The ninety-seventh weekly "No shit, Sherlock" award

This week's winner is the BBC for reporting Lord Turner's comments that

'Financial crisis 'not due to bonuses alone''

Something that the BBC are reluctant to report too often as that would mean examining the role in causing the financial crisis played by their heroes Gordon Brown and Bill Clinton. In Gordon Brown's case by creating a credit bubble so as to fund a massibve expansion in the largely Labour voting public sector and in Bill Clinton's case by extending the scope of the Community Reinvestment Act and approving the Financial Services Modernization Act. Do read up on both of these acts, what you find may surprise you if you believe that it was all the bank's fault.

Anyway for noticing that the Financial crisis was 'not due to bonuses alone'; "No shit, Sherlock"

Who knew what?

The BBC and Robert Peston are frantically trying to spin that Gordon Brown and Alistair Darling knew nothing about Sir Fred Goodwin's special pension arrangements. Now I don't know whether or not they did know, although I have my suspicions. However more to the point, Gordon Brown and Alistair Darling are paid a large amount of money, given lavish accommodation and a multitude of perks - not to mention a huge final salary pension - surely we should be able to expect them to know what is actually going on in the affairs of businesses they decide to take under full or partial state control. Instead it is claimed that they knew nothing of the impending financial crisis despite them being in charge of one of the three arms of the tripartite financial regulatory system. It is also claimed that they didn't know what RBS was planning to pay out by way of pensions and bonuses even after taking it over in our name. If Gordon Brown, Alistair Darling and the team of Treasury hot-shots, not to mention Shriti Vadera didn't feel able to check senior management's employment contracts to see what benefits were compulsory and what were discretionary, could they not have found an employment lawyer to check the details before they went ahead with the takeover?

The smokescreen of Sir Fred Goodwin's pension arrangements is being used to obscure the real story which is the accusations made by Lord King and Lord Turner to the Treasury Select Committee. The BBC in general and Robert Peston in particular are doing their best to "run interference" for Gordon Brown and Alistair Darling; how can we stop them?

Lord Turner at the Treasury Select Committee

I blogged yesterday that the BBC seemed somewhat shy of laying all the blame on Gordon Brown. The Mail, formerly big fans of the Great Clunking Idiot, are less circumspect:

" Gordon Brown helped fuel Britain's banking crisis by pressuring City watchdogs into 'light-touch regulation', MPs were told today.

In damning evidence to the Treasury select committee, Financial Services Authority chairman Lord Turner said there was clear 'political' pressure not to question the business models of banks such as Northern Rock, HBOS and Bradford and Bingley.

The phrase 'light-touch regulation' was one often used by Mr Brown when chancellor and his then City minister Ed Balls. "

When the day of reckoning arrives I trust Gordon Brown will be made to pay for the almighty mess he has made of this Country.

Shh don't mention "his" name

The BBC report Lord Turner's appearance before the Treasury Committee and his remarks. The BBC quote him saying that a "light touch" approach at the City watchdog had been seen as politically preferred and that he said that the regulatory approach that encouraged a light touch at institutions such as Northern Rock, HBOS, and RBS had been affected by "a political assumptions". "There was a philosophy routed in political assumptions which suggested the key priority was to keep it light rather than to ask more questions"

Buried further down the report is a reference to the man with the "Clunking Fist" who liked a "light touch" when it came to regulation, Mr Gordon Brown, but that is quickly followed up with a spreading of the blame to all parties:

"The comments may be seen as laying blame on Gordon Brown, who was responsible for setting up the regulatory system while chancellor.

But he adding that the preference for light touch regulation "existed in speeches on both sides of the House". "

Lord Turner wants to keep his job and the BBC a=want to keep Gordon Brown in power so Gordon Brown is allowed to play McCavity the Mystery Cat again.

Remind me, who set up the City regulatory framework

Lord Turner, the head of the FSA has called for major changes to the way Banks operate. Giving the Economist lecture he said that parts of the regulatory system were "seriously deficient" and he recommended that banks should be forced to build up capital during good times, so they could more easily weather an economic downturn.

Sounds like good advice, it's certainly advice that Gordon Brown could usefully have followed by setting aside money during the recent engineered boom. Hold on haven't the Conservatives been making this point for some weeks now and been derided for it by Gordon Brown and the BBC?


One further point, if the FSA "failed to piece together the jigsaw puzzle" of risks which included a large UK current account deficit, rapid credit extension and house price rises, then shouldn't some of the blame lie at the feet of the man who designed the tripartite City regulatory system, Mr Gordon Brown. He swept away the old system that worked and replaced it with something modern and shiny and not fit for purpose.