Sledgehead Posted December 20, 2010 Share Posted December 20, 2010 (edited) What on earth would make the CEO of what many once considered a stalwart of the free market defekt to state ownership? That was the question asked by many when Eric (should that be Erik?) Daniels jerked the steering wheel of Lloyds TSB toward the car crash of HBOS before relinqueshing control to the clunking fist of The Great Leader. Over the weekend the Telegraph ran a piece that quoted the former free-marketeer that goes some way to explaining this conundrum. In comments that would sit far better in a politburo manifesto, rather than an RNS feed, Erik stated: "There is an awful lot of mythology and perceived wisdom about competition ... that.. big must mean it is bad." He goes on to say that customers should be allowed to switch account smuch more easily. Presumabley from a LLoyds account, to an HBOS account. One can certainly see how in theory that might be made , well, effortless (if only they knew how to get the LAN card on the firt floor talking to the one on the second : darn technology!). But whilst bashing the free market in the free press, Erik is not so keen on some freedoms of speech. For instance, banker bashing. He reckons that the negative perception of bankers is down to "excessive" propaganda in the media, saying "... [that] which shapes customers perception is all the negative articles about what is happening in banks and banking." Sounds like a perfect excuse for press gagging to me comrade Daniels! So, free markets bad. Free press bad. Hmm, looks like we should have seen state ownership coming a mile off with this guy at the helm. If only we'd known he was such a frikken commie! Edited December 20, 2010 by Sledgehead Quote Link to comment Share on other sites More sharing options...
billybong Posted December 20, 2010 Share Posted December 20, 2010 stating "... [that] which shapes customers perception is all the negative articles truth about what is happening in banks and banking Sometimes their spin (twisting the truth) is just too blatant. Quote Link to comment Share on other sites More sharing options...
wonderpup Posted December 20, 2010 Share Posted December 20, 2010 All this 'banker bashing' is a threat to their bonus culture- that's why they are so desperate to 'move on' Quote Link to comment Share on other sites More sharing options...
tomandlu Posted December 20, 2010 Share Posted December 20, 2010 have to admit,it makes me laugh when I hear people saying the free market failed and caused this crash.what free market? how can you have a free market with so many f****** BBC style socio marxists in no 10/11,advising/running CB's and sleeping at the wheel in the regulators ship. The rewriting of history will begin soon in the great traditon of the soviet empire.So that our children will learn that capitalism failed,the free market failed,and it wouldn't have happened if we'd been part of a fully integrated EU superstate. There are no absolutes. To complain that blaming the free-market is wrong because it wasn't 100% free can be used as a get-out-of-jail-free card by pretty much any system (communism, socialism, whateverism). Since the failure was, by and large, a failure of regulation then it seems fair enough to largely hold free-market principles to blame, since, if the free-market was infallible, it wouldn't really have needed regulation in the first place. Bottom line, markets are no more infallible than anything else (unless you belong to the camp that says "well of course they fail - that's what they're meant to do" camp, which has always struck me as slightly self-evident and meaningless). In this case (iirc), you could even point to the mechanism that failed. Clever people came up with some formulas that supposedly reduced risk when lending. If that had been the end of the story, all might have been well. Instead, they used the formulas as a justification to take on more risk (in sub-prime), which, perversely took investment away from productive opportunities. Quote Link to comment Share on other sites More sharing options...
interestrateripoff Posted December 20, 2010 Share Posted December 20, 2010 The free market is only acceptable to the elites when profits are good, as soon as the losses start coming in they need to find someone to make it all better and the best group to fund the losses are the taxpayer. Quote Link to comment Share on other sites More sharing options...
Sledgehead Posted December 20, 2010 Author Share Posted December 20, 2010 (edited) There's another quote from the same piece by Daniels, where he seeks to justify bonuses : "Boy, I would hate to have to run with a mediocre workforce." I dunno, maybe I should just throw this one open in its own thread. It might do even better that the "houses that look like their owners" post. Just to kick off : - "Boy, I would hate to have to run with a mediocre workforce: but Gordon sweetened the deal too much." - "Boy, I would hate to have to run with a mediocre workforce: shareholders could get crucified." This sh!t just writes itself ..... Edited December 20, 2010 by Sledgehead Quote Link to comment Share on other sites More sharing options...
Blod Posted December 20, 2010 Share Posted December 20, 2010 Most modern CEOs are no more adept at running their companies than MPs are at running the country, this is evident from the way that good CEOs stand out.Generally they accept huge increases in their packages in the good times, "'cause their worth it", but as soon as their poor judgement comes home, pass the blame on. Many have little knowledge of the industry that their companies compete in, but justify their position from previous good fortune in other industries. As mentioned they operate under the premise that they can privatise the profits of a company to to board but socialise loses to the share holders/work force. The deteriorating ability to control information in the modern world is making it harder maintain their "emperors clothes" position, as information inevitability leaks to their minions. Quote Link to comment Share on other sites More sharing options...
Mikhail Liebenstein Posted December 20, 2010 Share Posted December 20, 2010 Most modern CEOs are no more adept at running their companies than MPs are at running the country, this is evident from the way that good CEOs stand out.Generally they accept huge increases in their packages in the good times, "'cause their worth it", but as soon as their poor judgement comes home, pass the blame on. Many have little knowledge of the industry that their companies compete in, but justify their position from previous good fortune in other industries. As mentioned they operate under the premise that they can privatise the profits of a company to to board but socialise loses to the share holders/work force. The deteriorating ability to control information in the modern world is making it harder maintain their "emperors clothes" position, as information inevitability leaks to their minions. Agree 100%, most CEOs are clueless and have no attention span. Quite how they can claim to be effective is beyond me. If they want the profits on the way up, they should be prepared for gallows on the way down. Quote Link to comment Share on other sites More sharing options...
Laughing Gnome Posted December 20, 2010 Share Posted December 20, 2010 (edited) have to admit,it makes me laugh when I hear people saying the free market failed and caused this crash.what free market? how can you have a free market with so many f****** BBC style socio marxists in no 10/11,advising/running CB's and sleeping at the wheel in the regulators ship. The rewriting of history will begin soon in the great traditon of the soviet empire.So that our children will learn that capitalism failed,the free market failed,and it wouldn't have happened if we'd been part of a fully integrated EU superstate. So naive. Capitalism is what it is, free market perfection is a utopian dream. The trouble with you free market capitalists is you don't allow for Human Nature Edited December 20, 2010 by Laughing Gnome Quote Link to comment Share on other sites More sharing options...
billybong Posted December 20, 2010 Share Posted December 20, 2010 (edited) There's another quote from the same piece by Daniels, where he seeks to justify bonuses : "Boy, I would hate to have to run with a mediocre workforce." I dunno, maybe I should just throw this one open in its own thread. It might do even better that the "houses that look like their owners" post. Just to kick off : - "Boy, I would hate to have to run with a mediocre workforce: but Gordon sweetened the deal too much." - "Boy, I would hate to have to run with a mediocre workforce: shareholders could get crucified." This sh!t just writes itself ..... It deserves its own thread because it's worth it. Edited December 20, 2010 by billybong Quote Link to comment Share on other sites More sharing options...
Fromage Frais Posted December 20, 2010 Share Posted December 20, 2010 have to admit,it makes me laugh when I hear people saying the free market failed and caused this crash.what free market? how can you have a free market with so many f****** BBC style socio marxists in no 10/11,advising/running CB's and sleeping at the wheel in the regulators ship. The rewriting of history will begin soon in the great traditon of the soviet empire.So that our children will learn that capitalism failed,the free market failed,and it wouldn't have happened if we'd been part of a fully integrated EU superstate. +1 I loved a article by the former IMF economist Simon johnson (i think) who pretty much said that the different between a successful country and a banana republic is that in the banana republic the leaders hoover everything up go bankrupt and the plebs and currency (via inflation) take the strain..........sounds like us a little now. Quote Link to comment Share on other sites More sharing options...
Bloo Loo Posted December 20, 2010 Share Posted December 20, 2010 we have bankers in the US lying about the value of their assets. we have bankers in the US that lied about what they were putting into off balance sheet trusts. we have bankers lying about things even BEING in off balance sheet trusts. we have bankers making up MBS of poor performing loans, and whilst selling them as gold plated AAA better than Gilts returns, shorting them to make a killing when they obviously tanked. we have bankers lying about borrowers incomes. we have bankers lying about their proof of owneship of mortgages in arrears. we have bankers lying about the value of Second mortgages ( HELOCS) on property that already has an underwater First mortgage. None of this is Capitalism or free markets. this is Crime...pure and simple Fraud....the biggest Fraud ever perpetrated by so few on so many. THATS why they want the press gagged. Roll on WIkileaks. Quote Link to comment Share on other sites More sharing options...
Blod Posted December 20, 2010 Share Posted December 20, 2010 we have bankers in the US lying about the value of their assets. we have bankers in the US that lied about what they were putting into off balance sheet trusts. we have bankers lying about things even BEING in off balance sheet trusts. we have bankers making up MBS of poor performing loans, and whilst selling them as gold plated AAA better than Gilts returns, shorting them to make a killing when they obviously tanked. we have bankers lying about borrowers incomes. we have bankers lying about their proof of owneship of mortgages in arrears. we have bankers lying about the value of Second mortgages ( HELOCS) on property that already has an underwater First mortgage. None of this is Capitalism or free markets. this is Crime...pure and simple Fraud....the biggest Fraud ever perpetrated by so few on so many. THATS why they want the press gagged. Roll on WIkileaks. +1 It's irritating how we come back again and again to the issue of regulation and that as the banks operated supposedly inside the frame work of their regulation they aren't calculable. Well regulation or not the fact is they defrauded everyone and bankrupted the industry. Time that the public woke up to what they have done. If an airline operated badly and kept crashing planes and killing their customers it'd be highly likely that they would be bailed out by the government. The banks maybe too big too fail but the bankers are small and should pay for their crimes. Quote Link to comment Share on other sites More sharing options...
tomandlu Posted December 20, 2010 Share Posted December 20, 2010 seriously,did you read that before you posted it. free markets may be fallible,never said they weren't,but at least they allow the right people to get punished ie those who laoded up on risk.socialism results in working people getting shafted for the bankocracy in this instance. As I said, free-markets = some stuff happens. My point - lack of regulation is what allowed the free markets to screw up so badly, ergo it wasn't some kind of restriction on free-market activity that led to the bust. Your point, which is valid but self-evident, is that in a truly free-market some businesses succeed, others fail. You would, I assume, maintain that the 'good' one thrive and the 'bad' ones fail. I'm not sure, since I'm not sure what these definitions mean in the context of a free-market (good = most ruthless?), and I'm also not sure since a truly free-market has never and never will exist (in other words, it's all a bit moot). It's not a case of whether I think the bailouts were good or bad (bad for the record), more a case of what system will prevent the need for them in future. You can place your faith in an 'ism', I will place mine in fighting for a proper regulatory framework (well, 'fighting' might be putting it a bit strongly). As a final point, saying that the bank bailouts were a victory or even an expression of socialism is a far more distorted take on the issue than anything I've come up with... Quote Link to comment Share on other sites More sharing options...
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