Categories: uncategorized
Date: 16 September 2008 13:01:34
So the wheels are finally starting to come off.
For years the financial markets have finally been found out for their smoke and mirror tactics. They have been betting for many years that their short term focus on profits and bonuses would not be found out. While they have made headlines for record profits and bonuses they had been hiding the sandy foundations of their sucess.
They have packaged up bad debts and sold them among themselves. That these debts would eventually go unpaid never ocurred to anyone. They were investment vehicles and tax write-offs that would help to bolster their bottom lines and give the impression of strong foundations to anyne unaware of how there schemes were structured. You only need to look at the fact that the investments/debts that they pedalled were actually greater than the available money in circulation. They were writing their own money, or so they thought.
This has is something that the markets never learn. For as long as I can remember they have always looked purely at the rosey future and past and not at what reality is showing them. Do you remember the advert taglines that "Investments can go down, as well as up"? Well many in financial circles would only point out that in the past we have grown at X% over the last 10, 15, 20 years etc. They never point out the blips where the market has significant changes.
What recent experience has shown is that out regulators are toothless to control things. Many of the senior executives are former bankers willing to turn a blind eye or use a "hands off" approach. They even warn the banks when they are coming to check their books and portfolios.
Our governments are in thrall to the bankers who are happy to provide millions to the various political parties. They always seem to take advice from people who are no more than cardsharps. Yet, when it comes to offshore tax avoidance they are powerless, and unwilling, to stop them. Our own Revenue department takes on former tax avoidance executives to run the taxation system. Is it any wonder that the Revenue are cutting enforcement staff when so much taxation is being avoided?
The hope would be that banks, accountants, regulators and politicians will learn from this. The likeihood is that they won't.
History Today:
1400: Owain Glyndwr pronounces himself Prince of Wales and the last Welsh revolt against English rule begins. 6 years later he'll be off to exile in France.
1931: Today marks the peaceful end of the Invergordon Mutiny, over pay. This was the last mutiny in British naval history - to date.
1949: The Roadrunner is introduced by Warner Bros. All Hail Wile E Coyote!
1977: Marc Bolan, the lead singer of T Rex, dies in a car crash in Wandsworth. Maria Callas dies in Paris aged 53.
1982: Phalangist militiamen begin a massacre of Palestinians at the Sabra and Shatila refugee camps. The Christian Phalangists were sent into the camps to hunt for terrorists at the request of the Israelis. Within 2 days 1000 people had been killed.
1992: Black Wednesday, as Britain drops out of the Exchange Rate Mechanism. We thus abandon steps towards European monetary union.