Wednesday, July 08, 2009

As we stood on the ledge - he said, jump you bastards.

July 8 (Bloomberg) -- " Chancellor of the Exchequer Alistair Darling today will set out measures to tighten regulation of the British banking industry, requiring institutions to plan for their own demise, a person familiar with the plan said.

The proposals from the Treasury will require banks to keep on file instructions on how to unwind their own businesses to assist regulators in a rescue. Darling will give details of the plans in a statement to Parliament at 12:30 p.m. in London.

The rules are aimed at preventing a repeat of turmoil in financial markets that forced Britain to rescue Royal Bank of Scotland Group Plc and Lloyds Banking Group Plc last year. Prime Minister Gordon Brown’s government is coordinating the overhaul with President Barack Obama’s administration in the U.S.

The Treasury is adopting all the recommendations made in March by Financial Services Authority Chairman Adair Turner, who called for a “revolution” in the way the industry is governed. He suggested banks hold more capital and hedge funds be more open with regulators. He wants mortgage loans not to exceed the value of the property they are secured against. "

While all well and good sounding - this is why you can't get a loan. As fewer people get loans, the more the government will require banks to hold more capital.

Now, I despise the banks with every cell in my being, but you only have to look past the immediate gratification contained in the sentiment, and you will realize this pattern will not end well. A plan that would make even the likes of Hugo Chavez proud.

Which to be quite honest - I can't even believe I'm saying. Yet, I can't figure out who is trying to injure us more. The banks or the administration(s).

I can't blame it all on the current administration after all. Way back here in March 2008, I couldn't figure out why banks were dragging their feet so much in the short sale segment of real estate. I still don't understand why honestly. If they would have started moving those houses then, maybe they could have manufactured a softer landing. Back when people still had money.

So, the banks have been trying to injure us for much longer than the current administration has.

Mr S. once said to me "we'll be lucky if we get out of this being as bad as the Carter era". I rolled my eyes and said "people will never let that happen". I'm guessing I will have never been so wrong.


  1. Keyser said on numerous occasions last fall, "You can't say you weren't warned" about Obama ("you" being the electorate, of course). Granted, the Old Guy wasn't much of an alternative, but people voted for a hard-left president plus a solid Democrat majority in the House, and now with the eventual election of (God help us) that idiot Al Franken from MN, there's even a filibuster-proof senate (and even if a few Dems defect on a given bill, no doubt there are enough idiots like Olympia Snowe from the Republican side to replace them).

    So what's the surprise that with the Democrats in charge, things will go back to the good old Carter days? The voters simply getting what they asked for.

  2. Yes. I know.

    I just want to point out I did not vote for him, yet I didn't believe it could be that bad.

    I thought he'd move to the center. Because that is really what I believed Americans to be. More in the center.

    It is a really hard lesson to learn. I'm not going to lie. If it didn't affect us all - I'd step out of the way and let them eat each other.

  3. >> Because that is really what I believed Americans to be. More in the center.

    At this point, America is 51% of the population voting themselves access to the wallets of 49% of the population. And that critical mass is just going to get worse: 52/48, 53/47, etc. Typically this pattern only ends when the wheels absolutely fall off the wagon, and that can take a long time to happen. So unless some cataclysmic black swan pushes the reboot button, prepare for death by a 1000 cuts.

    Steven in Dallas