Ritchie is a card, isn\’t he?

I often wonder how low the senior management of banks can stoop and they always exceed expectations.

This move shows the straightforward contempt of the directors and senior management of these banks for everyone else in the banks and in the world at large.

Are you really surprised that I want these banks nationalised when they fall over again, probably quite soon? And that the nationalisation should require a clear out of the people who do this sort of thing, for good?

If modern banking depends on ethics like these we can easily do without it. We need banking, for sure. But not like this.

He\’s complaining about this FT piece.

So, banks have lots of illiquid bonds on their balance sheets.

At present, things that are illiquid have low values: things that are liquid, like gilts and US Treasuries, have high values.

Banks also have pension fund deficits.

So, banks are moving those, because they\’re illiquid, bonds off their balance sheets and into the pension funds. Pension funds do not care about current illiquidity. They are investing for 20-40 years recall.

The transfers are taking place at the current, low, prices for illiquid bonds, not par or face value. Indeed, some of them are even being transferred at a discount to even current illiquid values.

Further, recall that Ritchie proposes that we should all invest in illiquid bonds for our retirements.

So, we\’ve an exchange that adds value: we\’re moving illiquid assets from people who want liquid ones to people who are quite happy with illiquid ones. We\’re propping up pension funds in exactly the manner Ritchie desires, with bonds that aren\’t going to get traded on the secondary markets, they\’re going to be held to maturity.

And for this Ritchie would nationalise the banks and fire everybody? For doing exactly as he recommends?

There is also a cherry on top of the icing of this particular cake. These pension funds are defined benefit ones, not defined contribution ones. So the banks have not washed their hands of their responsibilities by making these transfers. If those bonds go kablooie they\’ve got to put more money in.

Is there nothing in this world Ritchie understands?

9 thoughts on “Ritchie is a card, isn\’t he?”

  1. You’d have thought, if you weren’t aware of his penchant for hideous inconsistency, that he’d have been more concerned about the “double tax dipping” loophole.

    Which is, if it is correct, is clearly incompetence in the writing of the rules rather than a deliberate tax concession that is being exploited. Therefore worth being a valid “spirit rather than letter” complaint (unlike many of his others.) Although it is worthy of rewriting the rules to exclude the loophole from dates forward, rather than the back-dating our hero would insist on.

    Still, if he has the opportunity to rant about the evil capitalist exploiters, his evil faux-socialist funders will bestow him with more pieces of silver.

    I’d note that this is a double success on the bankers’ part – when the market for these bonds improves, or they come to term, the funds deficits might magically (the operations of economics and markets being magic to Ritchie and his harem) disappear!

  2. If Dickie believes the banks will fall over again why is he so set on nationalising them? It is the proper and done thing for bad businesses to go out of business.

    It didn’t work the first time. What makes him think it will work the second, or the third? If he wants banks to be run as he wishes he should start his own.

  3. You ask the easiest question to answer…”Is there nothing in this world Ritchie understands?”

    In the longest possible answer I could come up with…’no’. He clearly doesn’t know how a pension fund operates. He doesn’t know why this is actually good for the banks, AND good for the pension funds.

    All he believe is that a bank, no matter how big or small, is there to cause extreme world poverty and hunger, murder everyone who doesn’t believe in them, and BBQ kittens in their basement. (none of these are true if you are thinking of suing 😉

    He recommends the nationalisation of banks…erm, Murph, RBS – 90%+ state owned, Lloyds – 80%+ state owned. The other banks you have no say over Murph (as much as you would love to) they are a fantastic thing called private enterprise. I love private enterprise, because I know it gets up his nose.

  4. I think another question that profitably could be asked is: “should Richard Murphy be beaten into insensibility with a massive rubber cock?” I tend towards “yes”.

  5. I suppose contemptuous overfamiliarity has its place, but I would have appreciated some clue as to the identity of this “Ritchie” person. If he’s important enough to merit a blog entry, he’s important enough to merit a name.

  6. Well, Tony Sidaway, I definitely appreciate your sentiment, which is why I never refer to the repellent individual in question via the appellation “Ritchie” or “the Murphmeister” or some other pseudo-affectionate diminutive (no, really, fellow Worstallites: I don’t, Check). His name is Richard Murphy, trained as an accountant, now an economics and tax-policy commentator who by his own admission eschewed the study of economics at university and who inspired the immortal line by Han Solo in Star Wars: that’s not a gigantic cunt – it’s Richard Murphy!

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