The Anonymous Widower

The Labour Party’s Fantasy Economics

Today, the Labour Party has added a rail fare cap to their list of give-aways to all and sundry.

In the 1970s, I was asked to do a programming job for the Chief Management Accountant of a major clearing bank, who are still trading successfully, so my work didn’t toss them down the toilet.

I programmed a system, so that the Bank could work out how much every one of their management functions would cost. The program could be run so that the Bank could see how much say a pay rise for staff would add to the cost of clearing a cheque, in all of their branches. As you can imagine costs were very variable and the reasons for some of the high costs in some branches appeared in the tabloid newspapers.

It was fascinating and three things happened.

  • I learned a tremendous amount about the way bankers and accountants look at figures, which I put to good use in Artemis
  • I learned a lot about the way bankers think.
  • But above all, I gained a good friend, which was sadly cut short by the Chief Management Accountant’s early death from cancer, We regularly celebrated our fruendship  in Mother Bunches Wine Bar.

I also decided to move my Bank Account to the Bank and by luck, I was introduced to a Bank Manager, who played a large part in my life.

  • He became Metier’s Bank Manager and helped us to be the success we were.
  • He went on to be Business Banking Director of the Bank.
  • He loaned me the money to buy my first Porsche and then introduced me to the joys of owning a Lotus.
  • But as with the Chief Management Accountant, we became firm friends and put the world to rights in many convivial lunches.

Sadly, he died a few days before C.

These two friends taught me a lot about banking.

But I remember one conversation with the Bank Manager in particular.

We were talking about lending millions of pounds to companies, with strong Chilean, Israeli and South African ownership links. He said they were always difficult and risky because of the politics and determined individuals involved, but you satisfied this risk by adding a percentage or two to the deal.

Since then I have been involved in both a small finance company and Zopa; the peer-to-peer lender, as an investor, and the same principles apply.

Just as they do when the banks are lending to countries with dodgy finances.

So what makes the Labour Party think that they any sane Banker will fund their socialist fantasies, by loaning them billions at zero or low rates?

 

June 1, 2017 - Posted by | Computing, Finance, World |

2 Comments »

  1. Unfortunately there are a lot of young voters who think that there is no problem with the Labour Party getting any money it needs to fund their promised extravagance. When the promises were made they never expected to have to deliver. Hopefully, they won’t get the chance to try.

    Comment by John Wright | June 1, 2017 | Reply

  2. Absolutely agree. I just see a rerun of 1976 when IMF was called in. If folks don’t like current austerity just wait until IMF demands zero deficit budgetting.

    Comment by Mick Hewitt | June 1, 2017 | Reply


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