Missing the point
David Blackburn 10:33am
The Today programme really let Paul Myners off the hook this morning. The interviewer obsessed with why the loans had remained secret for so long. It’s a fair question, and it seems bizarre that we only learn of them ten months after the borrowing was repaid in full. However, there are more important questions.
As I wrote yesterday, these disclosure’s most potentially volatile revelation is that Gordon Brown was propping up HBOS whilst urging Lloyds to purchase the ailing giant. Was this issue examined in any depth? No, though it must be determined whether the Lloyds’ board understood HBOS’s predicament in its horrific entirety. The equally crucial question of how the government is addressing the banking system’s continued frailties received scant attention. As John Redwood notes there is nothing wrong with the lender of last resort conducting private bail outs. The danger is that financial hocus-pocus, forged in smoky backrooms, provide such a sensational story that more pressing but less glamorous issues are ignored.
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Rhoda Klapp
November 25th, 2009 11:40am Report this comment"The danger is that financial hocus-pocus, forged in smoky backrooms, provide such a sensational story that more pressing but less glamorous issues are ignored."
Because you journalists can only handle one thing at a time? Usually the people who say things like this are the ones who seek to misdirect attention away from what in this case is a fraudulent trick towards something altogether safer.
Moraymint
November 25th, 2009 11:48am Report this commentAm I right in thinking that the allegation here is that Gordon Brown acted like some sort of mafioso boss, using taxpayers' money on the QT to facilitate a dodgy deal that made him look like, er, the saviour of the world?
I guess if this deal had not been struck, it really is conceivable that a major systemic collapse would have been on the cards?
More investigation, analysis and interpretation please.
Pete Clark
November 25th, 2009 12:21pm Report this commentMy law is a little sketchy here, but doesn't this smell of insider trading? I sell you a company without mentioning that I know it's even more buggered than it looks? On the other hand, I suppose anybody who buys something on the recommendation of Goldfinger Broon deserves the donkey ears.
Ian C
November 25th, 2009 1:00pm Report this commentI would have thought that this is prima facie evidence against Lloyds TSB and its board members for not disclosing it. Shareholders have materially lost as a result and surely have a very clear case.
jon dee
November 25th, 2009 2:01pm Report this commentJohn sounded chummy with Paul, and Paul was so pally with John, what did you expect?
Naomi Muse
November 25th, 2009 6:00pm Report this commentThink I said most of this yesterday in response to the Mandy and von Rumpoy article:
It's chilling, isn't it?
How could LloydsTSB do anything like its due diligence prior to the takeover of HBOS?
We know that Gordon Brown was hurrying Lloyds TSB to take over HBOS in great haste. Could it be that Mr Brown did not realise that the government was propping up HBOS with our money to the extent we now understand?
Could it be that Mr Brown was also unaware how much of our money was already surreptitiously propping up RBS when he presented with Darlin Alistair that RBS was to be bought out?
If these sins of omission were 'overlooked' in doing their sums, then how does that square with the EU directives to increase competition in the wake of the public ownership of these banks?
How will it sit with the latest EU statements on bank bale outs?
The due diligence of looking after the shareholder's interests was the specific responsibility of the Chairman of LloydsTSB. If the government kept this information from the Chairman then, surely it makes the takeover, and any costs and consequential losses should be repayable, should it not?
Would this misrepresentation of the true facts be the equivalent of not putting up a true letter of disclosure and therefore make the take over nul and void?
With potential attempt to defraud action to follow?
Oh ho, what mud!
The support to RBS is clean and clear and only what the non-independent Bank of England used to do without telling anyone at all for many years, to good effect.
The difference here is not the support of RBS and HBOS to keep there from being a run on these banks as well as the Northern Rock, but that HBOS was supported and then LloydsTSB was, by all accounts, strong armed by GBroon into taking over HBOS without proper disclosure.
Shareholders in RBS and HBOS have taken a loss fairly because their directors made bad decisions, but Lloyds TSB appears to have been forced to take over HBOS for political reasons, which puts:
1. a different slant on the rights of LloydsTSB shareholders
2. a greater responsibility on the board, especially the Chairman of LloydsTSB
3. a greater responsibility on the board, especially the Chairman of HBOS
4. a greater responsibility on the Chancellor, Alistair Darling and on the PM who were the ones leaning on the board of LloydsTSB.
I expect a class action against the board of LloydsTSB and another on both the Chancellor and PM together with the government by the shareholders of LloydsTSB.
We certainly have not heard the end of this.
And, to add insult to injury, LloydsTSB current rights issue means that every UK resident LloydsTSB shareholder is expected to pay twice - once for their part of the taxpayer funding and once for their contribution toward the rights issue. Failure of these hapless shareholders to subscribe to the rights issue will reduce the value of their sharholding further.
What a mess of pottage!
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