It isn’t hard to know how to slay the zombies. The only way to do it is to hold a gun to the head of the various bankers – those various guys sitting with their heads in their hands staring at balance sheets with holes in them – and force them to admit what their assets are worth, right now. Many of the banks will turn out to be insolvent. In that case the bank is nationalised, or at the very least goes into administration and receivership. Then, a number of options become available, one of the principal ones being to break the bank up into the viable part of the business, which will eventually be refloated back onto the market, and a ‘bad bank’ of dodgy assets which must be sold off (or arguably held until the values recover) in whatever way makes the most possible money for the taxpayer.Nobody in power wants to do that. Nobody with power in the banking system, and nobody with power in government. Both the British and the American plans to help the banks are very, very, very expensive variations on the theme of sticking their fingers in their ears and loudly singing ‘La la la, I’m not listening.’ This is what’s happened so far.
But there are four things you don’t want to have, going into the current crisis. 1. You don’t want to have had a boom based on a property bubble. 2. You don’t want to have a consumer credit bubble. 3. You don’t want to have an economy based on financial services. 4. You don’t want your government to have just gone on a massive spending spree. We have all four of those things that you don’t want.
Tuesday, 16 June 2009
Very long article about the end of banking/capitalism as we know it. Worth reading