Perkins & the Northern Rock Quagmire

What Ho, Perkins! Top of the morninf to you! Ifve got some bubbly on the boil for us!

By Jove, Sir! You are in a good mood! I suppose itfs this Northern Rock business? .....

Yes! Great news, eh? A typically-ingenious wheeze to get the company off our hands! What a mind the Prime Minister - sorry, Chancellor - has ...

Well, the tabloids are saying itfs a clever-clever financial fudge not dissimilar from the kind of thing that got us into this mess in the first place.

Goodness me, Perkins - as if we paid any attention to the tabloids!

We seem to pay them quite a lot of attention when it comes to elections, Sir.

Of course - we need them on our side to win!

But how can that be if theyfre so wrong and awful?

Well, the trouble is, Perkins, that the mob tends to read them and vote the way they want; pathetic and misguided, of course, but we must face facts.

Could it just be that the tabloids reflect what the people are thinking, Sir, rather than the other way round? Wouldnft that be actually rather democratic?

I fear your grasp of politics is still somewhat embryonic, Perkins. Only a total and complete idiot reads the tabloids.

Will you tell my wife or shall I, Sir?

Oh come on Perkins! Lighten up a bit!

Ifm sorry, Sir; I just canft get my head round this whole Northern Rock business.

Perhaps I can help you, Perkins. What exactly is the problem?

Well, what theyfre saying in the gDaily Mailh is that Northern Rock agressively touted for business by cutting corners, making shady deals and generally over-extending themselves and completely getting sucked into this subprime scam and thereby rapidly increased their market share at the cost of their competitors who were being traditionally prudent and looking after their customersf money as a bank should .....

But ...

And that their hopeless, greedy, shortsighted, incompetent and reckless investment policies plunged them into a liquidity crisis and they effectively would have gone bankrupt without the Bankof of England stepping in.

Why is it, Perkins, that you always put the worst spin on things!! After all, donft you have some liquidity problems from time to time?

Yes, but I am not obliged to go cap-in-hand to the BoE to the tune of 50 billion quid of public money!

But thatfs what the BoE is there for, Perkins!

You mean, to lend billions of public money to save a totally, utterly and completely PRIVATE company that got into trouble through its own disastrous management?

Ifm not sure I would put it quite like that, Perkins! Ifve got shares in them myself!

But the government wouldnft bail out Rover or tens of thousands of other private companies that go bust! And why should it!

Ah, there Ifve got you! When a BANK is in trouble therefs CONFIDENCE involved. And besides, itfs MONEY wefre talking about!

You mean, saving a profligate, greedy, short-termist grab-the-profits-quick private bank with cretinous directors is more important than saving a viable manufacturing company with cash-flow problems? Just because money is involved? We put money before real peoplefs jobs?

Be serious, Perkins. There ARE no viable manufacturing companies.

But we have dozens of perfectly good banks. If one has to go through its own incompetence why should the state step in? Surely that is what capitalism is all about? Survival of the fittest and so on? You either believe in it or you donft!

We do as long as it suits us, Perkins. Besides, Ifve told you, Perkins, therefs money involved - and confidence!

Why is confidence so important? There was great confidence in the South Sea Bubble until the day it collapsed. False confidence is illusory, surely? Doesnft humanity in general - and the bloated, pretentions, rapacious and self-seeking financial sector in particular - need a reality check and a return to good old sound banking basics?

Perhaps in a philosophical sense, but you need confidence to survive; even if the underlying reality is appalling. Look at the government.

Ifd rather not, Sir. Ifm feeling a bit queasy already.