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Credit Suisse's Excellent Guide To Why The Uk Is Such A Mess


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The UK is such a mess because its government is owned by the City.

Once again, Gordon Brown has shown he is in thrall to the City (The Observer, Sunday 21 March 2010)

When the EU proposes to limit the activities of hedge funds, the prime minister acts against it.

Gordon Brown is confused about financial services. Sometimes he sees them as a legitimate target of popular anger, deserving punitive regulation. But sometimes he sees them as precious economic assets to be protected and nurtured.

The prime minister has spoken at international summits calling for taxes on speculative transactions and urging greater coordination of financial supervision. But when the EU proposes specific measures to limit the activities of hedge funds, Mr Brown knocks them into the long grass.

Last week, Mr Brown successfully lobbied to keep the "alternative investment directive" off an agenda of EU leaders. The new rules, which would impose tighter restrictions on where funds can operate, how much they can borrow and how much they have to disclose about their bets, are now on hold. They could be killed altogether by a Tory government.

Naturally that is what that hedge funds want. They argue that they did not cause the crisis (it was banks) and that they are a scapegoat for anti-market forces on continental Europe.

That is arrogant and wrong. Hedge funds attached to banks such as Bear Stearns and BNP, which had borrowed billions for risky speculation, were instrumental in the break down of confidence in markets that saw credit suddenly dry up. Besides, the destructive culture of taking wild bets while devising complex financial tricks to pass risk elsewhere, is integral to the hedge fund business game.

The alternative investment directive is not, as some financiers and Conservatives have sought to portray it, a conspiracy by European socialists to undermine British capitalism. It is a tool to limit practices that Mr Brown has himself suggested need regulation. But it will be harder now for him to take that line. Most EU governments suspect that a British prime minister always does the City's bidding in the end. It is a shame that Mr Brown has proved them right.

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any chance credit suisse will let us know how,them being so cleva an all,they got themselves into such a mess.

they and UBS are well up in the banking l;everage guesstimate tables.

Absolutely.

Has anyone written and excellent guide to why CS is such a mess?

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I dont think theyre a totally lost cause, should be a booming trade in Butlins and Pawnbrokers for the next couple of decades

LOL. Yes that's true.

I think (FWIW) the UK will become more like Japan and a two tier nation. The city institutions are doing well and the London Prime market looks good for the time being. For those who work in this sector in decent paid jobs there will be no "depression". On the other hand the less fortunate members of society will have a hard time of it.

Whether such increasing social injustice will result in action or not remains to be seen. Already strikes are happening and the Greek experience shows that we Europeans are not Japanese in our behaviour.

Perhaps our share of the oil revenues from the Malvinas and Gordon's sleight of hand will keep the illusion going for another decade or so. I hope so because the alternative doesn't look very nice to me.

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