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[Varche]

I have been pondering the current (world) crisis and the role the banks (money markets if you like) are playing.

Here is my take. The banks loan money to countries who need/want money. Everyone is happy. Then some paper shufflers somewhere spot that the maths don't quite add up and the country doesn't look such a good bet  to be able to make its repayments.So what do they do? They UP the interest rate and declare loudly that the (insert name here) country is a bad prospect so the rate goes up and up meaning that the country has less and less money to pay its debts and future debts. Only two possible outcomes. The country sells off its family silver (if it has any or if there are any buyers) OR it defaults meaning the banks lose their money and have to get it back from some other source (otherwise they won't be able to justify continuing to pay themselves fat bonuses)

If it was a family with a loan it would be like upping the mortgage interest rate because a member of the family had lost overtime or a family member had lost their job. Then they couldn't pay their mortgage and ultimately have their home repossessed.

So who actually regulates these bankers who literally have the fate of the world in their hands as they toy with Greece, Italy .....Spain maybe, France who knows where it will end. ??    They could plunge us into a huge depression with their antics. 

maybe just maybe those "grubby" protestors outside St Pauls and Times Square etc have a point 

[cleggy]

I can't pretend to understand it.

What I do know is that the banks make money(lots of it) whatever they do, and pay mega bonus' to those that make it for them

Must be a moral to it somewhere, PERHAPS NO MORALS

[Nickbat]

I have been pondering the current (world) crisis and the role the banks (money markets if you like) are playing.

Here is my take. The banks loan money to countries who need/want money. Everyone is happy. Then some paper shufflers somewhere spot that the maths don't quite add up and the country doesn't look such a good bet  to be able to make its repayments.So what do they do? They UP the interest rate and declare loudly that the (insert name here) country is a bad prospect so the rate goes up and up meaning that the country has less and less money to pay its debts and future debts. Only two possible outcomes. The country sells off its family silver (if it has any or if there are any buyers) OR it defaults meaning the banks lose their money and have to get it back from some other source (otherwise they won't be able to justify continuing to pay themselves fat bonuses)

If it was a family with a loan it would be like upping the mortgage interest rate because a member of the family had lost overtime or a family member had lost their job. Then they couldn't pay their mortgage and ultimately have their home repossessed.

So who actually regulates these bankers who literally have the fate of the world in their hands as they toy with Greece, Italy .....Spain maybe, France who knows where it will end. ??    They could plunge us into a huge depression with their antics. 

maybe just maybe those "grubby" protestors outside St Pauls and Times Square etc have a point 

Sorry, Varche, but blaming it all on the banks and "their antics" is simply wrong. Yes, there have been some dodgy lending practices by some banks, but essentially the problem is that certain countries have been spending too much money. You can see that is the case by looking at their debt/GDP ratios. If you add into that cocktail, the fact that eurozone countries have been locked into a single interest rate, you have the recipe for today's problems. Greece should never have been let into the euro in the first place, but it was a political decision and their books were not exactly pukka. Then again, the EU's books aren't exactly pukka, either. The Greek problem (and those of the other PIIGS) has led to contagion because, these days, banking is a globalised business (rightly or wrongly, and in hindsight, probably the latter). It's no use blaming the rating agencies. All they do is estimate the creditworthiness of countries and commercial enterprises. Despite the fact that fools in the EU have actually suggested regulating them (how? They're largely American?), it is a classic case of shooting the messenger, 'cos you don't like to hear the truth.   

[albitz]

Precisely Nick. To put it another way - if the banks and ratings agencied werent keeping an eye on the figures and charging interest/ giving ratings to countries accordingly - we would still have Gormless in No10 telling us that the economy is enjoying the biggest boom in its history,and everything in the U.K. garden is as rosy as it could possibly be. Anything anyone reads/ hears to the contrary is of course from the lying right wing media.
The story would be the same all over the world.Politicians are for the most part liars.The markets are brutal,cruel at times but as we have seen  - they cant get away with lying for too long.They are in the final analysis lying to themselves and run themselves into trouble.

[Dishevelled Den]

I think, given the mess that exists at the moment, it's fair to say that there's been a marked absence in any form of effective regulation.

It must also be said that there has been more than a fair indication that many people were living well beyond their means by enjoying a lifestyle supported by the availability of ready credit.

Irrespective of where the blame for all this may be justifiably apportioned, what must be obvious is that the further ‘we’ stray from basic good sense, the more latitude we give to politicians to massage our tendency to try and improve our standard of ‘living’ by marking that improvement in a materialistic way and the more we depend on a capricious financial industry for our national well-being (rather than manufacturing and industries producing tangible products), the more likely it is that we will continue to be held hostage to those for whom money is god.

Corporatism will be the ruination of many in the coming years.

[albitz]

A lot of truth in that Den.We (as a country) need to accept that in the short term the financial industry is at present our greatest asset (in financial terms) but we must be determined over the longer term to change that back to a more balanced economy.Thats why Germany is in its very strong position presently,relative to the rest of Europe.

[Johnny English]

I have been pondering the current (world) crisis and the role the banks (money markets if you like) are playing.

Here is my take. The banks loan money to countries who need/want money. Everyone is happy. Then some paper shufflers somewhere spot that the maths don't quite add up and the country doesn't look such a good bet  to be able to make its repayments.So what do they do? They UP the interest rate and declare loudly that the (insert name here) country is a bad prospect so the rate goes up and up meaning that the country has less and less money to pay its debts and future debts. Only two possible outcomes. The country sells off its family silver (if it has any or if there are any buyers) OR it defaults meaning the banks lose their money and have to get it back from some other source (otherwise they won't be able to justify continuing to pay themselves fat bonuses)

If it was a family with a loan it would be like upping the mortgage interest rate because a member of the family had lost overtime or a family member had lost their job. Then they couldn't pay their mortgage and ultimately have their home repossessed.

So who actually regulates these bankers who literally have the fate of the world in their hands as they toy with Greece, Italy .....Spain maybe, France who knows where it will end. ??    They could plunge us into a huge depression with their antics. 

maybe just maybe those "grubby" protestors outside St Pauls and Times Square etc have a point 

It's no use blaming the rating agencies.

Ok but who rate these rating agencies? Their analysis and announcies are often full of nonsense!

[Varche]

That is my point. Politicians (in theory) answer to the people and are doing the right things for their country. Money markets have little interest in anything other making money. There is a lot more at stake here than making a bit of money!

Germany- a strong economy. Really? Only while there are people in other countries that can afford to buy their goods. The Italians, Greeks and so on won't be buying much from them pretty soon. Then the French............. 

[Johnny English]

Yea...once I've seen a short cartoon about how the bank system is working. Have you ever known that neither of our countries have the right of money printing? This right is owned by a closed financial group all around western world and they can do anything they want.

[cem_devecioglu]

I have been pondering the current (world) crisis and the role the banks (money markets if you like) are playing.

Here is my take. The banks loan money to countries who need/want money. Everyone is happy. Then some paper shufflers somewhere spot that the maths don't quite add up and the country doesn't look such a good bet  to be able to make its repayments.So what do they do? They UP the interest rate and declare loudly that the (insert name here) country is a bad prospect so the rate goes up and up meaning that the country has less and less money to pay its debts and future debts. Only two possible outcomes. The country sells off its family silver (if it has any or if there are any buyers) OR it defaults meaning the banks lose their money and have to get it back from some other source (otherwise they won't be able to justify continuing to pay themselves fat bonuses)

If it was a family with a loan it would be like upping the mortgage interest rate because a member of the family had lost overtime or a family member had lost their job. Then they couldn't pay their mortgage and ultimately have their home repossessed.

So who actually regulates these bankers who literally have the fate of the world in their hands as they toy with Greece, Italy .....Spain maybe, France who knows where it will end. ??    They could plunge us into a huge depression with their antics. 

maybe just maybe those "grubby" protestors outside St Pauls and Times Square etc have a point 

Sorry, Varche, but blaming it all on the banks and "their antics" is simply wrong. Yes, there have been some dodgy lending practices by some banks, but essentially the problem is that certain countries have been spending too much money. You can see that is the case by looking at their debt/GDP ratios. If you add into that cocktail, the fact that eurozone countries have been locked into a single interest rate, you have the recipe for today's problems. Greece should never have been let into the euro in the first place, but it was a political decision and their books were not exactly pukka. Then again, the EU's books aren't exactly pukka, either. The Greek problem (and those of the other PIIGS) has led to contagion because, these days, banking is a globalised business (rightly or wrongly, and in hindsight, probably the latter). It's no use blaming the rating agencies. All they do is estimate the creditworthiness of countries and commercial enterprises. Despite the fact that fools in the EU have actually suggested regulating them (how? They're largely American?), it is a classic case of shooting the messenger, 'cos you don't like to hear the truth. 

good points Nickbat.. but there remains still many questions to be asked.. first and the most important, how in history these banks and capital flow organized at the beginning ? do they have political interactions ? who decides on their actions ? who is the biggest/bigger share holders(s) ?

[cem_devecioglu]

I think, given the mess that exists at the moment, it's fair to say that there's been a marked absence in any form of effective regulation.

It must also be said that there has been more than a fair indication that many people were living well beyond their means by enjoying a lifestyle supported by the availability of ready credit.

Irrespective of where the blame for all this may be justifiably apportioned, what must be obvious is that the further ‘we’ stray from basic good sense, the more latitude we give to politicians to massage our tendency to try and improve our standard of ‘living’ by marking that improvement in a materialistic way and the more we depend on a capricious financial industry for our national well-being (rather than manufacturing and industries producing tangible products), the more likely it is that we will continue to be held hostage to those for whom money is god.

Corporatism will be the ruination of many in the coming years.

another good point    now here is the question : why on earth even on simple subjects there are many strong regulations but especially on a subject which is very critical, regulations are that relaxed ?

[cem_devecioglu]

Yea...once I've seen a short cartoon about how the bank system is working. Have you ever known that neither of our countries have the right of money printing? This right is owned by a closed financial group all around western world and they can do anything they want.

phew.. thats the question which costed many lifes and resulted with assasinated presidents..

[cem_devecioglu]

actually , if you follow the media you can never find real answers to those questions ..
 
but if you follow the direction of money and where the flow ends, you will start to realize..
 
remember, most people and members here noticed/mentioned about the decline of industrial production ..
 
(thats not only in UK) strongly related subject to this crysis..  because the biggest financial players decided that
 
there are more profitable areas which have less risks and beyond control and tax..

[aaronjb]

I've given up trying to figure it all out, so now I'm just going to become an ostrich (and stick my head firmly in the sand)..

It seems the doomsayers (sorry Cem, you always seem to fall into that category with your posts, for me - but you're nowhere near the most doom-y.. I know, that's not a word) tell us that the whole western economy will implode and take everything we know and love with it, leaving us with .. socialism, or communism, I suppose.

So.. I'm just going to hope it holds out long enough that I'm dead & buried by the time it implodes. If anyone wants my, I'll be over here with my head in mmmrrrfffmrfff*muffled*

[cem_devecioglu]

I've given up trying to figure it all out, so now I'm just going to become an ostrich (and stick my head firmly in the sand)..

It seems the doomsayers (sorry Cem, you always seem to fall into that category with your posts, for me - but you're nowhere near the most doom-y.. I know, that's not a word) tell us that the whole western economy will implode and take everything we know and love with it, leaving us with .. socialism, or communism, I suppose.

So.. I'm just going to hope it holds out long enough that I'm dead & buried by the time it implodes. If anyone wants my, I'll be over here with my head in mmmrrrfffmrfff*muffled*

Aaronjb, you are a clever man, and if you look to the problem in a simpler fashion you will find the thief 
 
and as for doom, its simple mathematics.. if someone stoles all the food on the table , the people in house will start to eat each other like the situation in EU