Adopted Domain lays bare the economic ignorance at Holyrood:
Why did HBOS go down? If you listen to the Holyrood debating chamber led by the SNP, the recent blamestorm pointed almost unanimously toward the short-sellers - the spivs and the speculators - who took a one way bet against the public purse. Andy Cochrane and Holyrood Chronicles are surprised to see politicians from all the main parties lining up to have a populist dig at the short sellers, with the exception of the Greens, Patrick Harvie, who seemed to be the only one with any financial literacy whatsoever. This, despite the fact that many of the same short sellers who allegedly brought down HBOS, will have lost a great deal of cash when the market rebounded at the end of last week, largely led by financial stocks.I wonder whether MSPs really are as financially uninformed as they appear to be. Perhaps they just hope that spouting off about "spivs" will appeal to the electorate, no matter how nonsensical that theory may be. I have the horrible feeling that they really are ignorant and that doesn't make me too optimistic about what the political class will get up to in the future. Needless-to-say there's no evidence of any greater sophistication at Westminster.
The act of shorting stock does not bring banks down, a lack of trust in the business model does. It seems much more likely to me that the fact the growing perception in the city that HBOS had become too dependent on the wholesale money markets, just like Northern Rock, and the fact that it had the biggest exposure to the bust balloon UK property market, may well have been much bigger factors in their demise. Yet no criticism from Labour, the SNP, the Tories or the LibDems on the management of HBOS. And Gordon Browns solution to the crisis? Make a yet bigger bank.
As for HBOS itself, here's a marvellous quote from today's Mail on Sunday. It's about HBOS chairman Lord Stevenson:
Awarded the CBE in 1981 and made a life peer in 1999, he likes to describe himself as "an unreconstructed 1960s Guardian-reading liberal."If Stevenson had been an unreconstructed 1860s (Manchester) Guardian-reading liberal none of this would have happened.