This week our diarists talk about the future of UK plc, Cristiano Ronaldo's transfer fee and mistaking weeds for green shoots.
These diaries are written by people who work in finance and have had a front row seat as their industry goes through the biggest changes in decades.
They give us regular insiders' updates on the mood in the City of London and the dramatic changes in the world of finance.
"Laura" (not her real name) works for a commercial bank in London.
In recent months being able to put on your CV that you were a company director through the last recession has been seen as a positive, a badge of experience
In the grand scheme of things how will people look back on the Crunch Years? Will we have learnt the lessons that we needed to? Will we be better, stronger and more economically robust?
In recent months being able to put on your CV that you were a company director through the last recession has been seen as a positive, a badge of experience which counts for something when deciding if we are going to lend you money. But what if, as is seemingly becoming apparent, 10 years experience is nothing more than one year of experience repeated 10 times?
Last week I wrote about the imperceptible attempts by the government and the regulators to sort out our industry. This week I would like to extend that to UK Plc in general. The unions are the major paymasters of the governing party, and with unemployment expected to still rise we are potentially facing a Winter of Discontent where the economic and general lives of the many are at the mercy of the few.
How can it be right that just 3000 RMT members were able to try and ransom the City at the cost of millions of lost economic revenue? The irony that even fewer bankers than this managed to wreck the pensions and livelihoods of millions isn't lost here - particularly with the continued debates about the lack of democratic accountability of our parliament.
The markets are the real masters of the universe and no amount of anti-capitalist overtures are going to stop it for the same reason centre left parties fared so badly in the European elections - because there is no alternative.
In the same way that Pavlov caused dogs to salivate by ringing a bell so too does the market bell drive banks and corporations to salivate and follow expected behaviour
No Brave New World is around the corner to free us from its mercies. In the same way that Pavlov caused dogs to salivate by ringing a bell so too does the market bell drive banks and corporations to salivate and follow expected behaviour.
How can you expect real change in the financial services industry if the only behaviour which gets you a reward is profit and growth? It isn't entirely fair to blame the markets for this - they in turn are responding to their own masters who expect better than average returns on their investments and pension funds each year.
And this, dear readers, is the crux of the problem. There will be no wholesale reform of banking because there is no incentive to change. The old adage "Innovate or Die" can only apply so much - with the potential risks for innovating yourself in a direction that the crowd do not follow very high indeed.
Lloyds may have staved off further government intervention for the time being but in the medium term playing it safe will not bring them praise. They may have enjoyed a brief approval from the markets and economic commentators for being the Vince Cable of lending practices but the worm will soon turn.
RBS can only turn itself around and pay off their state ownership by posting massive profits and sales growth - exactly the behaviours we now understand were not the path to financial greatness. However, just as dear Vince Cable's party will falter at the real electoral test next year, so too will those who continue to play it safe after the rest start making hay find themselves on the wrong side of the financial debate.
"Mark" (not his real name) works for a stockbroker outside London.
That oft quoted phrase "the green shoots of recovery" seem to be coming on fine
As the markets have recovered from their low of around 3,500 points, a sense of relief and optimism seems to be returning to City.
No one is yet out there celebrating and the return of swine flu to mainstream media and the political unrest in Downing Street have caused worry, but it does seem that the worst might be over.
That oft quoted phrase "the green shoots of recovery" seem to be coming on fine and my old friend the Cheetah, aka Fred Goodwin, has not been on a front page for a long while. Over the last six months, I cannot remember how many times I have called a business colleague only to be told: "I am sorry he/she no longer works here." However, in the last week, four of these former industry colleagues have called, for their new employers. Those out of work are beginning to be re-employed and while a lot of those are temporary or long probation periods, it is, at least, employment.
The City feels a little happier at present and there are no longer the looks of suspicion when I comment that I work in the City or for a financial services firm, these looks being reserved for the politicians, or the next hot media topic. Cristiano Ronaldo might be next!
Indeed, some people feel happier with their current position than say this time last year. An old school friend recently showed off pictures of his new building project on his home. A teacher, he has a stable income and was not affected or worried by the recession. I asked him how he felt about the economy, the bankers, the current economic climate etc., "not fussed" came the reply.
I do wonder if the legacy of this recession will be that the top performers will be put off by the tax rates the country now charges?
Indeed, with interest rates falling so low, he is saving himself approximately £7500 a year, this has paid for the extension which, in years to come, will ultimately see him profit. It was not quite so easy for those working in financial services, as we will still take a cursory look over the shoulder to ensure the personnel manager is not coming our way, but it shows that not everyone is worse off.
Finally, we look to the world of sport and I could not update my diary without reference to the world record transfer fee agreed by Manchester United and Real Madrid this week. £80m for Cristiano Ronaldo. Spain has been badly affected by the recession but then their premier football club come close to spending some £170m on three players with Kaka (£56m) and David Villa (£34m (reportedly)) set to join Ronaldo at Real next year. Ronaldo reportedly earns £130k a week at Manchester United, paying 50% tax.
At Real Madrid, he is set to bring in £200k but, as a foreign national, will only pay 5% tax. Although the numbers are mind blowing, I do wonder if the legacy of this recession will be that the top performers, not just in sport but in any profession, will be put off by the tax rates the country now charges for those that do create a living for themselves on these shores?
"Anthony" (not his real name) works for an investment bank in the City.
We need to be careful that these fast growing green shoots do not turn out to be weeds
The G8 have decreed that the financial crisis is over. US Banks are attempting to pay back Tarp funds - the government bail-out money. Lloyds Bank has also said they will use the rights issue to pay the government back some of its support. This means Lloyds will issue extra shares to raise money.
It might be possible to think that investors are seeing a rosy future for Lloyds Bank but the truth is that the rights issue was so heavily discounted that investors could not refuse. The money raised is a paltry sum compared to the total cost of the bailout from the government.
The fact that the banks want to repay the governments as quickly as possible is not necessarily something to cheer about. Banks are able to do this partly because governments have been taking toxic assets off the banks' balance sheets. It is a simple business decision for the banks to want to restructure their capital and reduce the government involvement because the capital they have provided is very costly. But there is a limit to how many rights issues you can do at such heavy discounts.
It is also not about restoring mega bonuses. Legislation will restrict bonuses whether you are government owned or not.
On the economic front, it appears that the green shoots have sprouted out everywhere. Some commentators are even forecasting that the GDP will start growing again. So can we all breathe a sigh of relief and carry on as before?
Sorry to disappoint you but we need to be careful that these fast growing green shoots do not turn out to be weeds. The steep falls by the market on Monday following the IMF pronouncements seem to support my view.
The G8 may have a point that the banking crisis has reached the bottom but so what? There was no where further for the banks to fall. The debt problem has not gone away. It has just been passed like the proverbial hot potato to governments. Eventually governments will have to pass the baton on again to us in the form of increased taxes and lower public spending.
Readers of this diary will know that I have criticised Alistair Darling's optimism about the economy and warned about this being a false dawn
Readers of this diary will know that I have criticised Alistair Darling's optimism about the economy and warned about this being a false dawn. I have also said that a "W" recovery is most likely and my view has not changed. I believe we are at the spike of the W and are heading for a second fall. While the government continues to stimulate the economy, things will remain relatively benign but the day of reckoning has appeared and we are already seeing a number of banks and building societies raising rates for their fixed rate mortgages.
One in 10 mortgage holders are in negative equity and are trapped in the variable rate because they cannot remortgage, so it is impossible for them to take advantage of fixed rate deals to hedge against higher rates. And the Conservatives are right that public spending will have to be cut by as much as 10% if spending on the National Health Service is maintained.
But the current government will not own up to this and inflict this pain before the election because they want to present to the electorate an economy that appears to be no longer in recession.
Although there may be a lull in the announcements of job losses in financial services, there is still a real question out there about where the future revenue streams will come from. The days of cheap money are over. There is a real danger that if the banks raise margins too quickly good debt will turn bad. If this happens governments will no longer be able to afford to rescue the banks and the process will start all over again.