Dr Feelgood and the City Junkies

Article excerpt


WELL, the whining junkies of Wall Street got what they wanted - a bumperfix of their favourite narcotic, low interest rates.

Their City counterparts are salivating at the prospect of something similarfrom the Bank of England. They reckon that just as Federal Reserve Boardchairman Ben Bernanke dropped the idea of cold turkey and became the mostaccommodating of drug pushers, so straight-laced Mervyn King can be changedfrom Mr No into Dr Feelgood.

Like revellers facing the mother of all hangovers, the banks, brokerages andhedge funds have found a bar still open and decided a handful of Anadin and astiff Johnnie Walker is the road to health.

So the first lesson to be drawn from the turmoil of recent weeks is that therules applying to the car industry, coal mines, farming, fishing and everyother type of productive business, do not apply to financial services.

The City and Wall Street create mountains of debt and when it starts tocollapse they demand bailouts on the ground that their past stupidity nowthreatens a 'systemic crisis'. This racket makes running a chain letter looksophisticated.

The second lesson, relating to the run on Northern Rock, is that the public,having been lied to about everything from Iraq four years ago to the EuropeanConstitution, now sensibly believes nothing anyone in authority says unless itis cheat-proof. …