Thursday, December 15, 2011

The Banks, the investors and the shareholders!?

The financial institutions in the USA decided to allow, those Americans who were a credit risk, to borrow money for mortgages etc.


This money ( lots of it) was loaned at exhorbitant interest rates, the USA finance industry offered the ownership of these loans to foreign financial establishments.


The British finance industry, in it's thirst for more returns on it's money, it's need to reward it's executives with outlandish bonusses and it's desire to offer the best returns for it's investors and shareholders, decided to buy in to these loans big style.





The cost of living in the USA, drove many of those who recieved the loans, to default on their payments, the result being that many of the British financial institutions started to panic over what they had done with their members invested money.





So because one bank had no idea how much another bank had invested in those market, it created an air of suspicion and the usual facility of banks lending and borrowing off each other was ceased.





This caused a squeeze on the day to day operating cash available to the banks and financial institutions.


Investors started to withdraw their cash and shares and savers started to question the security of their deposits.





Now everyone of these people suddenly turned round and demanded the government "Do Something".





This raises a couple of questions.





A) as the value of shares can go up as well as down, were these people prepared to give the government a lump of their earnings when the times were good?





B) These people and their greed, were responsible for the price increase in commodities which were crippling the normal working man, is it now right that this same working man should loan his tax payments to these people to allow them to recover their ill gotten gains.





C) Should the senior board members and executives of these financial institutions be sacked for their incompetence and greed?|||A) If the Government does use taxpayer money to bail them out then yes. It should be a loan and make those morons pay interest.





B) It isn't right that taxpayers loan taxes to pay for this, but it doesn't seem like our government wanted to ask the citizens about it. This would have been something I would have wanted to vote on.





C) If that's how these businesses want to run things, then I say let them profit from loss, but lets not bail them out. Also, who are these companies that keep taking these people and hire them for boards and executive positions? It is mind blowing.





I'm one of the homeowners who was told I could make my payments, even when I thought I couldn't. But I trusted the fact that the loan officer, who calculated everything that we had as far as bills and assets and said that we could definitely do it.





I'm definitely doing it, but it's rough. We love our home and don't want to lose it, so we are cutting corners and not paying some of our bills when we should be. I don't want the government to bail me out, so I'm definitely of the mind set that the government shouldn't bail these companies out as well.





How is anyone going to learn if they don't burn?|||230 thousands of New Yorkers have been cut out of electricity and water supply due to their debts.





Every family should entitle to enjoy housing and daily necessary within their affordable range. If they borrowed money to go some investment, it just like gambling with others' money.





In most corporation, they need money to kick out their projects. At the end of each years, marketers and inventors got their project proposal and directors would use them to borrow money from banks. If the result of those project were good, they have money to return to banks. However, if there are too much projects as collins submarine - pushing hard but little revenue, then they would be in bad debt.





Life is more on gambling but you need to play it wise.





It would be good to have a central database for those debtors and loans. When they tried to apply, every bank would know their history.|||Firstly, shareholders do give lump sums on there dividend returns via taxation. Corporation tax takes a 20% marker off the profit margin left after all other costs have been paid out on behalf of all the workers, whoever they might be from management to ground force. The 20% corporation tax is a stealth against all industries doing well a cap against profit.





Secondly the people really responsible for the price increases are as follows;-





Estate agents and other property valuers inflating the costs of property. Property has gone up by 300% in some areas and 500% in others. It is obvious this is extortion. But sellers feel wow my property has gone up. I'll sell and make a profit. So individuals have become very greedy. Buyers on the other hand have to find ways to fund these increased costs. So end up paying more and eventually losing out when they can't afford to keep the payments up.





Estate agents have forced banks to increase lending rates and in truth we are now facing the life time mortgage and not just 25 years. In some instances mortgages are being arranged between more than one party rent to buy schemes is one avenue and another is two people agreeing to buy together. The problem here is that wages though have not kept pace with mortgage criteria. So this means the ordinary working man or woman must be really earning something decent to buy in the first place or maybe like my friend tells me, People lie about their incomes.





I feel your point B is not so clear. At least a third of all FTSE related companies are owned by ordinary working people who felt at a time when they had spare cash, to invest it. Some came by this extra cash in the form of shares when building societies became banks and to be honest this should never have happened. This added increased diversity from new investors who couldn't really afford to add to the investment opportunity. A good proportion sensed that the windfall would be better spent on holidays and withdrew it.





So Estate agents were the source that pushed up one of the most basic costs an individual is ever likely to have in a lifetime, the family home. Then human greed took over. Private householders thought they'd jump on the band wagon and feed the house market increases. As a result many householders are now struggling to pay mortgages, the amounts of negative equity is rising and the numbers of repossessions double every year.





On the social front the children of these families who have had there homes repossessed in economically depressed times suffer with their education and have problems with life.





You speak of the price hike on commodities, to this every negative has a positive. Prior to the price hikes on Gas, Electricity, Water, Telephones around 5 - 8 years of cost stability had been reached, when the price per unit, therm or call was stable. However during that time a steady rise in wages and the salaries of management had taken place, More monies being paid out meant less money available for investment so companies began to diversify, increase the number of shareholders and merge. All the time the costs were rising for all of the exploratory investment opportunities. Smaller Shareholders who had little to gain and little to lose began to lose out this left only the big cats in place to bolster the economy. In return they became greedy the bonuses were high and extortionate and some were tax free caused a greater divide between the rich and the poor. Even so instead of it being reinvested it went into buying estates and million pound mansions.





The idea of capping wages has never been popular but in all honesty I really think we need to start placing a cap at the upper end for who in the world is worth more than 100k a year. Nobody. Commisions should be tied to investments within the industry not personal gain.





These unforeseen gains carry even greater debt loads and greater interest charges so much so in the British press recently a self made millionaire orchestrated the arson of his property and killed his family in the process. He couldn't face the music. Meanwhile as such is the modern pace of money cylcles is now stagnant, in other words real money is not circulating instead it is figures only. The financial crisis is trying to get old money out of us.





Old money is anything you have as savings or collaterall.





So its not necessarily all about ill gotten gains, as all human beings possess the ability to be greedy.





Look again at property and ask yourself why we have so many rent to buy schemes. Why do we have TV programmes flogging houses to do it and profit on? Why do we have rising numbers homeless? Greed. Inadequate areas of real investment.





In order to resettle the economic issues you just need to see wage capping and a greater speread of the worlds wealth. Britain is a wealthy country for one so small, its unfortunate that we have 90% of the wealth tied up in 5% of the population.|||It isn't greed. It is all out Gluttony!





Oct 3, Washington Mutual President could get 13 million plus dollars for 18 days on the job, (supposedly, he is not going to take all of it from what I have been reading).


http://news.yahoo.com/s/nm/20081003/bs_n鈥?/a>





Here is another example:


It was just released this morning that AIG spent $440 thousand dollars


on a "retreat and spa" for their employees after the taxpayer (aka government) bailed them out! If that isn't an outrage what is?


http://news.yahoo.com/s/ap/20081008/ap_o鈥?/a>

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