Then there are all those extra little things that are nice to have: like money for culture or the arts. ibid.
Arts spending for the whole of England is $447 million. ibid.
Welcome to the fire control centre for the north-east of England ... The technology didn’t work; the building behind me is empty at a cost to you of $97,000 a month for the next 24 years. And there are eight others like it around the country. ibid.
They keep spending money they haven’t really got ... Today’s deficit is a whopper. ibid.
What looked like a downturn became a crash. ibid.
By the time of the last General Election Britain had the biggest deficit since the war: £160 billion. ibid.
Why if you live in some parts of Britain do you get more spent on you than other parts? ibid.
Infrastructure may be important but it doesn’t have a vote. ibid.
There’s nothing that politicians fear more than telling us our taxes are going up. ibid.
We put pressure on the Chancellor to spend more and more, and then we’re incredibly resistant to more tax to pay for it. Nick Robinson, Your Money and How They Spend It II
Taxes are for the very rich effectively voluntary. ibid.
We’re living way beyond our means. ibid.
By the end of the ’70s a new Tory government came to office promising lower income tax for all. The basic rate was cut to 30%, the top rate to 60%. ibid.
Gordon Brown had scrapped the lower level of income tax – the 10p band. ibid.
Tax and national insurance – they pay for exactly the same things. ibid.
We never seem to think we’re getting a bargain. ibid.
Takeaways used to be tax-free until back in 1984 the then Tory government decided to extend VAT to cover them. ibid.
The recession had destroyed $11 trillion of Americans’ net worth. A recovery seemed far off. Occupy Wall Street wanted bankers held responsible. Frontline: Money, Power and Wall Street I, PBS 2012
Credit Default Swaps – a kind of derivative that ensures a loan against default. ibid.
And so they began selling derivatives that were simply bets on any and all portfolios whether the bank owned them or not. These products came to be known as Synthetic Collateralised Debt Obligations – Synthetic CDOs. ibid.
A wave of lending abuses. ibid.
By the end of 2005 the total outstanding value of credit default swaps around the world was measured in trillions of dollars and was doubling every year. ibid.
AIG was on the hook for $440 billion of credit default swaps. ibid.
It was on a cold March day in 2008 that the fear of a meltdown would become a reality. After the real estate bubble burst it would only be a matter of time before investors would start to lose confidence in Wall Street’s biggest banks. Bear Stearns was the first to crack. Frontline: Money, Power and Wall Street II
Bear was party to complicated financial deals. Geithner learned that Bear had made credit default swap deals worth trillions of dollars all over Wall Street and around the world. Geithner saw what central bankers feared most: systemic risk. ibid.
A bail-out of Bear Stearns was not [Henry] Paulson’s style. But [Ben] Bernanke and Geithner believed it was too big to fail. And by that weekend options were dwindling. ibid.
One of the most basic moral tenets of the free market – Moral Hazard. ibid.
Paulson told President Bush what was needed now was to rebuild confidence in the economy ... It became known as the Summer of Assurances. ibid.
Then it hit: in the cross-hairs the world’s fourth largest investment bank – Lehman Brothers. ibid.
Paulson delivered the message: Lehman was in a death spiral and there would be no government bail-out. ibid.
Geithner realised that if AIG went down the consequences would be even worse than Lehman. He argued for another bail-out. ibid.
Conservative Republicans in the House were in full revolt. ibid.
The Congress finally passed Paulson’s Bill ... Paulson was about to hand out billions of dollars. ibid.
The Stock Market was down more than 6,000 points. Frontline: Money, Power and Wall Street III
The mega-bank Citibank was failing. ibid.
Barack Obama had made the economy a key issue. ibid.
For months there had been public anger of Wall Street. ibid.
The anger was not just confined to the streets. On Capitol Hill Congress responded to the public anger – they summoned the heads of the nation’s biggest banks. ibid.
The banks were so large and inter-connected the government felt it had to bail them out. Because their failure could bring down the entire economy. They are Too Big To Fail. ibid.
The loans were part of an unprecedented intervention in the financial system. ibid.
Now the president decided to revive a central theme of his campaign – reforming Wall Street. ibid.
None of the bank CEOs had been fired or prosecuted. ibid.
This season New York banks set aside $20 billion in bonuses. Since the crash of ’08 banks have paid out more than $80 billion in bonuses. Frontline: Money, Power and Wall Street IV
Cathy O’Neil, a mathematician, came to Wall Street in 2007 after beginning her career in academia. ibid.
For most of the last century bankers made the same salaries as lawyers, doctors and engineers. ibid.
Many American banks found London preferable to New York. ibid.
The country suddenly owed hundreds of millions of dollars of fees and penalties to its debt holders including J P Morgan. ibid.
So bankers descended on European capitals offering derivatives solutions. ibid.
Italy and J P Morgan entered into a currency swap. ibid.
Greece would also go on a massive spending spree. ibid.
Between 2001 and 2008 Greece’s debt had doubled. No-one it seemed wanted to ask any hard questions. ibid.
With the markets no longer willing to provide Greece cheap credit the country had to cut spending. People took to the streets in protest. ibid.
The five biggest banks in America have become larger ... 56% of the American economy. ibid.
‘A very cruel and destructive god.’ ibid.
On September 18th 2008 the Secretary of the Treasury Henry Paulson and the Chairman of the Federal Reserve Ben Bernanke arrived for an emergency meeting of the Cabinet. In the past seven months they have bailed out one bank and let another one fail, nationalised three of the nation’s largest companies and watched in horror as the credit markets froze. Frontline: Inside the Meltdown, PBS 2009
The road to riches for Bear [Stearns] was simple: buy hundreds of mortgages, then bundle them into securities and sell them to investors. ibid.
Bear had borrowed heavily to invest in toxic assets and other high risk securities. ibid.
They found billions in sub-prime default loans. ibid.
Bear had made credit-default-swap deals worth hundreds of billions of dollars all over Wall Street and around the world. ibid.
A shotgun marriage between Bear and J P Morgan. ibid.
30% of Bear stock was held by its own employees. At the end of the week that stock was selling for $30 a share; J P Morgan was offering $4. ibid.
This time it was the investment bank Lehman Brothers. ibid.
Moral Hazard trumped systemic risk. ibid.
The world’s largest insurance company AIG had invested tens of billions of their insurance profits in risky investments tied to the housing market. ibid.
With the market crashing, Congress felt intense pressure to reconsider Paulson’s plan to buy the toxic assets. ibid.
Paulson said the entire banking system was in trouble. ibid.
Moral Hazard was a thing of the past. ibid.
They created the largest bank in America. But it was troubled from the beginning. Government took over. Frontline: Breaking the Bank, PBS 2009
2008: The markets were teetering. Nobody knew how bad it was going to get. On one weekend in September the entire American financial system would be changed. ibid.