Back from a delightful holiday…
Hardy readers will know that I am regular traveller to the Far East, but in all the years I have been going I have never seen it so buoyant. The levels of construction activity and the planned infrastructure investment (largely either directly or indirectly Chinese-funded) are extraordinary.
The new world is leaving Europe and the UK behind at a faster and faster pace.
As much as I was hoping that both the UK and the eurozone economies would by now be showing firmer signs of recovery, even I am forced to admit that everything looks like it has gone backwards over the past quarter.
Cyprus was a big win for Angela Merkel. Damaging the savings of British ex-pats and Russian money launderers was a supposedly small price to pay to cement her re-election in the autumn. It’s all rather smelly though.
Meanwhile, I simply cannot resist a few asides about last week’s report by the Parliamentary Commission on Banking Standards into the collapse of HBOS.
First it never ceases to amaze me that merely having a job title on one’s CV can open so many career doors. It should be a relatively simple task to find out if the person in question was ever any good or not, but apparently it is not.
Second, a quick question that I think cuts to the quick of the previous deep seated malaise at the heart of the British financial system. Do you know where Sir James Crosby (knighted for services to the financial industry, two years after Fred Goodwin) went to work when he left HBOS? The FSA of course. You really couldn’t make it up. And have one guess who is (or used to be) a special adviser to the Treasury on the operation of the mortgage market. Got it in one.
And one final question: why has it taken over five years for a Parliamentary investigation to prove that this was an issue of disastrous lending, not one of liquidity? What happened to all the regulators (the FSA, the Treasury and the Bank of England)? And all the City analysts? And all the shareholders who thought fast growth for a bank was a good thing?
* Jim Wood-Smith is head of investment strategy at Investec Wealth & Investment
