21st Century Wire
A Story of Two Barclays
In France, the Eddie Barclay music group was founded in 1954, and is a lasting, but steadily declining moneymaker, churning out nostalgic 1960′s tunes from totally forgettable “French rockers” like Frank Alamo, Eddie Mitchell and Johnny Hallyday.
Only the over-50′s age group in France have any remaining interest in this nonsense.
Eddie Barclay
had Americanized his name from his gallic birth name, Edouard Ruault,
when he realized, like other French, that the Nazis were going to lose
World War II – after running highly profitable night clubs and festive
dives throughout the Nazi Occupation of Paris. He moved with the times
and never lost his urge and ability to turn a fast-easy buck. Wasn’t he
clever? Old Eddie passed away in 2005 but the genre still lives on.Like so many others in business, Eddie had sucked up to the Nazis while they were top dog in World War II. Then he whistled Liberation Tunes when the Americans arrived with their tanks. The same could be said for George Soros, who seems to have turned his first buck during the war working with the occupiers. What would you expect from these resilient human cockroaches? With a bit ingenuity, even bottom feeders can make it big.
The “Liberated French” loved his cockroach tunes, just as the liberated British and American financial communities loved the cockroach songs of his namesake, Barclays Bank plc who for years, followed the same time-hallowed trajectory as a declining moneymaker too, with an unhealthy appetite for bottom feeding. For exactly the same reasons as the near-total lack of interest in France for Eddie Barclay’s death in May 2005, nobody sane will shed any tears at all for the decline and fall of Barclays Bank.
You’ve probably seen the headlines, “Barclays’ share price is down after investment banking revenue fell 28%”. They’re in free fall right now. Whispers overheard at the recent Barclays AGM in London, “Are you a shareholder?” asks one man to another. Answer, “Yes, unfortunately”.
The headline news tells us that in 2014, Barclays Bank will cut at least 25% of the remaining workforce in its investment banking division and sell off half of all its assets, judged underperforming or subject to regulatory challenge – or both. Barclays Bank will also move to firstly reduce, then eliminate its so-called retail or high street banking. It will progressively disappear from the world’s “high streets”.
‘Assets? What Assets?’
Large
Cockroach: Former Barclays head Bob Diamond always managed to take home
a pretty sum, even though only junk existed on their ledger.
Born to lose, but certainly taking a lot of fools with it.
Listening to any Johnny Hallyday tune – a cheap bad French ripoff translation of anything from Buddy Holly or before him, Bo Diddley – bankster watchers can be forgiven for a sense of déjà vu in the supposed “Barclays crisis”. From the early-1980s they made a programmed and inevitable lunge – driven by pure and stupidity and greed – dedicated to exploiting every loophole and weakness in the “financial liberalization process” in the developed countries since 1980.
In brief, Barclays like the other bottom feeders counted on the regulators being out to (paid) lunch forever – but miscalculated just how long the lunch would last. Its own arrogance, incompetence, psychopathy – and monumental greed, surely accelerated its fall.
In 1983, top management of Barclays was loud-and-proud in its support to the London Stock Exchange’s decision to ‘open up competition’ (whenever they say that, alarms should always go off), ushering in the City of London reforms of 1986 known in financial circles as The Big Bang. Lord Camoys, then CEO of Barclays Merchant Bank, said: “Now we have the chance to crack right into the middle of the merchant banking business. If we choose, we can actually buy a broker and a jobber and form a real American-style investment bank!”, translated, that means: ‘Now we have the chance to really destroy our bank, and if we’re lucky, take the markets with us!’.
In 1984, Barclays bought out the upstream broker firm De Zoete & Bevan for 50 million GBP and the floor jobber Wedd Durlacher for 100 million GBP, to create Barclays De Zoete Wedd, or BZW. The blow-back from this did not take all that long.
By 1987, BZW had managed to gamble and pilfer away 75 million GBP of its capital in the 1987 stock market crash but nevertheless embarked on buy-all international expansion spending spree. Analysts in London by that time were forced to add a note of caution to their adoration of the ‘Barclays Miracle’. They even felt compelled to fix a sell note on the parent company. Some of them titled their investor notes with portentous headlines like: “There is something wrong with Barclays”. They had no idea just how wrong though.
Their failures in no way fazed the drunken neoliberal asset-buying spree of Barclays. By 1990, the BZW subsidiary bought out half of the US equities team from Drexel Burnham Lambert, but could not preventing the UK bank’s equities division from losing 45 million GBP that year. A large part of the recently bought DBL team had been laid off. One BZW director with hindsight said: “All aspiration to be a global equities business disappeared.”
Blow-back inside the “empire” soon went viral. By 1994, the new CEO of Barclays Martin Taylor quickly identified a problem with their ‘bonus pool’. He said: “We were hiring, paying a premium to get them in, and then they under-produced when they got in,” in interview with Philip Augur for “The Death of Gentlemanly Capitalism”.
It was (but of course) always the problem of individual persons and never the defects of Cockroach Crony Capitalism, sorted practices taking place throughout the “financial services” industry on whatever is sick and it can easily be exploited or destroyed. Make no mistake, all of this bottom feeding and creative ledger management was being done with the full endorsements of governments in the US and UK. No one complained, so long as the campaign cheques and off-shore investment opportunities were still churning.
Barclays Never Learned
“Learn nothing – forget nothing”, was the by-line of the Habsburg Emperors and one main reason why they disappeared – forever. Too stupid to learn anything new, and too stupid to forget old winning tricks which no longer work, they stumbled along, until they received their come-uppance, just like Barclays.
By 1997 Barclays was forced to sell the equities and corporate finance divisions of BZW to Credit Suisse. The remaining debt business became Barclays Capital Management. By 1998 this already sparked a new round of corporate plotting. Martin Taylor, the head of Barclays at the time, went on record in the UK Financial Times to say he had refused an offer from the evil genius Bob Diamond, then head of Barclays Capital Management, to resign in 1998 over a ‘breach of rules’ on the bank’s dodgy buy-sell operations in Russian bonds.
Diamond won the toss and became the head of Barclays Capital Management – which feted this event by making huge losses on bank trading exposure to Russia after the country defaulted on its debt in 1998. After that, Barclays went into a “quiescent phase’ reminiscent of the Sun’s nuclear fusion cycles or the cyclic time needed for their Eddie Barclay-style “empire” by dredging up and re-releasing tiresome hits and turning old financial tricks from the 1980′s.
Still sucking in investor support, and able to run profits on its inflated mortgage and realty loan businesses, by 2004, Barclays was “asset hungry” and able to waste more investor resources. In 2004, Barclays Capital Management then embarked on an aggressive hiring spree, adding 1000 new staff in less than 12 months. BCM’s pre-tax profits topped 1 billion GBP for the first time in 2004, increasing 25% on the previous year. This also contributed over half of the BARC-group’s total revenue.
A combination of deregulation and investor inanity resulted in these straws in the wind – headwinds not tailwinds – delivering a 15-million GBP bonus for Bob Diamond in 2007 for his outstanding “performance”. Sadly however, Bob’s attempts to buy out the failed Dutch bank ABN AmRo were not crowned with success.
Barclays continued its ingenious asset-buying craps table streak, buying the US operations of Lehman Brothers in 2008, but the sequels were not at all as programmed. In short order, through 2011 and 2012, Bob Diamond and his No2 Jerry del Missier, resigned and snuck out the back door following the LIBOR scandal. Antony Jenkins, formerly the head of retail and business banking, became the group’s new CEO.
Why Cry for Barclays?
The stench of a financial corpse was lingering in the air at Barclays recent AGM meeting on April 24th at the Royal Festival Hall in London.
For me, this merits no question mark, at all. Barclays was, and still is, a typical crony capitalist banking bottom feeder, a short-term opportunist, and a market rigging operator… and nothing else. When market conditions finally started to reflect some shards of reality – Barclays Bank was dead on arrival, just like Eddie Barclay’s record sales post-1980.
Surprised? I’m not, and I know that people get bored with daily dollops of trash – especially bankers’ trash.
Barclays Bank plc thought they could convince the world that they were on the winning side of History. It played the bent and degenerate game of Neoliberal bottom feeding – and it lost. It did not win. Barclays is a loser.
Central Banking receptionists like Janet Yellen, Mario Draghi, and their glad-handers Jacob Lew and George Osborne, and similar degenerates, ask us to subscribe like mindless and worthless chaff to their one way TINA trip to the abyss – but we are no longer interested.
It wasn’t our business when they were counting and hiding their fortunes behind closed doors before, so why should their failures be our business now? We don’t need scam-banking services from Barclays plc, or anybody else, to hasten our economic fall.
Whether Barclays plc survives will likely depend on a buyout, or worse – a bailout. It will no doubt be a long and drawn out, painful scenario. One more crony bank in the trashcan of history is as un-interesting as trash musicology.
Why do they take so long to disappear? Why can’t they just die like any other failed business? We can only ask.
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