Category Archives: Government

Osborne’s Crassness and Stupidity

All that Chancellor Gideon has achieved by stating that if the UK leaves the #EU, MORTGAGE RATES will increase, has been to highlight his stupidity and total lack of understanding of the mortgage market. Presumably he is implying that if we remain in the EU, mortgage rates will NOT go up?

However, it was good to see that in preparation for any backlash, he made the point that his weasel words were, in fact, quoting what “The Americans” said.

Javid and the Three Ps

In keeping with this government’s appalling standard of juvenile speech-writing and verbal gimmickry, Business Secretary Sajid Javid has delivered another priceless acronym. He said that any buyer of Port Talbot steelworks “…..would want to refer to “The Three Ps”. Did he mean the government’s Piss Poor Preparation or was he possibly referring to the three qualities that this government has become so well-known for: Procrastination, Procrastination, Procrastination.

Cameron talking Steel.

The government is “doing everything it can” to save thousands of steel jobs – but there are “no guarantees of success”

The situation at Port Talbot is of “deep concern” and “steel jobs are vital” to workers’ families and the communities.

A “more nuanced” solution is needed in recognition of the global oversupply of steel

“Just continuing to produce steel for which there is not adequate demand isn’t the answer.”

The European Union is  “a vital market for British steel.”

Britain is “having conversations with other Governments”

I’m sure that there is a word for the above type of rhetoric but I just can’t think what it might be!  🙂

p.s. Because the government appears to be treating the Port Talbot situation as some sort of surprise, here’s something I wrote FOUR MONTHS ago. See no.9……..http://www.spygun.uk/richard-ruzyllo/cameron-a-first-assessment

 

 

WEALTH WARNING!

Chancellor #Gideon is considering scrapping tax relief on Pension Contributions but then allowing tax-free access to savings upon retirement. This should be resisted by everyone. Not only is it a bad idea, borne of Treasury short-termism and a Chancellor with a singular lack of imagination but it is also a con…..He obviously has not learned the Tax Credits lesson and is obviously in a hurry – before the UK economy ‘tanks’ again.

No Syrian conflict for Dave.

An influential Commons committee has urged David Cameron not to press ahead with a vote on UK air strikes against Islamic State militants in Syria.

The Foreign Affairs Committee – which has a Conservative majority – said the Prime Minister should instead “focus on efforts to end Syria’s civil war”.

The committee also raised concerns about the legal basis for any UK action.

Downing Street has strongly denied reports Mr Cameron has abandoned plans for a vote altogether…….but Oh YES, he has!

There’s no way that he can risk another Commons defeat, Lords humiliation or be seen doing to Syria what Blair did to Iraq.

He has taken the line of least resistance.

The Nouveaux Pauvres.

Socialism was not invented by the working classes. Neither is it a natural state. It is a construct.

It was developed by intellectuals (who incidentally, now appear to be reclaiming it as their own) for the benefit of the poorer members of society. Originally, the theorists who invented it were concerned with social discrimination.

We no longer consider discrimination of the poor by the rich as prejudice but this type of intolerance is just as insidious as discrimination on the grounds of race, religion or disability.

Economic and Social Apartheid developed over hundreds of years and eventually caused societies to polarise. It is only in the last 100 years-or-so that the expansion of the middle-classes served to gradually dilute the Rich-Poor divide and give it “fuzzy edges”.

Some countries took a shortcut through the medium of revolution. The French did it in the 18th century and the Russians in the 20th.

Society will always “tend” towards a rich-poor split and without proper economic, organisational and social control, the trend accelerates.

Unfortunately (and to everyone’s surprise), in the United Kingdom,  there appears to have been a sudden resurgence!

Huge economic changes, which are being accelerated by destructive remedial measures are driving an accelerated programme of social engineering, creating a clearly-defined society of  “Haves” and “New Have-nots”……………. The Nouveaux Pauvres.

As the stock of “Have-nots” grows, so will discontent. That always leads to social unrest….with Greece being the latest and most visible.

Several governments, notably that of the UK and the Eurozone should think and remember that Government by Balance Sheet is NOT Government for the benefit of ALL of the People – otherwise the consequences will be catastrophic.


Have Newspapers lost their political influence?

newspaper

There’s a bit of a contradiction in  all this pre-election media nonsense. The pro-Conservative PRESS,  The Daily Telegraph, Daily Mail, The Sun, Times and the Evening Standard (TOTAL CIRCULATION 5.25 million) in the BLUE Corner AND  only The Mirror with the non-Libdem bit of the Guardian holding the sponge, (TOTAL CIRCULATION about 1.1 million) in the RED Corner.  That 5-1 in favour of the Blue corner! In spite of this apparent handicap, Labour and Miliband are edging ahead…. Can it be true that the electorate is finally making-up its own mind? Or is Tory dead-tree journalism a dead parrot?

#MH370 : What if…..

The red mark on the map is the location of the American Military Base on Diego Garcia, which is is a coral atoll and part of the British Indian Ocean Territory.

The disappearance of the flight has been the subject of many conspiracy theories……ranging from alien abduction to an on-board bomb.

A couple of days ago, INMARSAT, a British company completed some very subtle calculations and announced the most likely resting place of flight MH370….somewhere near the bottom of the above map, to the west of Australia.

We have all taken Inmarsat’s calculations at face value but the discovery that a recent addition to this company’s Board was General C. Robert Kehler, United States Air Force (Retired), puts a slight “spin” on the facts.

Until November, General Kehler was  Commander, US Strategic Command (USSTRATCOM).

So, we have a heavily-protected US base which has nuclear rockets pointed a several targets on the Asian mainland.

We have a (possibly) deranged pilot who is rumoured to have Diego Garcia programmed into his home-built aircraft simulator.

What if the pilot had decided to crash Malaysian Airlines Flight MH 370 into the Diego Garcia Base? Remember that he didn’t disappear from radar by accident. He disappeared at the point  where he knew that the plane would be “invisible” to radar.

There was absolutely NO reason to fly South and crash into the ocean.

Last question: WHAT would the USA Military do if they became conscious of what looked like a rogue plane with communications switched off heading towards them at a height of a few thousand feet?

They would blow it out of the sky.

The only issue remaining would be to lay a false trail in order to put the “crash site” as far away as possible from where it was “killed”.

One cannot blame the passengers’ families for being sceptical.

2014 Predictions – PART ONE

Predicting the future has always been a mug’s game. For instance, I continue to believe that the markets are all in the wrong place and overpriced and I predicted the FTSE at about 4500 – but then again, I could not have predicted the collective madness of Quantitative Easing and the real fear that politicians have of the banks. I used to understand investment…but not any more. Cheap virtual cash continues to fund the markets and to keep them artificially high.

The politicians feel that they have to please the banks first and only then the voter. Governments are no longer in control of events. Nowadays, finance drives politics and politicians have become the bankers’ lackeys.

For as long as banks and governments continue to mutually gorge themselves on virtual cash and governments do not have the courage to increase interest rates and taxes in order to join us in the real world, there is a very real possibility that the current economic situation will become the status quo.

These predictions are in no particular order.

1. The disconnect between economic data and the quality of life is fueling populism. It is also fueling right-wing extremism and anti-government sentiment. I fully expect the equivalent of the Arab Spring sometime during 2014 , in the UK and some other European states.

2. South Sudan will provide the next African bloodbath.

3. The Scots will vote “No” to independence.

4. The recently-adopted self-congratulatory air will desert both UK and European politicians as it is realised that the “virtual” economic recovery is unsustainable.

5. There will be a substantial increase in China’s birth rate (the new “one child plus” policy), contrubuting TWO MILLION children to the 2014 economy, boosting consumer motivation.

6. China will continue to build and accelerate its natural resource monopoly in Africa. (One million Chinese already live there).

7. As the West cuts its military budgets, China will continue to do exactly the opposite.

8. David Cameron will continue to tell us what MUST and SHOULD be done, one a whole range of issues.

9.  Anaemic growth in the advanced economies will see government debt continue to climb.

10. The US $ will continue its decline. Instead of Quantitative Easing Infinity accelerating economic growth, its effect will be to shrink the $’s buying power.

11. The sudden (and unexpected) pick-up in UK growth, followed by the indication of a reversal in the final quarter of 2013 suggests that businesses were adding to their inventories rather than selling their goods. Expect the reversal to continue in 2014.

12. Germany currently represents approximately 30% of the Eurozone economy and will continue to enjoy the fruits of a weak euro and ramp-up exports.Germany has the world’s highest current account balance as a percentage of GDP. During 2014, Germany’s economic success will continue to accelerate and will represent over ONE THIRD of the Eurozone’s output.

13. Japan will continue to prosper. Its economic output is not 75% of China’s. although it is 4% of China’s size with 9% of China’s population. “Abenomics” has provided the “jump-leads” which Japan needed.

14. The USA will enter another recession in 2014. Currently it is still on “below-2%” growth.

15. A Populist movement will become increasingly vocal here in the UK (and in certain Eurozone countries), with sudden impetus being generated AFTER the European Parliamentary Elections when the main traditional parties will be decimated by the Left and Right.

16. In spite of the Eurozone’s economic “recovery”, unemployment will remain at current record heights (Over 12%).

17. Deflation will accelerate within the Eurozone and economic forecasts will once again be downgraded.

18. The European Court of Auditors (ECA) will publish the 2013 EU accounts and once again, confirm that the continuing “errors” in all of the EU’s spending  areas have finally crossed 5%(!) of expenditure.

19. The UK government will do well to prepare for the possibility of social unrest which is driven by the rapid growth of the “have nots”. The financial hangover caused by  Christmas 2013 will be far more extreme than in previous years.

20. The Federal Reserve will announce and implement the end of its  massive bond-buying programme. This will have a substantial effect on the markets.

21. The full-extent of the banking industry’s Pension and Life Assurance mis-selling will become apparent.

22. There will by an explosion in Teacher Militancy as the government continues to fiddle with our childrens’ education.

23. The price of Crude Oil will fall to about $75 per barrel. The decrease will be primarily caused  by oversupply as a result of new production methods.

24. The European Union will fail to deal with its members’ collective debts. Again.

25. The Global Recovery will falter.

26. On January1st, Greece will take over the Presidency of the EU – at a cost to itself of €50 MILLION. This exemplifies the madness of the European Union when a de facto bankrupt state with zero clout is allowed to be burdened such a “spend”. Prediction: Greece will make a “pig’s ear” of its Presidency. Hopefully Subway and MacDonald’s are bidding for the catering contract.

27. Twitter, Amazon etc will be recognised as part of yet another totally unsustainable bubble.

28. In the UK, there will be yet more calls for House of Lords reform. Hopefully, as more and more of their Lordships’ financial “indiscretions” come to light, the debate will snowball, eventually leading to an elected Upper House. Turkeys may well HAVE to vote for Christmas.

29. Once South Africa has recovered from Mandela’s death, there is a real danger of  a return to what I can only describe as “Reverse Apartheid”. Violence.

30. Syria will continue to generate substantial profits for the world’s Arms producers as it has become increasingly apparent that there is NOT the political will to even attempt to end this butchery.

(I am NOT a Global Warming mullah but the image above shows all the world’s water and air to scale.)

Chancellor Gideon – Fact or Fiction?

One of the greatest pleasures in life used to be for someone to read a great work of fiction to you out loud. You would sink back, close your eyes and let it wash over you ……and all that you had to do is to compose the pictures! Unfortunately, reading out-loud is a dying art and now a pleasure only enjoyed by young children and the infirm.

So imagine the frisson of  anticipation ahead of listening to Chancellor Gideon reading The Autumn Statement – (I have always been a great fan of realistic fiction!)  I closed my eyes, kicked back…but…the pictures just wouldn’t come. All I could visualise was a smug fat boy with a Caligula haircut and eyes with all the charm of two bullet holes,  reading with all the conviction of a posh grocer reading a Fortnum’s shopping list.

GDP..blah blah….Growth…blah blah….Deficit…blah….and so on.

Then, after the “de rigeur” and customary:  “Hard-working people” , “Mess they left behind” and “Tough decisions” plus the recently conceived “It will be less that it WOULD have been”….all from the Coalition Book of Platitudes, came something about the Normal Retirement Age (NRA) moving ever closer to life expectancy!

I felt myself slowly emerging from the Treasury-induced coma.

Whether the NRA is 69, 70 or 102, it will never affect those on a private pension or those with enough money to be able to make choices.

The ability to make choices is what individual freedom is all about. One of the overriding features of this government is that too many people perceive that their choices have been compromised. Control has been wrested away from those who are relying on the State to feed and provide their shelter in old age.

Meanwhile, the “well-off” will continue to be able to stop working whenever they want to.

It is only those clapped out individuals who see retirement age as The Finishing Line who will be affected. They are the ones who used to retire at 65 and die at 67.

Soon, they will retire at 70… not quite dead but maybe wishing they were, knowing that some of their better-off acquaintances will have already been retired for 20 years.

(BTW, unemployment at the time of the 2010 General Election was 2.47 million. It is STILL 2.47 million. ……NO statistical sleight-of-hand will ever change that fact!)

Currrently, American politicians do NOT appear to be fulfilling their electoral mandate and  instead, are concentrating on a Washington power struggle. Perhaps they too should have their salaries suspended. It might help them to concentrate.

Ed and Jim Messina talk

We have been lucky enough to obtain a transcript of a telephone conversation between the leader of Britain’s Labour Party, Ed Miliband and Jim Messina who has been hired by the Conservatives to mastermind their attempt to win the next General Election in May 2015 with (for a change) an overall majority – something that they haven’t achieved for over 20 years! There’s a rumour that although David Cameron has secured Mr Messina’s  talents on behalf of Tory High Command, Messina was also approached by the Labour Party…..possibly even the Leader himself!

Mr Messina masterminded Barack Obama’s second election victory and is therefore regarded as a miracle worker – which is something that the Labour Party is in severe need of. At the time of publication, Ed Miliband is leader of the Labour Party.

Ring Ring

Woman’s voice:  Hello, this is James Messina’s Office.  Marilyn speaking. How may I help you?

Ed Miliband: Hello. This is Ed Miliband speaking. I am calling from England.

Marilyn: Where?

Ed: England. I’d like to speak to Jim please.

Marilyn: England? Is that near London? What was your name again?

Ed: Ed MIliband.

Marilyn: Ted Bilibann?

Ed: No it’s Ed. Ed Miliband. Miliband.

Marilyn: Is Mr Messina expecting your call, Ted?

Ed: No – but I’m the leader of the Labour Party.

Marilyn: The WHAT?

Ed: The Labour Party. Over here, we’re like the Democrats and I’m like Barack Obama..but not…

Marilyn: Not what?

Ed: Er…………….President. I’m not the President of England.

Marilyn: President?……..Who is the President of England if it’s not you, Ted?

(Man’s voice in background : Who is THAT, Mari?)

Marilyn (muffled): Its some guy saying he’s the President of England.

Messina grabs phone

Messina: Hi Dave. Didn’t realise it was you. Mari thought it was that f***ing jerk..er…

Ed: It’s Ed Miliband.

Messina: Yeah! That was the guy! What can we do for you, DC? How’s the gorgeous Sam?

Ed: THIS is Ed Miliband. Is that Jim?

Messina (Muffled) CRAP! er…. Hello Ed. There’s been some misunderstanding……..er Ed. How’s David?

Ed: Which one? They’re both  fine thanks, Jim. I wonder if I can have a word with you

Messina: How did you get this number, Ed?

Ed:  David Cameron had it written on the palm of his hand hand and I remembered it. I saw it when he was practising those funny salutes in the mirror….. in the Stranger’s Bar toilet.

Messina: So, Ed. What do you want?

Ed: We, the Labour Party want to win the next General Election and we wondered whether…..er…..you would consider helping us to achieve our goal.

(Sound of muffled but uncontrollable laughter from Messina. One minute later, he returns to the phone)

Messina: Sorry about that, Ed. I swallowed something  and it went down the wrong way…..

Ed: That’s OK, Jim. I was saying . Would you like to be my election guru and help me to win the next General Election? Please?

Messina : Sorry Ed. I’m very busy at the moment.

Ed: If it’s a question of money…that’s not a problem. I have lots. Well, to be perfectly honest I don’t have the cash but I know some powerful people who do and they say they’ll be able to contribute..er..

Messina: Let me be frank…er….Ed. I have a reputation and don’t normally HAVE to associate with losers.

Ed: So you haven’t signed with the Conservatives then, Jim? (laughs)

Messina: Can I speak frankly, Ed?

Ed: Yes of course, Jim. Fire away…as we say over here!

Messina: Sure you won’t be offended, Ed?

Ed: No Jim. Go ahead. Let me have it! (laughs)

Messina: Ed…you haven’t got a f***ing chance of winning. That is why I’m already working for Dave and the Conservativerers. The Labourite Party is going to get f***ed over if you remain as leader. THAT’s the word on the streets, Ed….Sorry, man….

Ed: Do you REALLY think so, Jim? Heard anything else, Jim?

Messina: Ed……If I talk for any longer than three minutes, it becomes a consultation and Mari is already typing the invoice….

Ed: Will you accept a cheque from UNITE, Jim?

Messina: ANY United Nations cheque is good enough for me, Ed. I have great respect for Kofi Ananan.

Ed: But he’s ….er…..er….never mind..You were saying…?

Messina: They say that you are like a guy called Kinnock….all wind and p**s, Ed…..

Ed: Neil was a great leader…who says that, Jim?

Messina: Everyone, Ed. THAT and the fact that you have no policies.

Ed: I HAVE! A European Referendum is one. Then there’s our intention to cut down on Social Security benefits. Then….

Messina: Those are Dave’s policies, Ed……..You stole them.

Ed: No, Jim. I thought of them first. Ed and I did.

Messina: You’re confusing me Ed….

Ed: Ed Balls.

Messina: So I’ve heard.

Marilyn (in background): Mr Messina, it’s time for your Orthodontist and Pilates.

Messina: Sorry, Ed. Have to go but the best of luck in the election….although I’m going to have to take you apart between now and then!! No hard feelings, eh?!

Ed: F*** you!

Messina: You too Ed…….Bye!

Immigrants – we NEED them!

According to the Office for Budget Responsibility (OBR), the UK needs SEVEN MILLION migrants over the next 50 years to help keep down national debt levels.

The OBR warns that the UK’s ageing population was squeezing public finances and said there was “clear evidence” that migrants, who tend to be working age, have a “positive effect on the public sector’s debt dynamics”.

The OBR has also warned that increasing pensioner numbers and a strained healthcare system means an extra £19 BILLION of spending cuts or tax increases  are needed to combat an “unsustainable” pressure on the nation’s public finances.

It IS possible that while we continue to live too long and not produce enough, those much maligned  immigrants could be the solution to our economic problems.

That should please UKIP!

HERE’S the Executive Summary of the OBR’s Fiscal Sustainability Report.

Economic Recovery: Fact or Faith?

Whenever man has struggled with solutions to big problems, he has turned to his God, who has consistently said that if man endures deprivations and suffering on this Earth, he will get his just reward in Heaven.

The weird thing is that here we are in the Year 5PL (Post Lehman) and our politicians are behaving just like those prophets of old. WITHOUT any proof and relying solely on faith, they say “Endure the austerity and soon you will be transported to the economic heaven.” Meanwhile they (the prophets) search for “signs”. For instance, a small statistical variation in economic data is seized upon as a “sign” that all will soon be well. (Chancellor Osborne did it again yesterday when he announced “encouraging signs that the economy is healing” HERE In fact, he repeats the holy phrase.)

Is that true? Have we been offered any proof? Do we have to accept the words of the prophets without question or are we being heretical and behaving like Doubting Thomases?

If the New Religion is true, then we have been witnessing the longest Resurrection ever!

There is much talk of “positive sentiment” and Central Bankers accept gifts and many sacrifices from the people and prophets….but, is there really room for faith in economic thinking?

Currently, it would appear that it is all we have.

(As you listen to the Chancellor, notice the total lack of numbers and dates in the affirmation of his faith)

Government Debt: “We’re all in this together.”

Never mind all that “Debt as a percentage of GDP” nonsense. Here’s a picture of government debt on a simple picture, courtesy of ukpublicspending.co.uk.

It is OUT OF CONTROL.

All steep graphs are scary, no matter which way they’re pointing. Make no mistake, the above graph is so scary and the Chancellor is running out of options so fast, that we are about to reach a very significant and critical moment in Britain’s social and economic history.

Because Chancellor Gideon has well-and-truly painted himself into a corner and is greedy for cash, he will soon become like a schoolkid with his nose pressed up against the sweet-shop window. But what will he be looking at? Surely, there’s nothing left to plunder.

Currently, our savings are languishing in banks, gradually losing their value. Investment rates are lower than inflation and currently it seems as if the differential will continue to increase. THAT will erode our savings at an accelerated rate.

Dormant bank savings accounts have already been looted in order to fund one of the Chancellor’s rapidly growing array of “schemes” to stimulate the economy. On this occasion, the booty (up to £400 MILLION) will be destined for the Big Society Bank (remember?) which has now been rebranded BIG SOCIETY CAPITAL (BSC). Forty percent of  BSC shares are owned by Barclays, HSBC, Lloyds Banking Group and RBS (They are preference shares which means that in the event of a collapse, the banks will have preference over other shareholders).

So what could the Chancellor and the banks be planning next? What happened in Cyprus ought to give us a clue.

As a country, we are not spending enough. One way to encourage us to spend would be to threaten our savings either by way of a levy (tax) or seizure.

You may be thinking “Yes, but surely, our savings are protected?” Yes, they are. The capital is protected  but our cash is not protected against taxes.

Within four to five years, the government will have to find about £70 BILLION per year JUST in order to fund the interest payments on the money it owes. So where will it find the money?

It is there somewhere. Here’s a clue:

The richest 1% of our population, many of whom famously squirrel away  their cash offshore, won’t be affected and neither will the large corporations  – they pay tax when they want to plus they are also lucky enough to be able to decide how much to pay.

That leaves the ordinary Saver and Depositor.

The only thing that the government needs to decide is how to present the raid on our money so as to disguise what essentially will be a tax. There are several ways in which the exercise can be delivered.

For instance, a Cyprus-like levy. Simple and straightforward.

There may be some sort of government share-offer, designed to relieve us of our cash or even a mandatory Government Bond which those with a certain level of savings will be bound to purchase.

I would suspect that even Pension Funds are no longer safe.

But the really scary thing is that because this will be a concerted and choreographed international assault by governments and banks, there will be nowhere to run.

We are well and truly “All in this together”………well….most of us.

What’s happened to PROPER Investment Banking?

As recently as 2009, banks’  investment fees were higher in Europe than in the United States. Nowadays, Europe is delivering only about a quarter of total investment activity, with the corresponding collapse in fee income.

Mergers and Acquisitions (M&A) used to be the investment banker’s bread and butter but nowadays, European bankers appear to be either dozing at the wheel or they’ve left the building! Or perhaps they’ve forgotten how to do it!

In the last year American acquisitions were up by about a third whereas in Europe, they appeared to be too busy sitting on their cash, playing the markets and endlessly “rebuilding balance sheets”.

Before the 2007 crisis, the European dealmaking level was about three times as high as today. In the last year, only about $750 billion in deals was announced. Six years ago, it was over 2 TRILLION!

Europe’s global share of M&A activity is now less than one third – the lowest in 10 years. In fact NINE OUT OF TEN of the largest deals in the last 12 months have been executed by US teams.

Equity Capital Markets are showing the same trend.

In EMEA (Europe Middle East and Africa), issuance (offering securities in order to raise funds) over the last 12 months has been about $145 billion. That is well down on last year. Compare that to an increase of nearly 50% in the USA!

Even Asia has overtaken EMEA which is now delivering only about 20% of global issuance. As recently as five years ago, it was nearly 40%.

The conclusion? European Corporates are waiting (they do have cash) and the banks have become lazy and preoccupied with their political debt games.

So what are the politicians doing to make the banks on this side of the Atlantic more profitable? Very little.

Unsurprisingly, subsidiarisation (breaking up or threatening to break up banks), “ringfencing”, bonus caps and financial transaction taxes are all serving to make Europe a structurally much less profitable region.

You see, the banks too are being made to suffer their own kind of austerity by the politicians.

Add to all that the 2013 craze of blatantly robbing bank depositors and the  outlook continues to feel depressingly negative.

Maggie’s Big Bang.

Although, in common with many others, I feel a sadness for the passing of Margaret Thatcher, there is one major part of her legacy which recent history has shown to have been an over-sold concept – The Big Bang.

That was the day – 27th October 1986 –  when London Stock Exchange rules changed.  Jobbers and Brokers became one and the stock market free-for-all began.

It also signaled  the coming of the modern Investment Bank.

That was also the day that the City of London became Americanised. The day that the MBAs and the suits showed up and eventually turned an old marketplace into a money-circus.

In 1986, I remember walking into an old Stockbroking firm called Scrimgeour Vickers as part of a Citicorp acquisition team. We had bought it and wanted to see exactly what it was that we had bought! I remember lots of frightened pale-looking people sitting in a sea of dark mahogany and typed paper, looking at us as if we had landed from another planet.

The contrast between us in our sharp suits with our management jive talk and these honest folk was striking.

One of them attempted to break the ice by saying: “This building was condemned in 1948!!” How he and his friends laughed! We didn’t. We were far too important for all that!

We fired most of them and installed new procedures, modern desks and computer screens. We were Gods and, without realising it at the time, a real metaphor for what was happening to the whole of financial services; an almost indiscriminate “Out with the old and in with the new!”

A white collar Revolution!

Margaret Thatcher had been unhappy about TWO main things. Firstly, London was in very real danger of losing its position as a major world finance hub and secondly, the City was ruled by an “Old Boys Network”. In place of the elitist public school stranglehold, Margaret Thatcher meant well when she had dreamed of it being replaced by the mythical “Meritocracy” – a place where people with talent and not necessarily “connected” could play their part.

She also wanted unrestrained competition and ultimately total deregulation, leading to more product innovation and the establishment of London as THE world’s financial centre.

Twenty seven years later, London is still the place to make deals and invest …..and still is the world’s biggest financial centre – but at what cost?

The Labour Government’s deregulation of the banks in 1997 unleashed a Frankenstein which was not recognised by the Financial Services Authority (FSA) until all the damage had been done. The FSA had been too busy looking through the filing cabinets of provincial insurance brokers whilst the banks had been trusted to carry on being as honest and straightforward as they had always been.

No-one appeared to appreciate that those Bankers were different bankers. In fact, most of them weren’t bankers at all.

They were a strange hybrid of Corporate Entrepreneur, pre-programmed to take risks with other people’s money as if it was their own…..and…..they are still doing it!

The global financial crisis certainly cannot all be blamed on Margaret Thatcher’s hopes and aspirations for Britain. But the creation of increasingly complex and convoluted financial products, deregulation and a total failure of successive governments and their regulators to spot bank wrongdoing, is very much part of her legacy.

Those Teflon Banks.

If the economy was purring along, companies were forming and not going bust, banks were lending properly (not statistically) and the government didn’t regard any GDP growth above zero as an achievement, most of us would not have any problem with those banker salaries and bonuses.

However, it is not sunny, manufacturing is down and we have a government which appears to be indulging in “Government by Accounting” as an increasingly panicked Chancellor justifies Welfare Butchery (in a newly-acquired Estuary English accent), to an assembled band of Morrison’s workers.

Meanwhile, senior bankers continue to pay themselves more than many of the largest and most successful corporations (the ones that make and export stuff).

As Chancellor Gideon might say these days: “Something ain’t right, innit?”

Since the largely-forgotten catastrophe of 2008, the incomes of many bank directors have increased by up to 60%!

So what else has happened to the banking industry since those far-off days? Oh yes………..they’ve had bailouts totaling BILLIONS, they have mis-sold an array of financial products and the Bank of England has handed-over BILLIONS  in Quantitative Easing for a variety of reasons, ranging from the perennial “rebuilding of Balance Sheets” to “Lending to Small and Medium businesses” to “Increased Mortgage Lending” ……(Notice I have placed those increasingly creative QE euphemisms in inverted commas!).

Admittedly, the effect of credit defaults on the banking system leading to those 2008 issues was devastating but the problems were self-inflicted and a direct result of the banks’ reckless leveraging with financial instruments, such as mortgage-backed securities and credit-default swaps.  Virtual money……just like Quantitative Easing.

The final straw should have been the LIBOR-fixing scandal…but the Quantitative Easing meant that the banks could easily afford the fines and legal settlements and still maintain those eye-watering incomes.

That wouldn’t be so scandalous if it were not for the fact that LIBOR is used to determine interest rates on student loans, mortgages and many other lending vehicles — and was “adjusted” in whatever direction benefited the banks’ bottom lines and the  resultant profits upon which many of those bonuses were based.

The question is – what do the banks have to do in order to stop being the government’s poster boys?

They certainly do not have the confidence of the ordinary investor, because , let’s face it, they don’t really NEED savers and depositors because they can either make cash by “adjusting” and then plundering the equities and bond markets or be given it by indulgent and clueless governments. Small businesses are wary of them because they (quite rightly) fear being ripped off.

There will be further scandals, more fraud, more “faux-outrage” from government Ministers but no meaningful legislation, culture change or reorganisation.

They are truly The Untouchables.