Monday, September 22, 2008

Bring back the stocks

Not the sort you had in mind, but the sort that once were used to hold individuals proposed for public ridicule.

There is a grave danger that in the scramble to smooth over the shambles of the past couple of weeks that the bankers and their political cohorts will be allowed to get away without being properly fingered and humiliated for their misdeeds over the past 5-10 years when the terms "securitisation" and "globalisation" began to be bandied about.

It seems probable that politicians in the US and UK have been well aware of the risks since the start of the whole toxic mortgage fiasco. Brown's reliance on funding the UK economy with fairy money (long before JK Rowling's wedge came along) created by inflated property values had been a feature of his fiscal srategy since the outset of his term as chancellor. A panicing Darling was first to break rank and tell the truth about the scale of the cock up - but was immediately forced to retract and rejoin Broon in splendid denial.

Opposition politicians in the UK and US find themselves obliged to participate in the clean up and cover up or be accused of rocking the boat - and since these policitians expect to inherit the rather unseaworthy boat soon enough, it is not in their interests to be too blunt with the truth and dish out the retribution that the bankers actually deserve.

This whole story is a classic examle of the oldest truth in banking: if you owe the bank £100K and you can't repay it, then you are in trouble; if you owe the bank £100m and can't repay it, then the bank is in trouble. And when the bank in turn then owes £100bn, we are ALL in trouble.

It's time to lock the whole incompetent lot up and pelt them with rotten vegetables.

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