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Written by Toxik
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Friday, 28 November 2008 |
Cull is signing off in the midst of a ‘global financial crisis' that emerged fully formed from the subprime securitisation frenzy and the banks' general mania for risky assets that could be lied about to the accountants, sorry, marked to market. Capitalism will eat itself, if states allow it, which they can't as that would generate an even deeper nadir and, oh, would put the very livelihoods of swathes of decent people (and lots of bankers too) on the brink.
But that won't mean proper regulation is coming back.
To recap, during a few crazy early Autumn weeks, Bear Stearns bit the dust, Lehman Brothers effectively went bankrupt and the good bits went for sale, AIG went to the FED for a bailout, the Fed said it's going to create a Toxic Bank to deal with the shit (which is probably not going to happen), and there was flurry of UK banking recapitalization from the govt and merger and acquisition activity, which may well not happen either (Northern Rock excepted, but it would be worth £288 for every person on the planet, according to freesheet Metro). And now Iceland, Citigroup, Woolworth's, Dubai - you name it - all the borrowers who pooh-poohed capital adequacy are fucked. All this downturn finally affected global demand, in turn dropping prices - crude at $55/barrel now when it was $147/barrel in July - so the complacent have at least ruled out inflation and postponed the end of history for a bit.
So blind leading the blind, govts have to step in not really knowing what they're doing as it has been official practice to practise Greenspan light-touch regulation for some time.
"The stock of regulations must be reduced: we should trust people to make their own mistakes and learn from them. And the flow of new regulation from the EU must also be reduced: our aim should be to take back control of employment and social regulation"
D Cameron, 2005
Or as Gerrald Nicksen of Surety Management put it: "The FSA are simply jealous of us City boys and the genuine benefit we bring to ourselves, while EU regulation is there to stop Britain from being the Britain we know and cream, sorry, care about."
We were always told we should trust banks and financial wizards to make their own mistakes (How foolish of the ill-informed public. Unfortunately these mistakes have been massive and the majority of new regulation from the EU is there for a reason. Betting/hedging/speculation/offsetting is never a secure, risk-free way to make money.
Now we're in a situation where the governments really have to generate indigenous wealth rather than rely on very offshore capital and the services industry - Darling's rejigging of the numbers in the PBR will only do so much - and with the emphasis now on tax cuts, it's going to take them a lot of time to relearn.
The Tories are the 'political wing of the banking industry' - lovely
stuff from Labour's Frank Dobson in October during parliament questions
in October, though there is a wing of the Labour Party that was/is not
necessarily a wing of the Banking Industry but certainly one that feels
it has to appease/suck up to and try and get them on their side.
With several ‘once proud' banks to be partially owned by the
government/taxpayer, the fallout was not pretty. Sir Fred Goodwin
didn't want to give up his severance package but was told he had to, a
humiliation for the oligarch (yes, Brits can be oligarchs too).
Barclays were rather smug about the fact they don't need the government
for any money but were quite happy to irritate shareholders by selling
large stakes to Qatar and the UAE. They have been going on about
poaching staff from HBOS etc and being more competitive because the
government won't be sticking their noses in, which again shows the
arrogance and question whether or not these people have learnt anything
at all.
Someone needs to enact much stiffer regulation on the cock markets but
willing statists so far aren't coming forward. The reasons given by the
industry will be the usual ones: if we don't offer competitive salaries
then those people will go elsewhere and we will lose ‘talent'.
We refuse to accept that rewarding this mass capitalist tantrum with
public money is somehow a ‘socialist solution' or might point to a
brighter future. This is neo-liberal narcissism in Technicolor and only
those who believe in eugenics would not accept public money to save a
financial institution. The conditions on the government bailout were
token to say the least. No mention of the structural reforms required
to prevent fluctuation (boom and bust, ay Gordonia), only a ‘headline'
focus on individual bonuses. This will just mean that basic pay
(already very generous) and pensions (ibid) will go up. What about a Tobin Tax on the global movement of capital?
No? Ok, we'll all go back to sleep until we're shaken awake again by
fiscal addicts who have spazzed their very generous allowance from
their political sponsors. Again.
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