Will HBOS stay independent?

The decision about HBOS's future is in the hands of its shareholders not in the Government. I would place little value on the opinions of the Chancellor whose knowledge of finance is insignificant. The bankers opinion is similar to that formed by the former treasurer of the Deutsche Bank and any shareholder would trust three experienced Bankers before the incompetent duo of Gordon Brown and Alastair Darling.

The Bankers assessment suggests that Lloyds is in a bigger mess than HBOS. That means if the deal falls through, LLoyds will be the next piece of prey. Both banks may end up being owned by foreigners. And it looks as though there are sharks waiting to pounce.

Hbos wouldnt survive as an independent when you have the PM backing the takeover for reasons of his own.
and the damage has been done so if lloyds rejects takeover some european giant will step in and snap Hbos up.
so it looks like the deal from lloyds is the only option left no matter how bad.
sadly the british banking sector is so weak it will end up being swallowed up by overseas investors and the government will have no say at all over banking policy.
this government stated they saved the bradford and bingley when in all reality the profitable arm was given to a big spanish bank that already has its claws into the british market by buying up abbey.
we are no longer great britian under this governments banking policy we are reduced to overseas owned banks,power companies, even major ship building / repair. globaly this country has become a joke and that is the saddest mark on all of us.

Hbos is just another casualty of inept and irratic government.

its our own fault we allowed them to do the running of this country there way and have done nothing to stop them.

but why did the government lend so much to these two banks knowing they were joining up????

how is the take over being paid if lloyds needed public funds to survive the recent crisis???

is there a con going on where the public will loose out yet again??

what did these banks do with there recent reported massive profits before the crisis to cause them to plead poverty?

a neutral investigation is required and those guilty brought to book if only to rebuild public confidence in banks and government.

I think the Financial Times had it right this morning - if you get a letter marked Edinburgh concerning banking put it in the bin!

I thought until the credit crunch really started to bite HBOS was seen as a highly profitable solvent bank. Even then it was only damaged by the short sellers unfairly targeting the bank - or so the Treasury had everyone believe.

I thought Gordon Brown claimed he had saved the world with his bail out plan, so solving the credit crunch?

Why should HBOS, with the aid of GB's plan to solve the credit crunch, not be able to return to the highly profitable organisation it was only recently?

You talk of exposure to the "battered British housing market". Again the Government has told us that the housing bust will not be as bad as the early 90's. The Halifax easily got through that - why not this time.

It appears that the Goverment has been spinning lies and misinformation. The truth must be one of the following:

1. HBOS could survive independantly with the Government liquidity bail out.

2. The Government liquidity bail out is not the panacea that Gordon Brown has made it out to be.

or

3. The Government, for it's own reasons that it has not divulged, want the merger with Lloyds to go ahead come what may.

talk about greed and stupidity of shareholders.

the public should withdraw all it funds let it go into administration then pick up the good part of the loan book and the savings for next to nothing.

Two words - Toxic Debt -- HBOS is (supposed(?)) to be full of it.

If HBOS needs no public money to have a realistic chance of not going bust than why did it want 15bn last week?

My guess is that with the USA's 3 major car companies (Form, Chrysler and GM) having to the saved in the next 100 days that the World's liquidity situation is actually so appalling that even the rescued Banks will need further rescues in a month or two.

Buckle down and merge the UK's banks quickly.

It shows again how wrong the government was when instead of first writing off the recalculated assets against risk provisions and against equity (or forcing the bailed out banks, among them HBOS to accumulate sufficient risk provision and if they were not able, then from equity), hence eliminating exisisting shareholders and recapitalising the bank fresh. The Banking Act is pretty clear about this, but it was shelved in the panick.

Then all these lovely shareholders whose money was exlusively saved by the government cash and capital injection would not be in the position to claim to be a victim of the government.

Another obstacle Burt & Mathewson apparently face is learning to spell. Their letter talks about 'the rescue of a bank in dire straights'.

Strange that Sir George Mathewson should put his head above the parapet at this particular time, two days after the SNP got a whipping at Glenrothes.
Could it be that Sir George, one of the Scottish Nationalist Parties more prominent supporters, and a close friend of Alex Salmon is more interested in playing politics than in helping HBOS shareholders. These same shareholders who were happy to benefit from the obscene profits that HBOS made from their dodgy dealings.

#1 "The Bankers assessment suggests that Lloyds is in a bigger mess than HBOS"

Oh come off it!! The markets say otherwise: since May 2007, the value of a LTSB share has dropped from £6 to £2, that on an HBOS share has dropped from £10 to £1. HBOS shares are worth consistently less than the LTSB takeover offer, meaning that the market regards HBOS as the weaker bank.

LTSB is the one major British bank which hasn't helped cause this banking disaster, whereas RBS and HBOS are in the biggest doo-doo, and, to an extent, have dragged the whole British economy with them. Burt's creation HBOS borrowed billions from the US to help pump up the house price bubble.

Mathewson's chosen successor, Goodwin exposed RBS to the US sup-prime market, AND compounded this with the ABN Amro fiasco.

Both Burt and Mathewson are partly responsible for getting Scotland and the UK to where we are now. I might not trust Gordon Brown, but nor would I trust the "Experienced Bankers" who created this problem, but are looking to the taxpayers to give them a second chance without having either their own financial backing or a business plan.

Why did not these two people tried to step in when the crisis was hitting the bank. All of a sudden they are proposing their name for the top job at the bank and want everyone to believe that they would be able to sustain the business? The question is why should anyone trust them and are they willing to put their own money or planning to raise investment from other sources? It seems unlikely as they are relying on government and tax payers for the money. What happens if the bank runs in trouble again after the deal does no go through or some overseas bank makes an approach? With the current economic climate it would require a lot more than their word for making people who made this merger decision to change their minds and rightly so, cause if the bank fails after they take the top spot they will not have a anything to lose and the government will have to step in once again.

The Scottish Sirs are living in dreamland if they think HBOS can somehow a) carry on as it did before, and b) remain independant i.e Scottish.
The merger with Lloyds is the only way it can survive, otherwise, as stated by others, it will just be swallowed by Santander, and they've pillaged enough of our banking sector as is acceptable.

The 'unseemly politics',: the PM's tactical political consideration in this matter (no rewards for Mathewson) will surely be outweighed by his capacity for strategic calculation.

If HBOS goes down to LLoyds on account of government manipulation (a threat to withhold support to a stand alone HBOS) thousands of jobs will be lost in Scotland and Yorkshire. Blame for this unecessary contribution to the numbers of unemployed will rightly be laid at the door of Gordon Brown.

If the proposed Lloyds TSB/HBOS deal was a good one from the point of view of HBOS shareholders, Loyds shareholders and employees both banks and consumers Gordon might get away with it. But, the fact is it is a poor deal from the perspective of all of the above. Whatever rationale for the deal existed on 18th September surely evaporated with the multi bank crisis of early October. The public are not fools and will come to see this.

The government has done a good job on the broader banking crisis. It is baffling that they would want to manoevre themselves onto the wrong side of the argument in respect of Lloyds TSB/HBOS 'subset' of the bigger issue. In the end I don't believe they will.

"11. At 5:46pm on 08 Nov 2008, lets_debate wrote:

Why did not these two people tried to step in when the crisis was hitting the bank. All of a sudden they are proposing their name for the top job at the bank and want everyone to believe that they would be able to sustain the business?"

Yes. But then, the level of slime in banking is fairly high.

Come on Robert Peston, and most of you who've commented so far...

I am no lover of rich ex-bankers. But I know plenty of them, having been an institutional investor covering the banking sector for many years.

George Mathewson and Peter Burt are probably Britain's best bankers of the past 20 years. They know what the heck they're talking about.

So I find it odd how their opinions are so easily dismissed by Robert and others. For example, Robert trots out the unthinking line: 'HBOS' dependence on wholesale funding..'. Didn't you read these two bankers' letter? Why not do some digging into their claims that actually Lloyds is worse-off in that respect?

Interesting stuff. These two will carry great weight with HBOS shareholders. This is not a done deal yet.

Good to see you are stil spinning the Labour Party line Mr Peston. It is amazing how many times your views link closely to the ones the Labour party wants to push.

At number 10. Yes LTSB's shares have fallen less, doesn't mean it is a beter bank. HBOS's shares fell due to short selling and a nasty rumour several months ago about the company going to the bank of england.

It wasn't due to their business plan that their shares fell initially but due to external factors that HBOS had no control over

“I am no lover of rich ex-bankers. But I know plenty of them, having been an institutional investor covering the banking sector for many years”

Roberts opinion is certianly just as valid as yours!

The opinions of institutional investors, analysts and brokers are not worth tuppence.

We are in uncharted terriotory – they know nothing.

There is no realistic alternative bid for HBOS because its bsiness model is no longer relevant. Its shareholders will have to accept the only bid on the table, from Lloyds TSB, or go into administartion.

As a tax payer I will loose no sleep if HBOS shareholders are left with nothing.

Who cares if they stay independent? Jobs are going to have to go, so it might as well be those from HBOS. They got themselves into the position they are in and they can only blame themselves. Sad but Darwinian...

Robert - Have you asked Burt and/or Mathewson for an interview yet?

Good point #15.

Over-dependence on wholesale funding comes about because a bank grows its balance sheet too quickly - the amount lent grows increases disproportionately to the underlying deposit base.

This is the problem HBOS faced when they fired the real bankers and replaced them with marketing men.

It is resolved by allowing an orderly reduction in the loan book over a period of a year or two during which time the Central Bank steps in with liquidity support and appropriate temporary guarantees.

Takeover by another bank is the right answer to a different problem altogether, namely, a collapse in the credit quality of the loan portfolio.

It is clear from the various statements and disclosures by HBOS and Lloyds TSB that the HBOS problem is of the first variety, not the second.

The LloydsTSB/HBOS deal is quite simply the wrong answer for the wrong problem: it will wreck the livelihoods of thousands, screw the consumer and does not serve the shareholder interests of either bank (except if the Treasury vetoes the alternatives).

Lloyds and Barclays (of Qatar and the UAE) are in a worse state than RBS and HBOS, although the Government lies would have us believe otherwise. RBS is still a formidable money making machine and the ABN Amro integration is progressing ahead of schedule. Lloyds is a capital deficient disaster with a poorer record of profitability than either bank. Barclays is is a part owned Arab bank which is stuffed with toxic assests (mostly off balance sheet, although the French know where they are and are suing them in New York).

HBOS can survive and it looks as though the French or Germans will buy it. There is nothing the Government can do to stop that. Forcing the current incompetent management out is a good way to facilitate the deal and Stevenson's response means nothing. The Shareholders will boot him out at the EGM.

The goverment has said that HBOS can only have funds if the Lloyds TSB deal goes through..In the hands of sharesholders I don't think so!! The major shareholders are Fund managers not Joe Bloggs on the street, who a year ago just did what the Money Mail told them to do and now they are all experts in money matters..At the end of the day if we did not live in a buy now pay later culture this would not of happened to HBOS or any other bank..

Robert

What many Scots want back is the real Bank of Scotland. I moved my money from the BoS not long after the HBOS merger.

So I for one cannot support HBOS. I want (but won't get I suspect) the bank that survived Darien, Culloden, Yorktown, Ypres, Dunkirk and even Dr. Beeching!

The Auld Bank (est, 1695) straddled the gap between the old Scots Parliament (1707) and the new(Scotland Act 1998) only to be dissolved by those who knew the value of nothing.

#18 Rubbish!
The Government has agreed not to allow any major financial institution to fail. Administration is not an option, and nationalisation is not required.

HBOS either gets bailed out or sold for a better offer. Ultimately the shareholders decide.

There are two explanations for this chaos, which is dragging on much longer than it should.

Either the bankers are stuck in a dream world, where they still call all the shots without let or hinderance from the authorities.

Or, despite all Brown's rhetoric, the authorities are just floundering in reactive mode, showing indecision and lack of command.

None of which gives grounds for any confidence. And this is just the banking sector: the rest of industry is now headed for the morass. What price bailing that lot out ?

This comment was removed because the moderators found it broke the house rules. Explain.

The more that comes out about this deal, the more it stinks. HBOS has been the victim of dirty share dealings, & the poison poured on it by Peston, & other financial hacks.
How interesting to read the Mathewson-Burt letter, which must certainly give the shareholders of both banks, food for thought.
Gordon Brown, & his new chum, Mandelson, must have been jumping for joy after 'sorting' this deal. 300year old Scottish institution, a basket case; comparing Scotland's situation to Iceland. And what happens? Glenrothes voters roll over, & Gordon Brown 'bounces' (quite a feat, in his case! )his unionist credentials reinforced
Both Mathewson & Burt are still highly respected bankers (not many of those around!!!) and I look forward to the removal of Stevenson & Hornby.
Only then will the shareholders have a better idea, than they have had for the last month, of what the possibilities are.

“Rubbish! The Government has agreed not to allow any major financial institution to fail. Administration is not an option, and nationalisation is not required.”

Oh really?


HBOS savers, like those of Norther Rock may vote with their feet.

When I heard one of those protectionist cronies defend their comments it was because HBOS is far better shape that it was when the merger was agreed

Well of course it is, it has billions of our money running around its veins to keep it alive.

Thankfully, not even the arabs would be stupid enough to bail out an old Scottish bank that has the majority of the UK's falling housing stock on its books and has still not worked out how much it has lost in the CDS debarcle.

Robert Peston - I keep reading posts regarding your affinity to New Labour.

I personally dont give a tosh about political affiliations and your comments do not seem to me to be biased in anyway.

However, as a consequence of the looming Depression, and the consensus now is that there will be one, how will your New Labour leanings cope with the consequences of having to rebuild the worlds economies with a real socialist government?

Who do you think will jump out of the box to spur a New Old Labour party fit for running a nationalised nation?

Do you think that the political change that will occur as a result of the people wanting to take back control will occur within two years and prevent the resurgent Tory Party?

I know its off topic, but you must stay ahead of the curve, dont you think?

HBOS were always an incompetent bank with their internal systems totally out of date.
The old duck metaphor, about things looking calm on the surface but an awful lot of paddling going on underneath, comes to mind.

It was time someone came in to move them, at least, into the 20th century from the 19th...

Quick question, has HMG actually bought these shares? Or is this yet another assumption being floated about?

I know they have **talked** about it but have they actually done it? How is HMG buying 11.5bn GBP worth of HBOS.L stock if the current market cap is 5.4bnGBP? Or is this yet another mickey-mouse figure that includes face values of guarantees for borrowing?

#30, what CDS "debacle" is that?

So far despite some of the largest credit events in history, the CDS market has run perfectly smoothly.

#21, overreliance on the wholesale markets comes about when interest rates are kept artificially low. People don't save so you can get money from deposits. Wierd that Mr RP hasn't mentioned that.....

I frankly think these two Scottish,titled ex bank managers have got a nerve.
They personally flushed the HBOS down the toilet through their incompetence,left with their tails between their legs but with huge pay-offs and now have got the nerve to claim they are best fit to manage an independant scottish bank revival.
Somebody need them they are not fit to run the local Spar never mind a bank

#18 - "Roberts opinion is certianly[sic] just as valid as yours!" - er, why? It certainly isn't because of his command of the basics of modern finance - savings accounts aren't "assets" for banks.... More educated people just have more educated views. Just because someone parrots the Treasury line doesn't make his view "valid"

The strength of LTSB is something of an unknown, but it will hardly be stronger for the taking on of HBOS's problems. LTSB's shareholders may yet vote down a merger but that does not mean that they would see the two Scottish knights as a solution.

34

The CDS market has run smoothly has it?

Well of course it has why the repayment of these insurances are being covered by our money.

Divide 13 trillion ( the amount held by commercial banks alone) by the bail out and add in the fact that the balance sheets are already hammered. Then factor in further losses through lack of lending ( no lending means no bank) and you get what we call in a trade bankruptcy.

Hmmm, and there is the other 30 trillion worth of insurances not held by the banks that is pending.

But hey, no problama mi amigo

Hi

I am not particularly in agreement with the merger of Lloyds TSB and HBOS. I think that it fitted political expediency more than it did real finance.

However these two sirs seem to want to rush in now that the situation has stabilised a little. Also if their idea is so good why do they not have any backing? If they are the banking geniuses they claim to be surely people would be rushing to back them.

Sir George only left RBS in 2006, so he appears to be one of the people involved in creating the mess that they are in. After all it did not start overnight. On that basis he is one of the last people who should be allowed to take charge.

With regards to Messrs Burt & Matthewson if they think they can run the bank better than the current management fine but in the words from that excellent film Jerry Maguire

Show me the money!

Surely they both could go out and spend some of their pensions buying HBOS shares and call for a vote of no confidence in the present board and their proposal to be taken over by Lloyds TSB.

Put themselves up for the board and then either raise the cash to bail it out or shut up and go away.

34

Decreasing the interest rate has only protected the Bond and therefore the margin calls for a short period.

As the rate gets nearer to Zero the Bonds become true junk instead of artificial junk and then on payout time the insured or the insurer go bust together with the 'thingy' they bet on

But hey, its all running smoothly mi amigo

Darling expects reaction in pulling accountancy strings - keen actor!

Need I say more - there are 5.4 billion reasons why the Lloyds merger need to go through, and the above sentence spells it out.

There's an agenda behind this, and a man who loves Brazilians knows what it is, even if it isn't clear to the rest of us.

What does (sic) mean?

It means 'so', or 'thus'. It implies that the use or grammar is wrong. Employed when quoting another and being pedantic, usualy (sic).

"no basis for future discussion"

#37 etc

Why oh why do you and your ilk continue to read Robert Peston's blog - and post comments to it - when your knowledge is apparently so superior to his?

If all he is doing is parroting the Treasury why don't you engage with something more challenging?

Meanwhile in order to find considered comment as I try to keep up with this extremely complicated story, I have to wade through your streams of invective which would be put to better use at Hyde Park Corner - with all the other nutters.

Lot of ill informed comments flying about, usually from those supporting the Bunglers line.

Sir Peter Burt was Governor of BOS until merger with HBOS at which point he became Deputy Governor up until 2003. i fail to see how he can be blamed for the actions of the grocer who blew it big style, with his ill considered stack it high sell it cheap approach to banking.

If you have to make things up to support your argument, googling Jackanory might be a better idea.

This merger could see us all losers in the long run. i believe every avenue should be explored to come up with the best solution for all but primarily the tax payer. I don't trust anyone who has a closed mind they rarely have anyones interests at heart but their own

I think post 40 summed it up pretty well.

This latest bid seems to offer nothing of real substance. There is no new money on offer. The only thing these two ex-bankers seem to be offering is an intention to create a detailed alternatve plan. But without sight of that plan, how on earth are shareholders expected to be able to judge its potential effectiveness. And if they really do have a viable plan for a sound, independent HBOS then why not seek a financial backer?

Now hang on a minute. George Mathewson was Chief Executive of Royal Bank of Scotland when they took over Nat West and the BBC reported that 18000 jobs would go then. So, it's OK for a Scottish Bank to take over and English one when it's in trouble but not the other way around. Any comment Mr Peston

Burt and Mathewson's plan, while open to much debate has at least one solid and irrefutable proposal ... the immediate resignation (or sacking) of the egotistical grocer Hornby.

His arrogant refusal to go having brought a solid financial institution to its knees is beyond my meagre wits to comprehend. Just what he believes he will deliver to HBOS shareholders by participating in the cut-price bargain takeover beggars’ belief.

Hornby's crimes against the British public and the very fabric of our once proud financial system are surely beyond compare. HE and his managerial acolytes should return to their Harvard intellectual exercises in down-market supermarkets where they can do less damage to the prosperity of this nation and its hard-working tax payers.

no its not going to happen Lloyds will take over and massive jobs cuts will happen...

All north of the border for now....

This is what happens when a bank gambles they sometimes lose.....

I have moved savings from both as i regard neither as a decent run company......

Personallly:

These gents build two world beating organisations prior to the overstretching and over leveraging of the last 7 years under different management.

As an HBOS shareholder I would rather take my chances with them than the current proposal. 90% of my investment has gone, I am betting that they can recover more for me than the combination with Lloyds. Lloyds is no silver bullet. It is a bank that has lost its way and been a terrible investment for all its shareholders prior to this debacle which has humbled all banks. Look at Lloyds returns from 2000 to 2007 and tell me that you believe that management is going to create any value for you. No thank you, I would take my chances with Burt anyday!

Economically:

Yes, I get it that the Treasury doesn't want to put out anymore tax payers money ... we as he taxpayers don't want them to either. But surely it must be more beneficial to keep competition healthy and keep the 10,000+ employees working and paying tax rather than claiming benefits, missing their mortgage payments, reducing their consumption and compounding the misery.

This is not a Scotland issue (technically both banks are Scottish as Lloyds is registered in Glasgow) as the majority of the job cuts are going to be in England where there is overlap. Scotland HQ, will suffer but no where near as much as the highstreet employees.

Show me some economic numbers that quantify job losses, lost tax etc. to prove that this deal is better for the taxpayers, as so far I haven't seen anything.

All I see is a Government who made a prudent deal, only to change the rules and then stick its head in the sand.

Come on Gordon, you are leading the world in the recapitalization of banks, don't stub your toe in your own back yard!

The Glenrothes result is barely inked in and now we will soon see significant redundancies in Scotland. That will have a political impact. If investors pick up on the signals - and they may not have the cash - then maybe there is a deal to be done.

ok-more evidence of politics and banking holding hands then?

We should all go back to old fashioned trade and cash only transactions-leave the banks out of any business dealings for just a week and see how they like being ignored!

All this wheeling and dealing is of no interest whatsover-while all this is going on, GB is not been called to account for treating the electorate like muppets.

Real life beyond banking exists-currently is harsh-if GB wants to avoid revolution he'd better start looking after his electorate and not himself and the banks.

Bring back Oliver Cromwell-NOW!

Re: 4.

Because the perception of serious trouble can and does create actual problems where there are none, and make existing problems much worse. The short-selling run on the basis of perceived trouble therefore turned into a self-fulfilling prophecy.

Peters Kitchen, what "taxpayer's money" was used to settle CDSs?

As far as i can tell your post #42 is pure unadulterated nonsense - maybe you are confusing CDOs, which have had some issues, with CDSs? What have INTEREST rates got to do with CREDIT Default Swaps?

And again you clearly have no idea what you are talking about. Just like RP, you can't tell the difference between face value and actually amount at risk. Look at the Lehmans bankruptcy, face value was well into the hundreds of billions of USD but only a few billion changed hands( from recollection about 4). Most of these swaps are collateralised and netted.

As for reading the blog, there are two reasons:

1) It is quicker than reading a treasury press release - which is essentially what this "service" is.

2) Occasionally someone posts something interesting and/or educational.

#27. M_London

wrote:

"company's accounts and understand ALL of its holdings before you make comments such as:

"Two words - Toxic Debt -- HBOS is (supposed(?)) to be full of it.""

Several points you may like to consider before making the accusation that you have made:

1. The accounts of Banks (and most financial institutions) have become less representative of the true assets and liabilities of the organisations because of off-balance sheet financing and liabilities.

2. I am sceptical of the content of the toxicity you will note my use of the word SUPPOSED. We just can't tell.

3. If HBOS was in such a good position why did they take 15 billion pounds from the Treasury? Or are you suggesting that it is all one giant conspiracy by the English against the Scots!

4. The perception of HBOS rightly of wrongly is that they have large contingent losses on their books because of their activities and aggressive lending into the British housing market.

5. The position of a bank is about confidence and it is apparent as the share price has shown that there is very little confidence in HBOS at present. The market has almost no confidence in HBOS. If you know something that is not apparent from the accounts and not apparent to anyone else then you can make your choice.

6. The accounts and the general accounting methodologies pertaining to banks and many other companies have been so open to having an artificial gloss added in recent years that I am afraid to say that if you rely on the accounts you will come unstuck - this is a major contributory factor in the decline in confidence in all financial institutions - that are the agents of their own destruction (along with the auditors and governments that permitted such a decline in openness and truthfulness).

7. In a market where liquidity has dried up if you are a financial institution that relies on external sources that have dried up then you are unable to continue in business, just like Northern Rock was unable to continue trading because it found it impossible to raise funds on the wholesale market through securitisation of bundled mortgages. Generally it is liquidity that kills businesses and if as you say HBOS has a liquidity problem then the answer seems obvious.

8. If your business model requires that in order to continue in business (have liquidity to do so) you need to trade in (in this case) bundled debt, and even if it is the widely held perception that this is the case, then you are in trouble.

9. If you believe or rely on historic accounts in this rapidly changing (deteriorating - as my insertion of the news about the US car giants indicated) environment when confidence and safety is all important you are in for a fall.

10. All of the forgoing confidence related issues are quite apart from the loans still on the books of HBOS and if these are performing or not. The other major problem in the finance sector generally is the trading in CDS's and related 'synthetic' instruments and the almost total inability of anyone to evaluate these at any point in time before their maturity or expiry.

I could go on but instead I prefer the words 'Toxic Debt' to encapsulate the difficulties of the banking sector. So the problem is that the sector has filled itself with the excrement you talk of. The accounts are almost a worthless waste of trees. If you have confidence when all about you do not you had better have a very very good reason to do so. Everyone else is in the lifeboat! You want to stay on board - that is your choice.

I banked with Johnson Matthey at the time they gambled and withdrew our overdraught overnight.

At that time on JM were affected so Barclays came to our aid.

Now ALL *ankers are affected by their gambling much like the rest of the financial market.

These people hate it when you say 'I am in the electronics business and you are in the money business so please give your best quote'.

In the end there is no competition so one less bank is neither here nor there. The only competition was to lend more with less collateral and to offer silly spreads on savings.

RP is to be commended for doing his job, even though his 'exclusive' stuff gets up everone's nose except his editor.

All the comments here about RP knowing nothing seem to support the bubble concept and we all know where that goes (Bremer et all recently summed it up nicely)

Pip pip

#29 "...Gordon Brown 'bounces'... "

Personally, I think he rather "thuds"...

Large lad, our Gordon...

Presumably pre crisis our competition laws had some point and were there to protect the public interest.

If a solution can be found which does not require setting a side a law designed to ensure that no one bank gets a near monoply then is it not in the public interest for this to be pursued.

The public, I am sure would be better served with smaller institutions not larger ones. So if Scotland's banking knights can come up with a viable solution they should be encouraged to do so.

What a shame they could not have sorted something out for Bradford and Bingley !

But lets take a sledgehammer to all the problems - why not ?

Have you checked your pension yet ?

The Govt will go for the option that costs the most jobs and damages Pension Funds the most.

Thats their policy.

With the BBC looking into Housebuilding soon, which Housebuilder will the Gov't try to nationalize first and will they get away with it ?

Before these two came along, I too thought it no longer made sense to put HBOS and Lloyds together - given that it is the government that is saving HBOS, not Lloyds.

But Burt and Mathewson have now turned this into a nationalistic issue.

I would prefer the Halifax and Natwest head offices come back to England where they belong, and leave the RBS and BoS rumps with their disastrous corporate lending to the SNP.

I despair there is no equivalent English grouping to match the Scotish mafia.

56. At 02:15am on 09 Nov 2008, laughingblacksheep wrote:

Peters Kitchen, what "taxpayer's money" was used to settle CDSs?

I think you will find, like the bail out of AIG, the first tranches of taxpayers money has been used to repay the margin calls of these insurances

As far as i can tell your post #42 is pure unadulterated nonsense - maybe you are confusing CDOs, which have had some issues, with CDSs? What have INTEREST rates got to do with CREDIT Default Swaps?


If you own a bond from BA, you are lending them money for a set for a specified length of time. You have two risks when buying this bond. The first is that BA go bankrupt and don’t pay you back. The second is that rise and the bond falls in value.

The price you pay for a bond goes down if interest rates go up and if rates go down the bond value goes up.

The seller of a CDS will have pay off on the BA bond if the company goes belly up. If rates go way down (like they have) the value of the bond goes up and the therefore the risk.

I suggest you get to know your subject before making judgement on your peers

Be realistic and wake up, HBOS cannot sustain itself and needs a lifeline rescue. Rejecting merge for the sake of Scottish identity is an irresponsible gesture. The problems of bank not only occur in Scotland but globally. History comes and goes. Take a step before the change or it changes us.

If the identity crisis is top of the agenda, then perhaps they should create a HBOS football club instead.

Bear in mind that Lloyds TSB's shareholders already own more than 60% of HBOS's shares. It's a done deal.

The economies of scale within the combined bank are the overwhelming incentive. Jobs, branch closures, Scottish banking traditions-it's all irrelevant, I'm afraid.

"The public, I am sure, would be better served with smaller institutions not larger ones" says alphaptarmigan.

Yes, but, can you see our alphaturkeys voting for that? Takeovers and mergers lavish largesse on London lawyers, bankers and stockbrokers and majestic salaries upon building society lightweights. Civil Service and BBC salary scales (and pensions...) must then keep pace.

#57

Responses:

1) that is simply not true. All of the liabilities and assets are reported in the annual accounts. If the "assets" have been truly securitised, ie the mortgages are put completely in to a pass-through CMO then there are NO liabilities to the Bank - and they are in a separate trust. If they have given extra covenants then they must be reported. Maybe you are confusing private accounts with the nonsense HMG puts out which makes Harry Potter look like a documentary.

2. Yes we can, look at the above.

3. It didn't.

4. This contradicts the concern about "off-balance sheet financing", because then the CMOs based on their mortgages would be facing losses not them.

5. True, but on the other hand the government and media have been taking non-stop about HBOS's non-viability and in today's environment you don't want to be the guy who took the punt and lost. Better to follow the herd.

6. Really? What exactly is "misrepresented"?

7. All financial institutions rely on external sources of funding whether it is deposits or wholesale markets. What you neglect to mention is this turn to the wholesale markets and it's subsequent decline is WHOLELY the fault of the UK government. It is the one that lowered interest rates so low that it killed retail and wholesale deposits, forcing the banks to turn to securitisation that was being driven by the same desire for yield and when that market turned down the uk gov put the knife in by flooding the market with risk free liquidity making the ABS market unattractive.

8. Really why?


9. you think institutions are relying on quarterly accounts? Or HMG?

10. Whats CDS's got to do with HBOS and it is not a "synthetic instrument". Again you seem to have your acronyms mixed up. You mean CMOs or CDOs.

You use "toxic debt" because it is the jargon de jour, clearly with no understanding of it's meaning.

#66, thanks for the lecture...

Firstly, the bond price is relevant if you are not holding to maturity.

Secondly, you clearly don't understand the mechanism of CDSs. CDS pays out the coupons that a defaulted bond doesn't. So if BA is paying 10% coupon and the risk-free interest rate goes down to 0% then BA defaults then the buyer of the CDS hands over the bond and the CDS seller pays out 10% coupons instead. The price of the bond is irrelevant as is the base rate.

There are two ways that interest rates going down COULD affect a CDS - make it less likely a variable coupon bond will default, and also to increase the NPV of any possible payouts. So if interest rates go down then on a fixed rate bond the value of the CDS goes UP. The price of the bond is not a factor.

#52

Why do you think the LTSB profitability has underperformed the rest of the sector these last few years?

Could it be that their profit was real (interest and charges received - interest paid and costs) rather than the illusionary profitability which comes from the financial engineering of their peers?

Just a thought but maybe the management that stuck with what it knew is worth backing in all of these

The combination of Burt and Mathewson is what HBOS needs - Stevenson and Hornby are clearly incapable of delivering the best deal for the bank...they should stand aside now.

John_From_Hendon:

1. The off-balance sheet financing you are referring to is not hidden and can be seen from the accounts.

2. I have seen first-hand, claims such as yours take banks down for no other reason than fear. In the market if you were to say such a thing it may be construed as manipulation

3. I will re-iterate, 'toxic' relates to credit quality. The injection required has come from mark-to-market writedowns all due to a re-pricing of the assets because of de-levering, liquidity. Yes there have been some impairments but not enough to require GBP15bn. Again, its to do with funding.

4. If you look into the loss levels on UK Prime Mortgages you will see that they are less than 2%. Yes they will trend higher but there are many factors in play such as margin that protects against these losses. There is far more to working how much a bank will be affected than saying the UK housing market is crashing so therefore the bank must be troubled. If you lend on average against 45% equity you have afforded yourself decent protection.

5. The HBOS share price initially took a hammering because the firm can be seen as a proxy for the UK economy given its lending to consumers and corporates specifically in the UK. As a result hedge funds who had finished shorting the US turned their attention to shorting the UK and found HBOS an excellent starting point. Furthermore, (and this relates to the following point) HBOS were very clear in describing the nature of their holdings with the hope this would calm people but seemingly more information scared them because they didn't understand it. Other UK banks have hidden the real depth of the problems they have and have faired better. Thus begun the reduction in confidence in the HBOS name.

6. See above.

7. I have not said HBOS has a liquidity problem, I said the entire market has a liquidity problem. Northern Rock had over 70% of its operations funded through wholesale markets. HBOS does use the wholesale funding markets but not to that extent and also benefits from a massive retail deposit base. This is part of the attraction for Lloyds as they need to increase the deposit base and also take the negative goodwill to tier 1 capital to offset further write-downs that they have avoided showing because of lack of clarity in their accounts.

8. HBOS do not trade in 'bundled debt'. They have financed it at the highest level in the capital structure and avoided the asset classes that are taking true credit impairments. Perception is created by your aforementioned comments.

9. Simply by referring to GM and Ford in the same sentence as HBOS will scare people and such comments are so irrelevant. Historic accounts are also irrelevant because we all know cash-flows will alter drastically going forward. But the balance sheet shows assets and will guide you far better than not looking at them at all. All the accounts are rigorously audited and the auditors are also liable for any errors.

10. I take it from this point that you have no clue about what CDS actually is and that you are latching on to yet another point that the media are gripping on to in order to sell stories. Fear of the unknown is great. These are insurance contracts, are you scared about the insurance industry now? When you take car insurance you are going short a car accident/theft and the insurance company is going long. The Lehman CDS auction went smoothly and there were no issues despite the face amount written against the name. Netting and collateralisation of mark-to-market changes are in place as there are believe it or not contracts between trading counterparts to ensure a further layer of protection on the instruments.

Using the word 'toxic' to cover all the issues in banking is complete and utter nonsense. You clearly do not understand the industry and if I were you it would be a good use of your money to hire a money manager to work out how you are going to invest because investors with the understanding you have are a great part of the reason we are where we are. It tires me to hear people complain about banks and their willingness to lend to people. How many of the people complaining have levered off of their paper gains made on house price increases and spent the money improving their standard of living? You weren't complaining then. All of the sudden people complain about irresponsible lending, how about irresponsible borrowing. How about investing in funds that fuelled all this leverage, did you REALLY know what you were investing in? Pure hypocrisy.

p.s. PetersKitchen: you are making ridiculous comments, please stop.

p.p.s. laughingblacksheep: I am glad you are talking sense this message board was starting to fill with clueless loud-mouths itching to blame someone else for their own irresponsible borrowing/investing.

70. laughingblacksheep

I fear I must disagree with you in nearly every particular.

1. Off balance sheet accounting: Over the years it has become more and more fashionable not to present every last asset or liability in a company's accounts. Mortgage securitisation is not well tested in Court as yet. Whilst it may appear that these assets and liabilities are nothing to do with the creator of the securitisation product, if there is outright fraud in creating the product, or the product was misrepresented, then the whole edifice has the possibility of failing. Thus the creating or trading in these products (what ever they are called) is fine so long as nobody defaults on a grand scale, however if they do then the whole product sector becomes toxic. Whoever bought or sold these products may well have contingent liabilities even if they no longer appear on their books or in their ownership (serial historic trading/counter-party risk). Thus, your position of saying that these are NOT liabilities on the bank is open to legal question. If a product passed through you hands some time ago and in so doing you misrepresented the product you may, like any used car dealer be liable, even if you traded in it in good faith.

2. see above.

3. Oh yes it did. If it didn't then why didn't the company have any truck with the Treasury, Bank of England or the FSA. Of course it did. HBOS HAD to repair its capital adequacy and nobody else would lend them any money.

4. Sorry NO, see 1 above.

5. Live in the real World, nobody (few) would touch HBOS shares - that is a fact or history - it does not matter why, it is simply a fact.

6. Ever since and well before the scandals of Enron, Worldcom etc. came to light the idea of a 'true and fair view' of a company's balance sheet and profit and loss has been eroded. All of the off-balance sheet constructs are just there to whitewash a company's accounts. They generally serve no other purpose. These misrepresented balance sheets were then use to get a false credit rating. This is a fact of history. For if this had not happened we would have had no credit crunch. Get used to it.

7. You say that the decline in sources of external funding is "WHOLLY the fault of the UK government" this is nonsense. Whilst I agree that interest rates were too low for too long in the last decade, it was the banks and financial institutions that chose to construct a means of manufacturing synthetic financial instruments to create extra money so that they could continue with their profligate lending. The collapse of the edifice that cause the crunch.

8. Here is why. Banks and financial institutions trade in debt. If you are unable to borrow then you cannot lend. If you cannot lend (and indeed increase your lending) you decline as a business. [This is compounded if interest rates are lowered - then you need to lend ever more.] One of the few pieces of financial information that is more reliable in the accounts of any business is the cash flow (liquidity). If this declines you are generally in deep 'do do'.

9. All accounts are historic; the rest is speculation and projections and far less reliable. The problem with all forecasts is in their nature they rely on unforeseeable external factors. The stress testing of the projections includes flexing the assumptions behind a forecast within best and worst cases. It is quite obvious that the Bank of England is unable to do this itself with any degree of accuracy (see the change in outlook from one month ago) so why do you think that HBOS will be any better?

10. The whole edifice of the synthetic instruments constructed on top of securitised loans is the unknown. Further many of these instruments are not regulated or traded and many have subtly different wordings which are untested in law of many different legislations and thus they are extremely difficult to evaluate - leaving aside the ripple effect of progressive failure that may occur when the underlying mortgages default. The issue of counter-party failure.

Thus the Toxic nature of the nonsense in the financial trading community - so long as the parcel is passed everyone thinks it is OK, but it isn't and it never was. This extreme credit mountain has to fail, and it will fail - but which banks or financial companies end up holding the baby is unknown and un-knowable, anybody who suggests that it is not is living in cloud cuckoo land. It will take decades for the toxicity to abate and the losses and profits to have crystallised.

The foregoing may or may not relate, in full or in part to HBOS I don't think it is possible for anyone to tell. It is certain that the market price of the shares reflects the perception of the quality of HBOS, right or wrong.

74. M_London

see #75

also There is little point discussing whether 'toxic debt' is a sensible description of the unwise edifice of synthetic financial instruments - it is the one being used.

I will add that the perception of the World's financial situation is coloured by events - the Ford ,GM, Chrysler situation as well as the astonishing cuts in interest rates changes perceptions for the worse. In that the Bank, that usually says that it takes 18 months for interest rate changes to work through, has panicked - it looks like blind panic. Things must therefore be far more serious that we are being told or we see at present.

If you have confidence in your understanding then so be it. I do not see the evidence and you have been unable to provide any evidence. This is not the place to go through the legal wording of credit default swaps and in any case the cases are as yet undecided as are most of those relating to the whole securitisation businesses and the 'insuring' of these instruments.

The issue is confidence. That is why HBOS shares fell. Facts are of little importance. Speculation is of little importance. Confidence and liquidity ratios matter.

If you a fifty billion or so to invest buy the bank if you wish, but don't expect the taxpayer to prop you up.

#17 "...Yes LTSB's shares have fallen less, doesn't mean it is a beter bank. HBOS's shares fell due to short selling.."

I have no brief for short sellers, I believe that, together with many other "investment" practices which add no value to the economy, it should be banned completely. However, the short sellers were right: HBOS was hedding down the pan. Since short selling has been banned, HBOS shares have not recovered, they have got worse. The "nasty" rumours were nowhere near as bad as the truth. In my view they are only worth anything at all because investors see a chance of getting a piece of a better bank on the cheap.

Brodick1: Have you understood any of the background to th credit crunch, or are you just posting misinformation to support a political agenda? "Lloyds is a capital deficient disaster with a poorer record of profitability than either bank (HBOS or RBS)"

If Lloyds is so capital deficient, why has it needed far less capital than the other banks? Remember all the rights issues where the money went straight into a black hole? As for the "poorer record of profitability", LTSB took a more cautious, longer term view. Specifically, it did not lend money it didn't have, borrowing from abroad to fuel a speculative bubble which is now collapsing.

RBS and HBOS have been like Titanic1 and Titanic2. The captains are gone or going, but I certainly don't want the architects, Mathewson and Burt, to have anything to do with a so called rescue.

The final point is this: Uncertainty about this deal is likely to cause HBOS shares to head for the floor tomorrow. If the deal does fall through, HMG will end up as the majority shareholder anyway and call all the shots. What it will want to do then is get the best deal for the taxpayer by selling it off or merging it with some other firm. The HBOS business model is dead.

Robert - What I would like to know is this. In the apparent good times, we were told not to worry about trade deficits, because "invisible earning" from banking and financial service would bridge the gap.

in the next couple of years will there be any net "invisible earnings "at all, or is the banking and financial services sector now adding to the deficit?

GOSH YOUVE GOT TO LAUGH:

'NO BASIS FOR FUTURE DISCUSSION'


STEVENSON NEEDS TO GROW UP,I WISH I HAD ADOPTED THAT ATTITUDE RE HALIFAX PLC AND PETITIONED FOR WINDING UP.. . .

Greed greed greed greed. From Knight hoods to bonuses to patriotic nonsense. The world is moving on. Banks should only make money from interest and lending, not from the City, fining people, dodgy currency dealings, hedge funding and financing risky financial instruments. A bank is there to secure money, provide loans, nothing else. The world is now "global" so the priority is with those people with accounts and loans, not you greedy bank employees, CEO's, Knights etc- It's not about Scotland or England either, its simply about people LIVES!

THE GREAT NATIONALISATION PLAN IS ALL PART OF NEW LABOURS AIMS.

REMEMBER THE FALL OF TROY AND THE TROJAN HORSE?

FRAU J SMITH WILL BE THERE TO BRAND US ALL WITH BAR CODES & TRACKER CHIPS!

SO WHO WILL YOU LOT VOTE FOR NEXT TIME?

RE POST NO 80:


COOL GUY YOUVE GOT 100%

HBOS

Who are the biggest individual losers here?
Small shareholders like me?
Pension funds holding banking stocks?
Staff of HBOS who could lose their jobs?
The tax payer whose tax funds are being put at risk By Gordon Brown?

There are some who fit into all categories.

Are the biggest individual losers those recently retired, or about to retire senior executives of HBOS whose wealth was invested in thousands of shares granted as performance bonus over their years of employment?

They at least should have had knowlege and control over the quality and type of business written to achieve their bonus.

Get the merger done, and at least protect the depositors of HBOS and prevent further uncertainty

No 80

Agree with the sentiment of your comment 100%
Thanks for saving me the chore of writing my own.

THE MAJORITY OF SENIOR BANK DIRECTORS COULD DO WITH BEING EXAMINED BY SHRINKS.

MEGALOMANIA IS A SERIOUS CHARACTER FLAW/ILLNESS.

SEEMS SO MANY OF OUR POLITICIANS HAVE THE SAME PROBLEM.


MIGHT BE A GOOD IDEA TO TEST THEM ALL AND LOCK THEM UP IF THEY ARE CONTAMINATED.

GET IN THE QUEUE CLUNKING FISTER!!

74 and 71

Ridiculous comments and lecture eh?

Taking BA as an example again, and lets throw in commodity prices as well as interest rates.

If these prices go down (as they have) the chances are BA can continue to make a profit and the trades in CDS in its bonds is relatively safe and the trades continue and premiums are paid. The interest rates, particularly in the states have been lowered to near zero to try to insure companies do not default and therefore, the insurers having to make collateral calls to the tune of bankrupting them. Thats fact, not a stupid comment and I refer you to AIG whose demise was brought upon by these calls. They did not have enough collateral.

Now if interest rates were to rise or the cost of oil went as high as it did, BA could struggle, would struggle. It may even go bankrupt. The collateral calls of insurers would be very big and possible big enough to make them insolvent.

Now, the effect of forcing rates down will ultimately cause inflation which means the rates will go up, maybe hyperinflation, as I predict.

So by turning the heat down on this now wont stop the pot from boiling dry next year.

Clearer now?

addendum

Thats why against logic the Detroit car industry will be bailed out. The consequences of the GM or Ford going bust will be 100 fold the amount of the bail out

it took only 7 years for Halifax to ruin one of Europe's oldest and respected Banking institutions that was Bank of Scotland.

Between Hornby and Stevenson taking the Bank to the brink of collapse shows their total ineptitude in how to run a Bank -go back to the beans!!!!

Any point discussing the concept of overtrading and whether they will be held accountable for it.

I would welcome the input of Burt and Mathewson because they would take HBOS back to core values.

please note that HBOS nor TSB will receive any Government funding until the merger is completed (unlike RBS, B&B, et al)- it will be a disaster for Scotland and anyone who holds HBOS shares.

Robert - fantastic to see that you keep this spinning - is it helping your book sales?

This comment was removed because the moderators found it broke the house rules. Explain.

SORRY MISSED THE R: GOVERNOR !!!!!

alexandercurzon:

"MEGALOMANIA IS A SERIOUS CHARACTER FLAW/ILLNESS. ....etc"

Why everything in block capitals? This blogging equivalent of shouting does not add weight to your arguments - au contraire. Physician heal thyself!

"Some 2m small shareholders..."
I didn't know there was a height restriction for holding shares.!

Sashaclarkson no 91


Sorry i like using capitals!

DO YOU SUFFER from MEGLOMANIA?

P.S. I AM NOT SHOUTING I JUST FIND CAPS EASIER TO READ ON SCREEN.

Ha. Three experienced bankers who helped create these monolithic failing banks. I put it to all of us that top bankers of our retail banks have made this mess, whilst they were trying to speculate sexiness into their acquisition bonuses. Raise a glass to the bankers!

Let the bankers run Scotland. Oh no better not as you'll have to be bailed out again. Scottish bankers do have a good history of bankrupting Scotland. HBOS is a basket case that over the next few years will have severe problems in the mortgage market. Lloyds TSB is not focused that way, has been run on a much sounder footing and is much more highly capitalised. Lloyds being saved by HBOS! You must be drunk on nationalism.

Where do you get your ideas from Brodick? Blindly trusting bankers who loved a bit of insane leverage? Yeah they got us into this mess and now they want to earn themselves some more risky bonuses by playing with our capital. Trust the bankers, they don't seek mammon or personal gain.

Scotland being robbed of it's capital? Couldn't someone say Scotland gambled on the English mortgage market now you want us to back you again to gamble with it again. That's a fair offer! Is it the truth? More so than your jaundiced view.

Trust Scottish bankers? I don't think so, they've been proved to be as greedy and useless as everyone else.

Robert

I read that mandleson has started to admit to discussing tariffs with Oleg.

So far he confesses to discussing 'wood tariffs', not yet confessing to discussing 'aluminium tariffs'.

Also in his normal duplicitious way, Mandleson says that when he has previously said had 'never' done such a thing, 'never' only referred to the time on the yacht in corfu.

Will you be following this up at all? This lack of transparency is clearly in breach of the ministerial code.

Is it just the tories that you are after (maybe connected with some FSA enquiry they may have triggered against you?).

I am going to vote AGAINST the HBOS/Lloyds TSB merger. It ia appalling value for the HBOS shareholders, a nightmare for the employees and a disaster for banking competition in the UK. I urge all other clear thinking shareholders to do the same. Gordon Brown and Alistair Darling must have had a senior moment when they approved the merger! The government says they will not support an independent HBOS. This is nonsense: they will have no choice but to do it if they want to avoid another banking crisis. So there IS a future for an independent HBOS!

alexandercurzon "P.S. I AM NOT SHOUTING I JUST FIND CAPS EASIER TO READ ON SCREEN."

I too am a little "ocularly challenged" - I use the Ctrl + option in Firefox to increase the size of the print. :-)

#94 "Trust Scottish bankers? I don't think so, they've been proved to be as greedy and useless as everyone else."

True, but not because they are Scottish, but are like all the rest of us, human and fallible. Financial crises are no longer respecters of borders, if they ever were. Fortis in Belgium had to be baled by the Netherlands, Belgium and France working together.

Today is not only Remembrance Sunday, but also the anniversary of Kristallnacht. Looking at Britain and Europe now, what unites us should be far more important than what divides us. We must try collectively to protect our economic future. This does not mean we can or should protect every institution or job, but where necessary we should pool our resources (ie pay enough tax) to give people enough of an economic cushion to be able to have an alternative future. For example, protecting people against reposession, by a mortgage to rent scheme might make good enonomic sense compared to the alternatives.

Above all, we must also try to base our analyses on the facts, not upon what we would like to be true. That doesn't mean that we will agree, but attempting rational debate will hopefully make all of us better informed at the end of it. I have certainly learned a considerable amount by participating in these blogs and then doing more research in the light of others' comments.

Re. 72

I agree with you - LTSB has delivered sustainable profits rather than the smoke and mirrors seen elsewhere in the banking sector.

I also note that Burt and Mathewson seem seduced by the supposed superior profitability of HBOS even when the figures suggest otherwise. They say in their letter:

"HBOS is larger than Lloyds (£681bn of total assets against £368bn of total assets), has more equity capital than Lloyds (£21.1bn against £11.1bn), historically has been much more profitable than Lloyds (in 2007 HBOS earned £5.47bn before tax against Lloyds' £4.0bn)."

You do not need to be an 'experienced banker' to see that on these figures Lloyds had by far the better return on equity.

What banking does not need at the moment is more 'cult of the personality' - particularly when the personalities seem to show little understanding of the figures they put forward.

"94. At 3:12pm on 09 Nov 2008, Tatruth wrote:

Let the bankers run Scotland. Oh no better not as you'll have to be bailed out again. Scottish bankers do have a good history of bankrupting Scotland."

Sorry to break the news to you old chap, but the UK is technically insolvent. It is only through exponentially growing loans that it continues to function at all...

#95 - see my post #43 above.

Every time I mention the M-word in a comment, it is moderated out of existence as 'potentially defamatory'.

That's why I've taken to making cryptic remarks about certain political figures and the obviously squeaky-clean company they keep.

Your comment obviously hasn't reached the ears of MiniTrue yet, otherwise it would be in the memory hole.

Bri.