Counting The Cost of Lehmans Bank

It really does astound me when, in the midst of the biggest banking crisis since the Great Depression, we still have greed ruling decision-making in banks while the industry takes a bath.

I was already appalled that Gordon Brown had personally intervened in the final hours of the takeover of HBOS by Lloyds TSB which gave the combined group over 28% of the UK mortgage market - not because it made a very uncompetitive situation but because Lloyds TSB did not have the financial resources to undertake the deal. It immediately required a bail out from the Government and consequently the taxpayer owns 43% of the new company. It simply should not have been allowed to take place.

But Barclays Bank - well, they are something else.

The Collapse of Lehmans Bank

Even before the aftermath of the crash of Lehman Bros had started to permeate through the system, Barclays Bank, almost with Fred Goodwin-style over-zealousness and like the proverbial rats up a drainpipe, steamed in to buy the investment banking remnants as a wise investment.

Even a circus clown could have told the executives that Investment Banking was not the 'strategic place to be' in the current economic climate - you know, a recession combined with a credit crunch, that 'Once every 100 years crisis' according to Alan Greenspan.

Nope, the diehard washouts at Barclays Bank decided that spending suicidally in a crisis is a really brilliant strategy, so two-fingered armchair sages and paid a fat wedge of cash for the defunct bank.

That was in September.

Fast Forward to Today

Oh yes, you guessed it already. The very same Barclays Bank today announced the loss of 1,300 jobs in Barclays Capital, the Investment Banking arm of their company. Bright, cutting-edge strategic thinking at work there then. In all 2,100 jobs are to be lost, some 7% of the workforce.

But these proud fellows don't come cap in hand to the taxpayer and expose us to their follies. Not this collection of Oxbridge-trained upwardly earning chaps, these boys are far more happy having Middle Eastern cash - and £7bn of it too.

It Beggars Belief

We are talking just 3 months from sinking a load of money into Investment Banking to grab the imploded Lehmans to announcing 1,300 job cuts in the investment banking business. It really does make you think how these people work and what they think as they hob-nob from meeting to meeting, power breakfast to power lunch and whizz across the Atlantic being the cream of British commerce.

I have blogged about planning for a recession to be prepared - the planning I meant was to avoid it. These boffins planned their way into it.

Frankly, I wouldn't give them a chip shop to run as they would buy parsnips because they look cheap when everyone wants potatoes, then fire the guy frying for cooking the wrong thing.

It's that stupid.