BEWARE! THE BANKS ARE OUT TO GET YOU!

[Tizer]

Yes, the FCA has decided not to publish some of the reports on bad behaviour at the banks. Well, they've got to protect their chances of a job in the banks, haven't they? And the return of commission based sales is, I think, at Santander but will no doubt spread elsewhere. I suppose as in the 1990s, nobody will stop them and we'll have another bubble.

[Stanley]

Vince Cable is quite sound on this. I reckon he's right, the Lords of the Universe have been given carte blanche again... (LINK) He says the rot clearly set in when Ossie got rid of Martin Wheatley who was taking a tougher line. It is a disgrace and sets the scene for a reversion to the the worst of the bad practices again. I class the pension shambles in the same bracket. Remember when the Tories used to boast they were the ones who understood finance? Too right they do, they know exactly how to get the most out of it. The rest of us are simply dupes.

[Stanley]

See THIS for the RBS warning of a cataclysmic year for shares mentioned by Plaques in quotations.

[Stanley]

The RBS warning is starting to look credible....

[Stanley]

Tiz, did you pick up Paul Lewis' report on the storage pod scam which has meant that some pensioners have invested their pension funds in what seemed a good investment but they have apparently lost their money?

[Tizer]

Is that the one that was promoted by Quentin Wilson? The scammers are getting innovative now they've realised that there are all those folk nearing pension age and thinking it would be great to cash in the pension and `invest' in a scheme of some sorts.

The FT this morning reveals that the big UK law firms are excited and gearing up for a Brexit which will allow them to make fortunes `advising' companies during the process. I'll bet they're investing money in the `Out' campaign!

The Saturday edition of The Times asks why only relatively junior executives of the Co-op have been fined by the FCA over the collapse of its bank and not the boss, Paul Flowers, or the Britannia CEO who oversaw his company being sold to the Co-op (with all its dodgy loans) then joined them in a top job. But an insider hints that the FCA is quietly going after those two. I hope it gets them!

[Stanley]

Bugger "quietly going after them"! I reckon they need the fear of god putting up them! The invulnerability of the top management since 2008 is a national scandal.

[Tizer]

I notice that RBS has gone into a state of panic and put out an analysis paper recommending people to sell all their stocks and shares and only keep a certain type of bond, all because of the current market ups and downs. It's being criticised by others in the financial business for undermining the age old investment advice of always investing for the long term. It seems very strange advice from a large bank. No wonder they've been in so much trouble.

[Stanley]

Tiz, if you look at their track record, why on earth would anyone take any notice of advice from RBS??

[Tizer]

The track record of supermarkets isn't too good either...
From BBC web site: LINK
Tesco "knowingly delayed paying money to suppliers in order to improve its own financial position", the supermarket ombudsman has found. The Grocery Code Adjudicator, Christine Tacon, said the supermarket seriously breached the industry's code of conduct to protect grocery suppliers. She found extensive evidence that Tesco had acted unreasonably when delaying payments to suppliers. Her investigation began in February 2015 following an accounting scandal. A £250m black hole was found in the company's accounts - a sum later revised up to £326m - because of the way Tesco booked income from its suppliers. Ms Tacon said: "I received internal Tesco emails which encouraged Tesco staff to seek agreement from suppliers to the deferral of payments due to them in order to temporarily help Tesco margins. "I also saw internal Tesco emails suggesting that payments should not be made to suppliers before a certain date in order to avoid underperformance against a forecasted margin." Tesco chief executive Dave Lewis apologised for practices that he said were both unsustainable and harmful to its suppliers.

[Stanley]

It's a very old practice Tiz and I can't see it ever being stopped. When Bancroft Shed closed in 1978 a contributory factor was that Courtaulds demanded payment inside a calendar month on pain of having yarn deliveries stopped. We wove cloth for them and their policy on that was payment in three months.... Might will always be stronger than right.

[Tizer]

Tesco is also being investigated for the accounting scandal uncovered last year.

RBS is setting aside another £500 million to pay for PPI and £1.5 billion for bad housing debts in the USA. In addition, it will write down £498 million from its private bank Coutts.

[Stanley]

Which leads me to ask again, why should anyone consider taking investment advice from RBS?
The latest moves on the FSA seem to indicate that despite statements to the contrary from Ossie, the bankers are being given unfettered power again. See Private Eye for some interesting opinions on this. How long until they trip up again?

[Tizer]

Last November I mentioned that `liar loans' were on their way back even though they are banned in the UK: LINK
Now they've arrived. The man has set up in the Czech republic to avoid UK law.

[Stanley]

I suppose my problem with all these activities is that a time of historic lows in basic interest rates we have historic heights in rates when lending to the poor. No difference between them and unregulated loan sharks with heavies as enforcers. It doesn't say a lot of the ethics of our financial system when we allow them to continue....

[Tizer]

"Barclays has confirmed it is being sued for more than £700m by deal-maker Amanda Staveley in connection with its emergency fundraising in 2008. The Financial Times reported that Ms Staveley's firm, PCP Capital Partners, had taken legal action against the bank in London." LINK

[Stanley]

£322million as payment for advice???? Who the hell do they think they are kidding? These institutions are out of control. Tin hats on lads!

[Tizer]

It never stops! You've got to give it to these guys, they work hard night and day at breaking the law.
`Barclays and Credit Suisse are fined over US 'dark pools' LINK
"Barclays and Credit Suisse have been fined a total of $154m (£108m) by US regulators for their US "dark pool" trading operations. "Dark pool" operations allow investors to trade large blocks of shares but keep the prices private. Barclays has admitted misleading investors and violating securities law in the way it operated the poll. It will pay a $70m fine. Credit Suisse will pay $60m and another $24.3m relating to other violations.

[Stanley]

These fines are simply a business cost and no doubt are allowed for in any preliminary calculations. If the sums add up go forward....
It's a rotten system!

[Tizer]

`HSBC pays $470,000,000 for mortgage misconduct' LINK
"HSBC has reached a $470m (£325m) settlement with the US government and states related to dubious mortgage lending and foreclosure practices that contributed to the financial crisis...Investigations began in 2010 after HSBC was found to be signing off foreclosure documents without proper review."

[Stanley]

And who will fork out the $470million in the long run?

[Stanley]

The repercussions of the changes made to 'improve' pensions continues. (LINK)
I become increasingly suspicious that the changes in how pension pots are treated is simply a cunning wheeze to increase the tax take, inject money into the economy and provide a lucrative income stream for 'advisers'. I can't help thinking that this is a potential disaster. What will happen when these people find they have been conned? Mind you, this will be so far in the future it won't bother the present incumbents.....

[Stanley]

Just for once the banks are seemingly out to get themselves. Their shares are dropping significantly as investors vote with their feet. Perhaps they should ask themselves why it is that investors have so little confidence in them. Bank shares have always been gold standard in the past....

[Tizer]

There was a telling moment on the Today programme this morning when Adair Turner, former FSA boss, said that he expected the peer-to-peer lending industry to fail spectacularly in coming years. He said it would happen because the industry didn't apply the strict checks on lenders that the banks used. A lady from the peer-to-peer lending association knocked the legs from under his argument by scornfully pointing out that the high street banks don't apply stringent checks. She more or less said that if he thought they did he was living in cloud cuckoo land.

There's a good article on the BBC web site about how Iceland cleaned up its banks and it makes an interesting contrast with what happened here. The Icelandic government let its three major banks fail and went after reckless bankers. Many senior executives have been jailed and the country's ex-prime minister Geir Haarde was also put on trial The former chief economist at Kaupthing Bank says: "We just had to accept the losses, accept a world with much lower real wages, much lower living standards. I think in many ways this is something other Western countries will have to face. In European banking, there is an unwillingness to accept losses. If you look at how the central banks in the UK and the US and in Europe responded, they printed money. We could not print money, so we had to face the reality. No-one really knows how all the money printing that has been taking place in the major economies of the West will end."

Dr Jay Cullen, lecturer in banking and finance law at the University of Sheffield, states: "The power of the banking lobby in the UK and the US is such that it's politically very difficult to make an enemy of big business. There has to be a fundamental change in the structure of the banking system, and that requires huge political will and sacrifice, and it's not evident to me that exists, because so little has changed since 2008. Now in the US, the banks are even larger than they were pre-2008. They are not only too big to fail, they are too big to manage and possibly too big to exist. The old phrase was, 'Main Street will never again bail out Wall Street.' That's a noble claim, but the evidence suggests that in the UK and the US, and also in the eurozone, where several countries simply have broken banking systems, the taxpayers are still on the hook. Very little has been done, and the day of reckoning is potentially around the corner." Icelandic banks

[Stanley]

I agree entirely Tiz. In my defence I always argued that the massive bail-out of our banks was a mistake, the funds should have been injected into the general economy, remember 'helicopter money'? I wasn't alone in my thinking. The only reason why QE was used was that it was all the BofE could do, it was (apart from devaluation) the only tool left in the box. Even King admitted they didn't really know what the effect would be. Now the dust has settled it appears that most of it was retained in the banks as contingency capital for the next big crisis. Encouraged by the Treasury's stress testing of banks.
I like the Icelandic approach and the key phrase is the one about accepting reality and realising that the overspending had to stop. That's the strategy the EU Central Bank imposed on Greece and the other failing systems but they will not apply the same medicine to themselves. In the UK we impose austerity but because of Tory DNA it is directed only at the lower percentile, ironically the very people who add value and spend their incomes. You couldn't make it up, nobody would believe you.
Leaving the banks to fail would have meant a fresh start and while it would have been difficult we would not be in the position we are in now where the banks have won the battle and it's business as usual. In my book it not a question of whether there will be another crash but when, we are working with debt and phantom money, the very same conditions which ensured 2008. It could be welcome because we would survive and this time the money isn't there for a bail out so the big reorganisation of the capital system might be forced on the banks in a way that the failed attempt to regulate them evidently hasn't.
I'm old, and I've never see such a mess......