Dr. John Sentamu, Archbishop of York, is outraged at those responsible for short selling shares in HBOS, labelling them as “bank robbers” and “asset strippers”.
Addressing the annual dinner of the Institute of Worshipful Company of International Bankers at Drapers Hall in the City of London, Dr. Sentamu said:
“To a bystander like me, those who made £190million deliberately underselling the shares of HBOS, in spite of its very strong capital base, and drove it into the bosom of Lloyds TSB Bank, are clearly bank robbers and asset strippers.
“We find ourselves in a market system which seems to have taken its rules of trade from Alice in Wonderland, where the share value of a bank is no longer dependent on the strength of its performance but rather on the willingness of the Government to bail it out, or rather on whether the Government has announced its intentions so to do.”
You should read the whole thing (via Ben Sternke and Maggi Dawn). Of course, a lot of people are outraged about the whole situation. The “bailout” package is so large that it’s not at all uncommon to hear people dropping not merely one but three decimal places when talking about it. At least until it started getting reported as “almost three-quarters of a trillion dollars.” It’s $700 Billion, with a “B.” Staggering. Yes, Mr. American taxpayer, $2,300 of that is yours. A family of four, you say? Oh, too bad! At least it’s still only four figures. Well, anyway, it was very nice of you to swoop in and buy up 80% of AIG, for example, investing in a dead horse in hopes that the expensive vitamins will bring it back to life. Realistically, nobody would take on these investments in the state these companies are in. Already own shares in AIG? Sorry, your 100 shares just lost 80% of their value. And you’re still getting the tax bill. Well, eventually… in the meantime, it’ll probably just be appended to the national debt, sending it well over $10 Trillion. That’s “trillion,” with a “T”.
Now, we must acknowledge that the cash being thrown at the problem is “simply” to avert an even bigger financial catastrophe that nobody wants to think about for very long in any of its significant gory detail. But see here… this morning my kids are browsing the World Vision Gift Catalogue to see what they might be able to raise some money for by Christmas time. A goat? Ducks? An alpaca? A camel? In each case, they learn how the particular animal is able to help out a family or a village. And Dr. Sentamu is talking about the lack of funding for the Millennium Development Goals due to be discussed at the United Nations.
Dr. Sentamu said: “Tomorrow morning I will attend a meeting to launch a campaign of ‘Education for All’ as part of the global effort to achieve the Millennium Development Goals, including the eradication of global poverty by 2015. Of course for such a target to be achieved there needs to be stable financial systems. There needs to be stable financial systems. Without a solid global economic base to work from, the eradication of world poverty would be an even greater task. But as one columnist recently noted, “the President of the United States recently announced a $700 billion bailout plans for banks and financial institutions. One of the ironies about this financial crisis is that it makes action on poverty look utterly achievable. It would cost $5 billion to save six million children’s lives. World leaders could find 140 times that amount for the banking system in a week. How can they now tell us that action for the poorest on the planet is too expensive?“
(Emphasis added.) It seems too great a trouble for the world — or even the G8 — to procure $5Billion by 2015 to save the lives of 6 million people in extreme poverty, but one of those nations can come up with $700Billion by the end of the week to prop up its financial system. Maybe it’s all about spending close to home? To save you the math, $5Billion is 0.07% of $700Billion. The interest rate on the national debt should be somewhere around 5.5% or less, meaning that the interest on the bailout package is about 7.5 times the sought-after $5Billion. To put it another way, the interest payments alone on $700Billion would be sufficient to save 6 million lives in extreme poverty every seven weeks.
On the other hand, I understand Obama wants to go further, spending $845Billion to eradicate global poverty by 2015. That’s $2450 each, if you’re counting — but for a goal like that it seems more… I don’t know… noble?
One thing that comes of this whole scenario… the goal of ending poverty, globally, should seem just that much more achievable. The big question that remains: just how will you now look them in the eyes and tell them it can’t be done?
Thanks for your thoughts. I agree that we definitely need to rethink everything in regard to the way we think about spending our money.