If you are new to this blog, you are invited to read first “The Largest Heist in History” which was accepted as evidence and published by the British Parliament, House of Commons, Treasury Committee.

"It is typically characterised by strong, compelling, logic. I loosely use the term 'pyramid selling' to describe the activities of the City but you explain in crystal clear terms why this is so." commented Dr Vincent Cable MP to the author.

This blog demonstrates that:

- the financial system was turned into a pyramid scheme in a technical, legal sense (not just proverbial);

- the current crisis was easily predictable (without any benefit of hindsight) by any competent financier, i.e. with rudimentary knowledge of mathematics, hence avoidable.

It is up to readers to draw their own conclusions. Whether this crisis is a result of a conspiracy to defraud taxpayers, or a massive negligence, or it is just a misfortune, or maybe a Swedish count, Axel Oxenstierna, was right when he said to his son in the 17th century: "Do you not know, my son, with how little wisdom the world is governed?".

Friday, 29 May 2009

MP’s came to the bankers rescue

Is it a coincidence that the current scandal with British Members of Parliament (MP) expenses happens in the midst of the current financial crisis? It shocked the entire British nation although the financial significance to the UK budget is minimal. But it showed a complete lack of integrity of a large number of the MP’s.

The timing of the MP’s expenses scandal may be indeed coincidental. It may also be an attempt on a part of establishment, The Daily Telegraph is popularly associated with Conservative Party, to force general elections. Conservative Party does not come through with flying colours, but somewhat better than The Labour Party. At a time of deep government unpopularity caused, inter alia, by the current financial crisis swift general elections are likely to produce a very strong Conservative win. But, by no means, this is certain but it seems to be a good bet.

The MP’s expenses crisis turned up to be a perfect cover-up for the ongoing financial crisis. Now politicians, not the bankers, are public enemy number one. So The Daily Telegraph is trying to hit two birds with one stone.

On emotional level it is completely understandable that MP’s expenses caused such a rage that it pushed ”greedy bankers” off the agenda. On financial level, however, it is rather absurd. The value of the expenses is miniscule compared to the costs of the current crisis. It was caused by the financial establishment (bankers, regulators and government officials) who built a giant pyramid scheme in the same way as Albanian gangsters did in 1996 – 1997. This was a crime. In a law abiding society the financial establishment, like Albanian gangsters, would have been prosecuted and given long jail sentences (creating financial pyramid schemes is a serious felony) and their wealth confiscated (to compensate as much as possible for the costs of this crisis, like rescue packages for the banks).

The timing of the ongoing MP’s expenses scandal may be just coincidental. But the fact is that it created an effective smokescreen protecting the financial establishment. Whilst getting rid off dishonest MP’s is important for the public good, it is also important to prosecute large scale financial fraudsters.

It looks like the stronger financial establishment threw the dishonest MP’s to the blood thirsty public to protect themselves.

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