Socialist Worker

City traders are even ripping each other off

Issue No. 2094

It was just one more crisis in the constant turmoil in the financial sector – last week Britain’s biggest mortgage lender, HBOS, nearly went bust. Someone started rumours that the bank was in trouble – and then bet on the falling share price. One speculator is thought to have made £100 million.

Now cheating is frowned upon even in the chaotic gambling dens of the stock market. The Financial Services Authority (FSA) said it will “not tolerate” such criminal activity. Since the FSA has never successfully prosecuted anyone for this sort of illegal trading, the traders will hardly be trembling in their Porsches.

However, do not worry too much about the shareholders of HBOS – the shares went back up once the rumours were scotched. So everybody is happy. Except that last week the Bank of England bailed out the City with £10 billion in loans and is under pressure to give more.

The frantic drive for profits means that speculators make a mess of the economy – then make the crisis even worse as they look for yet more ways to cash in.

Meanwhile the best the government can do is express its unshakeable confidence in the financial sector, praise millionaires and throw money at the rich – while solemnly telling the rest of us there are tough times ahead.

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What We Think
Tue 25 Mar 2008, 18:57 GMT
Issue No. 2094
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