OneGuyFromBarlick

A few months ago the BoE suggested that it may be rolling out new plastic banknotes.
One of the “benefits” of these new notes was added security. Ref:

• Secure, because they could include more sophisticated anti-counterfeiting techniques. New Zealand reported a big fall in reported counterfeits after introducing polymer notes

Clearly a good thing until you consider that they may also contain those micro chips called RFID’s (Radio Frequency Identification). The movement of each note could theoretically be traced as it passes through circulation. Everyone’s spending habits and movements could be monitored. This is of little consequence to the ordinary punter but cash in hand and other black market payments together with brown envelopes would be under suspicion. 1984 here we come.

The ones I buried on Weets are all old paper money so they'll never track them.....

Stanley, I never for one moment thought you would be daft enough to try to put them through your shredder.

Barclays have been named in the currency manipulation probe.

Nice little story in the Lancashire Telegraph of a man from Barlick who ran amok through the town in 1969 (I think) shouting "bl**dy banks"; and smashed all the windows of the banks with a crow bar, except the Midland, which had bullet proof glass

I can remember when I was taken to task for saying that LIBOR was a biggie. Have a look at this LINK for the latest twist, Fannie Mae is suing for $800million. It ain't over yet!

RBS, appears to be a complete basket case. £38 billion of bad debts to be hived off into a bad bank subsiduary on top of the £54 billion of toxic assets already in it's core bank.

A report that says it is not even functioning as a bank because it has become far too risk averse and it's managers lack basic bank management skills.

So who thought that it was a good idea to save this company? Liquidation would have cleared the decks. All those losses have to be 'written off' before it will ever declare a profit again, and become liable for Corporation Tax, and the current tinkering is expected to free up about £10 billion of capital for lending

At what point does it begin trading insolvently?

Just a quick question, as this is just one of many, many things of which I am woefully ignorant.

If the bank had gone into liquidation, and all the others that required propping up perhaps, what would happen to say mortgage holders? And deposit holders? What were the likely societal consequences? Fundamentally I guess, where in a situation where there may appear no good choices does the bigger societal risk lie? Or even more fundamentally, if the only real role of democratic Government is to ensure (in its widest sense) the safety of its peoples, would liquidation have secured this more than what was done in both the short and medium term? I have to confess I have no idea at all.

I only ask this, as one hears that at the time, the cash machines were due to run out (or words to that effect). I'm not sure if that had happened we'd immediately start eating people, but I don't imagine the country would have been an edifying place for too long. I mean, some fat blokes with a farmers a**e blocked a few oil terminals a decade or more ago and well, that led to panic buying an' all.......

Richard Broughton

All valid assets are saleable commodities, as were all those 'good' loans from Lehman Brothers which Barclays picked up

There may have been some disruption, but a liquidation would have written off all bad debt and provided a line in the sand. A new beginning.

The govt guaranteed all deposits up to £33k per banking licence account.

I go along with Bruff on this one. Liquidating RBS with the supposed losses equal to the national debt would have resulted in a TOTAL loss of confidence in ALL banks. The consequential run on the banks (Ref: Bradford & Bingley) would have brought the country to its knees. None of the banks hold that quantity of liquid assets. If fact: part of the current lack of lending to businesses is caused by the requirement to increased the liquidity ratios. The government would not have been able to pay out the "guaranteed" amount until months if not years later. Just cast your eyes over to Spain when they reigned back on all spending with only a tenth of the problem that we would have had.
As much as I deplore what is happening with RBS it was true that It was too big to fail.

I think you and Richard are right P. My first reaction when I heard about the RBS problems was let it go to the wall as a warning to the others but a bit of thinking and recognition of what it would have meant to ordinary people brought me round to complete nationalisation under which the worst effects of failure could be controlled. The deputy BofE governor's report seems to indicate that doing this and splitting into two banks would have been the best course at the time but unfortunately the government opted for partial ownership and threw the capital which could have been used for a rescue under nationalisation into the waiting arms of the bankers. I thought that was wrong then and still do now. The logic behind my thinking was that it was no use giving funds to managers who had already proved themselves criminally incompetent. The other mistake that was made was to neglect bringing in legal sanctions that could be used to punish the people responsible. To the best of my knowledge we still lack proper sanctions. One is forced to ask why?
Another point brought out in the report on RBS was the change in strategy and culture whereby local managers were deprived of any power in assessing and granting loans. It was passed upstream to 'credit committees'. All that expertise and local knowledge ditched in the name of 'better control'.
We were assured that steps would be taken to ensure it could never happen again. I can't see any evidence of this, it seems to me that the banks have been allowed to continue being run as cash cows for the shareholders and chief executives instead od being a service to the clients and the wider economy. Again, one has to ask where the influence to allow this stemmed from. To a simple minded observer like me it looks as though the financial sector is running the government when it ought to be the opposite way round. Another commanding height given up to the enemy!

We capitalised the profit and socialised the debt. RBS should have been broken up at the beginning and carefully sold off. The people who kept their money were the shareholders and bondholders. All the 'little' people were already protected. I don't believe that you should ever nationalise failure.

The banking system was already undermined by Darling's initial refusal to allow Barclays to buy Lehman's from the US authorities. Giving them no other option than to allow Lehman's to fail. Barclays then bought from the liquidator

The reason that Spain's banking system is in such crisis is again because of bad loans on property, The majority of RBS and HBoS 'debt' is property related where deals have gone 'bad' and there is little prospect of any repayment.

For any banking system to work there must be capital to flow to meet business requirements.

I would be surprised if the bad decisions made by Darling and Brown actually allowed any payback from RBS within a decade of the £48 billion lent by the Treasury, maybe even a generation. They also never say that they were wrong to allow that asset bubble to grow, as that gave an illusion of 'economic growth' to their policies.

What 'saving the banks' did was underpin the great asset bubble that still is the price of property and this has shown itself in the collapse in building and the sluggishness of the property market.

Tardis there is one or two false premises in your last posting.

1 Until the government got hold of RBS they had no idea what the bank was up to. This comment holds true even today. The private banks are up to all kinds of financial manoeuvrings some of which are proving to be illegal.
2 The protection given to the “little people” has never been tested. Even the experts are not clear what would happen. Payments, probably without interest, could take 6 months and possibly longer before you got your money back.
3 Even the American authorities now agree that letting Lehman’s fail was a mistake. Barcleys bank is worth watching. Enough said.
4 Spain is an example of housing bubble investments. No different to America, Ireland, RBS or Britannia. The plain truth is that the banks lost sight of what they were buying. The computer programmes that exist today can chop and dice investments to a degree that nobody knows what’s inside them.
5 It was Mrs Thatcher that set off the new paradigm of city lead expansion. All at the expense of the manufacturing sector. Mr Blair. Mr Brown and now Mr Cameron have slavishly followed this flawed model until we are now in the hole that we are in.
6 You are correct in the time scale of how long it will take to get out of this mess. Initially I thought 10 years. Now I think never!
7 The theory behind the expansion of the property market is that it will get people spending. Unfortunately, the vast majority of people have experienced 5 years of under inflation pay rises. Consequently, their potential to “spend” has been severely eroded. The north of England is dying on its feet. Get used to the idea.
8 “You should never nationalise failure”. This is a very blinkered view. I might remind you that Rolls Royce was nationalised in 1971. Without government intervention it would have been lights out for Barlick and a silent night for everyone.

"I don't believe that you should ever nationalise failure." Then you have missed the point. You are confusing individual brands with entities. When an industry gives signs of failure that's the time to go in and restructure it. Think about what we did with Coal, Steel, the Railways. All taken over, rationalised and new management structures imposed. The result was modernisation, more productivity and better conditions for the workers which led to new ethics in the industry. All were successful in their market conditions and before you point at the railways, recognise that we pump more subsidy into rail in real terms now than we ever did in the days of BR. BR was ruined because an economist was brought in and applied market thinking to a social good, exactly what is happening now with the NHS.
Have a look at this LINK for the current trend in Germany at the moment. Berlin is looking at going down the same route after excess profits by the privatised distribution company. It looks as though they agree with me about commanding heights.....

Survival of the Co-op bank goes to the vote, The organisation itself has had to commit at least £400million into the rescue plan to gain 30% of the shares if the vote is successful.

I agree about RBS P, so why did Darling go in and offer a blank cheque when he didn't know the extent of the problem? Far easier to allow the bankers to go in, carve it up and rescue what was salvageable, because that is what they do. Lehman's went bust on the Friday, by Sunday the liquidators had allowed Barclays in to have a look at the 'books'. They took the punt and by all agreement got a bargain.

You give the example of Rolls. That was a liquidity issue, the underlying businesses were sound and had customers. Many complex factors including not wanting to sell the technology to another country, but I would argue that they never tackled the underlying over manning until the business was refloated.

You miss the fundamental point of banking and capitalism. RBS and it's ilk were all too ready to pull the plugs on other enterprises, but when it came to themselves they turned to the state, when the processes were already there to tidy away the mess and allow freedom and liquidity back into the economy.

Look at many people's expenditure and the growth in "accommodation" costs have grown out of all proportion to other costs. The only other one that comes close was Council Tax which doubled up to 2010.

The Steel Industry is a shining light as to what could have been achieved if the industry had been run properly whilst under Public Ownership. When it has no customers who will buy it's product because it relies on imported raw materials then someone needs to make a fundamental reappraisal of the situation because the competition is fundamentally unfair. But you don't deal with that through tariffs.

BL was a watch word for all that was ever bad about nationalised industries.

Tardis, I can see that we look at things in a different light. We could argue this till we were blue in the face and bore everyone to death. Rolls was not a liquidity issue, they had entered a contract that for technical reasons they couldn't meet. The overmanning is debatable. They have now spread the standard manufacturing techniques round the world. Thankfully, Barlick had a good slice of strategic manufacture that would be difficult to move. You can thank the ingenuity of the Barlick workforce for that.

British Leyland was terrible. Lord Stokes headed a company that thought you had to buy from them no matter how poor their vehicles were. I was amazed when I heard this from his own mouth on radio. We agree at last.

More of the Co-op's rescue plan is emerging. 1 in 6 branches to close and no actual numbers about job losses yet, but believed to be in the thousands. All for bad property loan deals.

Then, there is Ed Balls speaking at the CBI:

‘…And we all failed to see the dangers that were emerging in our banking system in the middle of the last decade, and the inadequacy of bank regulation… and I have certainly learned from that experience.’

A little known fact for you about RR rescue. Harold Duxbury told me (and he didn't tell lies!) that at a creditor's meeting he told them to stop talking about what was owed, set the debts on one side and help get the company moving again. He was right, B&D got their money in the end. What we forget now is that B&D had 2000 employees on maintenance work on shadow factories and government building contract in the area during and after the war. Harold was also proud of the fact that when to whole of the wartime accounts were scrutinised the auditors said that there was only the odd penny discrepancy here and there. Harold asked which side of the balance sheet they were on.....

News today that two of the branches of the co-op to close are in Colne and Burnley

The Yorkshre Bank was yesterday quoted as an example of poor banking practice to it's users in the Commons yesterday by many MP's quoting specific examples of manipulation of rates to benefit the bank and reduce available credit lines to businesses

So, we learn that the Co-op chairman was running the company while he was high on drugs. (LINK) Gives a whole new meaning to running a company on ethical lines....
I got a thick envelope yesterday containing the next stage in my Card Protection claim. Never bothered to read the yards of legal statements, simply voted for the scheme and binned the rest. Thanks to Paul Lewis for guidance! I don't think I am due for much any way....

Now we know how the cocaine gets on our notes, it is put on at source.

It's interesting to look back at the Co-op blowing its trumpet in January 2012 on the brandrepublic.com (PR) web site, titled `The Rev Paul Flowers, The Co-operative Group: Capturing the ethical opportunity'
http://www.brandrepublic.com/news/1111893/
...and in particular this bit at the end:

Thought Leadership credentials
The Reverend Paul Flowers is unique among his corporate peers. A methodist minister, he brings a wealth of social experiences to his role in chairing The Co-operative Bank, as well as his experience in business. A lifetime serving the public includes leading work tackling drug abuse and, as vice-chair of the National Association of Citizens Advice Bureaux, bringing his people skills to the fore in helping to offer counsel in areas such as financial advice. He has taken on a challenge at the bank that in some ways mirrors what many ministers face in church each week; understanding the real pressures people face regarding the impact of the financial decisions they take.

On a different subject...Paul Lewis has warned that the insurance companies have become so dependent on making judgements from customer's post codes that if your code isn't recognised by their computers then your insurance policy will be terminated. People buying new houses are finding that they are driving without valid insurance because when they told the company their new address the new post code hadn't worked its way through the system and the computer simply decided they didn't exist and ended the insurance policy. And if you didn't tell them about the address change then your policy is invalid anyway. Catch 22. It turns out that there are so many post code changes every day, and it takes so long for them to go through `the system', that there must be lots of people who (theoretically at least) are driving without valid insurance.

Brilliant Paul Flowers quotation. Isn't it satisfying to see hypocrites caught out! I'm glad I have only one insurance, house contents, and it's done through a broker who knows me. How can it be legal for a company to unilaterally void a contract?

The postcode thing appears to be just a simple matter of the "Computer says no" without the additional ability of a human being to intervene.

Ian Martin wrote:Co-op man's drug shame all result of misunderstanding. Taking chairman though books finance team pointed to hole + said: "Do the Maths"