howard mcsweeney1- Location: Dover
- Registered: 12 Mar 2008
- Posts: 62,352
15 December 2010
16:0284763#1
there are conflicting statements from paul carter(the fuhrer at maidstone) and eric pickles the communities secretary over spending cuts.
paul is saying that k.c.c. are being striped up to the tune of £.90 million which would mean 1500 job losses and a black hole in their accounts of£.340 million over the next 4 years.
eric(blue barry's friend) reckons the reduction in government support amounts to £.18.5 million.
i bet both sides can give a good argument why their figures are correct.
i doubt the job loss figures though k.c.c. like many councils use a lot of agency temp staff, they would be the first to go.
15 December 2010
17:2184778#2
the first to go should be the team that lost the Tax payers of Kent all that money in the Icland banks I for one will never forgive them for that.
Guest 655- Registered: 13 Mar 2008
- Posts: 10,247
15 December 2010
17:5284781#3
Alan - I have previously explained that there is no fault in what they did. Do you really want me to explain, yet again, the complexities of investment management and risk issues!!!
Chill a bit on this matter, there is no real scandal to get hot and bothered about.
Blimey, their watchdog, the Audit Commission had cash in Iceland and IFAs who recommended Icelandic Banks in the September before the October crash, have not been censored because their due diligance did not show any problems. A bit odd to claim that there is something peculiarly wrong done by the KCC Treasury team under those circumstances.
Guest 670- Registered: 23 Apr 2008
- Posts: 573
15 December 2010
18:1484782#4
Barry i'm not too sure whether you are leaving out a key point and that is money was deposited by the KCC after they had been warned that the Icelandic Banks were in trouble.
Guest 671- Registered: 4 May 2008
- Posts: 2,095
15 December 2010
18:3284784#5
BarryW,
I don't want to hear your version of events yet again; they completely miss the point as far as I am concerned.
The simple fact is £19 million of tax payer's money has been lost, by investing it. Don't repeat to me about normal practise or obligation to invest
That money, if it was still in the bank, would have come in handy right now. Wouldn't it?
"My New Year's Resolution, is to try and emulate Marek's level of chilled out, thoughtfulness and humour towards other forumites and not lose my decorum"
howard mcsweeney1- Location: Dover
- Registered: 12 Mar 2008
- Posts: 62,352
15 December 2010
18:3784788#6
i thought a lot of the money was being clawed back, i may be wrong that there was a big debate in iceland over doing so.
the population was against it, but the business community said it needed to be done to restore commercial credibility in their country.
Guest 655- Registered: 13 Mar 2008
- Posts: 10,247
15 December 2010
18:3884790#7
No, Dave1, they were not warned any more than anyone else was, the Audit Commission or indeed IFAs, who did their due diligance just a few weeks before they went bust and found an A rating. In the January after it all happened I was talking to a highly experienced IFA at a rather select Conference in London who, about 12 days before they crashed was given a A rating clearance to invest £100k of a client's cash. Luckily for for him his client's money did not come through until a couple of days after the crash.
In my industry there is always someone, after an event, who comes out of the woodwork to claim some foresight and 99.9% of the time it is complete bull****.
Indeed, Dave1, seeing none of my clients lost any money in those banks I could make some sanctimonious and utterly incorrect claim that I read this sign or that sign and, as a result, made sure my clients did not have more than £30k in those banks. It would be bull**** of course as I knew no more than anyone else.
Guest 655- Registered: 13 Mar 2008
- Posts: 10,247
15 December 2010
18:4584791#8
GaryC - what you are saying then is that you would rather ignore the facts and any assesment of 'reasonableness' to feed your personal prejudices. I see.
What you perhaps should be aware of is just how much money the KCC Treasury Dept actualy make in profit by good investing of the money, taking into account any losses.
There is no such thing as 'no risk' when investing, there are only different risks and you control those risks by diversification. That is what KCC did, diversify to a range of institutions and assets to limit risk and maximise returns within a pre-determined risk criteria. If they had acted incorrectly outside acceptable risks then they would have been censored by the Audit Commission. The credit rating given to the Icelandic banks in September 2008 was a good 'A' rating. By no means considered risky.
Guest 670- Registered: 23 Apr 2008
- Posts: 573
15 December 2010
19:3484801#9
Myapologies Barry I must have been dreaming when a report carried out by the Audit Commission claimed that KCC were negligent in their dealing with the Icelandic Banks. Did the KCC sue as they threatened to do or was it all amicably settled?
Guest 698- Registered: 28 May 2010
- Posts: 8,664
15 December 2010
19:3484802#10
Barry a foreign single A rating is just not good enough to invest taxpayers' money in. UK bank deposits, Treasury bills and short gilts are all that local authorities ought to be investing short term cash reserves in. Doesn't anyone remember 1990 when the Highlands and Islands council had every last brass farthing of its reserves in BCCI? No lessons were learned, obviously. In my opinion taking on cross-border exposure is for the private sector and the Dept for Int'l Development. After 25 years in investment banking I have seen it over and over again. No doubt it will happen again until the Government sets up a clearing house to manage local authority cash surpluses and deficits.
I'm an optimist. But I'm an optimist who takes my raincoat - Harold Wilson
Guest 696- Registered: 31 Mar 2010
- Posts: 8,115
15 December 2010
19:4484806#11
Barry, years before the banks crashed, I already forsaw that the banks would financially crash;
and that the EU states would get into ever bigger debt I also forsaw!
Now I'm not blaming KCC here for anything, but wish to assure you that my knowledge of economics is evidently more advanced than what you assert as your knowledge.
Guest 649- Registered: 12 Mar 2008
- Posts: 14,118
15 December 2010
19:5184811#12
I am very glad and happy that Alex is on ourside,and I think he will do well later on.
Guest 671- Registered: 4 May 2008
- Posts: 2,095
15 December 2010
20:0884822#13
No BarryW
You dont see.
I made no acusations, i did not point the finger and quite frankly I dont give a toss who said or did what.
I simply said wouldn't the £19 million have come in handy now?
"My New Year's Resolution, is to try and emulate Marek's level of chilled out, thoughtfulness and humour towards other forumites and not lose my decorum"
Guest 655- Registered: 13 Mar 2008
- Posts: 10,247
15 December 2010
22:4184873#14
Dave1- You mean the Audit Commission who also had money in the Icelandic banks.
As I said people always come out into the daylight claiming an insight that was not there before.
Peter - I disagree with you totally. By narrowing down the investment options as you suggest you are reducing returns and concentrating money into too few assets. Look at the levels of capital loss and measure that against the different returns - I am quite certain you will find taxpayers getting the best returns out of the more diversified portfolios. As you know well BBB rated debt remains 'investment grade'.
By the way, not all was short term cash reserve - pension funds were part of it. BCCI is a case that illustrates the point in favour of KCC given the small proportion of funds in Iceland and contrary to what you said lessons were learnt (though they should not have been needed to).
Alexander - evidence?
GaryC - £19m will always be handy but I remain convinced that the diverified portfolio would have returned better than the capital loss over a few years ov the levels of total investment available.
Guest 670- Registered: 23 Apr 2008
- Posts: 573
15 December 2010
22:5484877#15
Barry to revert my statement back to the Audit Commission is not an answer. I'll make it simple were the KCC accused of negligence or not? Negligence is different to innocent mistake or taking all things into consideration at the time the money was invested, it is an action which causes loss as a direct result of a person or persons failing to take due care.
Guest 655- Registered: 13 Mar 2008
- Posts: 10,247
15 December 2010
22:5784879#16
Dave1 - I have answered fully the points raised and KCC were no more negligent than the Audit Commission.
Perhaps I was negligent myself because I did not antiicipate sovereign bonds achieving 45% growth in 2008 and failed to move all my clients money into them at the beginning of 2008.... There is a bit of admission for you. Of course it is with 100% hindsight and I would have needed to shift it all out again in January 2009 into corporate bonds and a year later into small cap equities....more 100% hindsight. Also it would have needed to be done without any regard to to risk profile and objectives of individual clients so I would have been negligent and incompetent if I did that anyway.
It is all complete rubbish of course. I am always amazed by how wise people are on financial matters after the event.
Ross Miller
- Location: London Road, Dover
- Registered: 17 Sep 2008
- Posts: 3,709
15 December 2010
23:0484880#17
But back to the real point - how much is the KCC budget going to be cut by next year is it £90m per Carter or £18.5m per Pickles?
Are they both right, just talking about different things?
"Dream as if you'll live forever. Live as if you'll die today." - James Dean
"Being deeply loved by someone gives you strength,
While loving someone deeply gives you courage" - Laozi
Guest 655- Registered: 13 Mar 2008
- Posts: 10,247
15 December 2010
23:0884882#18
That I do not know Ross. I suspect a like for like comparison is not being made.
Guest 670- Registered: 23 Apr 2008
- Posts: 573
15 December 2010
23:0884883#19
Barry KCC were warned days before the collapse of the Icelandic Banks and yet continued to invest a further £3 million. Apparently a junior clerk had not passed the relevant email to the treasury department.
That is where the negligence lies.
Guest 655- Registered: 13 Mar 2008
- Posts: 10,247
15 December 2010
23:2384885#20
Ah - so you say £3m of the £19m that was lost was because a junior clerk did not do her job properly, who was not even in the right department.
A different situation to suggesting the Treasury Department not investing properly and itself being negligent with the whole £500m or so portfolio. Losses of the £19m represent less than 5% of what was invested and under a year's interest. I am quite sure that the additional returns achieved by active management and diverifying the porfolio to A and even BBB rated stocks and institutions would have more than made up the loss in a couple of years, let alone the many years of activity. It really would not pay to restrict the investment assets in the manner suggested by Peter. (That £19m figure also assumes that none of the money was actually got back of course)
A few days I can agree with as a feasable warning time, it is rare for matters to move so swiftly and dramatically and normally a few days would not make a difference, not that this should be an excuse for the clerk.