Buhlmann's Corner
Who knows Willy Brandt?
He was a staunch socialist, and persecuted, and is now being outdone by the first German female chancellor – the first woman to set about “testing the resilience of the economy”. The first lady Chancellor is going even further than her socialist predecessor. Outside Germany, people think it’s only in a country like Germany that one can avoid being utterly confused by the vagaries of energy policy. But the game is not over yet.
The politicians’ latest tactic is forcing equity capital on the banks. Especially the “good” bankers must respond by shrinking the balance-sheet and raising the book profits – in the interest of the shareholder, there is no alternative. That’s not wise either for the bank or for the national economy. Whoever acts fastest will be safe from the rating agencies. Because before they can manage to act, the mobile (or rather, still moving) banker will have left the scene again. Really only one thing is clear: anyone who’s naive enough to really think that systemic trust in the financial market can be produced by increasing the accounting equity ratio a few percentage points without at least equal financial discipline is going to lose those same percentage points in intelligent voters.
Today the rankings listers are still going after individual States, and almost no one asks about their ownership structures. Those are the agencies whose regulation is always being called for, and always with the same lack of consequences. The agencies that would, if one had followed their assessments for investment purposes over the past decade, have destroyed more billions than they would have protected. The agencies that earn just as much from the downfall of their customers as from the contractual fees of those that depend on them. But anyone thinking of imperiously forbidding the raters should consistently also ban similar irresponsibility of governments and regulators, or the scoring of retail borrowers. To paraphrase the French Sun King Louis XIV, “LEtat, c’est moi.”
But back to energy: first a tax bringing in hundreds of millions a year is invented, and then its equivalent, or much more, is destroyed. The primacy of politics is clear and unquestioned. But the costs of decisions should be paid by the decision-makers. Anything else is the beginning of the end, like the financial crisis that we in Germany have often referred to as, and continue to call, a crisis of confidence. When are the shareholders going to call in the values? Where is the faithful trustee who truly protects the assets of his investing retirees and retail customers instead of only managing political decisions that are irresponsible because they have no consequences?
It’s still the Wall Street banks that are occupied; some day it’ll be the Frankfurt banking district, and finally the whole system will be called into question. Between capitalism and communism, there is a range – also known as the German way, with social peace, participation and the economic miracle. If, however, politics is ruled by the pendulum of the street, then the only recourse is Black & White – or even better, a well-matured Laphroaig!