Comments on: 10 UK regulatory howlers which mean this is also a Credit Crunch made in Britain http://www.johnredwoodsdiary.com/2008/09/20/10-uk-regulatory-hmowlers-which-mean-this-is-also-a-credit-crunch-made-in-britain/ Conservative Party Candidate for Wokingham Sat, 20 Mar 2010 16:56:39 +0000 http://wordpress.org/?v=2.9.2 hourly 1 By: mikestallard http://www.johnredwoodsdiary.com/2008/09/20/10-uk-regulatory-hmowlers-which-mean-this-is-also-a-credit-crunch-made-in-britain/#comment-26559 mikestallard Sun, 26 Oct 2008 19:52:39 +0000 http://www.johnredwoodsdiary.com/?p=1598#comment-26559 Have you read "A House for Mr Biswas" by VS Naipaul? Insur'n'burn? Have you read “A House for Mr Biswas” by VS Naipaul?
Insur’n'burn?

]]> By: Mohammed http://www.johnredwoodsdiary.com/2008/09/20/10-uk-regulatory-hmowlers-which-mean-this-is-also-a-credit-crunch-made-in-britain/#comment-26536 Mohammed Sat, 25 Oct 2008 16:46:17 +0000 http://www.johnredwoodsdiary.com/?p=1598#comment-26536 Hi John, I am a student and was doing an research in the financial Systems and institutions. One of my very close friend was working with a company and the company had 8 staffs and in one stage the company had a fire accident and they have lost all the stocks which is worth of £50000 and there was a lil bit of damage for the building. After the fire the company have closed down and they had a insurance claim for £8 million (Unbelievable) but they gave their staffs of just £500 and said they company is in heavy loss.. what do you think abt it?? Hi John,
I am a student and was doing an research in the financial Systems and institutions. One of my very close friend was working with a company and the company had 8 staffs and in one stage the company had a fire accident and they have lost all the stocks which is worth of £50000 and there was a lil bit of damage for the building.

After the fire the company have closed down and they had a insurance claim for £8 million (Unbelievable) but they gave their staffs of just £500 and said they company is in heavy loss..

what do you think abt it??

]]> By: Chris Hutcherson http://www.johnredwoodsdiary.com/2008/09/20/10-uk-regulatory-hmowlers-which-mean-this-is-also-a-credit-crunch-made-in-britain/#comment-25562 Chris Hutcherson Thu, 02 Oct 2008 17:27:56 +0000 http://www.johnredwoodsdiary.com/?p=1598#comment-25562 Now that the Senate has passed the 700 billon bailout has Wall Streets destiny been sealed? Now that the Senate has passed the 700 billon bailout has Wall Streets destiny been sealed?

]]> By: biltong http://www.johnredwoodsdiary.com/2008/09/20/10-uk-regulatory-hmowlers-which-mean-this-is-also-a-credit-crunch-made-in-britain/#comment-25152 biltong Sun, 21 Sep 2008 23:15:31 +0000 http://www.johnredwoodsdiary.com/?p=1598#comment-25152 Dear John, Another example of the way our government works against our best interests is what happened last year to the company I worked for. The company closed down due to insolvency and all staff were made redundant. It was a manufacturing company (Yes we made things!). The insolvency was due to a combination of bad management and bad luck, and not due to a decline in business. We had orders that we could not fulfil due to us having no cash. The business was still there after we had ceased trading, and our products are now made abroad, the brand name having been sold on. The company could not pay our final wages and redundancy pay, so we had to wait 3 months to get these from the Insolvency Service. We got only the statutory minimum amounts, in my case just over £6,000 for 24 years' service. At the same time as we were being made redundant, the NHS "Strategic Health Authorities" were being reorganised, and 700 of their staff were made redundant. The government paid them £80 million in redundancy payments. This averages at about £100,000 per person, although senior managers got £350,000 on average. The Strategic Health Authorities were set up in 2002. I do not begrudge the SHA staff their redundancy payments. What annoys me is that the cost of just one SHA senior manager's redundancy payments would have been enough to "refloat" our company, and this would have kept 250+ people in employment and their jobs in the UK. Reply: Iwas sorry to learn of the loss of your job. I have from time to time highlighted the growing inequality of treatment between public and private sectors. You make a powerful point. Dear John,

Another example of the way our government works against our best interests is what happened last year to the company I worked for.

The company closed down due to insolvency and all staff were made redundant. It was a manufacturing company (Yes we made things!). The insolvency was due to a combination of bad management and bad luck, and not due to a decline in business. We had orders that we could not fulfil due to us having no cash. The business was still there after we had ceased trading, and our products are now made abroad, the brand name having been sold on.

The company could not pay our final wages and redundancy pay, so we had to wait 3 months to get these from the Insolvency Service. We got only the statutory minimum amounts, in my case just over £6,000 for 24 years’ service.

At the same time as we were being made redundant, the NHS “Strategic Health Authorities” were being reorganised, and 700 of their staff were made redundant. The government paid them £80 million in redundancy payments. This averages at about £100,000 per person, although senior managers got £350,000 on average. The Strategic Health Authorities were set up in 2002.

I do not begrudge the SHA staff their redundancy payments. What annoys me is that the cost of just one SHA senior manager’s redundancy payments would have been enough to “refloat” our company, and this would have kept 250+ people in employment and their jobs in the UK.

Reply: Iwas sorry to learn of the loss of your job. I have from time to time highlighted the growing inequality of treatment between public and private sectors. You make a powerful point.

]]> By: mikestallard http://www.johnredwoodsdiary.com/2008/09/20/10-uk-regulatory-hmowlers-which-mean-this-is-also-a-credit-crunch-made-in-britain/#comment-25120 mikestallard Sat, 20 Sep 2008 18:29:09 +0000 http://www.johnredwoodsdiary.com/?p=1598#comment-25120 People are getting moral now. Some lefties are looking disdainfully at the rich bankers who walk away from the disaster with pockets stuffed fully of money, while the cleaners etc etc are left on the dole. Is the whole world financial system really built on greed? And fear of the bosses? And a total disregard for the people who actually create wealth through businesses? "I am in the life boat...." etc etc. It really seems to me that, in business, respect and empathy for the people who you deal with are vital. So is trust? My word is my bond? Leadership where it is animals first, then soldiers then officers? If we have forgotten that, then, surely, we just get a bunch of morons punching computers willy nilly? Lemmings? People are getting moral now. Some lefties are looking disdainfully at the rich bankers who walk away from the disaster with pockets stuffed fully of money, while the cleaners etc etc are left on the dole.

Is the whole world financial system really built on greed? And fear of the bosses? And a total disregard for the people who actually create wealth through businesses? “I am in the life boat….” etc etc.

It really seems to me that, in business, respect and empathy for the people who you deal with are vital. So is trust? My word is my bond? Leadership where it is animals first, then soldiers then officers?

If we have forgotten that, then, surely, we just get a bunch of morons punching computers willy nilly?

Lemmings?

]]> By: Bazman http://www.johnredwoodsdiary.com/2008/09/20/10-uk-regulatory-hmowlers-which-mean-this-is-also-a-credit-crunch-made-in-britain/#comment-25115 Bazman Sat, 20 Sep 2008 16:37:06 +0000 http://www.johnredwoodsdiary.com/?p=1598#comment-25115 The £1,000,000 Bank-Note By Mark Twain. I have always found this one a howler. http://www.eastoftheweb.com/short-stories/UBooks/MilPou.shtml The £1,000,000 Bank-Note By Mark Twain.
I have always found this one a howler.

http://www.eastoftheweb.com/short-stories/UBooks/MilPou.shtml

]]> By: Nick http://www.johnredwoodsdiary.com/2008/09/20/10-uk-regulatory-hmowlers-which-mean-this-is-also-a-credit-crunch-made-in-britain/#comment-25111 Nick Sat, 20 Sep 2008 11:41:38 +0000 http://www.johnredwoodsdiary.com/?p=1598#comment-25111 You're wrong on securitisation. Very wrong. If the banks had securitised all their lending, then so long as they didn't act as idiots and buy it all back, there would be no problem. No systemic risk whatso ever. The risk would all be off their books completely, on or off balance sheet. So, John. As soon as the Tories are back in power, are you going to put the government liabilities on the books? State employee pensions? 1 trillion State pension? 4-5 Trillion Nuclear decommisioning PFI Railtrack Government guarantees. Reply: I have said we should account properly for all the state liabilities. Securitisation can be helpful as you say, but if taken to excess it ends up with far too many overleveraged hedge funds and other financial intermediaries owning too much debt, as we have just seen. ... Or is it just hot air? Nick You’re wrong on securitisation. Very wrong.

If the banks had securitised all their lending, then so long as they didn’t act as idiots and buy it all back, there would be no problem. No systemic risk whatso ever. The risk would all be off their books completely, on or off balance sheet.

So, John. As soon as the Tories are back in power, are you going to put the government liabilities on the books?

State employee pensions? 1 trillion

State pension? 4-5 Trillion

Nuclear decommisioning

PFI

Railtrack

Government guarantees.

Reply: I have said we should account properly for all the state liabilities. Securitisation can be helpful as you say, but if taken to excess it ends up with far too many overleveraged hedge funds and other financial intermediaries owning too much debt, as we have just seen.

…

Or is it just hot air?

Nick

]]> By: Kit http://www.johnredwoodsdiary.com/2008/09/20/10-uk-regulatory-hmowlers-which-mean-this-is-also-a-credit-crunch-made-in-britain/#comment-25107 Kit Sat, 20 Sep 2008 10:32:21 +0000 http://www.johnredwoodsdiary.com/?p=1598#comment-25107 The FSA is dysfunctional and is a risk to the stability to the financial sector it is supposed to regulate. It has made many misleading statements, accusations of illegal activities with no evidence, and appears politically motivated. The FSA is dysfunctional and is a risk to the stability to the financial sector it is supposed to regulate.
It has made many misleading statements, accusations of illegal activities with no evidence, and appears politically motivated.

]]> By: figurewizard http://www.johnredwoodsdiary.com/2008/09/20/10-uk-regulatory-hmowlers-which-mean-this-is-also-a-credit-crunch-made-in-britain/#comment-25104 figurewizard Sat, 20 Sep 2008 09:34:10 +0000 http://www.johnredwoodsdiary.com/?p=1598#comment-25104 It's good to see that while Northern Rock is pretty much gone, it's not forgotten. What we should all be asking ourselves now though is if a £100 million commitment to a relatively small provincial mortgage company was crucial to 'financial stability' as Gordon Brown told us at the time, why wasn't this also true for HBOS? The answer is twofold. Firstly Northern Rock was located in Newcastle; the hinterland of which contained some twenty three safe Labour seats that could have been put at risk if thousands of jobs had been lost there and secondly unlike HBOS, it was completely bust. Not only had it run out of cash, the value of its assets were worth far less than its debts. We are all going to be paying a long and heavy price for a decision that Gordon Brown forced on us all purely on behalf of the Labour party in general and what he saw at the time as the long term security of his position as Prime Minister in particular. Reply: I think it was a £100 billion commitment It’s good to see that while Northern Rock is pretty much gone, it’s not forgotten. What we should all be asking ourselves now though is if a £100 million commitment to a relatively small provincial mortgage company was crucial to ‘financial stability’ as Gordon Brown told us at the time, why wasn’t this also true for HBOS? The answer is twofold. Firstly Northern Rock was located in Newcastle; the hinterland of which contained some twenty three safe Labour seats that could have been put at risk if thousands of jobs had been lost there and secondly unlike HBOS, it was completely bust. Not only had it run out of cash, the value of its assets were worth far less than its debts. We are all going to be paying a long and heavy price for a decision that Gordon Brown forced on us all purely on behalf of the Labour party in general and what he saw at the time as the long term security of his position as Prime Minister in particular.
Reply: I think it was a £100 billion commitment

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