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Anglo Disease - FT's solution: the Bush way

by Jerome a Paris Thu Jan 3rd, 2008 at 12:45:07 PM EST

In an editorial paper this morning, the Financial Times suggests the solution to our current woes:

If the new heads of big financial institutions manage to persuade regulators and politicians that they will not make the same housing finance mistakes again and have learnt their lessons, they will probably be allowed to keep going on a similar course to the one they have pursued for several decades.

Hmm, so bankers don't even have to promise not to do it again, they have to convince politicians and regulators that they won't, an even lower bar... Nice to see that financiers are keen to "keep the course" rather than learn (once again) the lessons of the past year about risk taking and the need for regulation.

(And yes, this is about the Bush administration. And in case you wonder what the "Anglo Disease" is, it's a variation on the "Dutch Disease" and you can read more about it here)


Bankers are not the only ones at fault. Easy credit terms led many individuals to speculate on rising home prices in the hope of making money. Although banks provided capital with which to take the bet, borrowers should have known that profits were not guaranteed.

(...)

It would, however, be surprising if government or ordinary investors fully turned their backs on Wall Street and the City or pushed for banks’ activities to be substantially curtailed. The rise of financial services in the US and UK economies has helped to ease the move from manufacturing to services and Wall Street banks, despite their extravagances, are eagerly courted by other countries and cities.

(...)

Even on Main Street, where many people are feeling – or are about to feel – the painful aftermath of financial exuberance, Wall Street still has its uses. So, at least, its chastened bankers must hope.

Despite the modicum of doubt in the last sentence, the overall tone is shamelessly defiant and unrepentant:

  • "We didn't do it" We fed the greed, supported the ideology that promoted it, provided the most blatant and celebrated examples of "wealth creation", but it's not really our fault if people were stupid enough to trust us.
    Just like journalists appearing surprised by the existence of dominant narratives that are contradicted by facts when they spend their time peddling that narrative, financiers, who have relentlessly promoted efficiency, return on capital and profit as the ultimate banchmark of everything now act surprised that people were all too willing to go for an apparently easy buck;
  • "We'll do it again (just not right away)" You need us more than we need you. We provide jobs, exports, "vibrant" cities and, most importantly, vital services, ie we hold you hostages. So take your hits, and let us do our thing, it's still less painful than if we went away.
    This is systemic risk and adverse selection at its most painfully blatant, with a twist of shamelessness to pretend that nothing can be done about it because it's too late this time.
This is the same behavior as the Bush administration - committing illegal and/or reckless acts, defiantly denying they are either, and taunting us to do anything about it. "You know what we did, we know you know, we don't give a shit, so what the fuck will you do about it? Because we'll continue. Oh, and fuck you."

And that's what we're fighting about. Which means that the only solution is to take power forcibly away from them. Exert rights, and actually enforce them. And describe the criminal they are as, well, criminals. And do what you do with criminals: don't let them at large.

Display:
http://www.dailykos.com/story/2008/1/3/12105/39064/423/429770

In the long run, we're all dead. John Maynard Keynes
by Jerome a Paris (etg@eurotrib.com) on Thu Jan 3rd, 2008 at 12:27:44 PM EST
European Tribune - Anglo Disease - FT's solution: the Bush way
And that's what we're fighting about. Which means that the only solution is to take power forcibly away from them. Exert rights, and actually enforce them. And describe the criminal they are as, well, criminals.
Who's "them"? This article was not written by the bankers but by the Financial Times editorial staff. In other words, the people whose crime it is to use their credibility to convince policy makers who don't know any better that "wealth capture is wealth creation".

It's not clear what crimes they committed, but "taking power away from them" means eroding their credibility, or somehow else getting the ear of policy makers.

We have met the enemy, and he is us — Pogo

by Migeru (migeru at eurotrib dot com) on Thu Jan 3rd, 2008 at 12:35:44 PM EST
No, I think taking the power away is stated in the Edwards sense. You don't ask their permission, you don't negotiate, you don't pay ransom, you take power away from them.

keep to the Fen Causeway
by Helen (lareinagal at yahoo dot co dot uk) on Thu Jan 3rd, 2008 at 01:19:43 PM EST
[ Parent ]
I think that the credibility of the FT, the Economist and all the rest will be cruelly exposed in the months to come because they simply and demonstrably will not have a solution to the "Credit Crash".

Money as Debt is terminally fucked - and that takes the whole narrative with it.

As for "taking power away" those in charge will IMHO actually cede it willingly: they will be hoist by their own petard because they will be "out-competed" by an optimal - collaborative, and "asset-based" - enterprise model.

Classic Darwinian emergence: the financial system will be Napsterised and Equitised.

"The future is already here -- it's just not very evenly distributed" William Gibson

by ChrisCook (cojockathotmaildotcom) on Thu Jan 3rd, 2008 at 02:21:25 PM EST
[ Parent ]
Jerome, Jerome ... the language, please.  The next thing I know you'll be telling people that IT IS TIME TO PUT FORWARD A PLAN OF ACTION INSTEAD OF JUST TALKING ABOUT HOW FUCKED WE ARE!!!

So please, more civilized language, please.

They tried to assimilate me. They failed.

by THE Twank (yatta blah blah @ blah.com) on Thu Jan 3rd, 2008 at 01:24:43 PM EST
You know, Twank, i find it kind of invigorating that a banker is willing to run across the street from the halls of the purseholders, and rip out his guts in the true Henry Miller tradition, screaming that the Emperor has not clothes on his naked, ugly body.  Actually, being angry is mild.  Me reaching for my government issue flamethrower is more appropriate, if i wasn't such a Gandhian quantum mechanic.

But then i always had a soft spot for the truth, and a warm heart for those who spray paint private property if necessary.

"Life shrinks or expands in proportion to one's courage." - Anaïs Nin

by Crazy Horse on Thu Jan 3rd, 2008 at 04:15:10 PM EST
[ Parent ]
Okay, put forward a plan of action.

We have met the enemy, and he is us — Pogo
by Migeru (migeru at eurotrib dot com) on Thu Jan 3rd, 2008 at 04:38:55 PM EST
[ Parent ]
OOOOOOOOOOOOOOOOOOOkay.

Let's remember a year from now (hopefully there will be OBVIOUS POSITIVE RESULTS!), you asked for it.

I'm not big on talking/blogging.  I'm into doing/tangible results.  And things are beginning to fall into place.

"Strap in; it's going to be a bumpy ride."

Think I'm kidding/bullshitting?  Watch!

They tried to assimilate me. They failed.

by THE Twank (yatta blah blah @ blah.com) on Thu Jan 3rd, 2008 at 09:02:14 PM EST
[ Parent ]


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