The ideal business.
You are allowed to take huge risks (without necessarily understanding what those risks are).
You then leverage those risks to take even more risk.
And in the good times it could be time to rock and roll.
But just when you’re waiting for the good times, the, er, bad times appear.
What should we do now?
I know, let’s play our joker. The rescue plan is just around the corner. Enter the taxpayer.
Of course, if you haven’t guessed we’re talking about the banks. Not all of them, but can you really distinguish between them all?
No? Neither can I.
Mr Darling and Mr Brown have stepped in to save the day!
Hurray!
Their solution is to construct a package to lend the banks our money so they can lend that money to…
Wait a minute. Isn’t that how we got here in the first place?
What a business model.
It’s hard to disagree with what the Government has done – simply because there was no other option. The banks had to survive for the sake of the whole economy.
But what about the businesses that have gone bust?
Where was their Knight in Shining Armour?
Surely some of those companies didn’t manage their operations worse than the banks? Where was the Government assistance?
Let’s hope that when this downturn passes, we all don’t forget about what has taken place.
