyhting else no!

Dont believe me?...look it up!

All these big fancy names...LOL, like JP Morgan, crooks & swindlers since the kick-off, Morgans own words ' if our firiends in the press knew what we had just done, there'd be hell to pay' circa 1919.

Funny how there falling over themselves to prop up allling banks for fear of us all going blind and dying of the dreaded lurgy....but why didnt they act as almost every single heavy industry was shut down, most of the technical support industry and support services, not to mention banking and call centres were shipped off to where they dont need to pay them that much?

My view? Serves em bl**dy right! They made the mess, let them sweep that into their 'golden parachute and jump!

For some light entertainment, may I suggest a squint at http://www.brasschecktv.com/ in the finance bit, enough to make my terrrier laugh, if it wasnt all so deadly serious.
Title: Re: Financial Meltdown
Post by: Ghost in the shell on September 30, 2008, 12:51:41 AM
over here the housing market has stalled because houses are so expensive, the average joe on the street earns a little over minimum wage, tie that in with running a car and everything that entails, (fuel, tax insurance etc), weekly shop, things like income tax, council tax, and ever rising itility bills (to pay for fat cat's holidays and a hefty £200k pa payrise)  a mortgage for a two bedroom terrace nowadays costs £90,000 to anywhere over £120,000 depending on where you live, and for a first time buyer trying to get onto the property market it is simply too much, so they are simply not bothering to even look for homes to buy, result a stall in the housing market.



Title: Re: Financial Meltdown
Post by: David_S on September 30, 2008, 05:39:59 AM
Not sure if I should be cheered by all this or shaking in my boots. Sold our current house yesterday and are off to the bank to sign & pay for our new one today. We'll be  moved in by tomorrow evening.
Title: Re: Financial Meltdown
Post by: Umi_Ryuzuki on September 30, 2008, 08:15:09 AM
Mortgage brokers loaned money to everyone that would sign.
They then sold the contracts to banks.
The banks ganged up bunches of mortgages and sold them as lots...(grade A guarantee payback)
The banks that bought them, on the promise of good return, were domestic and foreign.
The insurance companies that insured them bet they would be paid in full...

All companies and banks that are holding are now in trouble as the people
that over borrowed using interest only payments and variable rate loans suddenly
are faced with full payments they can not afford, and high interest rates they
could not refinance away from.

Greed is good,... but there should have been smarter decisions at each and every step.
Title: Re: Financial Meltdown
Post by: bigfella on September 30, 2008, 10:00:53 AM
Hi All

Part of the problem with banks (at least in Australia) is that they are self regulated. This is like letting the prisoners in jail look after the keys. The banks, as Umi stated above, lend money to people who can only just afford the repayments and have no buffer against rate rises or any other foreseen problems. The banks win if there is a default as the mortgage is insured and then the house is repossessed and sold. The banks win no matter what, unless they over lend.

They way I see the share market is that all this money that people say they have lost can only be monopoly money as discussed in an earlier post. For example if I purchased and payed for 1000 shares at $1 each 12 months ago (Value $1000) and these shares went up to $1.50 per share six months ago (Value $1500)  but I did not sell and now I find that the sell price is only 50 cents a share (Value $500). I have not lost that money have I???? I still own the shares they have just been devalued. The initial cost is similar to buying a car and a new model comes out, my car is less of value until it becomes a collectors item. If you stick with the long term on those shares they will eventually go up.

Those that speculate with shares but do not pay for them until the final deal is done are the ones who loose their money as they have to pay for the shares even if they end up being worthless. It is a risky business and they know the risks and should wear it.

The moral of the story is slow and steady wins the race.

By the way I don't own shares as I don't think I could handle the stress.

Regards David
Title: Re: Financial Meltdown
Post by: dougal99 on September 30, 2008, 11:34:02 AM

Part of the problem with banks (at least in Australia) is that they are self regulated. This is like letting the prisoners in jail look after the keys. The banks, as Umi stated above, lend money to people who can only just afford the repayments and have no buffer against rate rises or any other foreseen problems. The banks win if there is a default as the mortgage is insured and then the house is repossessed and sold. The banks win no matter what, unless they over lend.


As I understand it that is precisely the problem that started this whole debacle. Repossessions rose to a rate where the market was flooded with property, in some cases whole streets were repossessed, so that the resale value was virtually nil. Thus the debts were never going to be repaid.


Simple soul that I am, I have never understood why the banks didn't renegotiate the loans over a longer period. Yes, a lower return but you do eventually get your money back.  Funny old thing who was proposing that on Tuesday ex president Clinton.

Doug
Title: Re: Financial Meltdown
Post by: RipSlider on September 30, 2008, 12:06:42 PM
The situation has the potential to get a lot worse.

Umi is correct in what she put, but it goes further. - although the banks provided the packages to the mortgage and loan dealers in the first place.

The big issue now is one of trust, and that is why the market is collapsing.

"Big finance" needs vast amounts of cash available for very short periods in order for it to work. So a FTSE 100 company might borrow hundreds of millions of pounds, but pay it back within hours or days as it juggles the numbers on it's books. This is called the "Commercial Paper market - CP "

banks do the same, but with a lot more "things" than just commercial paper. Over the last 10 years, one of the things they have used a lot is these "packages" of loans or the shares that are sold from them. This isn't new though. These packages of mortgages have been around for 100 years, it's the new ways of splitting them up into stocks and shares that is fairly new.

The whole system is based on the assumption that about 1:100 mortgages will fall into debt. Over the last 20-odd years, it's been better than that - about 0.3%.

Now, with rises in interest rates and a slump starting in the economy - the general 7 year slump which no government can ever fix - it's built into the system - those mortgages are defaulting. The issue is that becuase of lax controls about WHO could be given a mortgage or a loan - which I think is fairly difficult to regulate - the figure of 1% default is now in question.

The big question that the banks are dealing with is "What is the actual level of deafult going to be?". And, becuase of all these new fancy ways of splitting up the packages of loans and mortgages, that is now very hard to work out. When you have a share which is a derivative of a put call on an index which tracks a variable set of these packages, it is virtually impossible to work out.

So a given bank MIGHT be technically bankrupt. Or it could be exposed to only an exceptionally safe set of of these loans and mortgages. but as it's almost impossible to know, and no one knows which specific mortgage will default - the banks have lost trust in each other.

This means that they are no longer as willing to lend each other money for short periods, which the whole financial system is based on, as they can no longer trust that the bank they lent to will be still there tomorrow morning.


It's all about confidence, and the sudden lack of it.

Without the ability to loan cash short term, banks get into difficultys. Which is why Northern rock went pop, becuase it had to borrow from the bank of england. The EU forced the BoE to make that public, the media spun it, and there was a run on the bank.

A similar situation with HBOS and B+B, but HBOS was ( for now, but now lloyds is looking shaky ) was rescued.

Up until this point - it's scary but to the man in the street, not a real issue - as long as you don't have more than £35,000 of savings in a single bank, as it's all insured.

The tim it gets bad is when this shakiness, and lack of confidence, starts to affect the Commercial Paper - CP - market, that non banking companies use. This started to happen a  couple of days ago, but went away within a few hours. But if i happens for a long period, then the "normal" businesses can no longer finance themselves, and even healthy businesses will crash. This is what happened in 1929, and why it was so bad.

As long as the panic stays in the banking sector, we'll get away with just a recession. If the madness hits the CP market, then it's a depression or worse.


What does this mean to the "man in the street"

Short term - not a lot. Your savings are safe. And if you have an OK credit rating, then your very valuable right now, and so no on will dare tamper with your fixed intrest mortgages or loans.

Variable rate mortgages are controlled by something called the LIBOR rate. This is rising, so there may be small rises in variable rate mortgages.

Medium term - inflation
The government didn't have the money it payed for B+B and Northern Rock "at the back of the sofa" - it just printed more money, which it;s perfectly entitled to do. However, all that money is now whizzing around the economy. Well, at the moment it's not whizzing anywhere, but when the short term crisis is over, it will start to move.

Inflation is caused by having too much money in the system, or the money moving around too quickly. The government has had to pump billions into the system, and that will force inflation up a fair bit.

That will be countered by the bank of england pushing up interest rates to try and halt it. And at this point, people with mortgages and loans will feel the pinch.

If you have big mortgages or big loans, now is probably an excellent time to see a financial advisor. They will probably try to get you onto fixed rate deals while it is still cheap.

<<Qualification here - this is NOT financial advice. It's personal opinion. But it never hurts to see an IFA >>


Hope this is vaugely interesting

Steve

Title: Re: Financial Meltdown
Post by: RipSlider on September 30, 2008, 12:17:35 PM
This is a very good article indeed and gives a good background to some of the issues.


http://www.theregister.co.uk/2008/09/29/destroying_banks/


Steve
Title: Re: Financial Meltdown
Post by: bigfella on September 30, 2008, 12:55:50 PM
In Australia the situation regarding property seems to be the reverse of what it is in the UK. There is a shortage of properties mainly because so many have bought more than one house in fact some I have heard have up to 100 investment properties all financially stacked like a house of cards. The upshot of this is that the house prices are artificially inflated. The rental market is also short of properties and there are cases for an auction for the highest bidder to rent.

The reason for so many defaults on mortgages in Australia is because so many want to get into the propriety market that they end up borrowing 100% of the mortgage and the repayments are up to in some reported cases 70% of their income. When something happens like interest rates go up they just cant afford it. Most have maxed credit cards on top of a mortgage as well as those "Buy now and pay later" schemes for big plasma TVs. It is all a result of irresponsible lending practices and self regulating of the financial market.

Regards David
Title: Re: Financial Meltdown
Post by: grandad on September 30, 2008, 01:16:37 PM
for years I have been telling anyone who would listen to me that this, or something simular was going to happen here in the good old USA
 e are supose to be a country where the people had a choice as to the development of the government! WHAT A JOKE!!
by the people for the people! Just who are we kidding??
My conjecture is thus~~ If our forefathers (The guys who wrote the Constitution and our Bill of Rights) could return to today and see what our wise? government bodies have done to our country they would declare war!
Think about it! the poor are getting poorer and the rich are getting richer at the expense of the working class!
my family cannot even purchase foodstuffs or gasoline
yet I ontinue to watch in horror as some people purchase groceries with food stamps (Something our family cannot aquire) then leave the store and climb in the back of a limo or get behind the wheel of a high dollar vehicle!
got that off my chest anyway

Larry
grandad
Title: Re: Financial Meltdown
Post by: toesupwa on September 30, 2008, 02:58:58 PM
If you stick with the long term on those shares they will eventually go up.


.. or not...  :-\
http://www.iconocast.com/B000000000000025/Q0/News7.htm
Title: Re: Financial Meltdown
Post by: Bryan Young on September 30, 2008, 06:18:18 PM
Whoa! Lets back up a bit here. Reading through all the posts on this subject I notice one glaring omission....the "buy to let" market.
Many people used the collateral on their own houses to buy more to rent out and make a profit. I personally know a guy who had between 15 and 25 properties and never stopped crowing and rubbing his hands. He totally dismissed the notion that markets can go down as well as up. Now he knows. Tough. The bank only loaned him the money to buy because of the "value" of his (the banks, really) properties. Not sub-prime or anywhere close to it. But this guy was exposed....and now he is both whinging and bust. So much for chasing the quick money. Human nature I guess, but a bit of "common-dog" could have prevented all this bedlam.
Title: Re: Financial Meltdown
Post by: Colin H on September 30, 2008, 10:47:12 PM
For many years I have worked in the rented property market for letting agents and the owners of rented property fall into 3 basic classes.

The person with money who has invested over a period of time and who takes a long term view of the market. These people will be virtually unaffected by the fall in prices as a large part of their portfolio will have been purchased some years ago and even now has a greater value than when bought.

The person who has moved house, buying a second property either here or abroad and renting out the first house as a source of income, possibly for retirement. Providing the first house is paid for a drop in value should not be a problem.

AND like a man I know, who had two rented properties 3 years ago and now with `buy to let` mortgages has 21. This person is very exposed as the rent is used to pay the mortgage and if the property is unlet for some time and the mortgage unpaid the property will be repossessed and will fetch far less than he paid for it. He will of course still owe the outstanding balance to the credit company.

Yours Colin H.
Title: Re: Financial Meltdown
Post by: Shipmate60 on September 30, 2008, 10:58:03 PM
The reasons for the failures is quite simple.
The Financial Market was completely deregulated.
To ensure that the "Financial Wizards" got their huge bonus which was tied to turnover and share price.
As the chased more and more loans eventually the "safe" loans dried up, so more riskier loans were offered.
Even in UK some mortgages were offered at 8 times salary on 110%.
The buy-to-let market just substituted the first time buyers and fueled the excessive rise in house prices.
The so called Toxic Sub Prime loans were then packaged up as "securities" and sold around the globe as "safe investments".
As the mortgagees (who should never have been granted a mortgage) started to fail, the scale of the problem started to dawn.
Who is to blame, imprudent, greedy bankers (yes I did say Bankers).
Capitalism at its best!!!

Bob
Title: Re: Financial Meltdown
Post by: Peter Fitness on October 01, 2008, 12:24:28 AM

If you stick with the long term on those shares they will eventually go up.



David is right, history shows us that the trend over a longer period (10 years or more) is upward. He is also correct in his assertion that you only lose "real" money if you sell when prices are low, if you stay with it, then losses are only on paper. When my wife and I retired almost 7 years ago, our super etc was invested, by our financial advisers, in a range of products. At that time, the Australian Stock Exchange (ASX) All Ordinaries Index stood at just over 2000. It rose steadily to a peak of over 6800, but has now gone down to about 4600. However, over the period, it has still gained well over 100%. We are not panicking (well, not too much), and will just wait it out. Hopefully the financial world will come to its senses soon.

Peter.
Title: Re: Financial Meltdown
Post by: dougal99 on October 01, 2008, 08:49:05 PM
This just in from Reuters:



Following the problems with Lehmann Bros and in the sub-prime lending
market in America and the run on Northern Rock, HBOS and Bradford &
Bingley in the UK , uncertainty has now hit Japan .

In the last 7 days Origami Bank has folded, Sumo Bank has gone belly up
and Bonsai Bank announced plans to cut some of its branches.

Yesterday, it was announced that Karaoke Bank is up for sale and will
likely go for a song, while today shares in Kamikaze Bank were suspended
after they nose-dived.

While Samurai Bank is soldiering on following sharp cutbacks, Ninja Bank
is reported to have taken a hit, but they remain in the black.

Furthermore, 500 staff at Karate Bank got the chop and analysts report
that there is something fishy going on at Sushi Bank where it is feared
that staff may get a raw deal
Title: Re: Financial Meltdown
Post by: kiwimodeller on October 01, 2008, 09:36:46 PM
Sounds like the whole thing has turned to SHITAKE! {-)
Title: Re: Financial Meltdown
Post by: Bee on October 02, 2008, 08:57:39 PM
I recall that in the early eighties in UK you could only get 2.5x salary for which you had to beg so house prices were held down as that meant only people 30+ could afford anything. Then 2.5x +1 was allowed so couples could buy though singles were still screwed. This increased the number of buyers resulting in strong inflation in that decade until in '88 the +1 was stopped. I think tax relief changed too. So after a rush to get in before deadline  the market hung in '89 lasting for 5 or more years. Progressively building societies became banks and banks gave mortgages and they alls started giving 3x then more and second houses so booooom.
So amongst other things I blame couples whether 'mating pairs' and 'dinkies'.
Title: Re: Financial Meltdown
Post by: malcolmfrary on October 02, 2008, 10:09:10 PM
Way back there was a large council house rental market.  This helped keep private landlords fairly honest and at least paid lip service to worker mobility, as somebody renting could move.  The virtual removal of this option was the real start of the ridiculous price inflation.
I note that the BBC is still filling its mornings in with "Isnt property development wonderful" programs made about three years ago telling all and sundry how wonderful it was to "buy to rent out".  It would be interesting for the programs to re-visit the scene of the crime.
I did hear of a fracas in a park between two bowler hatted gents, one of whom was yelling, between blows, "ITS ALL YOUR FAULT BINGLEY!!"
Title: Re: Financial Meltdown
Post by: Albion on October 03, 2008, 03:59:10 AM
Dont tell me about landlords being dishonest, as a landlord your rights suck. They introduced some laws which reflect the current Aussie system , however they didnt use all of them, only the ones that help the tenant. Someone stops paying the rent as a private landllord you have very little power, it takes about 3 months and a big chunk of legal money to chuck them out, and if they pay up to date when they leave, they can walk into another property without a black mark on their name. Guys pleading poverty because its christmas and they dont have the rent money, they need it so they can enjoy christmas, but dont see that i might want the money to enjoy my christmas. I'm pretty decent (honestly) but i can see why some landlords act the way they do, and charge what they do. 
Title: Re: Financial Meltdown
Post by: tigertiger on October 03, 2008, 04:19:28 AM
One of the big problems in the UK is the large number of properties that are unlet. Mostly due to the fact that landlords have very little power in law.
This is a problem as it is keeping rents up, and people homeless.

I rented a property to an unmarried couple. He did not pay rent from day one, and she payed the deposit. By the time I got them out they had lived rent free for 5 months.
Irrespective of whether or not the tenant can afford to pay, I do not see it as the duty of the landlord to subsidise the homeless. My case was different, this was a working couple.

Yes there are rogue landlords, but they are very few and far between. The local newspapers only publishstories about problem landlords, not good landlords and not problem tenants.

My two cents worth.
Title: Re: Financial Meltdown
Post by: Weeds on October 03, 2008, 04:33:10 AM
One of the big problems in the UK is the large number of properties that are unlet. Mostly due to the fact that landlords have very little power in law.
This is a problem as it is keeping rents up, and people homeless.

I rented a property to an unmarried couple. He did not pay rent from day one, and she payed the deposit. By the time I got them out they had lived rent free for 5 months.
Irrespective of whether or not the tenant can afford to pay, I do not see it as the duty of the landlord to subsidise the homeless. My case was different, this was a working couple.

Yes there are rogue landlords, but they are very few and far between. The local newspapers only publishstories about problem landlords, not good landlords and not problem tenants.

My two cents worth.

being a landlord is a double-edged sword, isn't it?
Title: Re: Financial Meltdown
Post by: toesupwa on October 03, 2008, 08:14:14 AM
Mrs Toes and I went out last night into the local 'restaurant' area for a meal...

Virtually ALL of the car parks in front of the restaurants were empty and the one we went to had three cars in the car park and 5 couples in the whole restaurant. When we came out, there were TWO cars in the car park...

Even the our server said the manager had sent half of the staff home earlier in the evening..

People seem to be staying in at home...
Title: Re: Financial Meltdown
Post by: tigertiger on October 03, 2008, 08:51:59 AM
The food and pub industries usually get hit first in an economic slow down. Sadly these are industries with low paid workers who are those who will struggle the most to keep up with mortgages/rent and loans.
And many of the poorer areas of the country are dependent on tourism and pubs restarants to keep the local economy going. The other main industries in some of these areas is retail. Also low paid and being hit badly at the moment.

I feel lucky that my job is not at risk. I feel sorry for many others out there who are not so lucky.
Title: Re: Financial Meltdown
Post by: Bryan Young on October 03, 2008, 07:00:39 PM
Another not so little component in this sorry saga is the payment of commissions. Why should a salaried employee of any financial institution be given a bonus for doing what he is paid to do. The lure of extra dosh must, human nature being what it is, lead to dubious practices. Most of us do (or did) a job for which we got paid. Why should the financial sector consider themselves "different"? BY.
Title: Re: Financial Meltdown
Post by: bigfella on October 04, 2008, 12:02:08 AM
I agree Bryan, most of what they do is speculation (guess work). There are just as many investors who loose money as make money through these so called experts who get paid either way.
Title: Re: Financial Meltdown
Post by: tigertiger on October 04, 2008, 03:04:18 AM
I agree Bryan, most of what they do is speculation (guess work). There are just as many investors who loose money as make money through these so called experts who get paid either way.

I think there is a valid point here. They get paid either way. And the total remuneration would be the same. Commission is paid as an icentive for sales people to do what they are paid for. The alternative is that people would underperform, and cost more money. This money would be paid for by us the customer.
Commission only does lead to abuse, but no additional incentive supports those who are unproductive or less than effeicient.

I am all for payinf sales people commission for performance, as long as the commission structure fits the industry. So for 'pile it high sell it cheap' or harder to sell or complementary sailes (e.g. life insurance with a mortgage) items the structure is usually low basic plus high commission. For high value, hibh quality items; Good salary plus a small commission is the norm.
And for stuff that is really hard to sell, or the market is saturated, or stuff that does not sell; commission only.
Never work for or buy from a company that offeres commission only. There is no after sales, as the salesman probably left to feed the family.
Title: Re: Financial Meltdown
Post by: Colin Bishop on October 06, 2008, 05:34:56 PM
Looking at today's news it seems that the Politicians are absolutely determined to finish what the Bankers have started. Is there nobody with any degree of competence out there?  >>:-( >>:-( >>:-(
Title: Re: Financial Meltdown
Post by: Bryan Young on October 09, 2008, 07:24:18 PM
I now read that just about all local councils have (had) "loads-a-money" stashed away in places like Iceland after following instructions from Central Government. This all just gets worse by the day.....and it doesn't take an Einstein to work out where the buck stops and the rot began. Yet the big council spenders are still recruiting people for non-jobs at vast salaries via the pages of the Gruniad.
There really is something rotten about the way we are governed; be it locally or centrally (or from "Europe"). And as for the rest of us poor 60 million suckers , well who gives a stuff. Certainly not the "Honourable" members of the wee emasculated council that used to be called Parliament. Welcome to a State owned society governed by incompetents only interested in themselves. Rant over. BY.
Title: Re: Financial Meltdown
Post by: Colin Bishop on October 09, 2008, 07:41:51 PM
Bryan, I think that, to be fair, a lot of people invested in the Iceland banks as they carried a very high credit rating and all the so called "experts" recommended them as safe havens for your money. Local Authorities are obliged to get the best rates they can for money on deposit and to spread it around so in this instance I don't think they can be accused of acting recklessly.

The basic problem is that the Icelandic Government have not stood behind their banks. Probably because the country itself is going bankrupt. In that case the other Nordic countries, Norway, Sweden and Denmark, were supposed to stand behind Iceland itself but there is a deafening silence in that respect.

Having said that, a while back when we were looking for a place to put some spare funds, I didn't much like the look of the Iceland accounts and settled for a slightly lower rate with Sainsbury's bank!

Colin
Title: Re: Financial Meltdown
Post by: Reade Models on October 09, 2008, 10:42:31 PM
What I can't understand is how all of these various Councils had all of that cash to stash away in overseas accounts? And is Iceland just the tip of the proverbial ice berg (no pun intended).

I have been aware for some time that a lot of what is clawed from us each month in Council Tax goes to pay pension contributions for the town hall fat cats.  Is this the boodle that they had stashed abroad, or have they been grossly overcharging us on top of that for all these years?

I suspect that some very searching questions will need to be asked over the coming weeks...

Malc
Title: Re: Financial Meltdown
Post by: Colin Bishop on October 09, 2008, 10:59:34 PM
Malc. As a Local Goverrnment pensioner I'm one of the fat cats you refer to. I worked 30 odd years to achieve that status paying 6% of my salary in over that period! (before they made me redundant).

The Local Government Pension Fund is totally separate from the Council's accounts although they do pay into it as a good employer should. You mustn't believe everything you read in the Daily
Mail.  %)

What totally P****s me and my ex colleagues off is the propensity for people who are not in possession of the facts to make sweeping statements that bear no relation to the facts!

As far as cash flows are concerned, anyone with the most basic knowledge of how government finance works would be aware that Councils handle large cash flows in and out which they need to deposit at short notice on the money markets to maximise the interest they can get on hehalf of the taxpayers. The Icelandic banks were rated as perfectly good risks until their Government stood by and allowed them to go bust.

If you want to make any further statements on this subject I'd appreciate it if you would do your homework first before parroting tabloid predjudices.  >:(

Colin
Title: Re: Financial Meltdown
Post by: Reade Models on October 09, 2008, 11:24:31 PM
Colin

I'm sorry if my point was a little too close to home for you?

Just to put the record straight, I wasn't paraphrasing the Daily Mail, I was making my own point and I rather regret your accusation - it was totally uncalled for.

At the end of the day, I'm a subject of Her Majesty, a voter, and a taxpayer and damn it, I'm entitled to the benefits of free speech that those attributes in this country afford me.  If that hurts you, please learn to live with it.

Malc
Title: Re: Financial Meltdown
Post by: Colin Bishop on October 09, 2008, 11:42:31 PM
Malc,

I have no problem with criticism provided that it is both constructive and informed.

Yours was neither!

Cheers,

Colin
Title: Re: Financial Meltdown
Post by: Reade Models on October 10, 2008, 12:23:07 AM
Colin

Pray tell me where I was being critical?

I suspect that the general public in the UK have perceptions of local government that are pretty similar to my own?  If those perceptions are misguided, please don't blame the public.  As a local government officer (a fat cat by your own admission) you and your colleagues surely only have yourselves to blame?  Frankly, (and here I am being rather critical) your 'I know better than you' attitude on this subject is precisely what we, the general public, find to be so distasteful about local government.

Truth is that the general public are sick to death of being forced to fund the index linked retirement annuities for the of likes of yourself when they can't afford to fund their own retirements.  The realisation that there are also apparently large amounts of cash on deposit all over the place is a new revelation that will certainly raise the eyebrows of long suffering Council Tax payers - wrong perceptions or not?

Local government is grossly overweight - it should be a quarter of the size that which it currently is.  Jobs in council offices should be real jobs - and please don't try to sell it to this Forum that they are, we do read the job advertisements in newspapers.  Whilst we're on the subject, we would also like to see local councils reverting to the position were they actually provide us with real services for our hard earned money.  Weekly refuse collections would be a good start?

If there is anything to be gained from the current financial crisis, I truly hope that it is reflected in vastly improved efficiencies, and a much reduced wage/pension bill in local government.  It is truly in dire need of root and branch reform.

Colin, I hold nothing personally against you, or what you were before retirement. I do also sincerely hope that this exchange will be taken, as intended by me, in the best interests of freedom of open discussion, and that neither of us will lower the tone of this thread to that of a personal slanging match - something that I am most anxious to avoid.  I will defend my own position most vigorously though, as is my right.

My best regards, Malcolm
Title: Re: Financial Meltdown
Post by: Shipmate60 on October 10, 2008, 12:36:17 AM
Malc,
Pension reform is on its way.
Civil Service and Local Govt are introducing "Median pensions".
What this means is the tie to final salary will be smashed.
The salary that pension is calculated on will be the median from initial salary to final salary.
When I first started in the Civil Service our pay was compared to outside industry (I was a fitter and Turner).
This figure was reduced by 5% for job security, and a further 5% for a non-contributory pension.
At that time there wasn't anyone paying 10% into a pension as almost all Company Pensions were Final Salary too.
On top of this I was also paying an additional 3%, and still am.
So the final figure is actually 13%, again more than outside industry.
We will be the last generation getting the Final Salary Pension, so you should feel better that we will be getting far less for our contributions.

Bob
Title: Re: Financial Meltdown
Post by: Proteus on October 10, 2008, 12:40:11 AM
Just for information one of the Icelandic bank's was in the Mail on Sunday that it  has been pushing as the best place to get a good return on your savings, this is in the last two weeks

 Proteus
Title: Re: Financial Meltdown
Post by: Reade Models on October 10, 2008, 06:18:28 AM
We will be the last generation getting the Final Salary Pension, so you should feel better that we will be getting far less for our contributions.

Good God, have the public got to bear these costs for another GENERATION?  I was rather hoping that local government would receive the root and branch reform treatment if not before the next general election, then certainly immediately after it?

(and yes, I will feel better when local government employees are forced to survive on the same terms as the rest of us)!

Malc
Title: Re: Financial Meltdown
Post by: White Ensign on October 10, 2008, 07:37:18 AM
Just out of interest, without being sarcastic (if possible):

Now that our hard-earned nesteggs melt away, do our debits the same?

The first German bank-managers had been fired for their unprofessional attitude. Now the sue their banks to pay their bonus in case of being sacked!!!
This is something which leaves a real bad taste....: They smash 520 000 000 Euros of our money and claim for a "Golden Handshake"?????

Thank god my English is not good enough to express what I think about it... and would lead to a 3-lifetime-ban from that page...

Jörg
Title: Re: Financial Meltdown
Post by: polaris on October 10, 2008, 09:45:02 AM

Dear All,

How Public bodies like Council's and Police Authorities are able to place Public funds outside of GB (offshore banking), beggars belief. No Public funds from local tax payers paid to local authorities should be permitted to leave GB, and such funds should only be banked in British banks. If they need to invest, they should do so via Govt. bonds and securities, and NOT gamble OUR money chasing high interest rates overseas. Anyone wisely advise should know that the higher the interest the higher the risk, and the risk is further increased when dealing with overseas, and further again when dealing in a country with a short track record. Ok, Switzerland and other similar locations do not pay the interest rates that other countries do, but the money is a damn site safer.

So, now we will have the County Councils with their hands out begging, and guess who is going to pay for it all... of course we will! >>:-( In the light of all this, any Council officer/official with any involvement in such investments that will now cost GB £1B should be fired, and the ridiculous salaries paid to County officers should be dramatically reduced. The rest of the country is feeling it, why should they be exempt... it is our money they are playing with - and loosing! >>:-(

Regards, Bernard
Title: Re: Financial Meltdown
Post by: ronkh on October 10, 2008, 10:33:00 AM
it is our money they are playing with - and loosing! Tickoff
Loosing for sure. To make up for this "crime", you, me and all taxpayers, will now suffer for this incompitance for years in the cost of increased poll-tax.
How come councils had so much of our money to "invest" in the first place? Why couldn't this money be used to help pay for OAP's heating bills etc. For community work. For more bobbys on the beat, instead of trying to get extra higher interest rates in a high risk move?
The councils are/were always saying how hard up they are and that they have to cut back on essentials. They will certainly cut back now and who are the ones who are going to suffer?
For many more years.
And local government employees will not suffer. Could you see the government allowing the poor things to suffer like us? They are not on the same planet as us and have no idea of the real world.
Title: Re: Financial Meltdown
Post by: Colin Bishop on October 10, 2008, 10:51:02 AM
Whee! this has brought out a lot of prejudices hasn't it?". I don't mind other people holding different views to me but just wish they were based upon facts rather than half truths peddled by the media and "my mate with a chip on his shoulder".

Yes, there are aspects of local government which can be criticised, same with central government, the banks, big business et. etc. We all have our favourite targets. Of course there is often some truth in the accusations but the real picture is always much more complex than you can pick up from the papers and TV where everything has to be dumbed down.

In my latter years in local Government I dealt extensively with the private sector because we were outsourcing just about everything we could using the mantra Public Bad/Private Good. What a joke! It was a real eye opener to see some of the featherbedding that went on in the so called lean, mean private sector and the collusion to keep contract prices up to fleece the taxpayer. Not always of course, but enough to convince me that the private sector doesn't hold any moral authority over their public sector counterparts. Contractors would frequently do anything to wriggle out of their contractual obligations and we no longer had the expert staff in house to hold them to account.

Regarding the old chestnut of waste collection, i think you will find that in the majority of cases this is now carried out by private contractors rather than local government staff. Recycling is a good idea if done properly but the real reason for weekly waste collections being stopped was central government turning off the funding tap to save money.

Pension? Well, public sector pensions have not got better, in fact the discretionary element has got a lot worse. What you are seeing is the private sector walking away from their moral obligations towards their staff in order to chase profits. Some final pension schemes in the private sector have genuinely failed. But a lot of others have just used this as an excuse to jump onto the bandwagon. It was not so long ago that many private sector pension schemes from big companies were significantly better that public sector ones but this is conveniently forgotten.

Let's for a moment turn things round the other way and express a view held by many in the public sector. "People who are self employed pay much less tax than I do because of imaginative use of "allowances". They also drive much more expensive cars than me as they get them on the business. In fact they are just a bunch of tax cheats when my tax is deducted from source in full."

Is that generally true? Of course not! But there are enough instances of it happening to sow healthy suspicion in the minds of us who have no option but to pay their taxes. (I know of at least two significant local businesses in the motor trade who are happy to take cash in hand - no, I don't use them myself). But my point is that this sort of accusation is exactly the counterpart of the ill informed attacks on the public sector you can read above. Enough truth to make it sound credible but nowhere near the real facts of the matter.

Colin

Title: Re: Financial Meltdown
Post by: Billyruffian on October 10, 2008, 11:23:55 AM
The start to the horrific mess started way back in Maggies day - and I am a firm Maggie fan whe, for some inane reason the Bank of Engkand was deregulated for want of a better word thereby removing the power to control interest rates from government direct to the Bank of England.

On the back of this we have had irresponsible banks stuffing unnaffordable mortgages into pockets - some as silly as 125%, 6 times earnings for 35 years.  Did these idiots who get salaries of close on £1m per year and bonuses in excess of this really think that the housing market was never goiung to readjust.

The we had the misfortune of 10years of Gordon Brown as chancellor who only knows how to spend money and massage the jobs market by employing hundreds of thousans in the public sector.  Then New Labour in their manifesto of 1983 categorically promised never to nationalise banking - oh really!!

Then he robs the pension funds to the tune of £5b per year to try and disguise his "black hole" which at that time was a paltry £10b.

If ever there was a point to EEC now was the time to unite but now each look after their own. This was the time to get ourselves out.

Now we can raise £500b to fund the banks which according to Mr Darling (how can we have a chancellor that looks like a pantomine dame?) is no different to funding a new building project.  Fine then put the £5b you stole from the pensions back in.

At least Dick Turpin had the decency to wear a mask.

Rant over - last one out turn the lights off.
Title: Re: Financial Meltdown
Post by: Reade Models on October 10, 2008, 11:29:14 AM
In my latter years in local Government I dealt extensively with the private sector because we were outsourcing just about everything we could using the mantra Public Bad/Private Good. What a joke! It was a real eye opener to see some of the featherbedding that went on in the so called lean, mean private sector and the collusion to keep contract prices up to fleece the taxpayer.

Colin

How right you are, but therein lies the rub...

I think that Joe Public feels that his hard earned Council tax money is being used to outsource wasteful, expensive and inefficient services from private contractors when the work was being done quite  capably in-house previously?  The refuse collection chestnut is a case in point. I do feel that a lot of the local government nonsense is driven by Brussels via central government, and that we're daft enough to run with it.  To us out here in the cold, it comes across as complete abrogation of responsibility by local authorities.

I also think that Joe Public also feels that local government has been taken over by the lunatics who are now running the asylum?  Jobs to measure the effects of passing clouds, grass inspectors - when you read some of the job descriptions advertised, crazy examples like this appear to be quite reasonable by comparison?  Criminal records for having the lid on your wheelie bin open 4 inches - come on folks, let's get real...

Prejudiced?  I don't think so.  Misunderstood?  Quite possibly, but as I said earlier, you can't blame Joe Public for that, he forms his own opinions based on what he hears and sees.  Sure, the press and media are responsible to some extent, but you surely have to concede that local government is its own worst enemy?

The Local Authorities Association was damn quick yesterday in getting Gordon Brown to sign on to the fact that investments in Iceland were based on sound principles, but Bernard is absolutely correct, OUR money should not have been invested offshore, and more likely than not WE WILL end up picking up the tab for this debacle.

Malc




 
Title: Re: Financial Meltdown
Post by: Shipmate60 on October 10, 2008, 11:57:55 AM
Malc,
It does seem that the facts could get in the way of the argument.
My job was privatised on 1st April.
The company that won the contract are now saying that we made a mistake in our costings so more jobs than planned will have to go.
And to ensure that this process progresses smoothly they have just appointed a "Change Director" at a greatly inflated salary.
Her Salary is worth about 4 AB's plus pension, plus a car, plus relocation, etc
So glad that Private Industry is so much better.
The service has degraded, our conditions are degrading oh yes and surprise, surprise the costs are rising.

Bob
Title: Re: Financial Meltdown
Post by: Colin Bishop on October 10, 2008, 12:05:18 PM
I quite agree that there are some crazy looking job titles advertised, although not so many as in the past when the Inner London Boroughs were nuclear free people's republics. But it should not be assumed that this is the rule. Most local government staff are normal people working hard at frequently thankless tasks, just as in any other type of employment. Years ago I was taken round a Council home for severely physically and mentally disabled adults. Many of these poor people were horrifically deformed to the extent that it was difficult to find Councillors to make the required regular inspections. The sights and sounds were indescribable but in there were low paid council care staff treating these poor souls with gentleness and as much dignity as possible. At today's prices, somebody doing a job like that for 30+ years (not likely!) would qualify for a pension of around £7,000 a year. Very few LG staff get full pensions because they don't put a full career in. Over 50% are women, not too well paid, who take career breaks to have children. They don't retire rich I can assure you.

Nothing is as it first seems.

Colin
Title: Re: Financial Meltdown
Post by: Reade Models on October 10, 2008, 12:15:30 PM
Bob

I didn't say that private industry was better - on the contrary, I feel that the labour force in local councils generally do/did a fine job.  It's the plonkers at the top who have lost the plot.

Of course any private contractor who is offered taxpayers money for any sort of service, be it emptying wheelie bins to management consultancy will naturally cream it for all they're worth.

As a taxpayer, all I want is value for the £120+ per month for 10 months per year that I have to pay to my local council for - er, well, I haven't actually discovered what it is that they actually do provide apart from a fortnightly wheelie bin collection?

Here's an interesting one...

Each year here in Cheshire (Vale Royal Borough Council / Cheshire County Council) there has been an ever increasing precept for policing.  I have a friend who is a policeman (that'll probably kill my business completely  :embarrassed:) who reliably informs me that there are now TWO policemen on duty in the whole of rural Cheshire on any given evening.

Makes you think doesn't it?

Malc


Title: Re: Financial Meltdown
Post by: Reade Models on October 10, 2008, 12:25:41 PM
At today's prices, somebody doing a job like that for 30+ years (not likely!) would qualify for a pension of around £7,000 a year. Very few LG staff get full pensions because they don't put a full career in. Over 50% are women, not too well paid, who take career breaks to have children. They don't retire rich I can assure you.

Nothing is as it first seems.

Colin

Colin,

I have the greatest admiration for the good souls who do that sort of work.  They are remarkable people.

£7K per year?  Show me where this Council Home is, and I'll do it!  I have been paying into my own personal pension plan for the past 15 years since we returned from Africa, and my pension is currently set to pay me less than a tenth of that figure annually!  (I was ripped off by a Natwest private financial advisor - who is now on long term 'stress' related sick leave).

Malc


Title: Re: Financial Meltdown
Post by: Colin Bishop on October 10, 2008, 12:35:39 PM
You'll have to put in your 35 years first Malc!

That's the trouble with pension schemes. You need to build up a pot of around half a million to get a £25k pa return. And that takes a hell of a long time, especially if you've got to find it all yourself with no helpful employer's contribution.

Colin
Title: Re: Financial Meltdown
Post by: Reade Models on October 10, 2008, 12:50:54 PM
Colin

Most of the contracts that I work on last between 3 and 6 months.  I expect to be laid-off between three and four times per year, sometimes it's more often than that.  It's down to me to find a new job each time one ends.

No sick pay, no holiday pay, paid hourly, no employers pension contributions, loss of pay if I have to visit the doctor/dentist etc.

2008 is my 41st year...

Would I have it any other way?  You can bet your sweet bippy that I would, but I do live in the real world.

Malc




Title: Re: Financial Meltdown
Post by: Welsh_Druid on October 10, 2008, 02:30:56 PM
Malcolm

I have refrained so far from getting involved in this discussion - mainly because Colin had very adequately covered all the points I would have made myself. However I must comment on "  I feel that the labour force in local councils generally do/did a fine job.  It's the plonkers at the top who have lost the plot."

The plonkers at the top who approve the positions which you object to and who dictate policy are the Councillors. Who appoints these  Councillors ? - YOU do - you do vote don't you ?


"er, well, I haven't actually discovered what it is that they actually do provide apart from a fortnightly wheelie bin collection?"     

When you get your council tax demand each year it is spelt out quite clearly in the accompanying papers what percentage of your council tax pays for what.  You do read it don't you ?

Don B.


Title: Re: Financial Meltdown
Post by: Bee on October 10, 2008, 03:46:16 PM
Getting back on topic. Can anyone explain where the money has gone?
Title: Re: Financial Meltdown
Post by: Martin [Admin] on October 10, 2008, 03:57:03 PM

.... well I ain't got it!  :(
Title: Re: Financial Meltdown
Post by: dreadnought72 on October 10, 2008, 03:59:28 PM
By "gone" you assume it existed in the first place. In some instances it hasn't.

A mortgage is a loan: usually along the lines of "I promise to pay back 2 to 3 times what I borrowed".

So if bank A sell your mortgage to bank B in order to make a quick profit, bank A have relied on your home and 1 to 2 times your property's value. The excess money doesn't exist yet, as it's based on your future ability to pay the mortgage. The money that's gone ("this mortgage is worthless") is virtual money.

Andy, longing for the end of unrestricted capitalism.

Title: Re: Financial Meltdown
Post by: Colin Bishop on October 10, 2008, 04:00:39 PM
In here?

Title: Re: Financial Meltdown
Post by: Reade Models on October 10, 2008, 04:17:58 PM
Don

I had a seat on our local Parish Council for some years, and the clerk to that Council was also a Borough Councillor, a Lib-Dem and although not of my own political alignment, which is probably somewhere a little to the right of Atilla the Hun, was a real asset to the area until he was ousted by a Conservative at last elections in May.  I talk to and work with these guys on a regular and ongoing basis.

The feedback that I get from them is that the Borough Council (elected officials) were presented with a fait-accompli by central government with regard to the refuse collection debacle - they had no option but to introduce it. Voting at local level apparently is pretty much an academic exercise in certain situations?

You are perfectly correct about the annual breakdown of Council tax allocation. - And yes, I do read it (can't make head nor tail of it, but I do read it).

Plonkers?  Yes, most certainly - any organisation that advertises the sorts of ludicrous job vacancies that local Government, (ours certainly, and most others as well by all accounts), does on a regular basis HAS to be managed by Plonkers!

As I said earlier, it's high time for a root and branch re-organisation of local Government - and the sooner the better!

Regards, Malc




Title: Re: Financial Meltdown
Post by: Colin H on October 10, 2008, 04:49:03 PM
Well I am not as erudite as some of you guy's but I do try to be factual.

The Office of The Deputy Prime Minister (remember him) instructed local government to invest for best return not for safety.

All councils receive central government funding some 3-4 times a year and that is the money that is invested until it is needed for use by the council.

I see both side to the coin I am self employed and my wife works in a council old peoples home and so we have some lively discussions if thats the right word.

From what I know most council employees up to about middle management do try very hard to do their jobs well but some of the top dogs are plonkers. Not all just some and they spend our money willy-nilly especially in the PC department.

As a for instance at the wife's home they used to have residents, then they had clients, now they have service users.

Yes I do know quite a few self employed people who evade paying their taxes avoidance is one thing evasion something else but we all know it happens.

Good and bad on both sides trouble with this site is we only have the good chaps on here and so it can lead to arguments like the present one.

Colin H.
Title: Re: Financial Meltdown
Post by: Colin Bishop on October 10, 2008, 05:06:01 PM
Well Malcolm, Local Government has been continually reorganised in one way or another for the last 20 years or more (I speak from frustrated experience) and the usual effect has simply been to replace one set of problems with another at great expense whilst diverting resources which could have been better applied to providing services. What makes you think that yet another upheaval will make any difference?

Would you prefer local authorities to be abolished and everything run by Whitehall and its Quangos?

One of the problems is that local government in the UK has effectively been emasculated by central government over a period of time and all the strings are pulled by the Government of the day. (Both Labour and Conservatives are equally responsible for this situation.) The hated council tax provides only a relatively small proportion of funding so local authorities have no truly independent fund raising powers of their own. With financial weakness goes lack of accountability as much can simply be blamed on Whitehall. There is little real scope for local action.

Reorganisation is not the key to the problem. You need to overhaul the funding system to give local authorities more control of their tax raising and spending so they can be held to account by their own electorate. Central Government will never allow this and the whole subject of local government finance is now so complex and labyrinthine that hardly anyone understands it or how to make improvements. The situation is not helped by glaring anomalies whereby taxes raised in the south of the country are applied to funding authorities in the North which means that us Southerners are subsidising other parts of the Country to a huge extent. You can just imagine the consequences of attempting to get that put back into a fairer balance.

Colin  
Title: Re: Financial Meltdown
Post by: Colin Bishop on October 10, 2008, 05:12:33 PM
Good points there Colin H and very well put. May I just add that the management "plonkers" at the top are more often than not people who have been parachuted in from the private sector at inflated salaries to "sort things out". Invariably they fail because they do not have a proper understanding of the business they are in. We called them seagull people. They descend on you from a great height, crap all over you and then fly off leaving you to try and clear up the mess. Sound familiar?

Colin
Title: Re: Financial Meltdown
Post by: Reade Models on October 10, 2008, 05:49:37 PM
I'm beginning to think that it's high time that we put this one to bed?

I think that there has been some good discussion on this thread, and I have certainly learned that there is more to the local Government story than initially meets the eye?  Colin H and Mr Bishop have both made extremely valid points.

The prospect of more centralised government of local matters absolutely terrifies me, as does the prospect of further additional tiers of local Government.

All I want to see are sensible, pragmatic and cost effective local services, properly funded and managed by local folk who are aware of the issues.  Oh, and our cash back from Iceland...

I suspect that I may not be alone in that?

Malc
Title: Re: Financial Meltdown
Post by: polaris on October 10, 2008, 06:41:05 PM

Dear Malc,

My only concern at the moment is the mess Councils have got themselves into by amazingly investing money overseas. On the whole I am not too concerned about other functions of County Councils, however, I have seen at first hand some of the quite regular and expensive disasters they manage to achieve - basically through lack of practical knowledge.

Councils are moving quite quickly to outsource many aspects of their general functions, and in some ways I think this a good idea. This still leaves the management chain somewhat too top heavy sometimes, and the general workings can fairly often be cumbersome and long winded resulting in unnecessary expense. Knowing what senior officials can earn and the packages offered (I have no 'direct' involvement with Councils I add), in comparison to general business and corporate salaries, does however make me rather cross sometimes... here for example, not long ago they put up the Council Tax and then voted themselves a 20% salary increase!!! Now councils have lost lot's of our money (looks increasingly that way), it will be interesting to see who gets the chop, and who gets salary reductions!? Mind you, these days accountability doesn't seem to matter... seemingly any public officials can make huge errors and 'mistakes' and refuse to resign! Personally I am all for installing guillotines in all Govt. and local Govt. offices, two mistakes and... chop!  :-))Can't see it happening somehow! :-)

Regards, Bernard
Title: Re: Financial Meltdown
Post by: Bryan Young on October 10, 2008, 07:27:12 PM
After reading all of the posts on this subject, I am now quite confused. Colin (Bishop) has stoutly defended his corner; as have others. It all makes for interesting reading. We,the general public, elect councillors. We, the public, do not elect the faceless "masters" of our elected representatives. My query is.....how much input, sway,influence and authority do "councillors" have? I get the impression that apart from being as thick as 2 short planks they all depend for judgements on advice given by people who have been employed at great expense who have to "justify" their employment. Who pays?
Title: Re: Financial Meltdown
Post by: Bryan Young on October 10, 2008, 07:31:21 PM
To Colin Bishop.....you have been given a rough ride recently.....and came through OK, but the defending of the indefensible cannot go on for much longer. Public anger is growing and I would hate to see you caught up in it. Cheers. BY.
Title: Re: Financial Meltdown
Post by: Proteus on October 10, 2008, 08:40:10 PM
From my very first to my last job in local government I had elected representatives on the interview board and that was over 25 + years so they are responsible for the people that make the decisions, also I could have earned more money in private firmas but I was looking to the future so was happy to put the money towards a good pension.

Proteus
Title: Re: Financial Meltdown
Post by: polaris on October 11, 2008, 02:15:12 PM

Dear Proteus,

I believe salaries differ county by county, and there doesn't seem to be any laid down rule? Length or service (rank in any Dept.), does make a difference, and there is always promotion obviously.

As to Local & gnrl. Govt. pensions I am told they are equivalent to apx. 25% in addition to whatever salary might be being earned since they are 'solid gold' Govt. backed (my second cousin worked in the Treasury). This calc. is assumed as any of us other mere mortals must take our chance on the open market... and we all know what that means! The Govt. previously encouraging the whole populace to take out pension schemes was a touch irresponsible with the current situation - no Govt. parachute protection for this. Thankfully I ditched private pensions and shares before the last glitch, and never considered going back into them - very partic. this last two years where it was quite obvious it was going to end in tears at some stage (especially with the ridiculous state the property mkt. got itself into).

Whilst no bank can be said to be absolutely safe at the moment, I choose very carefully and have stuck with mine for many years now. I keep a very close watch on what they are up to via my Bank Mgr.. They bought the best bit's of Leemans when this crashed a few weeks ago, and no-one spends £700M in a recession unless they have a pretty good idea of what's what. My bank (and I am not going to mention any name), satisfies me with it's wide diversity and non dependence on narrow activities like quite a few others; thankfully it's exposure was minimal to the USA Sub Prime nonsense, and profits were only down by a third.

As to shares and the like, it's actually quite a good time to think of buying - after some very careful watching. Many significant companies are worth considerably more than their low share price, and it won't be too long before things improve. It is surprising how some in the financial world seem to be panicing like amateur investors, but one wonders whether there is a motive here... a low market offers good future profits. As to property, well, it's not quite bottomed yet, and there will be opportunity for some to buy well even at this stage - a buyers mkt. now as we all know.

The reason I mention all this, is that one would have thought that Finance Depts. of Councils could have weighed all this up at least five + years ago? - since lot's of councils have been caught out by this, they must have been following what the Association of County Councils were suggesting - and some people in this body should obviously be shot! The first warning signs that things were starting to get unstable was in 1999, and when the property mkt. went silly a year or so ago this was a very significant red light. Nothing new in what's happened... it's happened before, it's happened now, and it will happen again - though I suspect there will be strong Govt. regulation to help it not happen again (partic. with councils who should definitely not be permitted to freely invest in the same way as private individuals - and very very particularly not overseas!). If councils hadn't invested so unwisely, now would be a good time to have invested in increasing their housing stock - I was always against the selling off of council houses - unless they were replaced.

Regards, Bernard

Title: Re: Financial Meltdown
Post by: Colin Bishop on October 12, 2008, 12:21:27 AM
I think I should point out that I am not trying to defend the indefensible, simply attempting to get the facts straight where they are being used to support people's arguments. Yes, there are a lot of valid criticisms  which can be made of the local government system, as can of central government and the private sector. In order to have a fighting chance of putting some of it right you do have to have a basic understanding of how the system works (or doesn't!)

In case anyone thinks I am particularly partisan, my redundancy and early retirement was not totally unconnected with the fact that I made something of a nuisance of myself with senior managers by speaking out against a computer system that IBM assured us would meet just about all the Council's needs at a cost of around £25m and save millions of pounds in the process. I and a few others expressed our strong opinions that it was not fit for purpose but the senior managers and elected members preferred to listen to IBM and gave them a ten year contract to install and manage it. Five years later the contract with IBM has now been terminated as it did not deliver the promised benefits and savings. They are still saddled with the system though! In my particular area of work i reckoned we couldhave got a decent up to date semi bespoke system for around £125k whereas the IBM offering cost over £2m and has never worked properly. It was very frustrating and I'm glad I'm out of it.

Colin
Title: Re: Financial Meltdown
Post by: Reade Models on October 12, 2008, 08:34:55 AM

Colin

As Will Rogers said.

"When you find yourself in a hole, stop digging!"

Malc


Title: Re: Financial Meltdown
Post by: Bryan Young on October 12, 2008, 09:02:49 PM
Colin

I'm sorry if my point was a little too close to home for you?

Just to put the record straight, I wasn't paraphrasing the Daily Mail, I was making my own point and I rather regret your accusation - it was totally uncalled for.

At the end of the day, I'm a subject of Her Majesty, a voter, and a taxpayer and damn it, I'm entitled to the benefits of free speech that those attributes in this country afford me.  If that hurts you, please learn to live with it.

Malc
And just is what is wrong with the "Daily Mail"? They appear to get things right more often than the licking reports of the so-called "broardsheets"
Title: Re: Financial Meltdown
Post by: Colin Bishop on October 12, 2008, 10:41:34 PM
I always find the "Daily Wail" a bit whinging in most respects. Although they sometimes make some good points, too many of the columnists seem bent on looking for the worst in things rather than reporting objectively. Years ago, before it went tabloid and downmarket, I used to be a Daily Mail reader (Moomin days!). having I tried most of the other papers I find that the Times is the only one I am tolerably comfortable with but I think that everything you read in the press needs to be taken with a pinch of salt and cross referenced against other sources wherever possible.

How do I know what's in the Mail? One of my daughters takes it.  :-)

Colin
Title: Re: Financial Meltdown
Post by: FullLeatherJacket on October 13, 2008, 11:06:59 AM
Sorry - I've come late to this thread and thought it might have something to do with the current financial meltdown (the title being supposedly an indication). Instead it's descended into the usual stuff about public vs private sector pay and pensions, The Daily Wail, Council Tax etc etc ad flaming nauseam.

The current crisis was created by greedy folk lending other people's money to those who couldn't afford to repay it - simply so that they could obtain huge cash bungs for themselves. The dear Colonials may have invented these scams and perfected them, but a sweet little bunch of OK Henries in Canary Wharf soon realised what a gravy train it was so they joined in the fun.

Now the wheels have come off, they've gone bleating to the Government (i.e. you and me...) to help them out. Needless to say, HMG has obliged - largely for its own political survival -  but not before the bottom-feeders have talked down share prices 40% in the meantime. Has anyone seen the sharp rise in the FTSE this morning, just after the fat cats had got their bail-out underwritten? Nice one, eh? They can now buy back at rock-bottom prices all the shares which they had previously talked down, and flog them once the price gets back to somewhere sensible............. KerCHING!

We never learn, do we?

BTW my Civil Service pension is MY money, not anyone else's. It's not some unearned, ex-gratis bung; it's MY salary which I didn't draw while I was working. Can you really imagine any  government giving its own petty minions something for nothing? I decided when I started work that I would forgo a big salary for the benefits which would accrue later in life - a conscious choice on my part, not a privilege granted to some otherwise-undefinable social group. I don't recall seeing any application form which had any undue restrictions, so I assume the choice to work in the public sector was open to anyone with the relevant educational qualifications. To put it bluntly (Bluntly? Me??), you made your bed and I made mine, so live with it.

As for the Mail, I shudder when I think of the Editor of that lamentable rag, who decries all public sector workers a reasonable level of pay and pension and castigates minority groups for most of society's ills while he pulls in over £1.2M a year. If you choose to buy it and read it then you're paying him handsomely to feed your prejudices, and I feel sorry for you. IMHO the only thing missing from the Mail is a perforation every six inches and a hole in the top corner for the string.........

Off to make some more stuff for the Blackpool show. See you there?

FLJ
Title: Re: Financial Meltdown
Post by: Colin Bishop on October 13, 2008, 11:53:42 AM
Oh FLJ, I DO love you.... :kiss: :kiss: :kiss:
Title: Re: Financial Meltdown
Post by: Peterm on October 13, 2008, 02:17:35 PM
FLJ, I am with you all the way.   I did 24 years in the Armed Forces and 25 years as a sort of Civil Servant.   My pensions are not enormous, but at least I earned them and saved for them.   Pete M
Title: Re: Financial Meltdown
Post by: polaris on October 14, 2008, 11:37:42 AM

Dear FLJ,

It's not quite as 'cut-&-dried' as that. There was indeed over lending, but there was also excessive borrowing - beyond means. We have all had that stuff through the letterbox... instant £25k, just phone and get it... take a £50k loan to do this and that, easy set up, no problem. The Treasury and the Govt. should have seen this meltdown coming... it was inevitable: this begs the question of whether to get rid of Brown because he allowed it to happen (let the good times roll), or, give him a medal for going a long way in sorting the mess out! ::)!

In between numerous bank's execs. greed and avarice and the people who over borrowed &/or bought property on a mkt. high (or rising mkt), there come the traders (the term bottom feeders is apt), and this bunch are just as responsible (if not moreso in some ways), in taking a major roll in making the situation very much worse. Then comes the Treasury and Govt., who failed to see and heed the warning signs and protect themselves - and more importantly us! Then come the greedy who seek as high an interest rate as possible, seemingly ignoring the fact that high interest means more risk - into this bracket fit's the councils and other local Govt. bodies (who should never have behaved like 'investors' moving money into overseas tax havens) - worse still when there is higher interest involved in off-shore banking. Switzerland is 3% and has been for years, but they are a very shrewd bunch over there and they seemingly take more care on what they do with peoples money - hence why the interest is less).

So, placing the blame is not quite as simple as it initially seems, but the major cause is most likely lack of regulation in banking and gnrl. financial mkts... something that will happen in GB, and now almost certainly world wide. A very good thing too.

Regards, Bernard
Title: Re: Financial Meltdown
Post by: cbr900 on October 14, 2008, 01:11:02 PM
On our news tonight they stated that Browny paid out to stop the rot then sacked all the bank managers
is that true, if seems he has at least started to tidy up a bit...........


Roy
Title: Re: Financial Meltdown
Post by: polaris on October 14, 2008, 02:15:31 PM

Dear Roy,

The Chairmen and Chief Execs. of RBS and HBOS have indeed gone. Don't forget the Treasury and Govt. are partly to blame for the mess, so Brown can't be too sweeping - there wouldn't be many people left all round otherwise!!! - including an Ex Prime Minister! O0!!!

Regards, Bernard
Title: Re: Financial Meltdown
Post by: tigertiger on October 14, 2008, 03:43:26 PM
For all those who believed in a free market economy, and decried regulation as being 'the Nanny State'.

The present situation we are in is because of a lack of regulation, and also as a result of poor risk management.

The biggest case for regualtion IMHO is the 'legal' practice of short selling. The FSA has put a temporary ban on it, it should be made illegal.
Title: Re: Financial Meltdown
Post by: Roger in France on October 14, 2008, 04:36:53 PM
Within a capitalistic "free market" there will always be winners and losers. Unfortunately it was always the the same "winners" until now. As some of them have felt the pinch (a serious pinch) for the first time they have squealed hard. In the past "the winners" won big or reasonably well. If you are poor then even a small change hurts disproportionately.

However, even now "the winners" will benefit from the clever contracts they negotiated and go out with significant benefits. And who allowed such clever contracts and obscene rewards? The middle men who hitched their futures to the overpaid stars.

When I helped enforce the Consumer Credit Act I was sickened by some of the practices I observed and more still by the attitudes of many of the fat cats. I often asked the question, "OK so your so good but maybe you could have done better still if you had tried harder. But who holds you to account?"

I beleived strongly in the power of Credit Unions to empower the poor but the major banks and financial institutions did all they could to dismiss them as being of no consequence. Similarly, sucessive Governments have damned them with faint praise.

Plese remember that local govt. must invest the short term funds they hold to the best advantage, the law demands that and Central Govt. requires it and regulates where they may invest and even recommends with whom.

I have yet to meet a principled banker and would gladly see all the directors and senior managers of the clearing banks shot!

Roger in France.
Title: Re: Financial Meltdown
Post by: Shipmate60 on October 14, 2008, 06:07:00 PM
Roger,

I have yet to meet a principled banker and would gladly see all the directors and senior managers of the clearing banks shot!

But lots of taxpayers would!!!!

Bob
Title: Re: Financial Meltdown
Post by: malcolmfrary on October 14, 2008, 08:00:50 PM
Tiger, there is legal and there is legitimate, and there is a reason for there being two different words.
The problems have been building since the early eighties with the advent of the yuppies.  These were the people who were happy to receive a good education in one of the socially useful professions before diving off to the gravy train having stopped someone potentially useful getting their qualification.  Any attempt at action would have been shouted down by those who perceived that their interests were best served by a fat cat society and had the means at their disposal to shout louder than anybody else.  Dwight D Eisenhower once said that communism would die of its own rottenness, it was not apparent at the time but this was also true of some brands of capitalism.
Shipmate - bullets are expensive.  Ropes can be re-used.
Anyway, some imponderables.
MPs insist on prefixing their names with "Honourable".  This is probably to fool us and remind them.
Judges title themselves "Justice".  They are rarely allowed to dispense this, usually its law.
That feels better.
Title: Re: Financial Meltdown
Post by: FullLeatherJacket on October 14, 2008, 11:24:50 PM
Gentlemen

I haven't read a single thing that's been posted since my little rant with which I would disagree by one iota. I just despair when a bunch of elderly model boat enthusiasts seem to have more fingers on the pulse than a whole wunch of bankers (if that's the correct collective noun). So where exactly were  the FSA?? I think we should be told.

If a bloke in a hoodie puts an £8 bottle of hootch into his pocket in his local supermarket, that's theft. If a chap in an Armani suit puts £10M of someone else's dosh into an offshore bank account then that's an administrative oversight. "It's the same the whole world over........." etc etc (to the sound of a scratchy violin).

Been there; checked the books; read the caution; been to court; watched the b******s walk away. Nothing changes.

Build model boats and keep your head down - the rest is propaganda.

FLJ
Title: Re: Financial Meltdown
Post by: Colin Bishop on October 15, 2008, 10:17:29 AM
I believe there is a move to rename the FSA SFA....
Title: Re: Financial Meltdown
Post by: Colin Bishop on October 16, 2008, 01:45:41 PM
Amusing to see today that the Audit Commission had £10m invested in Icelandic Banks.  ::)
Title: Re: Financial Meltdown
Post by: polaris on October 16, 2008, 04:09:11 PM

Dear All,

This 'thing' with Icelandic banks is amazing isn't it. How come all the local and central Govt. have had such an interest there? Ok, I know the interest rate has a lot to do with it, but somehow I can't help feeling there is something else........

Isle of Man, Jersey, Switzerland, Luxembourg, Bahamas, and all the other places... but it has to be Iceland! They weren't/aren't the only ones offering higher than normal rates, and, as we all know, when investing there is always the choice of investment routes... higher interest/higher risk, lower interest, lower risk. What right have all these public bodies to gamble on the markets with our money??? Ok, I have a 'thing'/gripe about this, and I am certain that most if not all of us do... it just makes me a bit angry that's all! >>:-( >>:-( >>:-(!!!!!!!!!!!!!!! I know where I would like to see some of these people go.......... :police: <*<!!!

Regards, Bernard
Title: Re: Financial Meltdown
Post by: Colin H on October 16, 2008, 05:16:33 PM
In our local rag today it was revealed that Nottm City Council was still investing in Iceland afetr they had been advised not to.


Colin H.
Title: Re: Financial Meltdown
Post by: polaris on October 16, 2008, 05:56:11 PM

Dear Colin,

Well then, it's time to get people to petition for the resignation of the Chief Exec., Finance Exec., and any others within this council that had any involvement with such totally irresponsible action with tax payers funds. Simple as that... it's your right and YOUR money they have squandered. This is negligence.

Regards, Bernard
Title: Re: Financial Meltdown
Post by: Bartapuss on October 18, 2008, 11:12:56 PM
It least in 1929 some of the bankers threw themselves out the nearest tall building window, were not exactly hearing the thuds of merchant bankers and hedge fund managers hitting the pavement now, are we, more like them laughing in our faces as they receive multi million pound payoffs and retire to the sun somewhere.