Sunday, April 13, 2008

Modern volunteering.

It seems that since the Bank of England decided to cut interest rates, I understand that it was not a request despite the independence of the Bank, it has been negated by these greedy banks. That's a bit of a problem. So something needs to be done and the crowd that does something, no matter who badly thought out, every time something needs to be done are swinging into action. Read here.

Thus Darling is going to have a word with the banks and get them to volunteer. I'd love to be a fly on that wall. The unspoken 'or else' is so loud that even I can hear it. I even think I would watch this discussion on pay per view just to see how he goes about it. It would be a classic.

Now this is a big problem for the banks. Since there has been rules put in place to limit their profits on overdrafts, missing payments etc. they have had to find others ways to keep their profits up. No sooner have they done that, to complaints, than the housing market is hit and there is the real risk that more than a few newer mortgages will be bigger than the value of the property it is secured on. Especially as over the last few years there has been a move back to mortgages over 100%. So they won't want to reduce mortgage rates and threaten their business never mind their profits. So the government makes them the bad guys again and our dozy public will believe that the following recession is their fault as we all know hoe greedy big business is.

So what to do? Drop the rate and possibly go under. Will the government have to guarantee that if they push this option? If I was a bank I would be looking for some assurance that if I step away from a safe strategic path to walk a third parties tactical path I would expect something in return. At least some guarantee of safe sailing. Even then, what about the share prices? If a bank is forced to do this, no matter how voluntary it is, will that not cause an impact on the banks share prices as it's investors question the move? Might that not trigger the same effect as high mortgage rates? Could shareholders take the directors to court? What a quandary. One think is certain in this game of chess Gordo and his puppet won't have thought more than one move ahead. Hell, even thinking of just one move causes massive headaches for that lot and they don't even consider risks attached to the moves.

Well now is the time for the banks to do what is right, not for Gordo and the bunch of useless b45^4rds who got us into this with an empty piggy bank, but for the country. I just don't see it being GordoDarlings way though. It might cause some issues but why should we believe this tinkering is going to help when everything else they have done for the last decade has made things worse.

I'm sure we will read about the whole thing in the papers. It will make interesting reading. I'm sure though that there will be a token 'voluntary' drop in rates. This lot still have a few years to go and the 'Or else' still has some teeth and they won't hesitate to bite.


At 12:47 pm, Blogger Semaj Mahgih said...

I like that. Coercion is now called "urged to volunteer".

At 6:13 pm, Blogger Bag said...

It's newspeak for the 2000s.

I don't know how many times I've heard the phrase 'It's entirely voluntary however if it is not taken up we will have to act.' Voluntary ID cards is another.

I hate this lot.


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