Long before Cityunslicker was writing this blog, Gordon Brown was showing his ineptitude in interfering with Capitalist markets.
The prime example of this is the gold sale, where he pre-announced the UK gold sale to the market, caused a huge dip and promptly sold into it. Now on the TV you often here Labour spinners saying we bought euro's so it was not such a bad thing as the euro has appreciated nearly 30%. Well, gold is up 500%, 30% does not even keep up with inflation over 10 years.
Now over the weekend Alistair Darling has been flagging that he intends to play with the UK retail banking market to create more banks. Up to 3 new ones will hit the high street to try and make amends for the failures in the building societies and banks during the credit crunch.
Nothing wrong with this, I am all in favour of the mega-banks being cut down to size. However, you do not pre-announce such sales to the market. it is just stupid as you lower the price of the assets. Moreover, during a credit crunch, which seems to happen about twice per century, is the worst time to be selling bank assets. Talk about picking the bottom of the market.
Plus I am less receptive to the idea of this new retail banking market. The retail banking market is quite competitive even with only a few players. Much like the mobile phone market.
The real issue is splitting investment and retail banking up to de-risk the banks. Also to provide more competition in in Corporate lending where companies are struggling to raise funds.
So in summary, the Government has manged to get the timing and target of its initiatives wrong again.