Wednesday 24 August 2011

Memento Mori

In the old days, it might happen that you would notice in the street more women than usual standing at their doors with older ones across the street from a particular home. They would be talking quietly and waiting. They would often remain for some time despite the household jobs to be done.

Then across the street the upstairs curtains would be drawn and shortly after the downstairs ones. The women would go back into their houses and the old women return to theirs.

The death watch was over.

There would be times when the wait was a long one. There would be others when either fervent praying brought about a recovery or the old blighter wasn’t going to go easily.

Across the web much the same is happening, this time it is the Bank of America that is the subject of the watching and waiting and there will be precious little quiet, dignity or respect when the lights go out. Business Insider sums it up:

It will not be like any other and the ramifications will be different because when a big bank goes down it is never the same and always with a great many unforeseen and unintended effects. At the moment the stock is twitchy but that is no great guide.

The only thing that is the same is that lessons have not been learned from other similar events in the recent past and also the financial world, governments and the rest will not learn the lessons from this one.

Whatever happens, even if this patient recovers the situation will not be the same in future and there will have been both direct and a lot of incidental damage done. Because of the many mysteries within the Bank’s accounts there is no telling what will be the future.

In the UK because of other matters there has been little notice taken of this, along with many other things that are problematical because it seems so far away and in any case as far as the USA is concerned a big earthquake along with a hurricane has more personal interest stories than a bank.

In the recent crash, however, we found out that the UK was far more connected than we thought. How many local councils had big money in Icelandic banks that were not quite banks when the money ran out? How much UK money is involved in Greece? If it is anything like Ireland it will be a lot.

The Bank of America also has major UK connections. Because of the default of one of its largest customers it now holds thousands of freeholds of UK leasehold properties. Moreover, it is the effective owner of several of the largest property management service companies running leasehold developments.

What will happen to them? Who might be their eventual owners? What will be their financial objectives? Who in the UK will be worst affected? What impact might this have on rentals and operations in the UK leasehold and renting sector?

Don’t ask our government, the Bank of England or any UK bodies, they will not have the faintest idea nor will they know what to do if the going gets rough.

Are the old ladies gathering on the pavement across from your place?

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