To exhausted London commuters, Chris Blackhurst’s smug visage nestled amidst a jungle of ill thought out drivel has become an all too familiar sight. The Evening Standard’s “City Editor” has a remarkably frequent residency on the paper’s comment pages, and it is interesting that a daily that generally sits right of centre should elect a thinly veiled leftist with clouded vision as its main financial correspondent. Today’s rant centred around Chancellor George Osborne’s announcement that there are plans afoot to segregate the retail and investment arms of big banks. Blackhurst appears to have mixed feelings on this subject, as his article is based on an obvious self-contradiction, to speak nothing of the shameless populism that serves as an undertone to his opinions.
The organ grinder makes all of the usual stops that a journalist desperate to appeal to the masses, ignorant of finance, makes. Project Merlin for example, is said to be something the banks “squealed” about. This is a government-mooted scheme whereby banks agree to increase their lending to business in order to regenerate the economy, with a large side of atonement for past sins presumably thrown in. As a person who is in a very strong position to gain first hand information on this matter, I would point out to the City Editor that one of the main problems with Project Merlin is the lack of demand. The numbers mentioned alongside this altruistic venture are barely a blot on most big banks’ balance sheets; however, businesses are understandably winding down their debt obligations as fast as possible in the current climate of commercial terror. It is now at a stage where banks are happy to comply to the scheme but are struggling to find takers, and are therefore worrying about the political fallout of failure to lend enough.
Blackhurst also complains about the fact that banks are still taking risks and speculating, “…as they always did.” I can understand somebody with limited financial knowledge being angry at the thought of ‘gamblers’ in ivory towers having a negative impact on their standard of living. However I feel that it’s disingenuous for a man whose livelihood is utterly dependant on banking to bemoan the risk taking it entails. If the industry he covers rid itself of risk taking, there would essentially be nothing for him to write about. Not that this stops him from taking a shot at “bankers letting their hair down” at the Chelsea flower show and Royal Ascot. This is held up as evidence that things are “back to normal” in the banking world, as though evil financiers had bought every tickets for these events to the exclusion of plebs such as him, and of course his readership. Heaven forbid that bankers should take a few hours off from being hated by everyone under the sun (largely at the whim of unoriginal hacks such as himself, it must be added).
His emotion-led tripe would be easier to stomach were it not sandwiched by an appalling contradiction. Blackhurst firstly says that bankers “know they’ve got away with it…” (referring to Osborne's edict) before concluding, “Deep down, though, make no mistake, they are smarting.” I fail to understand how his editor in chief didn’t press him on this dichotomy before submitting his work to the presses. If he wants to write an article exploring the banking industry’s reaction to this decision, Blackhurst should have the guts to say one way or the other what kind of effect it has had. His argument lacks bottle in the worst possible way.
The route he took instead was to tacitly admit that he doesn’t really understand the subject, so he has filled the rest of the article up with emotive rubbish about bankers feeling awkward at parties, or the humiliation that bankers must feel about the Chancellor dictating terms to them. Forgive me for my ignorance, but I was under the impression that government has always held the final say over finance? My understanding is that this move was the status quo until about 1999 when Bill Clinton reversed it in America, although I would hope Blackhurst is more knowledgeable given the responsibility he holds for informing the public.
Before I sign off, I would just like to give a mention to the Learned Editor’s hypothetical example of Barclays “encountering a crisis”, and how this move would make them “immune”. This must rank amongst the most ignorant comments ever published. In the same article Blackhurst mentions Northern Rock; one can only assume he had forgotten it existed by the time he’d written a few more lines of facile text. Any “City Editor” who claims this segregation will make retail banks immune to financial downturns is essentially beyond repair in terms of credibility, as they quite visibly have no idea how the markets function. The frustrating part is that the vitriol spat by this clown will almost certainly strike a chord with the public, who are starved of facts by the press and politicians alike. However, the Evening Standard should hang its proverbial head in shame for promoting this man to such a height above his competence.
If you feel like reading Blackhurst's efforts first hand I have included a link below, with the disclaimer that no rational or balanced comment is to be found therein.
Enjoy......
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