Sunday, September 28, 2008

Wanking bankers

What the bloody hell is our government playing at? Why the living fuck are they planning to nationalise Bradford and Bingley?
Troubled bank Bradford & Bingley is to be nationalised, the BBC has learned.

Officials from the Treasury and the Financial Services Authority (FSA) have been in talks with executives from the bank in a bid to secure its future.

Why? Look, you fucking morons, if you want to stop this kind of shit happening again, you have to teach these people that their actions—and their failure—have consequences.

A couple of days ago, I posted a Forbes article which pointed out that many US banks carried on with various dodgy deals because they believed that they were "too big to fail"—that the government would bail them out however stupidly they behaved.

It seems that they were correct.

Of course, as the same article highlighted, in the US the banks could justifiably claim that, since the Community Reinvestment Act stopped them from discriminating against customers using "arbitrary or outdated criteria that effectively disqualify many urban or lower-income minority applicants"—criteria that included most of the essentials of responsible lending: income level, income verification, credit history and savings history—that the government (and the taxpayers who had elected said government) should bear some of the financial fallout.

No such excuse exists in Britain. No doubt the UK banks would witter on about having to trade internationally, etc. but, ultimately, no one forced these banks to buy dodgy loan packages or to ignore their own loan rules.

And yet our government is bailing out these fuckers. I wonder why. Could it be that, like Northern Rock, B&B employs significant number of people in the Labour heartlands...?

I think that I would like to propose a Bill that ensures that the government has a fiduciary responsibility to taxpayers: if the government takes an obviously bad punt with our money—Northern Wreck, B&B and fuck it! let's throw the NHS spine in there too—then the taxpayer can take them to court and make ministers personally fucking liable for the repayment of that money in the event that it all goes tits up.

I think that you would find government spending would start to drop like a fucking stone...

UPDATE: Tom Paine, revelling in his 13% flat tax in Russia, summarises this point very nicely.
If you insulate people (not just greedy bankers, but the foolishly greedy people who over-borrowed to go into buy-to-let or remortgaged to pay for short-term expenditures) from the consequences of their actions, you promote levels of irresponsibility which will bring you back to this point over and over again.

Entirely true. Has the whole world gone mad? Oh, no, wait: it's that people having to suffer in order to learn that their actions have consequences is frowned upon in our wonderful "social democracy", isn't it?

Fucking hell.


Anonymous said...

As someone who's worked in property and property development for 25 years, I have been bemused, to say the least, to witness this peculiarly English obsession with 'investing' in property for instant, 'guaranteed riches.

People go on about how shareholders have to take the consequences when companies like Northern Rock fail. Yes - I agree. It's the same with houses and property generally.

You pays your money, you takes your risk.

I had negative equity for 10 years after 1989. No-one seemed bothered then. Why now?

Perhaps it's just because now this government has built its whole financial record on artificially hyped-up house prices. If we were not spending money on new cars and holidays raised on second mortgage, we'd be a fucking third world economy.

When will people see the Emperor has no clothes?

Mark Wadsworth said...

I was pleasantly surprised to see David Cameron on Andrew Marr this morning talk sense for once.

He basically said the same as I did, the banks should be realistic about the value of their assets and be forced to cancel a corresponding amount of long term debts, presumably by issuing new shares, which is a purely paper transaction, of course.

There is no need to spend a penny of taxpayers' finest, is the point. The losses get borne by reckless borrowers and reckless lenders and shareholders get wiped out, and the banking system is recapitalised at a stroke.

What's not to like?

Old Holborn said...

The Tuscan flagged a rather good article this morning.

Thoroughly recommended 5 minutes viewing

Brian said...

I'm all in favour of making ministers and others financial liable for their decisions. If you agree please sign this petition:

Anonymous said...

I agree entirely. The banks found a way to easy money, perhaps a modicum of their own advice, "if it is too good to be true" then ....

So, now they go tits up and NuLabour tossers bail them out. Just how much has the one eyed one thrown around in the last week. Yet, the same cunt takes hard working people to court (all the way to the House of Lords too) for acting legally, Arctic Systems springs to mind.

I have no sympathy whatsoever for those who borrow so much they have nothing left on which to live. Fuck them, they were OK spending other people's money, now it is payback time.

Meanwhile, I am saving for my house deposit, and when I have enough, expected February 2009, I shall be offering 20% less than the asking price. I shall have my payback that way!

Anonymous said...

"No such excuse exists in Britain"

Yes it does - there may not have been explicit legislation like the CRA, but the government bears a great deal of responsibility for encouraging poor lending decisions.

Labour artificially reduced interest rates by cheating the inflation measure.

Labour persistently claimed that it had abolished boom and bust and that there would be no house price crash, encouraging both lenders and borrowers to increase debt levels.

Labour believed that even poorer people should own their own homes, encouraged the idea that it was "unfair" that first time buyers were priced out of the market and leant on banks to help them out so that new mortgages were heavily subsidised by the back book of existing mortgages.

Labour's trashing of the pension system and "rip-off Britain" campaign against the financial services industry encouraged people - of all income levels - to see property as their only pension option, resulting in even the most unsuitable people joining the property market.

Unknown said...

They play squash with these guys. Their wives lunch together. Of course they are going to help them out.

Roger Thornhill said...

I wonder how many times the CRA has been mentioned by the BBC? Once in the context of the last year or so here on Paul Mason's blog. DIsgraceful. You'd think the "Liberal" Yank-loathers would be all over it, but they LIKE that kind of redistributive shyte and now the game is up they, OUR NATIONAL BROADCASTER is struck dumb. Obscene.

Regardless, just look at the newspeak " Community Reinvestment Act". Two words and they manage to be utterly disingenuous! Fabians must be happy.

Anonymous said...

Here's my plan.

I'm going to open a bank.
Not a bank account....a bank.
I know nothing about banking, so I'm at least as qualified as anyone else in the field.
I'm going to capitalise it with £5. So, it will be at least as solvent as any other bank out there.
On that basis I'm going to pay myself megabucks in bonuses. I'll get the money to do this by borrowing it on a credit card.
When the day of reckoning comes I'll get the Government to nationalise my bank, and the tax payer to pay off it's debts.

now, would you like to deposit some of your hard earned cash in my bank?
remember, the government ( ie the tax payer) protects the first £30k of your investment....and I'm perfectly happy to pay a very generous rate of interest meantime.

John Pickworth said...

Still the question remains... Why?

The B&B share price has fallen and there's a theoretical (but yet unseen) risk of a run on the bank. So what? Why does this concern the tax payer?

Clearly the Great Leader doesn't wish to see another bank run on his glorious watch; well why doesn't he buy the bank with his money then and not ours? This whole thing is about the saving of the Great Leader's bacon.

Anonymous said...

Here's another apposite video:

Trixy said...

Moral hazard, anyone?

Maybe the government should become more like the insurance companies they are trying to emulate and have 'no claims discounts' and voluntary excess?

Anonymous said...

The "savings" part of B&B's books are going to the Spannish, but the toxic loans part of B&B's books are going to the UK taxpayer.

This is exactly the same scam that was worked with Northern Rock.

I've been mugged....twice!!

Roger Thornhill said...


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