So exactly what are the toxic assets?
It now seems inescapable that Broon will be buying another priceless (literally) asset on behalf of the nation: £200bn of toxic assets that are so toxic that they continue to paralyse our doughty bankers. Does anyone actually have a list of the toxic assets that we can inspect? After all, we are going to own them.
I have a suspicion that the news will be that precious few of them relate to the anything like the types of loans presently being sought to keep the UK's businesses and individuals afloat at this torrid time. Most of them will probably further expose the incompetence, greed and stupidity of our bankers who eagerly cut corners and did things that "normal" business would regard as extremely unwise.
If these "assets" turn out to be fairy money mortgages in foreign lands now backed by property that is worth 30% of the outstanding mortgage, then why should this have any bearing on a mortgage required by a (relatively) honest and industrious Brit who needs an 80% mortgage on a property that is probably (oh dear, that word...) still going to covered by the asset value at the end of the year. Even if the predicted continued drop in UK housing continues.
Which seems like a pretty straightforward argument for a vote of confidence in establishing the principle of British assets for British loans. To coin a phrase.
But maybe our bankers are using more of their discredited economic modelling tools (Excel has a lot answer for) that are also factoring in the number of people who are going to be out of work as a result of the financial crisis brought about by the banks' incompetence - and extrapolating the consequences of an economy with almost no tax income other than the PAYE on the state payroll, and profits made by the relatively unscathed cartels and monopolies like the big supermarkets and utilities. The rest of us are feeling pretty much screwed unless our client base happens to be entirely comprised of one the lucky classes like MPs' expenses and Premiership footballers.
If the analysis to find out exactly what these toxic assets are made of shows that UK lending is still stuck in the headlights of foreign debt express trains that have yet to apply the brakes, then all those responsible really do need to be traced and made to something suitably contrite, starting with having all their personal assets forfeited. Yet the present plan seems to be to pretend these same people are the ones that will lead us out of Broon's bust and back to Broon's boom. Maybe Broon is scared that by properly sacking all those incumbents and replacing them with more competent souls from somewhere in the real world, far outside the banking industry, he would be inviting his own demise by the same argument?
Ironically, any action TMP proposes against our own Madoffs is strictly in the interests of keeping capitalism honest, and has nothing whatever to with socialism. All the rules necessary to prevent the present situation were almost certainly in place, but broken time and again by cavalier polticians, traders and bankers who got into a vicious spiral of chasing their apparently successful competitors.
This is a crisis entirely caused by state intervention in the first place! We must never lose sight of the fact that Clinton's democrats began the entire process by insisting the US institutions backed unwise loans for democrat voters. So maybe the first up for a sequestration of every personal asset should be old Slick himself; after all, he's no stranger to the notion of "going down".