If I was not such an inherently optimistic person I would get seriously depressed with the news coming at us. I am not even talking about the serious news like the people being killed in wars or blockades. I am not even talking about the resignation of Mr Laws, who spent some nine years hiding his lover and thinking that it was OK to spend £40,000 in tax payer money because he was such a private person.
No I am talking about the increasingly depressing FSA. This fine organisation employs 2,800 people I read and last year, the year after it failed in stopping the biggest economic catastrophe to date it felt the need to pay some £33million in bonuses. This glorious organisation has spent so much time focusing on damaging Enterprise Britain that it completely fails to look at the real problems.
The FSA has closed down as many small cap brokers as it possibly can. It has been successful in finding transgressions of its rule books through diligence and dedication of its vast staff. Usually paper transgressions, but rules are rules. And we cannot tolerate the breaking of rules can we now?
In the meantime banks failed but the FSA was elsewhere. No problem, we poured billions into them. So many billions that we, our children and our grand children will not only be paying for this fiasco for decades to come, but history and economics students in the future will have some fascinating case studies of how not to do things. It all makes the tulip bulb mania and the south sea bubble pale into insignificance.
No, the FSA focused on the important issues. The wide boys who sold shares at inflated prices and between them probably lost people a few hundred million, perhaps even a billion if we really stretch the years. Of course there are lots of these little guys, so the FSA needed lots of staff to kill them off.
Of course this had the added benefit that smaller businesses have found it impossible to raise capital, but that is OK – it makes for good headlines, and now I see for good bonuses, so no problems there. After all, who wants these little businesses? They are just a nuisance as we all know.
No what really got my attention this week was BP. Now BP is too big and too upstanding for people like the FSA to bother with. So it blew up a refinery, but that is not financial so that is OK. Besides it was in Texas so who cares. Then they cracked open a pipeline, but that was not financial either and small fry for BP, and abroad, so who cares again. Now they caused the biggest oil leak ever, but really that is an American problem and not financial, so no worries FSA. Crack on with your little brokers.
Sadly all these things are a problem for the rest of society, much more so than those little brokers. BP has so far lost more than £40 billion in market value because of its failure to manage its production risks. Too difficult of course for the FSA, and not directly in their jurisdiction, so who cares.
To date BP has spent almost £1 billion in cleaning up the oil mess in the gulf, probably more than all those small brokers closed by the FSA ever cost customers over all the years – not counting the customers who actually made a lot of money, because they are around also.
No, the FSA need not worry about BP, but should concentrate on the small fry. The FSA should ignore that BP management has succeeded in wiping £40 billion off our pension funds. Not to worry about those pensioners who put their savings in blue blooded stocks like BP (or RBS before). I am sure all these people are proud of the outstanding work of the FSA, are proud to take such small personal hits as wiped out pension plans and paying more tax and proud to help the FSA where it can to destroy the small cap market.
No, folks from the FSA, you keep focussing on your small fry, and get your headlines. No doubt somebody thinks you are doing a great job and deserve a bonus. Personally, I beg to differ.