From Pin Stripes To Orange Jump Suits

I took a trip to London yesterday and there were several stark reminders of the current bleak market. Most visual was the 'To Let' signs in the City, I have never seen as many offices up for rent, it was bizzarre. A certain sign that times are not good.

The most profound thing I saw, however, was at the airport. I glanced at the cover of Fortune Magazine which had a picture of someone in handcuffs and the teaser 'Sending Wall Street to jail, it's payback time' or something very similar.

In October last year, we said this was where it would all end up. In our article we said "We have said it before on this blog, the regulators are getting tough and are probably being backed by a political will to catch the big guys. Someone's scalp will be on the mantle of an ambitious politician soon, we are sure of it."

We never envisaged that the backlash would be so vitriolic. Don't get me wrong, people have a right to be angry. Some very greedy people did some very stupid things and vaporised $9 trillion dollars of asset value and cost taxpayers a trillion dollars and counting, but I fear things are getting carried away.

What is a CEO to do at his shareholders meetings, or in interviews now? If he says everything is OK and then earnings tank followed quickly by the share price he is committing an offence. If he says 'OK we are screwed, but we think we can get through it" he will be rewarded, within days, with a dead share price and vote of no confidence at a hastily arranged shareholders meeting.

It is a dilemma that is not appreciated by the lynch mobs baying for CEO's blood. Hard to be sympathetic thought, n'est pas?

This wave of hatred was backed up by a sticker I saw on a road sign in the City it read "Tax the rich, Make them pay for their crisis"

I also read an article in a newspaper while on the Tube that talked abut Raoul Weil, a fellow Swiss resident, who was formerly head of UBS's wealth managemnet business. He has been formally declared as a fugitive by the US.

Prosecutors in Miami released a copy of a judge's brief order putting Weil on the court's fugitive list, but said they would have no further comment.

An indictment unsealed in November alleged that Weil and other unidentified bankers conspired to help 17,000 Americans hide $20 billion of assets in Swiss bank accounts in order to avoid paying U.S. taxes.

At the time, an attorney for Weil said he was innocent and called the indictment against him "totally unjustified."

Visons of Harrison Ford playing Raoul in the movie 'Fugative III' - being chased by Tommy Lee in the Alps were replaced by those of the more sinister movie 'Rendition', the game has changed Raoul.. run.

I am sorry to make lite, but give me a break. Were UBS not regulated in the US? Were they not subject to inspection by the regulators? What did the regulators think a Swiss Bank was doing in the US? And now, Raoul, who I am sure is an honest, honorable and decent Swiss guy has had his life, basically, destroyed.

I am also sure that the Head of the SEC is an honorable, honest man but, just like Raoul, he is responsible for not making sure that all was above board. Where are his handcuffs?

What about UBS's US Lawyers? Did they not give opinions on the situation.. are they in court?

I am not making excuses for wrong doing, nor do I purport to know the full story, but witch hunts never end well and it all smacks of political manouvering. The IRS and, seemingly, all other European countries, do not like Switzerland's independance and their souvereign right to structure their tax system how the wish, so the easiest way is to start arresting people and throwing your weight around.

The bottom line is that, in our world, politicians make the rules, they are responsible. US politicians appointed the SEC boss, the SEC allowed UBS to operate under their supervision, UBS's lawyers no doubt made millions in fees advising UBS and our friend Raoul didn't believe he was doing anything wrong.

Problem is (especially for Raoul) the game changed, someone has to take the fall and the last people to take any blame, and who will never see the inside of a jail cell, will be those people who put themselves before us, pledged to do the best by us, to be honest, diligent and servants of the people.. politicians.

These are the real criminals here because they were asleep at the wheel, not just with UBS, but with the whole mess. Watching these pompous assholes now clamouring for anybody in a suit who gets over a million dollars to be jailed is, frankly, sickening. There are plenty of bankers deserving of jail time, but there are more politicians.