Southern Cross care homes bubble about to pop!

Southern Comfort not Southern Cross

When I was at school the general gist of studying history was that we could learn from our mistakes as a people. One subject that cropped up was the South Sea Bubble, that notorious scam about selling shares in a dubious company that was trading as a monopoly with Spanish South American colonies. The moral of the tale, as we heard, was that things which sound to good to be true often are.

Move on to the 21st Century and we got New Labour, a bubble with a political pong in it, doing dodgy deals all round. Banks were encouraged to trade debt rather like putrid bean sprouts. In fact, as Vince Cable kept telling us, the debts were toxic. Not much difference then between a bean sprout with rampant e-coli and a bad debt with a financial toxin. One does your belly and kidneys in, the other scrambles your brain.

Southern Cross is being described as a "beleaguered care home business" on the brink of bankruptcy. Why is this? Because they sold off homes on some leaseback venture to other like minded care home property types who then recycled the cash and, well, it's all going to end up with the Royal Bank of Scotland. When this bubble finally pops, it will leave a trail of debt of over £5billion. All for the taxpayer to sort out. None of this money was real in the first place, or precious little of it. RBS didn't reinvest savers deposits in the retirement homes of grannies and grandads. No, they pushed a button and a whole stream of cash appeared. Little or no control on anything.

So, with the national economy in the doldrums, these devious money shifters are conveniently pushing the blame around like dodgem car racers on a high. The disgusting thing in all this is that the only people to benefit from this crazed money production are those that cream off a slice each time it comes their way. But it's those left when the money creamers leave town that really matter. The old folk in distress and the taxpayers in confusion.

Posted in: care homes,Royal Bank of Scotland,Southern Cross