Read Cavendish's article on 26 April: Is boom town finally heading for bust? "All balloons eventually lose air. The only question is when. One of the biggest bets we have made is that the City will continue to keep the rest of the economy buoyant. With some parts of Britain now running almost exclusively on welfare benefits and public service jobs, we are hugely dependent on financial services. " The City is just a lot of hot air.

kt, london,

Funny the way job postings on Job boards like Jobserve to work with the Investment Banks always say 'banking experience essential' - their cosy little world is obviously so far divorced from the rest of the world that only the 'masters of the universe' could possibly understand it - God what a mess they have created, we haven;t seen the last of this, when Barclays need to borrow £1.6 billion from the BoE you know things are bad. Investment Bankers are immoral, greedy, and have no shame

John, Prestwood, UK

The banker is probably excavating a tiny flat in his basement because at current house prices, even he can't afford a larger place in London.

Oliver Chettle, Bedford,

And what pray were the 'scribblers' doing while all this pass the parcel was going on? Telling us in many a column inches that the rules had changed, there would be no crisis, that the sub prime scandal was nothing. Yet this same group are now tut-tutting over fantasy banking. Well , my view is that they should have told us the readers what was really going on long ago. It didn't actually take more than an ounce of common sense to realise the truth of Warren Buffett's words. What is the point of reading expert financial comment when the person writing it has willfully suspended disbelief? The strange thing is that as she says 'having known this for a year' Camilla did not tell us until now. I imagine my views will be struck out be the moderator as well.

John Walter, bonn, Germany

The current crisis is a double blow for the innocent bystander. Making all this cash available in the first place drove house prices to unreasonable levels. And now we'll have to bail out the bankers!
You might even end up with negative equity to boot.
But why wouldn't a banker take these unquantifiable risks if they know that they'll make staggering anount of cash if it works and they'll be bailed out if it all goes wrong?
There might be a little more risk analysis going on in the city if their past bonuses were part of the bet!

Steve, Cork, Ireland

Is this not like the problems banks got themselves into when they lent money to South American countries about seventeen years ago.
This article is quite right in stating that this is not skill, it is not even luck, it's gambling plan and simple and we all know your chosen horse does not always pass the winnning post first.
For far too long these finincial experts have told us what to invest in and at the end of the day you receive such a small amount of money back while they feather their nests. Perhaps the some people are correct in investing in second properties etc. or putting their savings under their mattresses. At least if it goes belly up its their own fault not some overpaid financer who has had too many lunches, holidays, school fees, expensive cars and very large house paid for by the very people who pay them and who they look down on.

Susan James, Oxford, UK

In the US, the consumer is (hopefully) protected by the "Fair Lending Act" . Why much of this has happened can be laid directly at the door of the consumer. The borrower is screaming for the loan, wants the best rate (albeit a high one and adjustable because they have rotten credit) and is threatening to take their business elsewhere, knowing full well knowing that this lender is giving the best rate. The lender caves because a) it wants the business and b) it doesn't want to deal with the inevitable complaint to the CEO of the company (which costs a lot of money to deal with) and has the lending exceptions in its Fannie Mae and Freddie Mac lending contracts that can accomodate the loan.

Now why the consumer has this arrogant sense of entitlement over here I can't explain.

Sue, San Antonio, USA/TX

All politicians and all bankers should actually have to study History of their relative subject.When ever I hear that banks are lending more with lower criteria I know that the bank in question has no idea of what has happened in the past.They do not learn and so disasters happen.They think that they are so clever that nothing will go wrong,only to find that they have totally mismanaged the whole thing.

Nigel Wheatcroft, wimbledon, uk

Didn't you know, the laws of the normal universe don't apply to banking. Their world is stiil flat, so what goes around never comes back, does it?

KR, Stockport,

Not so long and admitting to being a hedge fund manager will become a thing best done quietly. You knew that things were getting a bit out of hand when reading reports that London is becoming short of butlers. It was about time for the bubble to burst and in the US it may well end in recession.

Carl, London,

And the financiers continue to push the stock market up today and act like there is nothing wrong.

Anthony, London,

Spot on, Camilla - and well done for highlighting not only the stupidity and arrogance of the big-money groupies, but their appalling behaviour and attitudes. There aren't many people upon whom I'd wish hard times, but this lot...

Groucheaux, Toulouse, France

Loved it. You confirmed what we always knew, the motto of the Disasters of the Universe "Greed is good for..............us, s-d the rest of them!

M.Fishman, London,

They never learn. The dot com bubble burst not that long ago.

A bubble is a bubble. Greed drives a bubble. Risk management failed because the managers and their institutions got so greedy that they pushed "risk" as a concept into the closet, out of sight. The investing environment was seen as benign. Ho Ho!

I recall seeing an interview on CNBC close to the end of the dot com bubble. The person being interviewed was a young man who was involved in a tech start-up that was not yet making money. He stated something to the effect that it didn't matter that his company didn't make money--that dot coms were different. I don't pretend to be a financial guru, but when I heard that, and it was said seriously, I started selling the equity portion of my portfolio.

Just as Joseph P. Kenndy supposedly said that when he heard his shoe-shine boy discussing the movements of the stock market during the pre-Depression late 1920's US stock market bubble, he knew it was time to get ou

Terry L. Walker, Ladson, SC / USA

Was risk mispriced? These financiers made a fortune until their dodgy dealings were found out, then were bailed out by the taxpayer. Where's the downside? If they were held responsible and thrown in debtors' jail when it went wrong you'd see a very different attitide to risk.

Andrew Crompton, London, UK

A note to George Lewis: the norm in America for purchasing the family home is still a repayment mortgage of twenty to thirty years with the rate fixed at between 2 and 8 percent depending on the creditworthiness of the applicant. A minority of "sub-prime" home buyers may have taken out floating-rate mortgages, and be facing 50% hikes, but they are very much the minority. Changes in floating rates will affect US business lending, but they will not have the direct impact on homeowners in the US that they will in Britain.

Delilah, Frederick, Maryland

I must say that I never thought I would read such a frank, pull no punches, article in The Times. I have to say though that the media also shares part of the blame for cheerleading and quoting the "Masters" verbatim, when the party was in full swing, without questioning their motives and obvious self interest in having the music play on. As to their unintelligible speech and frightening jargon, Warren Buffett said it best when he once remarked: " What witchdoctor has ever achieved fame and fortune by simply advising 'Take two aspirins'?"

anthony, london, england

Never ever, ever, forget that the concept of paper money, or its plastic or virtual equivalents, is a confidence trick imposed upon those who are governed by those who govern. In the end, land is all.

Dennis Brint, Jersey,

I don t know anything about high finance either, except that it s fiddled and they are more likely to eat Ferrero Rocher than I am. Obviously Jimmy Goldsmith represented an era which is past, but he was a curiously English phenomenon, I suspect. It think it remains to be seen whether Gordon Brown made the British economy or the British economy made Gordon Brown.

Henry Percy, London, UK

These firms create ever more clever ways to extract fees from people who neither have the time nor inclination to trade/invest for themselves. When the next 'boom' arrives, there'll be a new batch of candidates to hand over their cash.....

John, London, UK

A very good, insightful article. If you've not read it yet, I urge you to read the excellent book Fooled By Randomness by Nassim Nicholas Taleb - sums up a lot of what's been going wrong lately.

Pete, London,

Its funny why such articles do not appear when things are going well in the financial markets ...

Nishant, London, UK

And now the Fed bails them out. Lets just close our eyes, start the music again, and keep this party going.

Moral hazard.

The only loser will be average joe. It will be his money, and his entire livelihood when the record player finally breaks once and for all.

let the bad banks go to the wall.

Matt, London, UK

Hello Camilla,

You have a very good sense of this isssue, the bigger issue is of course the lack of compassion many of the financial people feel . The events of the past month is creating the recession/ downturn in the economy that will level the playing field. You are correct that many of the financail people did no more than follow a recommendation , rather than creat wealth they have simply piggy backed on someone else's success. The economic conditions today do not look good at all. Many of these financail people will now need to get areal job to pay the rent. best, jerry

Jerry McCullough, St.Catharines, Ontario, Canada

I disagree with Jack from Glasgow: I don't blame accountants for Enron, sub-prime or any of the classic meltdowns in either the stock market or, as now, the money markets.

Greed is the cause, yes the greedy men will have to find some colluding accountants to produce the 'smoke n' mirrors' to get the current particular trick past the regulators: that makes them the instrument, not the cause.

P.S. I'm not an accountant or any similar profession

Bryan McGrath, Weston-s-Mare,

It's very easy to point the fingers once the music has stopped, and I note a certain sense of glee in the reporting of how the city should have read the signs. Glib analogys of evil capitalist types persecuting third world victims and primary school teachers instill a sense of loathing which I feel is undeserved.
I was quite surprised you didnt introduce Michael Douglas as your next door neighbour screaming "greed is good" in red braces.
You tend to forget that city bonuses fund a ream of other industries and fields and what happens to one happens to all.

charles thomson, singapore, singapore

I see that the city bonuses are up this year. Let's reward failure shall we. I suppose all of us little people should feel grateful when our pension gives us a meagure return.

cashisking, not London, UK

One word to describe what is responsible for Enron, this debacle, and all others.....accountants!

Jack, Glasgow, Scotland

Any industry founded on lending money to people who self evidently can't pay it back is doomed to fail - and before it fails it morphs into a giant Ponzi scheme. Watch the dominoes fall... first Subprime, then Alt-A (movie now showing), then LBO Finance (coming soon).

Ed Blagden, Nairobi, Kenya

"This gives some of them an astonishing sense of entitlement. I have been amazed to meet primary school teachers who have been bullied by parents who are bankers yelling “Don’t you know who I am?” while threatening to remove little Archie unless he gets a bigger role in the school play. I have met financiers who boast about how little they pay their cleaners and housekeepers, apparently believing that they are uniquely entitled to exploit those whose poverty self-evidently makes them less deserving. "

Idiots.

Alan, B'ham,

I'm always trying have better days.

Seungha Park, Suwon, South Korea

Have the markets just behaved in the way that would be expected, if the individuals involved were working not in the best interests of the funds that they managed, but purely to maximize their bonuses.

Keith Calder, Ashford Middlesex,

The surprise is that the problem has surfaced so early. US
government sources say that 2,000,000 other homeowners will see their monthly payments increase by at least 50%
over the next year, the majority of these people will default
resulting in further falls in the value of US homes. Last month 178,000 homes were foreclosed. Things are going to get much worse over the next year.

George Lewis, Brackley,Northants, England

What do you expect when banks create money out of thin air and our entire economy is debt based

The writing has been on the wall for years.

The dollar will implode in the next 12 months. The entire global financial system is teetering on the verge of collapse.

It's the ordinary people with mortgages and debt who will pay for this insanity

Matt Myers, Redhill, UK

It seems to me inevitable that printing paper money in large quantities will always lead to disaster. - eventually. However those responsible are not likely to receive any punishment for negligence, ignorance or error as it takes decades or even centuries for the chickens to come home to roost. By now the hedge fund managers, finance ministers and others will have millions stashed away, so losing the job will not really worry them. much. The overall question is whether these methods of running the economics of society (perhaps admired by politicians) are just a modern way of being a robber baron, unrestricted (yet) by a modern magna carta.

Brian Lewis, Manila, Philippines

Consider this analogy - stability in a gyroscope comes from motion- speed - and as it slows down it begins to wobble - one way then another - thus with economic systems out of balance -ultimately sharing the wealth is not an option it is a neccesity.

Secondly one can't help but notice that of American Presidential candidates not a single one has made banking reform an issue- perhaps they feed at the same trough, but then no one in the media seems interested in holding them to account - perhaps they too have developed a taste for swill.

What can one do? I wish someone would tell me.

glenn schaefer, holbrook, ny usa

The one thing that you can be absolutely sure of is that it will not be the bankers who foot the bill for sorting out the mess. It will be Muggins, as usual.

Frank Upton, Solihull,

The irony of all this is that the spread of historically cheap credit throughout the working population financed by distributed securitised risk (in moderation and managed effectively using information technology) is a powerful cohesive force for society and stability and guarantee of economic growth.

However, some might question whether the forward time shifting of most or more than the material rewards for work in too loosely organised ways might not only have facilitated but encouraged possible abuse of that system and other distortions in the absence of careful financial education of all and universal probity. The high rewards from being pioneers in such innovative systems fairly compensate for risk of consequences of error.

The separate question of whether committing forward the fruits of a lifetime of work or more in this way differs only in detail, choice and enforcement from feudal land tenure or other work management systems on which empires were founded is best ignored.

dr venables preller, Warminster, UK

Financial capital markets contribute tens of billions of pounds to the UK economy, and provide millions of jobs. Yes - millions.

eels, The City, UK

Readers may enjoy the following extracts from "Thomas Mellon and his Times", the autobiography of Thomas Mellon, the remarkable founder of the Mellon Bank in Pittsburgh, who emgrated to America from Ulster in 1819 and died in 1908:

"And since then I have lived to see several crashes of the same kind, especially that of 1873, over fifty years afterwards, resulting from the same cause - excessive extension of credit and consequent expansion of values...the vitals of trade were destroyed by the canker worm of credit; bloated inflation spread and increased until the decayed carcass dropped dead. ... ("Ch 2: Boyhood")
"After the panic commenced ... money immediately disappeared from circulation and values of all kinds subsided rapidly. Credit was gone, payment in money imperative but no money for the purpose... property of all kinds remained, but it was set afloat in search of its true owners ... through ...judicial sales in the bankrupt and other courts." ("Ch. 19: After the Panic")

Delilah, Frederick, Maryland

Surely one of the larger cons of all time - matches the weapons of mass destruction fiasco at least.

John, Sydney,

a very insightful account of the present crisis. I think central bank, especially the Fed in America, and Greenspan in particular has to take some blame. He has always loosened credit whenever the market tried to correct itself, thereby protecting these reckless financiers from their chicanery. When others see these people always being bailed out by the Fed and making loads of money, how not to jump in and grab the money as well. In life, u have to let people take the consequences for their actions and not reward the crooks.

anthony wong, london, uk

Much to agree with here Camilla, but unfortunately I think your point about rich bankers and primary school teachers is over-egging just a tad. Unfortunately, primary school teachers are yelled at by a wider range of society than that. I bet Warren Buffett is aware.

Mike, Midlands, UK