Brown and the Banks

[Monkeytrousers]

www.thisismoney.co.uk/news/article.html?in_article_id=453203&in_page_id=2

I know there wil be a chorus of cynical voices echoing Tory grumbles (I have been told by an insider that the Tories are despeeratley praying for disaster in the economy - our economy - their economy - just so they can play the 'I told you so' card) of unfair use of taxpayer money, which completley ignores the payoff at the end if this works. This move will radicalise the banking system, and for the better.

I think this plan is a stroke of genius. I am in awe of GB's balls. I really hope it works and am almost sorry it's taken a global recession to do this, as it needed doing anyway.

I saw this Torygraph article - which I agree with to a certain extent -
and remembered this thread!
Will rejoin debate shortly.

Blimey, papers immitating MN - or the other way around!?

The Times: The City is feeling sorry for itself

Merrill delivered bonuses before BofA deal

Could be quite relevant to our chat..

Lord Turner, new head of FSA, says unkind things about bankers.

Another ignorant person jumps on the bandwagon

MT, with regard to your opening post,
I don't think it's just cynicism that leads people
to doubt the merits of the latest bail-out.

This is an opinion piece from Reuters
which does address the fundamentals
and however you look at it, it ain't pretty.

A graph like this would suggest that bail-outs might not be the solution
although in the short-term they could potentially soften the blow a little.

DaddyJ, if you are interested in this subject may I suggest you read a rather fascinating book called "The Origin of Financial Crises" which I've just finished.

It addresses the causes of these type of financial crises, the economic models which create them and how bail-outs need to operate to be effective.

Thank you, cest, will check it out and report back.
Did you read 'When Genius failed'? What did you think about it?

A lot has been said about bankers in general
but it would be nice to get to know them a little better.

Meet John Thain, freshly sacked ex-boss of Merrill Lynch.
He is the man responsible for pushing through Merrill bonuses early.

Another interesting chap is Dick Fuld who was boss of Lehman Brothers.
This article tells the story of how his empire folded and gives an idea of his character.

In Britain the personalities are slightly less flamboyant
but look here for a few names that will be associated with this desaster for quite some time.

Under normal circumstances they would deserve a certain measure of pity.
As it is..

Not fair
Lord Myners has nicked all my best lines

By the time I am finished reading the papers
it's already time for bed. Shame, it's a good debate!

This article about Lehman's failure to protect their creditors
is a month old but tells its own tale.
Maybe part of the reason why Fuld is being sued by investors.

More on Sir Fred the Shred.

And some thoughts on The bosses who broke Britain.

The Guardian managed to put together the ultimate blamestormy list
which should make most people on this thread happy!

Everyone back from Davos?

To get us in the mood I found something
slightly alarmist and ott but good fun nevertheless:
Apropos 'teensy'..

Regarding the 'Bill Clinton is to blame' angle,
I would recommenda blog article with lots of hot debate underneath it
which illustrates what this is all about:
a partisan point-scoring exercise launched (rather half-heartedly) by the Republicans
in the latter stages of the Presidential race.

cestlavie, I looked at the reviews of the book you recommended
and it appears that the author thinks 'that central banks should
target asset/land price inflation' - is that right?

Does he comment on why Greenspan did not do that?
Even though he (Greenspan) was fully aware of this issue?
After all, the phrase 'irrational exuberance' describes
this very phenomenon - and was coined by none other than
Alan Greenspan. In 1996.

We pretty much know what went wrong, cestlavie.
A lot of us have known for quite some time -
here is yet another list of people who saw the crisis coming.

Why do you think the people in charge did not see it coming?
Why do you think bankers - who must had an excellent inside track on all this -
did not see it coming?

Forget about Greenspan for a second
tell me about Merrill Lynch..what went on there??

Thain appears to be in the clear as regards the internal procedures
but I am curious why a company that has made billions
in losses and that needed to be bailed out
has paid out $4 billion in bonuses for 2008.

There is real disconnect here and I would be grateful
if you City folk could explain.
Why are bonuses of such magnitude being paid at all?
Even Obama is displeased.

What has been most fascinating about this thread -
praise and thanks again to the OP for kicking things off in style! -
is the realisation that we are not just dealing with toxic assets.

The real problem are the toxic mindsets.

We are dealing with extraordinary levels of denial,
people who desperately cling on to victimhood
even though their industry is directly responsible for
a man-made disaster of staggering proportions.
People who then trouser one more big-ish bonus.
And whinge about it.

Will these very same people help Gordon (and us) get out of this mess?
Can we trust them when they barely trust each other?
Can there be trust without fairness and integrity?

Will the phrase 'bankster' become popular again?

Will we see riots or even worse:
'But if they continue to pay themselves millions, they should not be surprised to look down from their windows in London and New York and see threatening faces peering upwards, and hands fingering ropes.'

Right now, I really don't know.

Not sure who this chap is or what he knows about finance
but he certainly makes some good points.

Worth posting for the soundtrack alone!

Not a bad effort from the Business and City Editor of The Independent.

Particularly relevant to this thread:

1. Retribution

Justice demands that bankers whose excesses have helped bring the system to its knees are punished. They may not have done anything overtly illegal, though there is plenty of evidence of deception and false accounting. But there will be no closure on this crisis, or end to the growing sense of public injustice, until those responsible are subjected to the full force of public and criminal inquiry. The careless way in which the crisis is dismissed as an inevitable part of the cycle is entirely unsatisfactory and only encourages the view of one rule for the poor and another for the rich. Some bankers need to be made an example of. An eye for an eye.

I would add that as long as the people responsible have not been brought to account
fingers will point at ALL bankers and ALL bonus payments will attract public outrage.
Which is probably not a good thing at all.

Thank you, Mr. President.

It's late, not retrospective and will probably not affect that many banks
but the symbolism is powerful and it's a step in the right direction.