This is a man who would explain The City to us

Wave after wave of mergers and acquisitions meant banks could generate higher profits than the GDPs of their host countries,

You what?

The Guardian, always wrong about everything.

11 comments on “This is a man who would explain The City to us

  1. “oris Luyendijk spent two years talking to hundreds of City insiders“

    Maybe he should have set aside a few days to listen to them.

  2. A bizzare article!

    It starts in usual Guardian style: interview unrepresentative bunch of people, extract quotes that fit your narrative, claim victory. All so predictable so far. He then alights on the real story (interaction of distorted incentives/poorly designed regulation), fails to realise it and instead decides rapacious shareholders are to blame. Hmm, if I recall, they got royally screwed from both ends!

    Perhaps if he’d kept his eyes and mind open, he’d have discovered an interesting tale … but then the Guardian wouldn’t have published that!

    I recommend the recent Econtalk.org episode with George Selgin for a grown-up take on 2007/08.

  3. Would work if the entire component of the rest of the GDP was negative. I must have blinked and missed it where the entire economy except banking was running at a loss.

  4. A profoundly ignorant article. He hasn’t heard of Bear, Sterns.
    Secondly,his list of culprits apart from bankers omits the two basic culprits (the idiots on Wall Street who packaged mortgages because they thought there was no correlation between the default risk of two borrowers in the same town were not basic) the estate agents/mortgage brokers and the housebuyers who both lied about the borrowers’ incomes. Thirdly there are still small investment banks that are partnerships and several that are companies are largely owned by the workers.
    Fourthly – unlike him, I worked in The City in the 1970s and 1980s before Big Bang, so I know a little about it (a lot about the “quality” end, very little about the barrow-boys) and “misogynistic, anti-semitic” is wrong. I heard more moans (in a low voice which carries less than a whisper) about discimination against Gentiles than about anti-semitism – OTOH a lot of Gentiles felt more confident when dealing with Jews than with Gentiles they did not know so that may have been rational discrimination – and a significant number of institutions, including my own, went out of their way to attract female recruits because they assumed that there must be a lot of female talent out there and it was all the fault of gender stereotyping that it wasn’t allowed to blossom. There were *some* – the best Brewery analyst we ever had was a teetotal woman but she chose to become an Actuary instead – but not much: I can count on my left fingers the number of female analysts who were better than I at their sector while I was covering several.
    That’s enough for one rant fifthly to tenthly available on request.

  5. It sounds implausible, but were there any tiny countries with big banks who made their profit elsewhere – first coming to mind, Iceland?

  6. @ BiM
    The assets and liabilities of the big Icelandic banks *combined* were greater than Iceland’s GDP per year (please note the dimensional change) but their profits were not.

  7. @ Tim
    You’re making me look stupid – that’s #1 son’s prerogative!
    I was talking elementary Euclid because I assume topology is way beyond Guardian writers.

  8. Ok ok, I know that sounds about right, and I’m just engaging in these mental gymnastics about this point for a laugh – but if you made your profit elsewhere, is that not included in the GDP of elsewhere? (presuming you booked it there)

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