So lets sum up here
Bankers - to blame
People who went to the bank for a mortgage and were told they could borrow more than they thought - to blame
People who were a bit short and wanted second mortgages even though they had already borrowed much of their "credit rating allowance" and were granted them by their bank - to blame
People who sold the loans pretending they were assets (bankers) - to blame
People who resold the loads pretending they were assets (bankers) - to blame
People who consolodated the loans because they'd been bought and sold too many times and had little return value left unconsolodated (bankers) - to blame
People who thought this kind of risk, getting millions of tiny returns on many-times-consolodated-and-resold loads which, ultimately, relied on the economy expanding forever and house prices rising stupidly quickly wasn't completely insane (bankers and banking regulators) - to blame

Yes, I can see why you might think we can't simply blame the banks.
(MrOli is ugly, but in the morning you will be sober, Tue 15 Jun 2010, 17:29, 2 replies)

Or alternatively
Bankers - to blame
People who went to the bank for a mortgage and were told they could borrow more than they thought (Joe Public) - to blame
People who were a bit short and wanted second mortgages - to blame
People who sold the loans pretending they were assets (bankers) - to blame
People who were a bit short and wanted second mortgages - to blame
Ratings agencies who the loans pretending they were assets as higher quality than they should (Ratings Agency) - to blame
People who didn't provide any sort of rules around what you could or couldn't lend or repackage (Regulators) - to blame
People who didn't fund the regulatory framework appropriately (Government) - to blame
People who put pressure on banks to make ever bigger profits (Investors) - to blame
People who encouraged people to borrow more and more with a have it now attitude (The Media) - to blame
People who relied on the economy expanding forever for the feelgood factor that resulted in their reelection (The Government) - to blame

Yes, you can see why I might think we can't simply blame the banks.
( The Teviot Moose major 5th., Tue 15 Jun 2010, 17:36, closed)

Couldn't have put it better myself
Though I tried to...
b3ta.com/questions/badmanagement/post755518

There are many forces at work in this country which have caused the problems we have..."Cheap" money being lent to people who have been conditioned by advertising in to a constant state of want...

I think you are right that banks, government, advertising and no regulation are at fault, and I think Badger is right that we all need to face up to the fact that it is all our own greed and responsibility as a society.

But who will win? There's only one way to find out...
(MrOli is ugly, but in the morning you will be sober, Tue 15 Jun 2010, 20:36, closed)

You've missed
"all of society who have any investments or pensions or any non-property based financial provision for the future who demand dividend profits on PLCs, therefore fueling the whole risk/reward financial strategy"

You can't win. you don't want people investing in property for their future (I don't necessarily agree but I can see your point there) and now you can't have people having shares or pensions either in case it encourages companies to try and make a profit?
( the mighty badger Aphrodite, on a bar stool, by your side, Tue 15 Jun 2010, 17:39, closed)

I don't want to live in a society which is obsessed
with the idea that everything can be payed back later, but that the only way to "get ahead" with "real investment" is to buy three houses and rent them out, selling them later at a profit. If you do this, there are three fewer houses available to buy and the rest go up in price. This particular example is a huge bugbear of mine, as you probably guessed.

But with your bit about investments, you're trying to put words in my mouth. I never said I was against pensions, shares, buying and selling, general bartering...these are things that our economy is built on and it kinda works.

What doesn't work is where a loan shark sells the debt to a bailiff before the debt is due, who sells it to another who sells it again. Then when the bailiff goes knocking on the door, he finds a frail old lady. And this is basically what happened a couple of years ago.

There's two things you both need to watch: A series on YouTube called, "Money as debt" and Michael Moore's "Capitalism: A love story".

In fact, everyone should watch the first one, as it proves quite well that money is a figment of its own imagination.

Apologies for carrying this on so late, been a long trip back from work... :-)
(MrOli is ugly, but in the morning you will be sober, Tue 15 Jun 2010, 20:47, closed)

The idea that debt can be paid later
is a cornerstone of modern capitalism. Unless you want to live in China or Cuba, good luck avoiding that ;)

I'll check out that YouTube thing, but I'm not sure you're not slightly missing the point. You've ascribed human characteristics again (a frail old lady) to a system of corporations which can have no such properties. I'm not saying that the issues with the banks are either good or desirable. Only that they are an difficult-to-avoid byproduct of a system which rewards short-termism. And we (the public) want a system that does that, because we want pensions and savings and to be comfortable later in life. Divends=short-termism. It's like spending years and years training a dog to attack intruders, and then blaming the dog when it bites you.

As an aside, for the love of god, fucking don't pay any attention to Michael Moore. He's an attention seeking, lying, scheming arsehole with no more morals or integrity than the things he seeks to attack. Almost all his writing and proclomations are also wrong and very easy to show as wrong.
( the mighty badger Aphrodite, on a bar stool, by your side, Wed 16 Jun 2010, 9:06, closed)

That's the trouble with these debates...
we both think the other is missing the point.

The "old lady" in my analogy was the person who owed the original debt, not the corporation.

The corporations in this case, forgot that the person who owed the original debt was a real person who can have real problems repaying that debt, and forgot that the debt wasn't an asset, and saw repayment of that debt as a "revenue stream".

The more times the debt is sold on for a profit, the smaller that "revenue stream" gets. Then it is so small, that only when thousands of these sold debts are consolodated do they give any return - but that return could be big if enough are consolodated.

This consolodated debt then gets bought and sold on the open market, the same as other stocks, shares and bonds.

But if the economy doesn't grow, and, instead, doubt grows, lots of people get affected by certain news, the original "revenue streams" disappear in people's bankrupcy, and pretty soon you have institutions which have come to rely on these streams as sources of large revenue in a lot of trouble. What should be a "blip" becomes absolutely critical, as the economy has been taken right to the wire.

I'm not attributing human emotions to large corporations, I'm attributing absolute stupidity in over optimism and a complete removal of their view of reality - they could only see the numbers. "woods" and "trees" spring to mind.

But there is another view, that those large corporations are made up of individuals who each (should) have their share of sense, decency and responsibility and who should have each realised and made each other aware of the utter naivity and insanity of what they were doing.
(MrOli is ugly, but in the morning you will be sober, Wed 16 Jun 2010, 11:28, closed)

fair comment
but in companies that big, it's in reality impossible to easily judge on a case-by-case basis. And individuals don't really effect the way things are run. And in any case, from the "company model" kind of thing, it's not naive and insane. This is exactly how it's supposed to work. Of course from an individual human point of view, it's not.

Mind you, at the risk of sounding like (even more of) a cunt here, why does it matter if it's a little old lady that owes the money? Still a debt. And a debt is a revenue stream. To consider it otherwise is a bit foolish. A bank doesn't lend money through the good of it's heart. Maybe smaller, more "personal" banks might judge situations on a more individual basis. But then they don't make as much money, and we don't get as big a pension, yadayada.

All of the stuff you're saying I basically agree would be better, from a "nicer life" kind of view. I'm jut trying to explain why reality isn't like this, and why it's largely down to us that it isn't.
( the mighty badger Aphrodite, on a bar stool, by your side, Wed 16 Jun 2010, 11:51, closed)

But that's exactly my point
At the end of that "revenue stream" is a little old lady who could die, get her pension cut, be forced into greater poverty by inflation, lose her husband. She defaults, no more revenue stream. It's the extreme example, but one which was repeated enough times with other debts and cirumstances to bring down all these "Investments".

To consider it as a revenue stream is fine - that's what it is. To consider it as an asset which can be sold at a profit, then consolodated and resold, then bartered for on the open market is madness.

Picture it not as a set of loans, picture it as a bet on the economy increasing in size at a rate of, say 3% a year. And picture it so close to the wire because of the continual bartering that a growth of only 2% can shake it.

Picture those loans as secured against houses, where if the bank forcloses it can sell the house - except it can't, because no one can afford them. But then again, if you default on a debt which has been sold, broken, joined, resold, buried in soft peat for 5 years and resold as firelighters, who sells the house, who gets the money from the sale and does it cover the debt?
(MrOli is ugly, but in the morning you will be sober, Wed 16 Jun 2010, 12:24, closed)

I shouldn't be doing this today
I'm far, far too busy.

Seriously, go watch "Money as Debt".

Been fun though :-)
(MrOli is ugly, but in the morning you will be sober, Wed 16 Jun 2010, 12:26, closed)