Tuesday, December 7, 2010
My re-write of history, Part 1
Chronic recklessness powered by unchecked greed
Gordon Brown writes about banking and property....
Posted by alan @ 08:52 AM (1614 views)
26 thoughts on “My re-write of history, Part 1”
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doomwatch says:
So there we have it in black & white:
“… moral norms were not constraining the behaviour of those competing across complex and interlocked global entities that covered both shadow and formal banking systems.”
“…was to stake everything on rising prices in the property market.”
hpwatcher says:
Gordon Brown, still has to face up to his part in causing the instability.
alan_540 says:
Opening paragraph quote :
“”We are only just beginning to understand the risks we have been taking.” That single sentence, coming in a moment of frankness from a senior banker who normally personified confidence to the point of arrogance, summed up for me what had gone wrong.”
– He wastes no time laying the blame firmly at the door of the bankers, thus obviating himself of any blame. What a nasty lying little man.
hpwatcher says:
Brown let it happen. The reson why he let it happen, was to keep the good times going long enough to put him into number 10.
Come clean you scumbag.
sibley's b'stard child says:
*Throws PC out of window*
str 2007 says:
”Lehman funded its plan through the short-term “repo” markets, in other words by borrowing millions of dollars each day from counterparties just to be able to do business. Of course that meant that the moment counterparties to repurchase agreements were to lose confidence in Lehman, Lehman would be unable to fund itself or to continue to operate.”
Doesn’t that sound just a bit like most countries. Ours for instance, which is currently seen by the markets as stable and in control still runs a monthly deficit and is growing it’s overall debt.
”People will rightly ask why we did not know earlier of the fundamental weakness of Royal Bank of Scotland. The simple answer is: we were misled.”
Really, the fact houses were going up at 15% per year and people were taking out self cert interest only mortgages to be able to afford ‘normal’ houses didn’t raise any suspicions with you then Gordon ?
”When I look again at the story of HBOS it is not only the scale of what they assumed was their one-way bet on property that shocks me; it is also the sheer aggression and presumption of the bank.”
Yes Gordon, that sounds a familiar trait – yours for instance.
Gordon Brown, you oversaw this mess and all the clues were there from 2003, in 2005 when the market wobbled you sat back while the D o E dropped interest rates to further fuel the bubble.
You Gordon Brown stood up and basked in the glory of ever rising house prices.
You Gordon Brown are one of the MAIN reasons it all went wrong.
Please crawl back under your stone and stop trying to pass the buck.
tyrellcorporation says:
His legacy is financial ruin, economic ruin, the collapse of social mobility and a lost generation. Like any politician he yearns to paint a rosier picture of his golden age in office. Sadly the carnage is just too widespread and runs too deep to simply be glossed over with a few choice speeches and no doubt, a Christmas memoir.
I’d have a glimmer of respect for this oaf if he just came clean, said he messed up badly and apologised for his part in the crisis we now find ourselves in.
mark wadsworth says:
“The story of bankers whose approach to risk-taking became so complex and obscure that only very few people could fully understand what they were doing”
Don’t worry about the mechanics, it was just an old fashioned credit bubble/land price bubble.
The symptoms were quite clear to see to anybody who remembers scooping up armfuls of zero-interest rate credit cards offers from the doormat every day; people who saw house prices rising ten per cent a year; people who scooped up yet another armful of bank circulars offering savings accounts paying five per cent interest and yet another armful of bank circulars offering 125% residential mortgages at four per cent interest; the rapid expansion of Northern Rock. etc etc etc.
alan_540 says:
What Mark said.
alan_540 says:
Brown not Mark 😉
alan_540 says:
No comments allowed on this Guardian piece I notice… Wonder why LOL
letthemfall says:
Don’t blame one politician: blame yourselves and the electorate in general. The first goal of any politician is to get power and hold on to it. This in effect means keeping the wealthy on side, and kidding the rest their interests are being served. Hence the result we’ve seen, not unlike those in the past.
sibley's b'stard child says:
Aye, I noticed that Alan; would probably crash their server otherwise…
sibley's b'stard child says:
Alternatively LTF, blame Labour supporters?
tyrellcorporation says:
Don’t try and pin the blame on Labour, the Labour government or Labour supporters Sibley; they had nothing to do with it. My money is it was that bitch Maggie who has been orchestrating everything since her public demise over 20 years ago.
mark wadsworth says:
LTF, quite correct.
Apart from the HPCers and the Priced Outers and the Land Value Taxers (i.e. about 1% of the population), there was widespread massive support and popularity of ever rising house prices because 99% of voters genuinely believe that rising house prices make them richer.
But let’s stick to the topic in hand, which is that Brown is a deluded madman and hypocrite.
nickb says:
Yip, Brown did what 99% of other politicians would do… ride the wave. I haven’t read the article yet but I hope he points out that it is basic structural flaws in the so-called banking system that are responsible rather than simply moral failures of individuals. Of the kind pointed out by the ‘positive money’ campaign (and several generations of campaigners before them).
Nick
sibley's b'stard child says:
Fair enough Tyrell; i’m in a conciliatory mood today so let’s just agree to blame the Romans.
icarus says:
“A new and largely unregulated global financial system developed in the 20 years before the crisis and, in a risk-laden world in which excessive financial remuneration was at the expense of the equity capital that banks needed, we had created a wholly new economic phenomenon: capitalism without capital” (Then he goes on about unregulated shadow banks – Gordon, they had a field day in London FFS.)
Note how the unregulated ‘global’ system just “developed” all by itself. Who was the main architect of this ‘system’?
In his own words (2006 Mansion House speech):
Financial services are now 7 per cent of our economy. Financial and business services as much as 10 per cent. A larger share of our economy than they are in any other major economy, contributing £19 billion of net exports to our balance of payments, a success all the more remarkable because while New York and Tokyo rely for business on their large domestic base, London’s international ranking is founded on a large and expanding global market.
London now the home and natural location for 20 per cent of all cross border lending: 30 per cent of world foreign exchange turnover, 40 per cent of over-the-counter derivatives trades, 70 per cent of the global secondary bond market.
London is the favoured location of choice for more international business than ever before, the world’s leading banking centre with more foreign banks than in any other city, the location for 200 foreign law firms – including home for six of the worlds largest ten, and last year new foreign listings not only from China, India and Russia, but also the USA itself (cont. p94)
the number cruncher says:
LTF @ 13, MW @ 17 and Nickb – On the button – Brown or Thatcher have no more power than Gideon or Vince.
Since Maggie and Reagan got in, we gave away all the power of politics to Anglo American financial interests.
You Maggie lovers need to see the long term picture and recognise how she and Reagan started the ball rolling. Brown was just a week self serving politician who thought he could do a bit of good while not upsetting those in real power.
alan_540 says:
@13 letthemfall said : “Don’t blame one politician: blame yourselves and the electorate in general.”
Disagree completely letthemfall, it is government’s role to lead and not allow house prices to rise to unaffordable levels. We forget that 90% of first time buyers are priced out of the market – that’s my kids and yours (or yourself if you’re unfortunate enough to be in that position).
hpwatcher says:
LTF @ 13, MW @ 17 and Nickb – On the button – Brown or Thatcher have no more power than Gideon or Vince.
Well, Gordon Brown’s financial ”light touch” deregulation, the wonderful innovation of the FSA and other tripartite nonsense must all have been my imagination?
You can’t deny the incompetent meddling of Brown significantly enhanced the chances of some form of crisis.
icarus says:
Brown talks about being furious about Lehman’s accounting tricks (repo 105 – a means of dressing up its balance sheet by borrowing cash just before each quartely report to show reduced bal sheet/leverage and then re-exhanging the cash for the securities it had originally provided as collateral to borrow that cash). Well, Lehman had to pull this stroke in London because these accounting practices were not considered legal in the US.
http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/7431033/London-at-centre-of-Lehman-Brothers-accounting-gimmick.html
orcusmaximus says:
@mark wadsworth “Brown is a deluded madman and hypocrite.” Is it possible to be both?
@icarus – Brown furious about accounting tricks? What a deluded mad hypocrite!
capitalist says:
I hope he points out that it is basic structural flaws in the so-called banking system that are responsible rather than simply moral failures of individuals.
Bang on the money nickb. (And no, he doesn’t.)
123jim says:
“The reason governments had to step in during October 2008 was not because government action had itself caused the problem but because the music stopped.”
But the government should have been conducting the orchestra.
Government is there to protect people by framing regulations, whether from banks, unscrupulous employers, vagabonds, thieves or murderers. In the event HIS government was working the other way round, regulating not to protect people, but to protect the banks, government, and other authorities from the people. NEVER LET THIS MAN IN CHARGE OF ANYTHING EVER AGAIN.