Don't you just hate it when

.... the FT goes all "Daily Mail". This morning's target are "Those clever investment bankers". The other pink paper has got itself uptight over securitisation from Barclays and Goldman.

"Barclays Capital has found ways of pooling risky assets on banks’ balance sheets from several clients into “smart” securitisation vehicles that can be rated by a ratings agency. Unlike discredited collateralised debt obligations, however, this is about slicing and dicing existing assets, not new lending."

So shock horror, Barclays is using some the asset securitisation schemes that have been around for years. Like the recession, this started in America, but unlike the recession this started out in the Reagan era with US commercial banks doing exactly the same thing funding pools of customer 's financial assets through off-balance sheet vehicles funded by the commercial paper market.

"Goldman Sachs is working on, in effect, a private sector equivalent to the asset insurance scheme run by the UK government."

You mean a syndicated guarantee? Now I am shocked, shocked that is that the FT pay people to write about this as if it is newsworthy.

"In both cases, this would reduce banks’ capital requirements."

Now the FT could have figurd out that if governments make capital requirements more obnersous, the economics of various arrangements will be impacted and banks will adjust their funding arangements to compensate.

To read the opinions of a wiser financial journalist, readers should turn to this month;s Vanity Fair where they will find a wonderful article by Michael Lewis on the decline and fall of AIG FP, again capturing the key elements of the story ("The Man Who Crashed the World"). I am a little surprised that Lewis has taken so long to get out this article, but it reads to another outsider, to be perfectly pausible. It is a simple story of how well run financial institutions go bad when the wrong people get int power.

I knew AIG FP well in the early 90's when they made the market in long dated swaps. At the time I had a need for long dated cross-currency swaps, and they led the market. Not only did they give the best pricing, they also made the most money, but they soon had competition from the likes of Swiss Re, Gen Re and one or two Japanese institutions. Their problems started when Joe Cassano moved from being head of operations to running the division.

What was previously a geek-led company with a culture of discussion, became a money machine driven by an autocrat, but ultimately failed because while the ungeeky Cassano did not appreciate the risks that wee building, he did understand the massive profit share and pushed AIG's executives to book deals. It might be said that one of the most intelligent houses in the City became the AAA-rated stuffee of choice but of course the level-headed guys at Goldman would never be so rash as to say that.