Stanford Fraud and Global financial strip-tease

"Sir" Allen Stanfraud's $8,000,000,000 scam may seem small beer compared to the Bernie Madoff's mighty $50 billion job, but it does deserve attention, as the second in what promises to be a long line of frauds as we watch the slow disrobing of the diseased global financial system.

Stanfraud sold CDs. No, not that kind, but Certificate of Deposit which were labeled as safe, easily-cashed high rate of return investments, whereas in fact he was putting them into unsafe property and private equity schemes. His clients were idiots, because the rule is, you get safe and low return, or risky and high return, you don't get safe and high return.

Experts had been suspicious of "Sir" Allen (knighted for acts of money distribution in the Caribbean, and I believe that the Irish term for louse is pronounced "Sir") for 15 years. Why did the suspicions not get turned into evidence? Because there is a basic premise that you do not question the man who has a lot of money. It goes back to the chimpanzee side of our nature - do not challenge the alpha male, unless you want to go about with bits of fur missing.

Derek Wall will be pleased to see that the Venezuelans who did not like Chavez put their money into Stanfraud's banks instead of local Venezuelan banks. There's karma.

Schadenfreud is frowned on, but it is not illegal.

Overall, though, there is an urgent need for Governments to put up a Security Wall, a ring-fence, between good money and bad money. Good money is what is used to oil the machinery of the real economy - provision of water, food, low carbon energy, housing and pollution control, fundamentally. Good money is what people earn by honest toil, from lifetime savings.

Bad money is money made by trading in money, or trading in guns and toxins, and scams and Ponzi schemes.

If Greens were in government, we would be working hard to design a way to allow the good money to survive, and for the bad money to collapse down and drown in the cesspit of its own corruption. To create a situation where the banksters, the spivs and wheeler-dealers personally accept responsibility for their decisions, so that as and when the whizzo Ponzi schemes they invested in collapse into nothingness, it is they personally who go bankrupt, and not the banks that people have put their savings into. Bankrupt, the business persons will have to live the experience suggested by Wanda, the keenest financial analyst of all.

Unfortunately, Gordon is living up to his reputation for dithering. He has put the question of bonuses out for review, instead of wading in there with a financial machete. The Tories are criticising, but would do the same.

We do not need a general election, with a political makeover that changes the wallpaper from pale pink to pale blue. We need a robust, root and branch overhaul of the entire political and economic system.