Facing The Consequences

While many of us are struggling just to keep it together month after month, the news this summer in London's financial community is BAB...bonuses are back.

BAB stands for Bonuses are Back, and its arrival in the lexicon of the Square Mile is evidence that bankers are once again looking forward to bumper payouts, just eight months after the sector faced meltdown and governments worldwide were required to prop them up.

It is universally accepted that the vast rewards available to bankers for taking huge risks were the root cause of the crisis, but nevertheless Goldman Sachs's 28,000 staff – 5,400 of them in London – are now looking forward to the biggest payouts in the bank's 140-year history. Credit Suisse, Deutsche Bank, Barclays Capital, JP Morgan and Morgan Stanley are also anticipating bumper profits.

Even Royal Bank of Scotland, which is now 70% owned by the UK taxpayer and was supposed to restrict the way it pays bonuses, is back in bonanza mode. In March, a key executive was awarded millions of shares and options, already worth more than £8m. This week it emerged that the new chief executive, Stephen Hester, has a £15m pay package.

Just months after showing staff the door there's a hiring frenzy in the investment banks. Business is booming – in no small part as a result of the financial chaos caused by the bankers. The bond markets are hectic as a result of governments' need to finance their deficits, while economic problems have created (profitable) volatility in the foreign exchange markets. Even guaranteed bonuses have made a comeback.

And of course they have the money to do this. We gave it to them through counter-party deals. We spent tens of billions bailing out the likes of AIG, who turned around and gave that money to the banksters. They are having the best year on record in 2009. They're driving up yet another massive bubble in the markets to try to make the green.

They've gone right back to the same behavior that created the collapse in the first place, because they know if this current bubble pops, the world's governments have no choice but to bail them right back out again or face the complete financial ruin of the globe. The time of Permanent Moral Hazard is upon us.

Banks are right back at the gambling table, only this time they have taxpayer money. They'll keep it all, too. Billions and billions in free taxpayer money to make massive profits and to keep playing the game, that's all that matters now.

We exist to pay the banksters to make stuff up to get rich from. The rest of us are just peons and serfs...and nobody dares to cross the feudal lords that run the world.

And when this bubble pops just like all the others, then what? When what little middle class wealth is decimated by this new bubble and Americans have nothing...then what?