Chaps supporting chaps

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From this morning’s Guardian:

Banks benefited from a spate of positive reports yesterday, with Lloyds Banking Group the biggest riser in the leading index after an upgrade from Goldman Sachs.

Goldman raised its rating from neutral to conviction buy and lifted its price target from 61p to 107p. "We see Lloyds as a key beneficiary of increased market share concentration in the UK," it said, "and expect the group to be able to take advantage of its 30% share through market-leading cost efficiency and pricing power."

Lloyds closed up 4.07p at 70.56p, while Royal Bank of Scotland — recommended by Cazenove last week — rose 0.87p to 39p after Goldman upped its target from 36p to 41p. Meanwhile, Barclays added 11.5p to 279.65p after a change of heart at Soci?©t?© G?©n?©rale. SocGen moved from sell to hold with a 260p price target, up from only 46p, after the recent announcement of the sale of Barclays Global Investors.

So banks went out of their way to tip banks. Now there’s a surprise.

And I know that the state owns some of those banks, but what is inherent in these soaring bank prices is the externalisation of their risk: the state bears that now. Which is exactly why they should be under  much tighter state control, be split into traditional and casino banks, and should be subject to a 10% extra tax to pay the insurance premium for the risk they impose on society.

If we don’t do that what is quite clear from the above is that they’re laughing all the way to the bank.