A Predictable Autumn Statement
Predictable in that it was more of the same, even if you don’t like one or more of bankers, large corporations, benefit claimants, pensioners, unions or drivers. I don’t like at least three!
Some taxes and allowances went up and some went down. Was it ever any different?
We need some radical ideas to get the economy going?
Take these statements which are more or less agreed policy between all the major parties.
1. Banks should lend more to individuals and businesses, so that they purchase capital goods and services.
2. Savers should get a better return on their money.
3. The banks should have more capital reserves.
Point 3 is the elephant in the room, as any money the banks get goes on salaries or to improve their balance sheet rather than more lending.
So let’s leave it out and go to peer-to-peer lending, where borrowers and savers are put in touch by intelligent computer systems.
The Chancellor didn’t take the radical route and help peer-to-peer lending at the expense of the banks. After all if he did, the price of all those Government bank shares would drop. So as they will continue to lose value, wouldn’t it have been better if Gordon Brown had done the prudent thing and put them down, when they went bust?
But then Labour would never have got another vote in Scotland. As it is, Labour doesn’t seem to get many!
The Alternative Finance Routes Are Coming
I found this article on a website called Bridging and Commercial.
It talks about how Funding Circle are trying to bridge the gap in the market left by the withdrawal of ING, by paying an increased commission of 4% to intermediaries.
It is an article that should be read.
My reservations about Funding Circle is that they are very small in the overall scheme of things. They have currently lent about fifty million pounds, as against five times that amount by Zopa, which lends to individuals.
A £100 Button On A Nationwide Cashpoint
I needed to get some money out this morning, so I went to a Nationwide Cashpoint in Kings Cross Station. After keying in my pin, it offered me the usual choice, but with a special £100 button.
As that was what I was going to draw out, I just touched it and got my money!
How sensible!
And Now Savings Rates Go Negative!
The FT is now reporting that Credit Suisse is charging savers to keep their money with the bank.
I suppose we’re not there yet, but it seems rates are still going down.
Payday Loans To Be Controlled
I feel that pay-day and short-term loan companies like Wonga are not the best of ideas. They’re not good for customers as their interest rates are just totally out of line and I think that their business model will come a cropper, as I outlined here.
The government has stated that the new Financial Conduct Authority will have the power to impose a limit on interest rates, as outlined in this article.
It sounds fine in practice, but what will happen to existing loans? And who will lend to those, who use the payday loan system?
It will also effectively kill off all these companies, so they’ll be more unemployed.
And how many criminals and thugs will move into the loan-sharking business?
So all in all, with the proposed alcohol price legislation, it’s been a very good day for criminals.
LloydsTSB Move Customers Without Their Permission
I choose the organisation I bank with, not politicians or bloated bureaucrats from Brussels. So LloydsTSB is totally out of order to move customers to a new bank as reported here.
I suspect a good proportion of those moved will create a stink. UKIP must be rubbing its hands with glee.
You might also argue, that you have few rights when your bank is taken over by another. I used to bank with the Woolwich, which was taken over by Barclays, who I don’t care for. So I moved to Nationwide.
On the subject of Barclays, I used to work with a guy, who had a T-shirt complete with the Basrclay’s eagle, that said “Bank With Warclays”
Greece’s Final Bailout?
I don’t expect so!
But they got one yesterday, as the BBC reports.
Will we ever sort Greece out?
In some ways all we’re doing with Greece, is like giving an alcoholic a bottle of Scotch a day.
Until the Greeks change their habits and accept their lifestyle will have to change, we’ll have to keep bailing them out.
In some ways, the key to a country’s future is its education system. According to this report on the BBC, the UK system ranks sixth in the world. We could obviously do better, but on looking at the full table, Greece is ranked 34.
Zopa Hits A Quarter Of A Billion
Zopa are reporting on their web site, that they have now lent out over a quarter of a billion pounds. That may seem a lot of money, but consider that ING have pulled four times that amount out of lending in the UK in this year alone. But every little helps.
You can make an estimate of Zopa’s income, by starting with one per cent charged on all loans. So that looks like £2,500,000. And to that you can add about a £100 for each successful loan.
But this is probably a lot less than Barclays or another big bank, would make by lending a quarter of a billion.
So possibly Zopa is really only an irritant in the hide of the big banks.
On the other hand, Zopa is a company that lives without the cost structure that any bank feels it must have.
So if they ignore Zopa, the banks will live to regret it. But they won’t live very long in their current bloated and top-heavy forms.
The reason is simple. Zopa’s financial model appeals to both lenders and borrowers and is very simple. So all the discontent, that many feel about the banks, has found a home.
My only worry about Zopa is that politicians legislate against social lending to protect their shareholdings in LloydsTSB and RBS.
George Osborne Hands His Successor A Poison Pill
I think that the appointment of Mark Carney to the Governorship of the Bank of England is a good one. I think he’s got the right experience and of course Canada has a much better-sorted banking industry than the United States, the United Kingdom and most of Europe.
So a good helping of Canadian experience can’t but help.
But say in 2016 or whenever the election is held, Labour should win, he would be a difficult thorn in the side of any Labour Chancellor.
An Acceptable Face Of Credit?
I was ion a Northern line train a few days ago, when I saw an American Express advert for their new credit card. I haven’t got a picture, but the APR for the card was prominently displayed.
Surely all adverts for credit cards and loans must state the APR prominently.
The Anonymous Widower 