Tuesday, November 11, 2008

Sharks that never went away

While Britons are being fed the fable that SuperGordon's saving them, the banks are back to their old tricks. In fact how can they be 'back' if they never stopped in the first place?

From 'credit munches' to 'Gordon Brown the saviour', it really looks like Britain's appetite for hollow, shallow in fact, cliches is insatiable. For weeks, however, you've been fed the fable that the Prime Minister is a "superhero" who "rescued the economic system" and all the rest. To top it all off, the Bank of England cutting rates from 5 to 3 per cent would surely jumpstart the economy again.

And so you can believe all the bullshit that you want, but the truth is the rot sits right at the heart of the banking system. The Government can pump however many billions they want into it, but the fact remains shareholders are in for the short haul and the biggest possible gain. If they wanted a career in the Samaritans they'd have picked one.

They base their fortune entirely on getting loads of people into a financial mess. Remember: if everybody were bang on time with their loans and bills, the banks could forget about half their bonuses. If the populace suddenly stopped what Nick Clegg rightly dubbed "Labour's terrible legacy of personal debt" and our "debt addiction" of "£3000 per second", what do you think the banks would live on?

And so cue the shock and horror for the banks did NOT pass on said interest rate cut to the borrowers. You get Peter Mandelson mumbling that "the public would be surprised and disappointed" if that was the case and The Guardian reporting that "Ministers and opposition politicians piled moral and political pressure on banks to pass on yesterday’s stunning 1.5% cut in interest rates to borrowers”.

Moral pressure? Who are we kidding? That from the people who can't even begin to utter the words 'windfall' and 'tax' just in case they get struck by lightning.

Pessimists, aren't we? Well, look at today's papers.

They are now surprised that, not only did the banks fail to pass on any interest rate cut, but that they've actually increased interest. From the Daily Mail: "Banks have increased interest rates on tens of millions of debit and credit card holders despite the cost of borrowing falling to a 50-year low. The average annual percentage rate for plastic has risen from 17.2 to 17.6 per cent since May". And this from the Independent, "Some have risen faster – such as the NW card, which has risen from 13.9 per cent to 16.9 per cent, while Hugo's and the Virgin card have both climbed one percentage point to the same mark".

Usury, it used to be called.

1 comment:

Stan Moss said...

And guess what...?
Now Gordon Brown is "warning" that "credit card firms should behave responsibly". oohh really???

Absolute shite. Show some cojones, Brown.