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I've worked in Financial Services across 3 countries over the last 26 years and have seen many market cycles from the crash of 1987 to sterling leaving the ERM to the current extreme volatility. Right now FS is a bad place to be as of course we caused people (and countries even) to borrow more than they could ever afford to service let alone repay. Not only that but we've all been feathering our nests at the expense of poor joe public, apparently. The best strategy now is just to lie low and certainly not look for sympathy when it comes to being squeezed by bank taxes, capital requirements on one side and a requirement by politicians to lend imprudently on the other side to keep the economy going.
I've even been physically attacked by a drunken greengrocer at a party for my profession and got rescued by his mate the butcher (true story) who understood that maybe we're not all shysters...
So given the negative image of my sector, it is absolutely delicious to see the socialist and alarmist BBC get its come-uppance and suffer an even worse fate. Schadenfreude is indeed a wonderful thing :-)
Nobody was obliged to take out loans to finance foreign holidays, BMW's and other rubbish.
TV viewers pay the BBC's £3,500,000,000 licence fee income whether they wish to or not.
I'm sorry FarleyR, but I and no doubt many other middle-aged future superannuants believe that the current poor standing of the financial sector is deserved and largely self-inflicted, due to unwise and on occasion irresponsible use of other people's money. When prudent people see their retirement nest eggs continually under threat due to the precarious state of the markets, it's not surprising that they don't want to invest anymore in that way.
A few years ago a retired Chief Justice of the Australian High Court, Murray Gleeson, gave a talk on the nature of professionalism, the definition of which has been expanded over the past century to include (by self-inclusion on the basis of social status) people like bankers. And yet (my interpretation, not quoting Mr Gleeson) the primary focus of a true professional is to act in the interests of the client (e.g. medical, legal, accounting, engineering) by utilising the uncommon expertise gained from specific tertiary education and supervised practical experience.
The financial sector does not have that professional structure, being primarily profit rather than client-focused. I am not saying that is a bad thing, and money really does make the world go around, but at the end of the day the whole edifice will come crashing down if ordinary people are too scared to invest. Which is why the concept of professionalism, protecting the interests of the client, is also applicable.
That being said, I can appreciate your Schadenfreude, and wish you success in your future endeavours in the financial sphere. We are all relying on people like you to keep the ship upright!
Chris, I'd like to think I'm one of the good guys. For too long Finance has been the domain of types who only looked at their own interests and indeed were encouraged to do exactly that by compensation systems. Thankfully those times are largely in the past now.
Whilst its true that Goldman Sachs may have helped Greece into the Eurozone back in the late 1990's with some creative debt management contracts, the fact is that the Greek population do not like to pay their taxes. And this is the real cause of their current malaise (government expenditure structurally exceeds receipts). But that would be sticking it to the little guy, so let's blame those greedy banksters instead. The bas*ards!
Well I guess the truth or reality is somewhere in the middle as far as the finance sector concerned. Finance of course is a very wide spread of activities, all the ways from products that I don't understand, but seem closer to gambling than anything else, (and reckless gambling at that ) to the simple need to borrow to purchase items like a house or a car, or to save for a pension.
There is no doubt that the lending policy to individuals in the UK and USA got pretty stupid, but lack of regulation allowed that to go unhindered. A year or two back 50% of all credit card debt in the EU was in the UK, and I don't suppose that has improved much. As Martin A said yesterday, nobody forced people to borrow more than they can pay back. To blame others for the fact that one has got into debt, is an insult to those people with very moderate incomes who didn't get into debt - but are now expected to help those who did. My Grandmother had a word for people such as these debtors - Degenerates.
There is no doubt that the pension sector in the UK was under-performing (a euphemism for taking too much in charges) well before the crash. The fact that in 2005 someone in Holland would draw on average 25% more than someone in the UK for a similar contribution, tells all. The biggest scandal of all has been the decimation of private pension payouts, where many have paid in all their lives and drawn little and sometimes nothing. This was of course helped along by the idea of removing tax relief from pension funds - reputed to have been the idea of the current shadow chancellor.
All our problems now have been caused by a government that increased spending by 50% above inflation in a decade, by taxing more (about 10% of income), borrowing in the good times, shoving hospital and school building on a credit card called PFI to be paid by our children and grandchildren. Our troubles all stem from this stupidity. The false boom created lead to an overvalued pound and the decimation of manufacturing jobs (40% lost since 2000). As for the current crop of idiots in charge - don't get me started.
So that is just a long winded way of saying that I blame government more for our woes than the finance sector, especially, as Alistair Darling pointed out in his book, they have paid more revenue to the treasury than North Sea Oil (27% of all revenue in the best year around 2004 and still pushing 20% now).
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