Quote Mintball="Mintball"Do try to keep up.
Banks – 'casino banking' – removing the option for straightforward, safe savings accounts, but selling you 'products' that are based on a bet: ie something that could go up as well as down.
Oh, hang on: I forgot that I'm supposed to be the expert in absolutely everything I buy – more expert, indeed, than those trained in the selling of such products (and see McLaren's posts too on this).
Do you actually think such things through? Why do you think that service is not a laudable idea and institutions such as banks have no responsibility to be trustworthy and provide a genuine service? Because if you're lumping the responsibility for being more expert than the supposed experts on to the customers, then you have ditched any such ideas of service or trustworthiness, sunshine, and it would be good to see you come out and specifically acknowledge that.
As only a very slight aside, Jon Snow is working on a report of how Barclay's mis-selling has affected individuals and small businesses. Why don't you give him a call and tell him that it was their responsibility to make sure they knew more about the products being flogged than the salesperson – sorry, banker?
In terms of the economy? Are you struggling to maintain this pretence that you don't know what is meant by such a phrase? I do hope you're paid well for being such self-demeaning apologist.
Vast amounts of what has happened, which has caused the financial crisis, have been based on – let's put it politely – speculation. To speculate – that's to guess at the outcome of something. Which is what a bet is; a gamble.
What do you do in a casino? You take money and you use it to speculate, to bet, to gamble, in the hope that you'll make more money. The odds in any bet may vary. The odds may, indeed, even be something like 90% in favour of your preferred outcome, but it is still a bet; still a gamble.
We have banks and finance betting huge sums of money – people's pensions (their lives, in other words), their savings etc – by buying really sound things like, err, debts. They do so in the hope that they'll be able to make even more money.
There has been speculation in the finance sector all over the place. Finance is a major part of the economy. Such speculation – such gambling – has been the prime cause of the crisis., because it was the reason the banks had to be rescued. Thus we see the results of a casino economy.
And what about Keynes? Did you laugh then too – or have you conveniently 'forgotten' that one?'"
The financial crisis was caused by:
Bad traditional bank lending, based primarily on property lending and to some extent lending to business;
Bad policy by central banks - keeping interest rates deliberately low in order to continue to fuel an asset bubble in property to mask poor economic performance (Brown's end to boom and bust);
Poor US policy in response to the crisis - causing a much deeper crisis than necessary.
In short, investment banking (which does not use people's pensions) was not the problem. They are just easy scape goats for politicians to mask their own ineptitude. In the UK we only have one big investment bank - Barclays - and that did not even need state aid.
