And The UK Bankers Get Richer... Again!

On the UK Telegraph: Families £4,000 worse off

• Middle-income families will be £4,000 a year worse off by 2013 in light of the decision to scrap child benefit for higher-rate taxpayers, writes Rosie Murray-West.
  
  Calculations for The Sunday Telegraph show that a family earning £50,000 could be £4,000 a year worse off after all of the Coalition's tax and benefit changes are implemented, while the cost of living is also predicted to rise.
  
  This will mean significant belt-tightening for many families," warned Patricia Mock, a tax partner at Deloitte, who said couples with a single wage earner on £50,000 would be particularly affected. By 2013, when child benefit is cut, she calculated that a family with two children at this income level could have £3,036 less a year to spend............

Yeah.. the picture in that article... says it nicely..... SQuuuuuuuuuuuuuuueeezed!

That would be accepted if everyone is treated the same.

But no.... the bankers... they live in another planet!

On the UK Telegrapgh: City bankers expect billions in bonuses

Sigh!

• More than half of Britain's bankers are expecting their bonus cheques to rocket – in some cases by up to 70pc.
  
  Two surveys conducted by eFinancialCareers.com and Morgan McKinley show that despite a clampdown on pay by global regulators City staff are still placing orders at their local Porsche dealership in expectation of bumper cash bonuses.
  
  Last week's report by the Centre for Economics and Business Research (CEBR) suggested those in the financial sector would receive nearly £7bn in bonuses this year.
  
  Regulators have tried to force banks to curb bonuses to restrict excessive risk-taking in the wake of the global financial crisis. Current proposals being put forward by Brussels could see the biggest clampdown yet on bankers' pay – surpassing even the plans of the UK's Financial Services Authority (FSA) – which are set to include a cap that would limit the amount bankers get upfront to a maximum of 30pc.
  
  But according to a eFinancialCareers.com survey, of more than 5,000 financial professionals, 50pc of UK bankers are expecting an increased bonus this year – and 70pc expect a larger total remuneration. About 20pc believe they will net a bonus 50pc larger than their cheque last year.
  
  Despite rules attempting to cap cash payouts at all levels in the City, 51pc of respondents still believe they will be paid in fully in cash with no deferred element to their pay. And only 28pc are aware of their employer currently having a clawback policy.
  
  James Bennett, managing director at eFinancialCareers.com, said: "Despite the warnings on bonus payments from the Coalition, expectation levels in the City are running high this year which, if realised, will place bankers in the eye of a political storm once more."
  
  The Morgan McKinley survey suggests that 72pc of bankers are "more confident" about "London financial services jobs market" compared with last year .

More Shareholders Against Bankers Bonus!

Great!!

On UK Telegraph: Shareholders attack banks in bonus row

• Institutions want regulators to calculate the value of the state aid provided to Britain's lenders to ensure bonuses are only paid out of profits the bank has generated independently. Their demands echo angry comments made over the weekend by George Soros, the hedge fund manager, who described the industry's recent success as a "hidden gift" from the taxpayer that should not be used in payouts.
  
  Colin Melvin, chief executive of Hermes Equity Ownership Services, which represents about £50bn of assets, said: "From an incentivisation point of view, you want to establish the principle that bank performance based on guarantees or government support would not be part of a bonus calculation...

Now on CNBC website: Banks Taking Same Risks That Led to Crisis: ECB's Noyer

• European Central Bank Governing Council member Christian Noyer warned that banks are taking the same risks that led to the financial crisis and said they should preserve capital rather than pay it out to bankers and investors.
  
  His comments came as regulators around the world mull reforms to lower the risks that large banks can pose to the financial system and rein in the type of recklessness that fueled the credit crisis.
  
  Noyer said impressive bank profits in recent weeks were a result of public policies to combat the crisis, and did not mean the industry had recovered its balance or that further reforms were not necessary.
  
  "Nothing could be further from the truth. Indeed, one major risk in the period to come is the emergence of a business as usual mentality," Noyer said in a speech at a financial conference in Singapore on Monday.
  
  "There are signs that parts of the financial industry have resumed risk taking practices reminiscent of those which led to the crisis," he said, pointing to bankers' pay packages that appeared out of line with performance.
  

Credit Crunch Rant Of The Year - Al Murray

Published on UK Sun: Why bankers leave a bitter taste

By Al Murray

• FIRST thing’s first, I am not one to shy away from the big stories.
  It’s time for some Credit Crunch Blah Blah, and what a surprise, the banks have screwed something up! Who’d have thought it, eh?
  
  The people who make sure your cashpoint card doesn’t work when you’re abroad, who write you a £20 letter about your £10 overdraft, have cocked it all up.
  
  No one knows how or why or when — least of all them — but somehow they’ve lost more money than anyone has lost before.
  
  Thing is, when you take a step back and think about it, you realise just whose money it is.
  
  Yes. IT’S OUR MONEY! They lost our money. Whose money? OUR MONEY!
  
  So what do they do about it? Long before they apologise, long before they put their own money on a horse and hope it comes in (which is what anyone normal would do, let’s face it) they go to Gordon Brown, cap in hand and ask him to help them out.
  
  They say: “We’ve lost a load of money, we don’t know where the money is, help us, please!” (Whose money? OUR MONEY!) And then Gordon Brown says: “Aye, laddies, I’ll help ya oot, here’s a cheque for 70 ballion poonds, that should cover it.” That’s nice and dandy of him, but whose money is he giving them? That’s right, OUR MONEY! So he’s given them OUR MONEY to replace OUR MONEY that they’ve lost.
  
  But the trouble is he’s not got enough money because it’s been spent on Health and Safety and second houses for MPs, and so he’s had to borrow some more money.
  
  So he goes to another bank and borrows a load more money, and whose money is it that he borrows? — OUR MONEY!
  
  So he’s borrowing OUR MONEY to replace OUR MONEY, that he’s already spent, to replace OUR MONEY that the banks lost.
  
  And how’s he going to pay off that loan? By raising taxes — which come out of OUR MONEY!
  
  So he’s going to insist we cough up more of OUR MONEY to repay the loan of OUR MONEY needed to replace OUR MONEY the banks need to replace OUR MONEY that they lost. In other words, we pay four times over. Thanks for that.
  
  But here’s the part that really gets my goat. I don’t have a goat, but feel like I should buy one just so it can get got. The banks’ one job is to look after our money — that’s it, it’s not like they’ve got anything else to do, is it? That’s what they do, look after money.
  
  Stick it in a safe, sit a bloke next to the safe, fill up the cashpoint machine as and when. It can’t be hard, can it?
  
  If I can figure it out, why does a bloke who gets a million Pound bonus at Christmas not realise any of this?
  
  Banks look after money, full stop. A bank that doesn’t have any money in it is just a building, the same way a pint without any beer in it is just a glass.
  
  What’s worse is we don’t hear the bloody end of it, it’s all over the telly and papers. Ironically it’s the financial experts who are raking it in.
  
  It’s lucky the media doesn’t charge us a tenner every time they tell us the country’s gone overdrawn like the banks do, otherwise we’d have even less money.
  
  I might start it. You’ve got no money mate, there you go, I’ve just provided you with a service.

Pricelss mate!

Banking Loans Is Not Increasing, It Is Decreasing!

I like Bob Pisani short notes from the markets. On today's he notes on the banking sector. Pain For Banks On Both Sides Of The Pond

• I've been asked repeatedly what is going on in U.K. banks, with double digit declines in Royal Bank of Scotland, Barclays, and single digit declines in Lloyds.
  
  The answer is, shareholders in those companies have the same fears that shareholders of large banks here do: massive dilution and further significant write-downs.
  
  The UK Prime Minister has indicated the government would be announcing new measures to "resume the normal function of lending" to the private sector.
  
  Read: More capital injections are coming into U.K. banks, in the hope they will use the money to do more lending.
  
  Why? The U.K. government, like the U.S. government, is worried that without more intervention bank lending will continue to shrink.
  
  But here in the U.S., there is growing debate about the limits of government intervention. The reason banks are not lending is not because they don't want to, it's because:
  
  1) Deteriorating credit quality is a strong motivation to limit new lending growth, and
  
  2) Banks need more deposits so they can lend more (i.e. people need to save more)
  
  And that's just the supply side. On the demand side, loan demand is not INCREASING, it is DECREASING, both here and in the U.K.
  
  That is not a bad thing. Corporations and households have too much debt already and need to deleverage.
  
  The bottom line: government is not going to create an artificial demand by creating a false supply. Let us start by building up capital and increasing savings.
  
  And to everyone--Sheila Bair on down--who angrily say to the banks, "What did you do with all the TARP money?," the correct answer is, "We used it to survive."
  
  

Another Round Of Bailouts In UK?

Posted on UK TimesOnline: Chancellor Alistair Darling on brink of second bailout for banks

• Alistair Darling has been forced to consider a second bailout for banks as the lending drought worsens.
  
  The Chancellor will decide within weeks whether to pump billions more into the economy as evidence mounts that the £37 billion part-nationalisation last year has failed to keep credit flowing. Options include cash injections, offering banks cheaper state guarantees to raise money privately or buying up “toxic assets”, The Times has learnt.
  
  The Bank of England revealed yesterday that, despite intense pressure, the banks curbed lending in the final quarter of last year and plan even tighter restrictions in the coming months. Its findings will alarm the Treasury.
  
  The Bank is expected to take yet more aggressive action this week by cutting the base rate from its current level of 2 per cent. Doing so would reduce the cost of borrowing but have little effect on the availability of loans.
  
  Whitehall sources said that ministers planned to “keep the banks on the boil” but accepted that they need more help to restore lending levels. Formally, the Treasury plans to focus on state-backed gurantees to encourage private finance, but a number of interventions are on the table, including further injections of taxpayers’ cash.
  
  Under one option, a “bad bank” would be created to dispose of bad debts. The Treasury would take bad loans off the hands of troubled banks, perhaps swapping them for government bonds. The toxic assets, blamed for poisoning the financial system, would be parked in a state vehicle or “bad bank” that would manage them and attempt to dispose of them while “detoxifying” the main-stream banking system.
  
  The idea would mirror the initial proposal by Henry Paulson, the US Treasury Secretary, to underpin the American banking system by buying up toxic assets. The idea was abandoned, ironically, when Mr Paulson decided to follow Britain’s plan of injecting cash directly into troubled banks.
  
  Mr Darling, Gordon Brown and Lord Mandelson, the Business Secretary, are expected to take the final decision on what extra help to give the banks by the end of the month.
  
  The banks have taken much of the heat for the economy’s woes. But ministers are said increasingly to accept that attacking the banks will not by itself transform a situation that is jeopardising Britain’s economic prospects.
  
  Insiders point out that Mr Darling’s criticism of mortgage lenders has softened in recent weeks.
  
  After the Bank of England’s radical cuts in interest rates over the past two months, the focus at the Treasury has shifted away from mortgage lending to the pressure being put on businesses by the scarcity of loans, which is emerging as the bigger economic danger.
  
  Richard Lambert, the Director-General of the CBI, said yesterday: “The Government is going to have to do more to restore credit flows across the economy.”
  
  He said that the car industry was especially vulnerable: “Without access to credit or loan guarantees on commercial terms, this vital part of the economy will incur lasting damage.”
  
  The scale of the lending drought was highlighted as separate Bank figures showed that the number of new home loans approved plunged to a record low in November. Only 27,000 mortgages for house purchase were approved by banks and building societies, down from a revised 31,000 in October. It is the lowest level since the Bank began collecting data in 1999. The Bank’s quarterly credit conditions survey showed that banks restricted access to loans of all kinds by companies and consumers in the past quarter, and that they plan to tighten the screws more in this quarter.
  
  Halifax reported that the price of the average house fell by more than £100 a day last year. Its quarterly figures showed that the average house ended the year down in price by £37,178, or 16.2 per cent.
  
  

And Bank Of England Cuts The UK Banke Rates To Just 2%!!

Just out on Bloomberg News: Bank of England Cuts Key Interest Rate to 2%, Lowest Since 1951

• By Jennifer Ryan
  
  Dec. 4 (Bloomberg) -- The Bank of England cut the benchmark interest rate to the lowest level since 1951 as lenders rationed credit, pushing the U.K. economy deeper into a recession.
  
  The Monetary Policy Committee, led by Governor Mervyn King, reduced the bank rate by 1 percentage point to 2 percent, the central bank said in London today. The move matched the median forecast of 61 economists in a Bloomberg News survey. Sweden’s central bank also cut its rate today by the most since 1992.
  
  King discussed the possibility of lowering the interest rate to zero for the first time on Nov. 25 and said the biggest challenge he faces is renewing the flow of credit in the economy. Service industries, manufacturing and construction shrank at the fastest pace on record last month and house prices dropped 2.6 percent, the most since 1992.
  
  “There’s no sign that any of the data is in any way bottoming out, and it justifies big moves in interest rates,” said Grant Lewis, an economist at Daiwa Securities SMBC Europe Ltd. in London and a former U.K. Treasury official. “There are further cuts in the pipeline.”
  
  Investor speculation of interest-rate reductions pushed the pound to a record low of 86.75 pence per euro today. The currency was at 86.67 pence per euro as of 11:49 a.m. in London.
  
  The interest rate now matches the lowest in the central bank’s history. It was last at 2 percent when Winston Churchill’s victory in a general election made him prime minister for the second time.
  
  ECB Decision
  
  The U.S. Federal Reserve cut its key rate to 1 percent last month. The European Central Bank will reduce its benchmark by a half point to 2.75 percent at 1:45 p.m. in Brussels today, according to the median estimate of 56 economists in a Bloomberg News survey.
  
  The Bank of England’s move was the latest in a series of steps across the world today. Sweden’s Riksbank lowered its key rate by 1.75 percentage points to 2 percent. New Zealand’s central bank cut its rate by a record 1.5 percentage points to 5 percent, and Bank Indonesia reduced its rate to 9.25 percent from 9.5 percent.
  
  The U.K. benchmark may fall to zero early next year, forcing policy makers to consider other means of restarting bank lending and reviving the economy, former policy maker Willem Buiter said this week. Such steps may include expanding money supply and using it to finance government deficits or buying securities such as bonds or stocks, he said.
  
  ‘Acute’ Problems
  
  “U.K. rates could end up American-style because the problems in the financial sector are so acute,” said Lewis, the Daiwa economist.
  
  King said Nov. 25 that “close coordination” with the government is needed if the interest rate reaches zero and said the “most pressing” challenge facing policy makers is getting financial institutions to resume lending. Banks approved just 32,000 mortgages in October, matching the least since 1999.
  
  Interest rates below 1.5 percent “wouldn’t leave them with much scope for further cuts,” said Peter Dixon, an economist at Commerzbank AG in London. “We may have to see the bank looking at other measures.”
  
  Policy makers face a growing risk of missing their 2 percent inflation target as economic growth slows. King refused to rule out the risk of deflation when he presented forecasts in November, which showed a danger that consumer prices may start to fall across the U.K. economy. An index showing prices charged by services companies fell to the lowest since 2001 last month.
  
  Economic Outlook
  
  Recent reports indicate the outlook for Britain’s economy is worsening. Stagecoach Group Plc, owner of the U.K.’s biggest rail franchise, said yesterday it may cut jobs as earnings experience “downward pressure.” Bellway Plc, a homebuilder, said today its order book has halved after banks granted fewer mortgages and a separate report showed U.K. car sales plunged 37 percent in November from a year earlier, the most in 28 years.
  
  The U.K. economy may contract by 1.1 percent next year, the most since 1991, the Organization for Economic Cooperation and Development said Nov. 25. Gross domestic product fell by 0.5 percent in the third quarter, the first drop in 16 years.
  
  Services from banks to recruiters contracted at the fastest pace in at least 12 years in November, and manufacturing and construction shrank, surveys by the Chartered Institute of Purchasing and Supply showed this week. House prices fell 2.6 percent on the month, HBOS Plc said today.
  
  “This economy needs all the help it can get at the moment,” said Malcolm Barr, an economist at J.P. Morgan Chase & Co. who forecasts the benchmark rate will fall to 1 percent by May. “Their own analysis of the issue shows they need rates to be a lot lower.”

The Global World Cut is surely ON!!!

And the winner is the one to cut to ZERO??