Posts Tagged ‘financial crisis

20
Jul
10

Bankers, Regulators and law makers “stumble” on a bargain

Lord Levene - Gets his hands on the branches

Levene - Can't wait to get his hands on the branches

It seems that the Bankers are still lining their pockets and this time they have rowed in regulators and law makers from the House of Lords.

Lord Levene, the chairman of the Lloyds insurance market, is to create a new high street bank to be floated on AIM and initially funded by £50m from City institutions including Invesco and F&C. The bank will then issue shares to gain more funds and expand rapidly to acquire other businesses including Northern Rock’s state-owned “good bank”. Not the bad one, mind you, that is to be left for the tax payer.

I heard Lord Levene on the radio a week or so ago  who said that he considered that the High Street banking business could do very well but an article in The Independent newspaper quotes Neil Saunders, of the DataMonitor consultancy, as saying “All banks face apathy in terms of switching behaviour….It takes an awful lot to get people to change bank.”

No problem, Lord Levene has thought of that and plans to simply buy up the 600 branches that Lloyds Banking Group had been ordered to sell following its state rescue.

Lord Levin obviously spotted the chance to make some money as did half the regulators and House of Lords.

One has to wonder who it was who decided that Lloyds should be ordered to sell the 600 branches and whether any of those involved in Lord Levine’s new bank had any involvement such as the “non-executive directors” of the new bank Sir David Walker (former official of the Treasury and Bank of England and deputy chairman of Lloyds bank), Lord McFall (chaired the House of Commons’ inquiry into the banking crisis) or Charlie McCreevy (former EU commissioner). Presumably these honourable men merely spotted a chance which came about coincientally following thier decision to force Lloyds to sell its branches. One can imagine them around the board room able: “Buy up the 600 branches? By Jove, never thought of that!”

The article in The Independent says that “executives will be appointed after the flotation”. It seems odd to wait until after the flotation to appoint executives but perhaps the new bank will be such a money spinner that they could employ any old fool to run it. If past performance is any indicator of future results then they probably will though it is not known if Sir Fred is still available.

Lovely Jubbly as del boy would say.

13
Jul
10

Balls talks bollocks

Balls, Balls, Banquets and Balls

Balls' Balls - Banquets and Balls

This morning I listened to John Humphries interview the Shadow Education Secretary, Ed Balls, on BBC Radio 4′s Today program. Yes, I know, I should move on from ranting about the inadequacies of New Labour and start ranting about the Tories and Lib Dems but hang on.

Following the publication of Mandelson’s diaries and a book by Andrew Rawnsley both documenting the infighting within the New Labour cabinet between Blair and Brown, Humprys was trying to pin down Balls on his association with the infighting through his association with Brown. Mandy had called the infighting an insurgency and Humphries said that Andrew Rawnsley’s book claims Mr. Brown was vacillating before a planned “coup” in 2006 and Ed Balls told Mr Brown: “It’s too late. It’s all in place. It’s going to happen.”. Adn article in The Evening Standard claimed Balls also said: “Blair is never going to go. He has to be pushed. You mustn’t be weak. You’ve been weak for too long.”

So Mr. Balls waffled and said the book was full of inaccuracies but, tellingly, did not deny the specific incident.

Humphries drew attention to Labour’s part in the financial crisis and a McKinsey document stating the UK’s horrendous debt. Mr. Balls waffled, saying “interests rates were low” and “inflation was low” and went on to say that the crisis was global, implying that nobody is to blame at all.

This tosh is like a second rate rehash of Gordon Brown’s interview technique and shows that Balls, like Brown, does not understand the linkage between cheap money (low interest rates), the asset price bubble and the financial crisis. I am reading the diaries of Tony Benn – “More Time For Politics” at the moment and he wrote something which goes to the heart of New Labour spin. He said: “….I no longer feel that I am required to believe what I am told by (new Labour) ministers”.

It occurred to me that the feud between Brown and Blair may have contributed, in a very substantial way, to the prevalence of manipulators, bullshitters and bullies surrounding the New Labour government. Both Blair and Brown would have needed hatchet men and this need would have driven out any wise, thoughtful or competent advise. Leading on from this one can speculate on the whole nature of the New Labour years without the likes of Campbell, Mandelson and Balls. If wiser heads had prevailed might Blair have remained relatively sane and not led the UK into Iraq? Might Brown have had more time for the economy and avoided the worst of the financial crisis? We shall never know.

Several people have commented to me that the Tories would have screwed things up just as bad as Labour. Maybe. But of course they didn’t did they. It was Labour and you have to punish governments who screw up by chucking them out otherwise you are just rewarding incompetence.

No doubt the Tory/LibDem coalition will draw my attention in time, though right now I just find the absence of Mandy bullshit a refreshing change and with the remnants of New Labour still voluminously TALKING BOLLOCKS it is easy to get distracted.

The Labour party wont move on until it faces up to its mistakes and rejects the unsavoury characters from the New Labour years. If it doesn’t then, once the Tories have fallen out of favour, we will be faced with another Labour government  wastin ti’s time on spin rather than achieving objectives. In the words of Monty Python’s Spanish Inquisition the Labour party need to “Confess the heinous sin of heresy”and “reject the works of the ungodly”.  ie admit that they screwed up and chuck out the likes of Balls.

16
Jan
10

Wonga – greedy and irresponsible lending

Wonga

Wonga

Remember when it used to take five days to transfer money from one account to the other? Remember all the irritated letters to TV and radio consumer programs? In 2009, the banks finally got their act together and it is now possible to transfer money on the same day. A good idea? I’d say so. However the law of unintended consequence has now kicked in with the arrival of Wonga.com.

I heard about Wonga on the radio yesterday and later saw their advert on the London Underground. Wonga are a company who will give you a short term loan and provide the money in around 15 minutes. The application is handled using the Internet via your PC or mobile phone. The customer uses a simple “slider” to select how much money they want to borrow and how long they want it for. Presumably credit checks are performed automatically and, if approved, the money is squirted into the customers bank account within minutes. A good idea? I’d say not.

The world has only just gone through a financial crisis which broke all sorts of records in all sorts of ways. The blame has been placed firmly on cheap and overly available credit. The result has been to put the western world in massive debt to a totalitarian and undemocratic Chinese regime.

While the experts rake over the details the public are disgusted by the greed of the banks and the incompetence of the organisations responsible for monitoring and controlling credit risk. Even Gordon Brown, the British chancellor on whose watch Britain’s economy was flushed down the toilet, claimed that he knew nothing of what was going on. While the world and his wife knew that anyone could get a “self certified” mortgage by lying on their application form Gordon Brown knew nothing. One wonders whether Brown knows about Wonga. Does he know that Wonga are targeting young people? Check them out on facebook and twitter.

British young people have a reputation for liking their booze. Now we have a company which is allowing them to buy credit when they’re drunk. You’re out with your mates, you’ve been in the pub all evening and now everyone is off clubbing but you’ve run out of cash. No problem, pull out your mobile and click, click, click you have £200 dumped in your bank account. What’s not to like?

Well how about a typical APR of 2,689%

Wonga is the epitome of greedy and irresponsible lending and one has to ask: Are our regulators asleep or simply stupid?
Let’s be clear who is behind these greedy, irresponsible people. Wonga list the following Joint Venture partnerships amongst their investors:

Balderton Capital
Greylock Partners
Accel Partners
Dawn Capital

Here are the people behind each partnership. I encourage you to click on the  link,  view the thumbnail pictures and then Email these greedy and irresponsible people and tell them in, polite but firm terms, what you think about loan sharks. If you know them then disown them.

Balderton Capital

Barry Maloney
Mark Evans
Bernard Liautaud
Tim Bunting
Dharmash Mistry
Jerome Misso
Roberto Bonanzinga
Andrew Nutter
Harry Briggs
Rob Moffat

http://www.balderton.com/our-team/

Greylock Partners

Arvin Babu
Aneel Bhusri
Tom Bogan
Asheem Chandna
Charles Chi
Roger Evans
Isaac Fehrenbach
Donald Fischer
Bill Helman
Reid Hoffman
Bill Kaiser
Ivy Li
James Slavet
David Strohm
David Sze
David Thacker

http://www.greylock.com/team/team/

Accel Partners

Kevin Comolli
Sonali De Rycker
Bruce Golden
Harry Nelis
Jeremiah Daly
Spencer Lazar

http://www.accel.com/people/index.php?group_id=122000

Dawn Capital

Josh Bell
Norman Fiore
Haakon Overli
Chad Raube
Glen Drury
Dr. Arjang Zadeh

http://www.dawncapital.co.uk/welcome/our-team/the-dawn-team.aspx

16
Jan
09

Sub Prime

Below is a link to a Powerpoint presentation with as good an explanation of the current financial mess as any.

sub-prime1

20
Sep
08

Whatever it takes? – What about stepping down Brown

Just heard Gordon Brown on the radio state exactly what his government will do to sort out the financial crisis: “Whatever it takes”. This is very reminiscent of Chancellor Alistair Darling’s promise to do “everything possible”.

Gordon Brown

Both statements are mere bravado and neither statement shows any understanding of the problems or the least idea of a solution.

After over a decade of New Labour the British people are used to spin and Gordon’s Brown is as bad as Blair in this respect. However the site of the grinning Blair buffoon on American television this week only emphasised how irredeemably dull Gordon Brown’s little clique are.

Just go Gordon – Just go.

But don’t stop there! Sign the Downing Street petition: http://petitions.number10.gov.uk/please-go/




谈胡说

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