Guido Fawkes noticeshow upset the BBC are when the mainstay of our economy is not split asunder andthe bankers not fleeing on their private jets to sunny tax exile…..
http://order-order.com/2011/04/11/bank-break-up-sends-beeboids-bonkers/
‘The speculation that the Vickers Commission was going to force the banksabroad by breaking them up clearly got the better of some hacks sympathetic tothe idea. At his press conference earlier John Vickers fielded questions fromthe all the financial press scribes. Not one mentioned a perceived failure tosplit up the banks adequately until the not-for-profit BBC waded in. BothPeston and Paul Mason opened fire. Mason had a rant about “casino banking” andPeston accused them of “bottling it”. Guido’s eyes and ears in the roomdescribed the contrast with everyone else’s questions as “striking”…’
Notice the real lies from Peston.
1. We need to prevent the casino banks bringing down the retail banks.
B&B – failed – retail bank
RBS – failed – retail bank (mortgages are retail)
Lloyds – failed – retail bank (mortages again)
Icesave – failed – retail (savings)
Kaupthing edge – failed – retail (savings)
Northern Rock – failed – retail bank
Lehmans? American and not the UK.
So it looks like the merchant banks need protection from the failures of retail banks.
Peston – what a prick
Thats what goes against the narrative the Beeb loves. The 2 banks that survived (Barclays and HSBC) had the biggest “casino” operations (OK Barclays also took outside money) the ones that went tits up were the ones in the UK mortgage game. It would be more sensible for Peston to call for all the banks to move into derivatives and stay out of the toxic mortgage business.
And Lloyds only has problems because the man about whom Peston wrote a biography twisted Victor Blank’s arm into buying HBOS, without allowing them time to find out the key information which showed just how badly off HBOS really was. When it happened, Peston at first tried to claim the Mr. Brown was fully responsible for saving the banking industry by doing this, but then as soon as it became clear how bad HBOS was he shifted blame and never brought it up again.
The retail banks were “investing” in the corrupt and fraudulent CDOs and lost a fortune doing so, many coming to the edge of bankruptcy themselves. Anything to stop retail banks from speculating in what could be utterly fraudulent and worthless financial instruments is a good idea to protect everyday people’s savings.
High street banking should be safe, should operate a much higher fractional reserve and should NOT speculate where hundreds of trillions of dollars were invented out of thin air, speculated upon and lost, over the past few years.
Could I point out that the CDO’s were not, in and of themselves, “fraudulent”. As it happened much of the underlying “secured” assets which were bundlled together and packaged as CDOs were worthless. They were worthless because two brilliant presidents of the US – Carter and Clinton (both, uncoincidentally, Democrats) – insisted that US commercial banks lend to the monumentally credit-unworthy. This, together, with the cod-privatisation of Fannie Mae and Freddie Mac (ie private but “everybody” knew the federal government would stand behind them) meant that CDOs were readily accepted and traded world-wide. IMHO, if indeed UK retail banks invested in CDOs (I suspect they financed their purchase rather than invested in them direct but, hey, what do I know?) then the fault lies not completely with those banks – who lent and lost money on crap property on the traditional and unsophisticated mortgage basis – but with the auditors of the banks and the banks themselves. The auditors should have questioned the worth of CDOs. They didn’t because 1. they didn’t understand what sort of animal they were, 2. they accepted, apparently, the banks’ assurances that the CDOs were worth the value that they were in the books, and 3. the “mark to market” lunacy of the accountancy bureaucrats meant that the profit on this kind of “asset” was taken up-front thus ballooning the (non)profits of the banks for the taxes on which Brown said a grateful “thank you” (and thus the pressure was on the banks not to provide prudently against possible losses which would reduce notional, not real profits).
On your general point I agree that the banks should be re-split since, in practice,”Chinese walls” always collapse under pressure. The problem here is that no-one has genuinely addressed the problem of why the collapse happened in the first place. The politics of finding out what happened are, of course, horrendous and it’ll be a century before the real story emerges (if then). Even now (80 years on) Flanders and the rest of the lefty economists beloved of the BBC keep telling us that it was Roosevelt’s Keynesian policies which saved the US from the Depression and thus the Conservative-led coalition should keep on spending. They conveniently forget that Keynes’ General Theory was only published in 1936 and Roosevelt’s economic policies were a failure which contrasts with the success of the economic policies of the 1930s Conservative governments (balanced budgets and all). However, mention The Thirties at Broadcasting House and all you’ll get is reminders of the Jarrow March and starving children in Glasgow slums. You won’t see, for instance, the (well constituted and non-inflationary) building boom in the South East and the explosion in private car ownership.
Already shared elsewhere, but a worthy reminder of the market rate talents deployed to critique on behalf of the nation…
http://blogs.telegraph.co.uk/news/danielhannan/100083389/the-politicians-who-got-it-wrong-on-the-euro-are-not-being-called-to-account-because-the-media-made-the-same-mistake/
‘Here, even more hilariously, is the BBC’s Robert Peston as recently as two weeks ago:
Only in the event that the Portuguese financial crisis exhausted the available money in the eurozone’s bail out fund – which it won’t – would the UK become liable.’
This is a good example of BBC journalists giving us their political opinions rather than telling us the facts. News and interpretation should be kept separate. To its credit Newsnight challenged their interpretation, although this was more by accident than design. Generally Newsnight adds yet further layers of Leftist interpretation (a sort of disinformation service on behalf of Middle Class Leftists) but every now and then its guests do not behave as predicted.
More (or as much) to the point, the really big failures – and the ones which will cost the taxpayers dear – were the 2 major Scottish banks: RBS and HBOS. HBOS, of course, was “saved” by a stitch-up between Brown and his friend Victor Blank. The brilliant “rescue” of HBOS brought down Lloyds. Accordingly, the next time some SNP scrote starts talking about England “stealing” Scotland’s oil and the revenue therefrom, maybe s/he should be reminded what happened to all that oil money ie it (+ an extra few £billion) went back to Scotland: not that you’ll hear this from the BBC – well not from Naughtie or Kuenssberg certainly.
Hah! Well do I remember Alex Salmond complaining how “spivs and speculators” brought down HBOS. He was referring to stock market speculators, of course, when in fact the actual speculators responsible for the downfall were working at the bank all the time.