So what happens to the money? On the one hand we’re told taxpayers to make £27 billion profit from bank bailouts instead of the £850 billion loss some predicted and on the other we’re told pensions require funding boost as they’ve whopping deficits.

So the government can make money from buying and insuring assets so toxic that they’re guaranteed to lose money whilst our pension funds can’t make money from assets that shouldn’t lose a penny?

Something smells here and it’s the salaries and bonuses of bankers again – whether our pension funds win or lose they still bank huge wads of cash.

The Guardian’s Cutswatch

Touch Stone Blog’s Cuts Watch

A Thousand Cuts

I’m sure there are others

US bank Goldman Sachs has agreed to pay $550m (£356m) to settle civil fraud charges of misleading investors.

The charges concerned Goldman’s marketing of mortgage investments as the US housing market faltered.

US finance watchdog the Securities and Exchange Commission said it was the biggest fine for a bank in its history.

Terms of the settlement are subject to approval by a federal judge.

The SEC said Goldman had acknowledged that marketing material contained “incomplete information”.

In a statement, Goldman did not admit legal wrongdoing but said the move was “the right outcome for our firm, our shareholders and our clients”.

Despite the record fine, Goldman shares rose by 4.5%, reflecting the fact that many analysts felt the firm had got off lightly. BBC.

To most of us $550m seems like a vast amount of money to Goldman Sachs its loose change – little more than a day’s trading revenue – this isn’t a fine it’s more like goodwill payment – a pat-on-the-back – Goldman Sachs made billions out of lying to its clients – how can $550m be seen any other way?

We’ve learned nothing from the banking crisis – why am I not surprised?

The chairman of the UK financial watchdog has warned that the economic recovery could be undermined if new regulation is introduced too quickly.

Lord Turner said reducing debt levels across the financial system was key, but doing so too quickly could slow the recovery.

He also warned regulators not to get preoccupied with bankers’ bonuses, which were not the fundamental problem. BBC.

I don’t see any quick fixes in fact I don’t see any fixes – and the problem is bonuses – it isn’t anything else – payment of huge salaries, pensions and bonuses encouraged bank employees to make a profit anyway they could.

Bankers invented a bewildering array of financial products to trade in many so complex that by the time the banking crises happened no one had any idea what they were trading – all bankers were doing was pocketing ever more money.

Then banking crisis happened and we the tax payer bailed them out meanwhile bankers went back to huge salaries, bonuses and pensions – whilst the rest of us are left paying back their debts.

Now why are we putting up with that – come to that why do we believe the Com-Dem lies that Labour created the mess? They didn’t banks did. Why on earth do we want to go back to the status quo – it’ll only end one way and we’ll end up picking up the bill again – it’s time we stopped believing their lies.

The government’s new tax and spending watchdog was plunged into fresh controversy last night after it was revealed that the Office for Budget Responsibility slashed its forecasts for expected job losses from George Osborne’s austerity package in the days leading up to last month’s budget.

…

A Treasury spokesman denied last night that any pressure had been put on the OBR to make its forecasts for job losses more politically acceptable to the coalition government. “The OBR themselves made some methodological changes between the pre-budget report and the budget. The Treasury did not put any pressure on the OBR to make the employment forecasts more favourable to the government.” Larry Elliott, The Guardian.

The Office for Budget Responsibility should be renamed the Office for Budget Irresponsibility – not a watchdog but a Com-Dem lapdog.

It has been a lousy three months for hedge funds.

I hope I didn’t hear you say “diddums” – because it is possible, you know, that a bit of your wealth is being managed by a hedge fund, via your pension scheme. Robert Peston, BBC.

Doesn’t Peston realise that some fucker ran off with our pension money long ago – probably a hedge fund manager – instead of pension contributions I’d have done better to have spent the money then at least I’d have had something to show for the fruits of my labour.

Am I the only one that lays the blame for the current pension crises at the feet of regulators when the allowed companies to take pension holidays because the funds were awash with money – oh those where the days – instead of pensions we’ve now got one of the largest wealth gaps in western Europe as the rich used our pensions to line their pockets and now they’re coming for public sector pensions.

No you don’t hear my say “diddums” – it’s not the first word that springs to mind – far too mild a word for what I’m thinking.

Remember the food crisis of 2008 when prices of staple foods rose inexplicably – rice by a an unbelievable 320 per cent – no like me you’ve probably forgotten – but between 120 and 200 million people around the world couldn’t afford to buy food anymore – those that survived haven’t forgotten.

At the time we were told it was just supply and demand too many mouths and too little food plus we’d started diverting arable land from food production to producing crops to make bio-fuels to burn in our cars – we were all to blame – I bet the oil companies loved that one – guilt of burning fuel in our cars certainly made many of us conclude that maybe it was better to burn oil instead.

However, nothing was further from the truth. Peter Wahl at the German policy Unit WEED argues that food speculation played a decisive role in the price bubble in 2008.

The factors governing the pricing of agricultural commodities are complex. No single factor alone determines the price.

Firstly, one must distinguish between long-term and short-term factors.

The long-term factors include:

A. Increasing demand, predominantly through the economic rise of emerging economies, especially through the adoption of western consumption habits by the middle classes. The Chinese, for example, are increasingly consuming dairy products.

B. Agricultural productivity. The trend in productivity is stagnating in many developing countries. This is due to under-investment and structural adjustment programmes which have imposed a priority of export orientation instead of national food security, as well as the liberalisation pressure due to the WTO and bilateral trade agreements or the decline by half in the ODA (official development aid) for agricultural promotion between the 1980s and the present day.

C. Production of agro fuels. Over the last ten years, the US and the EU, but also Brazil, have started to cultivate renewable agricultural commodities (among others, rape, sugar cane) to produce ethanol and diesels on a large scale in the search for alternatives to mineral oil. The cultivation of agro fuels absorbs agriculturally productive land, and this can lead to a substitution effect and therefore to a reduction in food production.

D. The reduction of food stocks, particularly in the EU.

The short-term factors include

E. The increase in the oil price in 2007/2008 as well as fertilizer prices.

F. Bad harvests in 2006 and 2007 in Australia, one of the world’s biggest grain exporters.

G. The U.S. dollar exchange rate fluctuations, the lead currency in international trade; or changes in the value of national currencies, such as the temporary decrease in the dollar exchange rate as a result of the financial crisis.

H. Export restrictions on food by governments which want to guarantee food self- sufficiency for their own countries due to the explosion in food prices. However, this well-intentioned measure also contributes to the food supply shortage on the world market and consequently increases prices.

I. Finally, speculation.

When the food prices sky-rocketed in 2007, the role of speculation was mentioned as an afterthought or completely ignored by mainstream economists. Instead, mainly long-term factors such as the increase in demand and the production of biogas were made responsible for the drastic price increases. A World Bank study even claimed that agro fuels contributed a proportion of 70% to the food price increase.

In a study on the food crisis, even before the food price reversal, UNCTAD pointed out that this factor could not be so important in prices increasing to more than double in such a short time period. For example, the price of rice increased by 165% between April 2007 and April 2008, and rice cannot be used for biogas, and there is no substitution of acreage in the countries where it is grown, either.

It has become incontestably clear since the decrease in food prices from July 2008 at the latest, that neither increasing demand in the emerging economies nor agro fuel production caused the food price trend. It cannot be that the Chinese suddenly start to eat much more yoghurt only to stop again just a few months later. Neither has agro fuel cultivation risen so sharply only to decrease again just as abruptly. Short term factors, such as poor harvests, did not play a role in the price upswing either.

Moreover, speculation in connection with the financial crisis is the decisive factor. We are dealing with the classic case of a speculative bubble which was built up in the second half of 2007. The crisis in the mortgage sector in the US, which was also the result of a huge speculative bubble, started to spread across the whole financial sector. People in the financial market sought alternatives in the commodity sector and the bubble started to form. It reached its maximum in Summer 2008 and then burst.

Meanwhile, even mainstream economists no longer deny that speculation at least contributed to this bubble. Thus, the BMZ describes speculation as one of the reasons for high food prices in April 2008: “the international capital markets have become aware of the agricultural markets again in their search for lucrative and relatively safe investment areas of the future. This causes more volatility, especially when participants act in a strongly speculative way.” UNCTAD also identifies speculation as a factor for the agricultural commodities price bubble. In the meantime, even the World Bank acknowledges that speculation shares the responsibility for the price increases even if it considers speculation as a subordinate factor. And even the IMF can no longer ignore the facts when writing very vaguely that pure financial factors, including the mood of the markets, can have short term effects on the price of oil and other commodities. Read Peter Wahl’s Full Report.

So what do the speculators have to say for themselves?

The hedge fund manager Michael Masters estimated that even on the regulated exchanges in the US – which take up a small part of the business – 64 percent of all wheat contracts were held by speculators with no interest whatever in real wheat. They owned it solely to inflate the price and sell it on. Even George Soros said this was “just like secretly hoarding food during a hunger crisis in order to make profits from increasing prices.” The bubble only burst in March 2008 when the situation got so bad in the US that the speculators had to slash their spending to cover their losses back home.

When asked to comment on the charge of causing mass hunger, Merrill Lynch’s spokesman said: “Huh. I didn’t know about that.” He later emailed to say: “I am going to decline comment.” Deutsche Bank also refused to comment. Goldman Sachs were a little more detailed in their response: they said “serious analyses… have concluded index funds did not cause a bubble in commodity futures prices”, offering as evidence a single statement by the OECD. Johann Hari.

Every last investment banker is nothing but a self-centred cunt and don’t let anyone tell you different they don’t give a shit how they make a profit – who suffers or dies – whatever their protestations to the contrary.

And we need theses bastards? Why? It’s time we stopped this madness otherwise it’s going to happen again. Trouble is the Con-Dems aren’t going to be interested in upsetting their friends and donors in the city. What a lovely world we’ve created!

I suggest we all visit the World Development Movement’s website and take some action.

Is there an alternative to cuts and a “double-dip” recession?

Yes, but a conspiracy of silence between top politicians, big business and most of the mass media has tried to conceal it.

Not a day passes when some British bank, oil corporation, retail chain, telecoms company, energy utility or arms dealer is not announcing enormous profits.

There’s no belt-tightening for the corporate fat cats. Their salaries, fees, bonuses and dividends are going through the roof.

The national statistics report Wealth In Great Britain shows that the richest tenth of the population own almost half (44 per cent) of all personal wealth. Their fortune is valued at £4,000bn – not counting the huge amounts hidden in offshore tax havens.

Britain’s budget deficit this year was expected to be £163bn.

A modest 20 per cent windfall tax on company super-profits would raise at least £16bn – enough to cover the cuts already announced.

An even smaller levy on the super-rich, say of 5 per cent, would wipe out the deficit altogether and leave £50bn to invest in better public services.

Cuts could still be made in government spending by ending the use of overpriced consultants, reducing military spending to average European levels and nationalising the railways instead of subsidising private operators. Dominic MacAskill, Morning Star.

For too long we’ve allowed ourselves to brain washed by the propaganda that Murdoch and his ilk have peddled us in the media and press – it is time we stopped and made those responsible pay.

Whilst Clegg and Cameron are busy slashing £6bn form public services I wonder why we meekly accept the sacrifices we’re going to make. John Pilger provides a compelling answer – propaganda.

In Britain, such has been the 30-year propaganda of an extreme economic theory known first as monetarism, then as neoliberalism, that the new Prime Minister can, like his predecessor, describe his demands that ordinary people pay the debts of crooks as “fiscally responsible.” John Pilger.

There’s been absolutely no discussion of an alternative in the main stream media and precious little elsewhere – the solution proposed has become an un-questioned fact – it’s just a matter of timing – and start now won the general election.

…the city party like the crash never happened.

Pay and bonuses in the City are surging back to their pre-crash levels despite widespread criticism of the Square Mile and the banking industry, which was rescued by the taxpayer 18 months ago. Phillip Inman, The Guardian.

Well we shouldn’t be surprised absolutely nothing has been done to reform the banks – we’re heading for another crash. The trouble is what no one seems prepared to grasp is you can’t just reform banks in isolation – there’s a whole raft of business that would also need to be reformed.