Incidentally, if all this talk about footsie 100 companies being able to find capital through the, er, capital markets, and SMEs not being able to finance through bank loans, means anything -- it means that the system is fucked. Well, obviously.
But what does all this meaningful talk mean (2nd degree)?
I think it's fair to say that there's an imbalance between those (large) companies who have benefited from QE (via better terms on the markets) and those (small to medium) companies who have not.
Many people would frame this imbalance in moral terms, but not I. I'm a libertarian anarchist, for God's sake: they can all go to Hell, on an equal basis.
However, in terms of pure political economy, this is obviously something of an issue. Naive septuagenarians, such as say Mr Cable, would solve it by insisting that banks lend more whilst saving more in terms of their capital base. This is non-viable, as they say in the CIA when their cover has been blown.
And you can't even "invest in winners," as successive governments since the Second World War have shown. Well, you probably can. But you wouldn't let a random bunch of 650 idiots, backed by the Civil Service, do this.
So, thinks I to myself (I do this often. My doctor recommends it), why not set up a National Loser Bank? It'd be quite cheap, actually. Ignoring all the other stupid waste that New Labour managed on PFIs and various bureaucracy, you could just laser in on the now defunct Partnership for Schools. Yes, I know, it was a PFI. But the point is, it was an infrastructure program costed at something like £45 billion.
I reckon you could start a pretty decent National Loser Bank for, say, 25% of that.
The beauty of this is that you don't actually want the bank to make money. In fact, you'd be happy for it to lose a controlled amount of money, say 10%. All it needs to do is to throw money at SMEs (not winners as such, but I suppose you'd have to get someone like Challinger to examine the cash-flow and EBITDA to make sure they're not total losers), set up a couple of off-shore special purpose vehicles, and work with reputable types like Lloyds insurers to produce a transparent version of CDOs and CDSs.
I await, like Oswald Mosley, the acclamation of my people. My time will come.
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Commanding Depths
Date: 2010-07-29 08:46 pm (UTC)But what does all this meaningful talk mean (2nd degree)?
I think it's fair to say that there's an imbalance between those (large) companies who have benefited from QE (via better terms on the markets) and those (small to medium) companies who have not.
Many people would frame this imbalance in moral terms, but not I. I'm a libertarian anarchist, for God's sake: they can all go to Hell, on an equal basis.
However, in terms of pure political economy, this is obviously something of an issue. Naive septuagenarians, such as say Mr Cable, would solve it by insisting that banks lend more whilst saving more in terms of their capital base. This is non-viable, as they say in the CIA when their cover has been blown.
And you can't even "invest in winners," as successive governments since the Second World War have shown. Well, you probably can. But you wouldn't let a random bunch of 650 idiots, backed by the Civil Service, do this.
So, thinks I to myself (I do this often. My doctor recommends it), why not set up a National Loser Bank? It'd be quite cheap, actually. Ignoring all the other stupid waste that New Labour managed on PFIs and various bureaucracy, you could just laser in on the now defunct Partnership for Schools. Yes, I know, it was a PFI. But the point is, it was an infrastructure program costed at something like £45 billion.
I reckon you could start a pretty decent National Loser Bank for, say, 25% of that.
The beauty of this is that you don't actually want the bank to make money. In fact, you'd be happy for it to lose a controlled amount of money, say 10%. All it needs to do is to throw money at SMEs (not winners as such, but I suppose you'd have to get someone like Challinger to examine the cash-flow and EBITDA to make sure they're not total losers), set up a couple of off-shore special purpose vehicles, and work with reputable types like Lloyds insurers to produce a transparent version of CDOs and CDSs.
I await, like Oswald Mosley, the acclamation of my people. My time will come.