Wednesday, 17 November 2010
Stupid cunts (being us)
Reading Robert Peston’s recent blog about how Ireland, the nation that is, is propping up its banking system, which in turn is being propped up by the European Central bank, a coupla things struck me. One, obviously, is the fact Ireland voted no to the EU constitution as recently as 2008, so it’s a big ha ha there. The other is the extent to which successive Irish governments have chosen to prop up their banking sector on as easy and no questions asked wherever possible basis (e.g. the blanket guarantee given to Irish depositors, which put the Irish taxpayer on the line for fuck knows how many billions of Euros in the event of a bank going bust). But, what really put all that in perspective was an email from a fabulous person today telling me how yet another Scottish local authority is hacking back its spending on musical tuition for children.
I’ll explain; the credit crunch that we are now living with and ain’t going away for the foreseeable future (no its not gone away, look at any mortgage comparison website and compare the loan to values on deals available today with what was available before August 2007. Then tell the British Bankers Association to piss off every time they claim mortgage lending stats reflect restricted demand rather than a conservative step change in supply) may have originated in some super duper complex sub prime securitisation financial engineering shite in the US that in turn engendered a crisis of confidence that rapidly destroyed the unproven balance sheet financing models adopted by banks and former building societies here and in Ireland, but actually, from a UK and Ireland perspective it was to do with shite lending.
Put simply, bog standard commercial bankers and retail i.e. mortgage lenders adopted the view that property values could only ever increase. In fact not only could they only ever increase, they could only ever rise rapidly to the extent entire banking organisations (and government policy lets be honest) were structured around that one, simple over-arching principle. Only lend 70% loan to value? Nah, fuck that make it 80, 90, 100 or even 120% in some cases cos it don’t matter cos the property market will only ever keep on rising.
Now, this isn’t rocket science and neither is it casino banking (Well it is in that its taking a punt, but its not the pointless split of investment banking from retail banking shite Vince Cable has a hard on for). The end result was they lent way, way too much against property. Like seriously, way, way too much.
Except in Ireland the property market has fallen into an utter fucking blackhole leaving the following reality:
1) With positive noises from fund managers providing the mood music bank CEOs (and their marketing and strategy departments and what not) ordered their people to lend more cash. Pronto.
1) Basically if you want to do that in banking you do so by lending more against property, hence fuelling a boom.
2) The people who did the lending met sales targets set by the great and the good and as a result got good bonuses (not investment bank mega bonuses, but good bonuses relative to the national average wage).
3) Anyone who queried this kind of lending got fucked over by organisational politics, hence all the backroom bods quickly learned to say yes to every deal so they’d get a promotion/get a not as good as the schmoos doing the actual lending, but still quite healthy bonus.
Now picking through all that the reality we've all been let with is incredibly straightforward and is as follows; the fund manager fuckwits that looked positively on massively increasing shit lending are most likely still in place.
All the CEOs, corporate bigwigs etc., who gave in to the fund managers, didn’t know any better, but set sales targets regardless are either still in place, are already earning mucho cash working for a different financial services company or have fecked off to the Algarve to piss away their early retirement pension on being cunts.
The cunts that did the actual lending? A LOT of the schmoos that did the shit lending in the first place to meet those targets/get those bonuses have moved over into bank business repair teams to sort out the shite they put on the books in the first place, but on the same salaries.
So there you are then. Few if any people that did well out the boom times have done badly during the subsequent crash they helped engineer. And that’s kind of it (in fact there are some scum who did well out the boom and are going to do even better out the crash, but that’s a different post).
Except, its not the end because to save their banks entire nations have been put on the line and to be able to afford to do so, as fabulous person informed me this morning, because of this governments are doing things like denying hundreds of kids music lessons.
What I don’t get to the extent it confuses the pants off me is the utter failure to connect these two realities and take real umbrage as a result. I mean back here its not as if its hard to work out who the worst mortgage or commercial property lenders are in British banking history, nor is it especially challenging, given what's in the process of being done to say family allowances, to spell out how the personal decisions these gits personally profited from have ultimately done more damage to things like the family than Josef Fritzl.