We're doomed!!!

First came to me about a couple of weeks ago when both the UK and the US politicians started chastising the bank chiefs and blaming the banks for the financial crisis. Besides humiliating them on their huge pay packages, they have also brought out a lot of very flawed arguments - that makes me wonder if they really know what they are talking about.

Argument: RBS made a very bad decision buying ABN AMRO.
Analysis: That is now clear in hindsight. RBS simply didn't have enough cash to make such a large purchase - it would only have made sense if both RBS and ABN were growing as they had for the past 3 years. However, 94% of shareholders were in favour of the takeover. No one could have forseen the depth of the current crisis - that all banks, not only RBS and ABN, have massively lower market cap.

Argument: Bankers with their large pay packages siphoned money off the economy, therefore they shouldn't be paid so much.
Analysis: Bankers that have caused losses have long been fired from the banks, but its the ones remaining that are suffering the brunt of the blame.

Argument: Banks and their fancy financial products caused the financial crisis.
Analysis: Admittedly, they were part of the problem. But who profited from getting cheap mortages they couldn't afford, and walked away when they realised they couldn't pay up? Who built and sold houses on what we know now are inflated prices? Who bragged that boom in 2007 was due to the deregulation of the economy? We are all to blame.

There was even this very pointed question at a particular chairman of a bank, "How many in your board have experience or qualification in finance?". This question coming from a gray haired politician who, himself, has no such experience or qualification. In fact, looking at the entire room of executioners - I doubt that anyone in the room really understood the crux of the crisis.

I thought the point of the whole exercise was to find the problem, fix it, and prevent it from happening again. Alas, they never even got past finger pointing.

Under the current leadership.... We're doomed...