Saturday, 7 July 2012

Libor Libor Pants on Fire

Mac's take on Barclays (From The Daily Mail)
Credit is like a drug. In fact, it's like a few drugs.

You start with something soft, like an overdraft, interest free for the duration of your student years. Then you move onto a credit card, the thrill of spending money that isn't yours on the never-never too tempting to pass up. Then a consolidation loan, just enough to free up some cash month to month. Next you get a Mortgage, it's worth it, you've got a house and one day it might make you a profit! Finally there's equity release, not a loan so much as a way to decimate the lovely profit that your house has just made.

You might as well be sat in a gutter, belt around your forearm trying to find a vein - please, just one more hit, one more grand, one more loan. And that's when the real pushers come in. and their ilk have become the loan sharks of the 2010s. There was a time when anything more than 30%APR was considered extortionate, now when you look at those ads, you see upwards of 1000%APR justified by the fact that "these loans are not a long term solution". Try telling that to the single Mum who is now paying half her weekly wage to one of these companies trying to play catch up.

So finding out that Barclays traders had been fixing interest rates didn't surprise me. It annoyed me, but it didn't surprise me. It made me feel physically sick with rage, but it didn't surprise me. Essentially it's like finding out your drug dealer has been in cahoots with the other drug dealers in the area and has kept the price of your crack artificially high. Yes, I just compared bankers to drug dealers, which is frankly offensive to drug dealers - at least they're honest about the work they do!

I feel so angry and helpless, and it has left me asking the question, how the hell did this happen? It started in 2005 when traders from several banks began fixing the LIBOR rates (London Interbanking Offer Rate) artificially high. This meant that when the banks loaned each other money, they could rake in huge profits. This went on throughout 2006, 2007 and 2008 and during the global recession when the purpose of fixing the rates was to deceive the world at large that they were doing better than they were.

Now obviously, I've been writing a lot about this, but there is a reason. I feel personally aggrieved by the behaviour of one particular bank - Barclays. At the same time as Barclays were raking in the profits through lying and scheming, they were also telephoning me between 3 and 4 times every day demanding that I paid them £300.00/month to repay my overdraft in the shortest possible time. I couldn't afford to do this, it was a large overdraft accrued during my time at University and in the end my father took out a loan that I repaid in order to get them off my back. It makes me feel physically sick that at a time when I was financially vulnerable, they were threatening me with court action and bailiffs requesting more than a 3rd of my monthly earnings, whilst defrauding the Bank of England, the British Tax Payers and of course their customers.

So is it time to say NO to the banks?

We are all so blinded by this perceived need to put our money in the hands of the banks that we can't imagine there is another option. My reason for staying with Barclays is simple, like an unfortunate divorcee, there's a lot of debt, all in my name, which has to be cleared before I can be rid of them. I've got an overdraft and a loan and so for the next 5 years (or less with a lotto win), I'll be tied to the bank.

I keep having this fantasy, a daydream of sorts in which I win the lottery - a big win. For most people they'd be dreaming about telling their boss where to stick their job... Not me! My fantasy has my bank manager calling me up personally to discuss my options and me uttering a string of expletives and then putting the money into my local credit union.

So what to do? I feel as though I'm in limbo. A curious mixture of abject fury and helplessness, I am just one person. How can I take on the banks? The reality is, I can't. My fury will remain, quietly poking me stomach lining until I get an ulcer and tapping away at my brain tissue. I am so angry I'm struggling to sleep and although that seems ridiculous, my righteous indignation has suffered a hit (if you don't know that's a Captain Bucky O'Hare reference, you're either too old or too young!). I worry so much for my entire generation, and the next, as it will be us who clean up after today's leaders. We're unlikely to get on the property ladder, we can't afford to insure our cars or have children or take holidays without almost impossible savings.

I'll let you in on a little secret. I have SUCH a desire to protest, march, make my voice heard. But there is that fear that my participation would lead to my arrest and ruin a possible future as a teacher. So how about a peaceful protest to begin with? How about joining a Facebook Group... may I suggest Topple The Banks? A civil forum for organised discussion. Somebody needs to fix this, and we can't rely on Cameron, Clegg or Milliband. They are more interested squabbling amongst themselves (Seriously, have you every watched Prime Ministers Question Time? It's like a school yard!) Could we be the first serious political party created on Facebook? Why not? We can't do much worse than the current lot...

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