On Saturday, The Scotsman went with the cover headline:-

HBOS: The questions that must be answered

Today The Scotsman raises ten of the serious concerns that remain in the wake of the collape of a Scottish institution.

There are no questions to be answered!

HBOS collapsed because of greed.

The greed of the board of directors. The greed of the shareholders.

Because of GREED.

They gambled on things they did not understand. The market reacted properly and punished them for their ignorance.

All of this rushing around and accusing fingers is pointless.

The rescue packages are worse. Public money is being used to support the wealthy caught out by their own folly.

I called The Scotsman newsdesk. I got through to an important person who understands these things from his perspective of cutting and pasting someone elses financial copy. From the perspective of the financial consequences of ordering a pint or a half on a Saturday night.

I have been in the financial jungles. Heard the big beasts roar. Suffered the financial costs of my decisions. I have known FEAR.

For a while in the 1980s, I traded S & P 500 futures on the Chicago Board of Trade (CBOT).

All you needed was an account and a computer terminal. The entry fee was $20,000 on deposit. Thanks to a 10% margin call, this allowed me to trade up to $200,000.

When you have $200,000 of your money on the line, you pay attention. You pay attention to each up tick, each down tick.

You pay attention for hours, for days, for weeks. You get to feel the market. The rise and fall in volume. The balance between sell and buy orders. The meaning of liquidity and its relation to the buy/sell spread.

Futures contracts have to be settled when the contracts run out. The action really gets intense when three of the important contracts run out at the same time. Triple witching days. Then the big blocks of the institutional players come into play. The big beasts roar and thrash and naked greed and fear stalk the land.

I have been in the market place. I have followed the market. I have come to some understanding of money, of markets. Of Capitalism.

Capitalism requires markets free from government interference.

The forces of GREED and FEAR will regulate the market.

The market players who make the right decisions will get their rewards. Those who make the wrong decisions must be punished.

When GREED and FEAR are in balance, the market place works.

Any attempt by government to mitigate the consequences of failure will destroy the balance. Will destroy the basis of Capitalism.

We will have a quasi-capitalism to go with the quasi-democracy.

An independent Scotland can return to the roots of capitalism and democracy untainted by the views of ignorant politicians and newspaper editors.

©  John Black 2008.