Monday, December 15, 2008

A financial classic

A classic feature of economic crises is that suddenly corruption is unveiled - economic growth is the great rock that, when it is lifted, is found to be covering for the lice festering beneath.

Simply put, during the good times, a plausible story can allow an otherwise worthless company to keep on borrowing, so long as investors keep making profits, no-one looks too closely, but when the chips are down, and someone gets bilked, suddenly we all realise that everyone gets bilked. In this case, not, that the firm was judged to be reasonably sound and a secure investment, not a fringe risky business, level headed investment folk, not mad speculators, have been burnt here.

Of course, Davy Cameron reckons there must be a day of reckoning. of course, it has to be the consciously bourgeois party that says that, coming from Labour it would be called a return to class war. I always laugh at the cretins who see the PRC (China)'s long prison sentences for fraud as being some proof of socialism.

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