La_Dolce_Vita Posted September 16, 2008 Share Posted September 16, 2008 La Dolce Vita - by almost any measure - time spent to buy a loaf of bread, a car, a TV, longevity, access to medical care, education, higher educaction etc etc etc the "worker" who ever you think that is is better off today than 25 years ago - compared to 50 years ago the change is massive. Even when real income has decreased - which I believe is an issue for the poorest 10% in the last 25 years (though I think that statisticians argue about that) those fewer pounds are able to purchase a more diversified basket of goods. Defining wealth is very difficult, but if you take the narrow view that it is worldly goods the "workers'" wealth have increased - consumer electronics, telecomunications, double glazing, central heating are now available when previously they were not. If you take a broader view I am pretty certain it can be shown that they have access to more educational opportunities, more cultural opportunities, more travel, more ability to change their place of work. How wealth is shared is complex - but the idea you can break society down into workers who are denied acceess to wealth and some other class who monopolizes capital seems to me to be massively simplistic to the point that it is of little use in analysing society. I think it is of very much use. Because so much capital is monopolised by a relatively small amount of people who own it and those who work are denied a lot part of the wealth that should be theirs. This is largely how the rich get rich, it is off the back of the worker. I agree that there is no large gulf between those who earn pittance and those who do not work and own huge amounts of capital. But a divide there still is. But little of the wealth generated never finds it ways to the average worker. I would suppose also that wealth is historical specific in the sense that TV set of the 50s is equivalent to the (I don't know) Blue Ray DVD player of today. But I agree that the AVERAGE worker is better off in terms of their wealth. Link to comment Share on other sites More sharing options...
Chinahand Posted September 16, 2008 Share Posted September 16, 2008 Chinahand - It is the fact that all these contracts are two sided, with a buyer and a seller, which gives the system its robustness. Not so much. Read Anatole Kaletsky in the Times today. 10 years ago if you had a mortgage it was a contract between you and your bank, Now its about 20 counter party transactions which probably end up back with your bank anyway. Cut the 20 profit centres out of the loop and its clear your contractual relationship stays just about the same. Just less scumbags get their noses in the trough. I think you are totally missing the point here: those 20 intermediaries cut up, dice and slice and amalgamate the cashflows the mortgage creates - by doing that the banks are able to issue far more mortgages for the same capital base - and hence cost, which means overall mortgages are cheaper. Look I've never said there aren't problems concerning capital ratios etc - this argument has been rumbling on MF for years now, and Albert Tatlock and I have debated it earlier if you can be bothered to search - but the simple way to put it is that Banks borrow short and lend long - innovative finance has enabled that inherent risk to be reduced and reduced - there is no doubt that the system isn't perfect, but one of the reasons mortgages are so expensive and difficult to get at the moment is because several of those 20 profit centres have closed down - so yep at the moment the relationship is much more like your ideal of a single contractual relationship between you and your bank. It costs more and is far more difficult to get. You seem to think that's a good thing. I disagree. Edited to add - In response to the comment that this isn't a two sided deal: in every one of those 20 transactions their was one person buying the product and one person selling it. The person selling it would try and get as much money for it as possible, the buyer the least - if it was felt to be too expensive they could ask for a discount or not buy - caveat emptor and all that. Link to comment Share on other sites More sharing options...
P.K. Posted September 16, 2008 Share Posted September 16, 2008 That will create more wealth for the whole world than any amount of hatred and envy. What planet are you on? The arms industry is worth $zillions - you've got to be having a laugh! Link to comment Share on other sites More sharing options...
Mutley Posted September 16, 2008 Share Posted September 16, 2008 Someone posted a link to a You tube video a while ago that explains the way the banking system works in laymans terms. I wanted to send it to my nephew who's getting to that age where he's interested in the news. Anyone help with the link as I can't find it. Cheers. Link to comment Share on other sites More sharing options...
P.K. Posted September 17, 2008 Share Posted September 17, 2008 The Fed is going to prop up AIG. It's serious... Link to comment Share on other sites More sharing options...
jimbms Posted September 17, 2008 Share Posted September 17, 2008 HBOS is in the shit, some very unhappy people about today Link to comment Share on other sites More sharing options...
bluemonday Posted September 17, 2008 Share Posted September 17, 2008 House of cards. Bound to happen sooner or later. History oft repeats itself. Link to comment Share on other sites More sharing options...
When Skies Are Grey Posted September 17, 2008 Author Share Posted September 17, 2008 HBOS is in the shit, some very unhappy people about today HBOS shares are back up 10% this morning...one man's selling spree is another man's buying opportunity. Link to comment Share on other sites More sharing options...
ai_Droid Posted September 17, 2008 Share Posted September 17, 2008 HBOS shares are back up 10% this morning...one man's selling spree is another man's buying opportunity. Because Lloyds are trying to buy em. Link to comment Share on other sites More sharing options...
When Skies Are Grey Posted September 17, 2008 Author Share Posted September 17, 2008 HBOS shares are back up 10% this morning...one man's selling spree is another man's buying opportunity. Because Lloyds are trying to buy em. Which seems to have sent them back in to freefall after early rally....eek Link to comment Share on other sites More sharing options...
Skeddan Posted September 17, 2008 Share Posted September 17, 2008 The Lehman collapse is having effects in Japan - Shinsei, Mizuho and Sumitomo. Not yet enough for any major impact, but with current economic climate in Japan it could pose a bit of a worry. Japanese investors are going to safe havens (Japan govt bonds etc.). If Japan gets sucked into full scale financial crisis, there'd be major 'realignment'. Link to comment Share on other sites More sharing options...
When Skies Are Grey Posted September 17, 2008 Author Share Posted September 17, 2008 So unfounded runours of HBOS liquidity caueses share prices to plummet....and then along comes TSB to present a "merger" and take up the shares at rock bottom prices....smells somewhat fishy to me! Link to comment Share on other sites More sharing options...
Bombay Bad Boy Posted September 17, 2008 Share Posted September 17, 2008 Why is it, that when banks go down the swanee, that it's only people's savings that vanish, and not loans/mortgages Link to comment Share on other sites More sharing options...
ai_Droid Posted September 17, 2008 Share Posted September 17, 2008 Why is it, that when banks go down the swanee, that it's only people's savings that vanish, and not loans/mortgages Because they're worth something. Link to comment Share on other sites More sharing options...
thesultanofsheight Posted September 17, 2008 Share Posted September 17, 2008 caveat emptor and all that. Caveat emptor is an important point. How many of the 20 counter parties actually know what security they have? The CDO's they hold have been cut and diced so many times they are completely distanced from the mortgage book (and the assets) the contracts are written against. Its meaningless paper to everyone. If one defaults they have no idea what the knock-on effect is, or what security is in the portfolio. Its finance for morons, and you seek to defend it. There has been a definate change in the last three days from hopeful optimism to total panic. HBOS is being taken over by Lloyds, 4 weeks time from now Lloyds shareprice will get shorted to shit and the same will happen to them. Its unregulated hedge fund activity causing all of this and the government (in the UK) failed to rein these funds in properly years ago. The unscrupulous are making millions of the back of the fears of the average guy who is worried about his bank deposit. Its sick, its opportunistic, and its downright wrong. Link to comment Share on other sites More sharing options...
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