Idiot is idiot

Standard Life is going to take over Aberdeen Asset Management. I hate to say it but it has all the feel of those notorious pre-2008 crash financial sector mergers that were so ill-fated.

Of course history does not repeat itself, exactly. Irrational exuberance does.

Sigh:

The two companies are exploring an all-share merger

9 comments on “Idiot is idiot

  1. The interesting question is whether they will feel the need to move to London, should Ms Sturgeon get cocky.

  2. Idiot on so many levels.

    As Tim points out, that this is an all-share merger, simply plugging together two similar things that already exist.

    (I’m assuming Richie doesn’t mean prudently cutting some overlapping administrative costs when he talks about irrational exuberance!)

    Importantly, it’s also the case that regular asset management companies are fundamentally different to banks. They do not leverage themselves by taking deposits, and they do not need the same significant capital buffers to guard against potential amplified losses resulting from that leverage.

    So whilst there is a risk you might lose the value you spend on buying an asset management company, if all the clients abandon you, you can’t torpedo yourself (or the system) in the same way a bank can.

    Which is why 2009 was about the banks, not asset management companies

  3. You would think he would be expelling more semen over the Peugeot-Citroën, Vauxhall – Opel tie-up, which is obviously a massive job reduction ploy plus gaining dominance over VW-audi and Skoda.

  4. “Which is why 2009 was about the banks” – actually it was about confidence and funding models.

    But that nuance would be lost on Spud, being as he is a dickhead.

  5. A straight merger should, in theory, make for a solid company.
    Minor efficiencies possible – eventually being able to make more profit than the two individual companies.

    So what is Richard’s problem with it?

    Nothing like the banks.

  6. Asset management is a very different business to banking with very different risks.

    You’d think an accountant and “economist” would understand this, but I guess doing tax returns for smallholders in Norfolk and Cambridgshire is a different scene to big business and the City.

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