BEWARE! THE BANKS ARE OUT TO GET YOU!

[Stanley]

See this LINK for news that the Wonga scam of sending fake letters demanding payment of debt is more widespread than was suspected. Other banks have been named as well. It becomes apparent that this was a standard 'cunning wheeze' in the industry and not confined to Wonga.

[Stanley]

It looks as though the treasury has woken up to the fact that leaving the pension companies to give advice to new pensioners researching the minefield of annuities it might be better if they had free independent advice. Sounds like a no-brainer to me.... (LINK)

[Tizer]

Yes but....it won't be face to face advisers, except perhaps in a small proportion of cases and most of the advice will be via online services and won't go into much detail about our needs, so will it be fit for purpose? The reason is that 600,000 people retire each year which means 12,000 people will need advice each week.

[Stanley]

True, and in the present state of the financial industry who can trust any source of advice?
See THIS for the latest suspicions about the activities of the banks. £3trillion a day passes through the system and it looks as though the temptation was too great to resist. Commentators say it is at least as serious as LIBOR.
Nearest comparison I can come up with is powerful barons under weak kings. They did exactly what they wanted to and the only defence against their activities was to force them to submit. Who is going to do it?

[Tizer]

I suppose people aren't going to bite off the hand that feeds them all those juicy loans and allows them to keep on living in the manner to which they've become accustomed.

[Stanley]

You really do have to start wondering if anything at all is being done to correct current malpractice. Remember all the brave words in 2008? Where are all the fraudsters in handcuffs?

[Stanley]

It's a toss up whether this should be here or in Politics Corner. See THIS for the latest views of the BofE on interest rates. The committee have decided unanimously to keep the 0.5% interest rate for another month but they are under mounting pressure from industry to raise the rate. The danger is that the 'economic miracle' is so fragile that raising the rate will have serious repercussions on the domestic spend and this is one of the main drivers of any recovery.
One is allowed to be wise before the event and you may remember that I have always said that the regime of austerity was wrong because it attacked the domestic spend which supports 85% of our economy. Too late now for any remedial action, incomes continue to fall and when the rise in rates comes it will be a disaster.

[Stanley]

The 'Dark Pool' is the latest subject of enquiry. (LINK) Am I right in thinking that the banks have made the system so convoluted and obscure that the opportunities for malpractice are almost limitless? The whole system of High Frequency trading seems to me to be obviously unfair as the ordinary investor can't participate and in many cases doesn't even know that their trades are being piggy-backed by well equipped rogue traders who can extract profit by being nano-seconds quicker than normal trading routes. How can this be fair or legal?

[Tizer]

28 July 2014, BBC
Lloyds fined £218m over Libor rate rigging scandal
"Lloyds Banking Group has been fined £218m for "serious misconduct" over some key interest rates set in London. Lloyds manipulated the London interbank offered rate (Libor) for yen and sterling and tried to rig the rate for yen, sterling and the US dollar, said the US legal order. It also manipulated submissions for another short-term rate linked to the value of UK government debt. Bank of England Governor Mark Carney called such misconduct "reprehensible". Lloyds said it "condemns the actions of the individuals responsible". The fines were issued by the UK-based Financial Conduct Authority (FCA) and a US-based trading commission."
http://www.bbc.co.uk/news/business-28528349
Apparently Lloyds intends to claw back bonuses from 15 staff who were involved.

[Stanley]

Some interesting reactions in the media yesterday to news that bonuses could be clawed back up to seven years after the event. Very little support for handcuffs but one trader did say that the most effective way to stop the gamblers and fraudsters would be to bring in clear criminal sanctions. He's right, treat them the same way as benefit fraudsters!

[Tizer]

I was most interested by the response of the banking industry representative (I think it was the man who replaced Angela Knight at the BBA). He expressed the usual bankers' attitude that it will scare away the `best' people, saying that if they can choose between London with the claw back potential and New York without it then we'll lose them to New York. He doesn't seem to understand that his response suggests that we would `lose' the potential fraudsters to NY and keep the trustworthy people in London - which is what we want! His inability to understand that he's admitting the banking industry wants the scammers says it all.

[plaques]

it will scare away the `best' people,

Another interpretation could be that the 'shop floor' banking system is totally out of control and no matter who is at the top those underneath will continue with their illegal scams. Either way the 'City' could be heading for another disaster. And as Stanley has pointed out several times its those at the bottom of the heap who will pick up the tab.

[Stanley]

Quite right P. As for the bankers leaving, every time this has been tested, like when US banks close offices in London, the bankers move sideways... Tiz is quite right and has anyone done a proper cost analysis exercise on the amounts of money that would be saved if these frauds ceased? And as P points out, every time there is a big fine it has to come out of the system, the poor bloody customer! Same applies to bribery in the pharma sector as well.

[Stanley]

See THIS for yet another record fine and compensation order on Bank of America for knowingly selling dodgy mortgages and derivatives. $17billion gives some idea of the scale of what can only be described as corruption in the system. How much more evidence is needed to trigger some meaningful regulation of these monsters.

[Tizer]

It was interesting to hear Paul Lewis describing how Credit Suisse had provided a number of UK banks and building societies with a dodgy investment product to sell to elderly folk. Apparently Credit Suisse have already been fined for a previous case yet they went on to repeat it. Arrogance.

[Stanley]

Or wicked cynical greed.....

[Tizer]

Cheeky bankers again! Not content with mis-selling, they are now mis-handling the complaints...
BBC, 29 August 2014
`Banks to reopen 2.5m PPI claims after FCA inquiry'
"Banks and card companies will reopen 2.5 million PPI mis-selling complaints amid claims of underpayment and rejection of compensation. The Financial Conduct Authority (FCA) said that firms would look again at cases in 2012 and 2013 where claimants could have been treated unfairly. A BBC investigation in June highlighted concerns over PPI compensation. One expert, commissioned by the BBC, estimated that underpayments could have hit £1bn."
http://www.bbc.co.uk/news/business-28983267

[Stanley]

And recent fines for mis-selling mortgages.... So common now that I can't even remember which bank it was! It's got to the stage where deception is the default mode in many banks.

[Stanley]

See THIS for news that the charity Step Change reports cases of hardship resulting from high interest pay day loans are up 42% on last year. These are of course the poorest people at the bottom of the heap. If ever there was a case of cynicism in government it is the way that lenders are allowed to operate schemes with interest rates that sometimes exceed 2000% per annum.
When this evil first surfaced one commentator said that the prospect for anyone in this predicament is complete destitution. It is inescapable. Think of the future repercussions of this....
See THIS for a report on the latest effect of the market on farm gate liquid milk prices. This is a disaster for the industry and entirely due to the short-term view of market traders who know nothing about the industry. It isn't a tap that can be turned on and off instantly. There is the further damage to the management of the countryside and further pressure on one of the backbones of our society, a strong and profitable farming community. Because grass farming and milk production is the mainstay of farming in areas where climate and soil militate against arable farming it is even more damaging.

[David Whipp]

There are widespread problems of unsold food across Europe due to the Russian sanctions... presumably, more perishable items will rot in the fields?

[Stanley]

If there's no market that's what will happen, the market at its finest again while people go hungry. Yes, that's part of the problem but globally, demand for milk products has fallen due to the recessions.

[Tizer]

Poland exported large quantities of apples to Russia but now that market has been closed to them by Putin and there are `apple mountains' in Poland.

As for the payday loans at 2000%, the banks charge even higher % rates on their unauthorised overdrafts. As someone who has never resorted to an overdraft I don't have much sympathy for most of those who end up paying the banks' exorbitant rates, but there are some who have to pay the rates because they made a mistake and others who have unexpectedly been thrown into great debt and are forced to default to an overdraft.

[Stanley]

Taking the umbrella back when it starts raining.....
I see the Treasury are going to have to follow EU rules on calculation of GDP. The new method will include drug dealing, prostitution and the charity shops etc. So that's that sorted out, we are doing better than we thought.....

[Stanley]

See THIS for a Guardian report on bonuses being paid at the Passport Office for performance while the enormous backlog of applications was building in July. The argument is that these were paid for the previous year but surely this was when decisions were being made by management which led to the backlog? Any chance of reality getting a foothold here?

[Stanley]

See THIS for the market's view of what a YES vote would mean. Hint of panic as realisation dawns?