And there go another 70000 votes

Today the HBOS part of Lloyds Banking group announced a loss of £10 Billion, while the Lloyds TSB part of the group expected to make a profit of £1.3 Billion. With share prices plunging, one wonder what’s going through the mind of the rank and file Lloyds TSB workers at the moment.
 
Let’s look at the position of this business only a few months ago. As the credit crunch took hold, it was generally felt that Lloyds TSB were sitting pretty and smugly having been cautious with lending, and being in a good position to see the recession through. It had avoided the poisoned chalice of Northern Rock and if it played its cards right, could come out of the other end in a very good position.
 
Then came along Gordon Brown. His political shacking up of the business with HBOS under the complicit supervision of Lloyds TSB CEO Eric Daniels has transformed the business. Now Lloyds TSB resembles Sir Paul McCartney landed with a demanding and expensive wife.
 
So what must the staff make of this? As I have a relative who’s a Lloyds employee, I have a little insight. They are furious. Why?, well the banks have a practice of tying there employees down with share options. It’s possibly the only way they can retain staff in such a grim sales driven environment. They’re seeing the shares they’ve saved up for over many years crash. Not simply due to the recession, but the crass decision made by their CEO and sold to him by Gordon Brown.
 
At least they have a chance to vent their fury within the next 15 months.

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5 Responses to And there go another 70000 votes

  1. Keynesianism says:

    I agree, this is an absolute mess and is indicative of what happens when knee jerk reactions are allowed to become government policy.  The government policy can create more problems than the problem it was designed to solve.  Apparently there are more banking and financial shocks on the way and given the current state of the economy and the pessimistic forecast for the future I wonder how long the argument that "pumping money into these banks is essential for the stability of the British economy" can prevail. 

    Paul McCartney doesn't appear to have learned much from his past errors of judgement and is apparently set to marry again in haste.  Brown is behaving recklessly with tax payers money and in my view without a mandate, its time he left and fast.  I for one am losing patience with the reckless use of taxpayers money in the banking system.  It is a blank cheque with nobody knowing how large of for how long, ridiculous!

  2. Keynesianism says:

    I've just been flicking through the November pre budget statement which forecasted borrowing for this year of 4.8% and for 2009/10 of 8.9% of GDP (excluding financial sector interventions).  Leaving aside the arguments for and against the bracketed omissions these forecasts look woefully out of date already, given the perilous state of the economy.

    I seem to remember that the PSNCR forecast for 2009/10 was around £118 billion. What if it turns out to be much higher, say £160 billion or even £200 billion?  The future tax implications of this are to say the least very worrying.    It looks as though Brown is definately running out of time and is entering the end game.  Could he be tempted to go for a scorched earth policy?  A massive tax giveaway budget followed by a snap election in June might just be his last gasp but if it fails it leaves the tories with an enormous financial headache and a lot of unpopular economic decisions to be made.

    Could a future Tory government be forced to go to the IMF with Gordon Brown as its head?  Well Tony Blair did become the middle east envoy!

    How the next Tory government will tackle the huge financial problems that we face is anybody's guess.  If they don't get in soon there may be nothing left to save. 

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