October 2013

Bank bad public good?

Risk transfer, and they did not ask us

It's a bargain!It's a bargain!
'Too big to fail', was a popular way for banks to portray themselves, until that is, the public had to bail them out following the financial crisis. Several years on and the Royal Bank of Scotland, now in better health due to all that public money, is running an advert related to George Osborne's 'help to buy' scheme. This is so funny.

First a ridiculous style of management took RBS, and other lenders, to the brink and did so in an era of property price expansion that was encouraged by government. Then, when it had gone wrong, and without any consultation the public were signed up to a rescue plan and so 'bought' RBS. Now some years later and again without consultation the public are helping again.

This time it will be different, so they say! House prices are too high in relation to typical incomes, especially so in the London and South East of the UK. Furthermore, it has been impossible to see any government policy since the downturn began that would alter this. It would be more honest for the present government to admit this rather than tinker with the problem.

Buying anything comes with a risk, there's no reason why property should be different. It's the duty of the purchaser to evaluate the risk and traditionally it was this caution that helped to stabilise the market. And in extreme cases act to lower prices.

The faithful servant

Marxism, spinners and the BBC

Damian Mcbride, the one on the left Damian Mcbride, the one on the left

The life of the energy producers had been tranquil until Ed Miliband bared his teeth at the Labour party conference. They did business upon the back of barmy green energy policies that Miliband's party, spinners and MPs alike, had endorsed. But before that moment we had all been agog at the sight of Damian McBride basking in the limelight. It has suited the MSM and McBride's publisher to paint him as a bad boy. But he is not. He is a faithful servant and there is more to him than you might think.

If we go back to the dawn of Nulabour the three central characters were: Tony Blair, Gordon Brown and Peter Mandelson. In time a pattern emerged with each of those three being associated with their sidekick-cum-spinner. Blair and Alastair Campbell merged to become the double act of the world's most deluded smarmy git and his Northern thug. It's hard to say that McBride is wicked but pretend that Campbell was not working the same trade, because he was then and is now.

The BBC finding that Blair is now beyond their reach uses Campbell as a stop-gap; a sort of cheap-and-cheerful elder statesman who can deliver the 'I was there' history lesson and rent a quote without blushing. Mandelson's sidekick was Benjamin Wegg-Prosser and, like Blair and Campbell, they too followed the money and still work together.