Of course, it’s not just jubilation at Blank leaving that prompted the faith in Lloyds. They also announced plans to raise £4bn that will pay off the preference shares bought by the government back in the excrement-fan days of last October – an investment opportunity that has sent the share price up. It’s also a sign that the government is beginning to retreat from its investments in banks – they’d originally pledged to take on all the shares from this issue, effectively swapping around preference shares for common shares, but now they’re only taking up 43% of them, and letting other investors in on the action. Lloyds is doing all this because it wants to stop paying the government the interest on preference shares, as it’s costing them £480m a year. 

Blank resigned because everyone was realising that no heads had rolled for the HBOS merger that saw Lloyds saddled with defaulting loans and toxic assets – they announced in February that HBOS lost £10.8bn last year. Rather than get slaughtered at the annual shareholder meeting, Blank stepped down, avoiding an ugly end to his career at Lloyds and also sparing Gordon Brown, relatively speaking, from any blushes – Brown had allowed the Lloyds/HBOS merger to go ahead without impediment from competition law after Blank schmoozed him at a Whitehall cocktail party.

As the FT notes today, UKFI, the Treasury body managing government stakes in banks, has not sided with Brown but instead has been listening to hesitance from investors over the quality of Lloyds’s leadership. But rather than publicly side with those investors, tantamount to “an open insult” to Brown, they diplomatically nudged Blank towards the edge and suggested that jumping might be an awfully fun thing to do.

Yesterday the FT’s Lex column suggested that Eric Daniels, Lloyds’s chief exec, “should not delay in preparing his own exit”, the suggestion being that a shareholder revolt against him would be inevitable as he and Blank are “inextricably linked” over the HBOS deal. But today there are suggestions from sources that Daniels could be safe: “Eric has some serious supporters out there”; “Eric is the right guy to make a success of this”; “Eric’s Sino-Germanic heritage suggests mystic power combined with ruthless efficacy, while looking like an exceptionally wise ape – this will surely be enough to survive”. That last one was me, but it’s true! Anyway, even Blank probably won’t leave for a good few months – posting a new chairman won’t be a quick task, and certainly won’t want to be seen to be rushed.

But just as we’ve seen with Goldman Sachs et al recently, a less competitive banking sector has thus far meant massive profits for the ones who have survived. As Pesto suggests on his blog, the sheer amount of assets that Lloyds now has as a result of the HBOS deal will eventually help it turn some massive profits once people stop defaulting and they’re not tied to the government any more. Some are calling the merger “the worst deal in British corporate history”, but thanks to that deeply irregular Brown-sanctioned waiving of competition rules, Blank gave Lloyds a once-in-a-lifetime opportunity to amass a huge chunk of assets, which could go on to make them (and therefore the taxpayer) a lot of money.

And while the cocktail party decision smacks of Labour being in thrall to the private sector, as well as being quite simply rash, the government is getting a healthy return on its investment. Whether a contracted banking sector starts to mean a less competitive atmosphere, it’s too early to say, but right now the government’s exit strategy is looking strong.

2,500 are to go in Switzerland, and a fair proportion of them in America too – it’s hoped that the culls at UBS in the City last year will mean that London shouldn’t see too many more. The news dragged down their share price a massive 8.7% this morning, along with other financial stocks that had previously been buoyed with the news that Goldman Sachs is all ready to pay off its TARP money.

The other ongoing UBS story is their harbouring of US tax evaders, and how the American taxman doesn’t like it. We saw last week that Steven Rubenstein became the first American to get arrested for evading taxes through the bank; now Robert Moran, who owns a luxury yacht company, joins him. He pleaded guilty to the charges and was released on $6m bail; he now faces three years in the slammer and a $250,000 fine. The New York Times is right to highlight the ridiculousness of the boats he sells – they’ve sometimes got helipads, always cost millions, and have such hedge fund manager-pleasing names like “We Won”, “Sabbatical”, “Salute”, “Romance”, “Battered Bull”, “Galactica”, “Project Apostrophe”, and, rather aptly given the greed of its manager, “Never Enough”. “Amnesia” is presumably named for the condition you hope you’ll succumb to after you pay the bills for it; it may cost $345,000 euros a week to hire, but you do at least get an “inflatable workout sphere” included.

Rewind to May last year, and Liechti, head of offshore private banking, was detained in Miami by the US authorities as a witness in their probe of tax evaders. He used his Fifth Amendment rights to not incriminate himself, and ended up leaving in August; clearly the US didn’t have as cast iron a case as they did on fellow UBS tax-scorner Brad Birkenfeld, who was forced to blow the whistle on UBS’s evasion practices to avoid years in jail.

Birkenfeld revealed all sorts of krazy schemes that were used to channel his client’s money, including smuggling diamonds hidden in a tube of toothpaste. Interestingly his client, Igor Olenicoff, named Liechti as a defendent along with Birkenfeld and 28 others when he sued UBS for betraying his trust after the tax evasion came to light – Liechti must have actively participated in Olenicoff’s tax evasion. Maybe UBS now regard him as simply too much of a liability as the US step up their action against the bank. He’s getting paid leave though, which positively rewards him for his tax-evasion facilitation. Nice message!

It comes as UBS and other private Swiss banks are keeping their staff grounded within their stunning Alpine borders, for fear of being taken in for questioning over the tax dodging of their clients if they travel abroad. UBS is being pressured into releasing 52,000 names of people suspected of evading taxes by keeping their wealth in anonymous Swiss bank accounts; UBS says that despite the recent compromise over Swiss banking secrecy, they’re still not going to reveal the names to the US authorities.

A Business Week article from 2005, in which a writer poses as an investor with a multimillion-dollar portfolio to see what sort of thing UBS would offer him, is enlightening on the matter – in addition to the investment options they provide, “UBS also tailors its offerings to suit the client’s tax jurisdiction”.

Quite apart from the tax issue, UBS are looking very shaky mid-recession. Their shares dived 7% this morning after Swiss newspaper Sonntag announced yesterday that the bank would need to be written down by another $2bn thanks to assets turning sour, adding to the $49bn writedown it’s already had since mid-2007. UBS are also set to cut 8000 jobs according to the paper, adding to the 7000 already gone and the 2000 more announced a month ago. We’ll have to wait til later in the week for confirmation from the bank, but the news isn’t going to be good whatever the numbers are.

Despite running a company that seems hardwired to annoy your zest for musical expression out of you,  and turn your evening into a Brazil-like bureaucratic puzzle, chairman Barry Diller whined that: “The better we sell tickets, the more unpopular we become”. Look, until you stop being a talentless middleman taking ridiculous commissions on bank transactions, or at least find a very good way of hiding it, then you’ll be somewhere between traffic wardens and cowboy builders in the popular imagination.

TIcketmaster’s most recent dick move was redirecting Bruce Springsteen fans to its sister re-selling site where ticket prices were higher, rather than selling them at the advertised price – they ended up getting fined $350,000 by the state of New Jersey. They also confused this Fall Out Boy fan into spending nearly $1500 on tickets with their redirection tactics. Boss fans also got stung by the Ticketmaster telephone service that told them they weren’t selling tickets, before hanging up, before said Boss fans smashed their phones in rage at being held impotent hostage by a company dealing in perforated card.

But things are set to get potentially worse with Ticketmaster potentially getting bought out by the promoters Live Nation. Both companies have recently got into the “artist management” business, so there’s potential for some kind of vast musical empire charging you commission every time you simply lay eyes on the Jonas Brothers. Unsurprisingly, antitrust hearings were launched, but now it’s being suggested that the $2.5bn deal actually has a good chance of being approved. Trent Reznor will be pissed, though Billy Corgan will be chuffed.

To give you an idea of Live Nation’s operation runs, they’ll charge you $6 to park your car at one of their venues. And $6 for each person you’re carrying along with you. So if you’ve rocked up in a party bus with 8 other chums, expect to pay $54 in parking. Welcome to the future of entertainment.

So wha’ gwarn? Lloyds had a busy weekend, signing up to the government’s insurance scheme that Darling set up back in January, which has the government take on banks’ “troubled assets” (still loving that bit of euphemistic psychological terminology). Lloyds needed to do this because of the massive amounts of these assets held by HBOS, whom it bought out last year. So under the scheme, Lloyds pays the government a £15.2bn insurance premium to have it insure its £260bn of potentially bad assets – things like defaulted mortgages – so that if they do turn out to be bad, the government will absorb the losses (after the first £25bn of losses is taken on by Lloyds themselves). The hope is that the confidence given to them by not having to worry about these assets will improve its health – it’ll start lending again (it’s promised £28bn over the next few years), the economy will pick up, not as many of the assets will turn bad, and the ol’ capitalist machine will whirr with renewed vigour. 

Well, let’s hope so, because if it doesn’t then the taxpayer is shouldering the burden. And Gordon Brown must be hoping so too, as the political mileage gained by his rivals will be enough to sink him if it doesn’t work out. Brown allowed the takeover of HBOS by Lloyds last year to pass unheeded by competition rules, and with five times less due diligence – this will come to be seen as rash and clumsy if it doesn’t work out. Michael Fallon, the Tory chairman of the Treasury sub-committee has already waded in, calling the soiree where chairman Sir Victor Blank persuaded Brown to waive the rules “the most expensive cocktail party in history”, adding: “Brown should never have egged Victor Blank on by offering to waive the competition rules. The law is there for a good reason”. Expect a lot more of this in the next few days.

But while we should wait until we actually take on assets before we get angry with them (though The Times isn’t bothering), shareholders are already mad at Blank and chief exec Eric “Fat Dr. No” Daniels. Considering 83% of the assets insured by the government came from HBOS, shareholders can’t believe that their investment has been dragged down by Lloyds chasing cheap acquisitions. The deal cut by Lloyds is less favourable than the insurance package for RBS, who paid £6.5bn to the government for insuring against £325bn of its assets. Daniels can’t seem to please anyone, having “pissed the Treasury off” during the hashing out of the deal, according to a source quoted by the FT. Still, they’ve both got Brown’s support, who said: “When we rescued RBS last year, we removed the chief executive and chairman. That is not happening at Lloyds”.

Elsewhere, the papers are gamely encouraging us to get all riled up at the news that 40,000 junior Lloyds employees are still set to get bonuses of around £1000 each, not really the story that “Lloyds bankers in line for £80m bonuses” promises. Don’t worry – Daniels et al are still not getting any bonus action this year (though Daniels is getting a £3m pension).

So while the shareholder revolt foments, hopefully resulting in the trashing of Blank’s pathetic attempt at a car and fresh tears from Daniels, another one is brewing over at Barclays. Despite them taking on tons of Middle Eastern investment to avoid a government bailout, they might need to sign up to the insurance scheme anyway. Alastair “Don” Darling is clearly making everyone offers they can’t refuse – fingers crossed it all works out.

You may remember that Porsche revealed that it owned the majority of the common stock of VW, sending the price of the rest through the roof (with VW staff cashing in their personal stakes and presumably buying really nice summer houses). This wasn’t what some hedge funds thought would happen – fair enough, considering the state of the car industry post-recession – and they lost big through short selling. One of the biggest losers was Adolf Merckle, who went on to commit suicide amid the ruins of his business empire.

Now the fact that this trade by Porsche wasn’t the only time they’ve played the markets to their advantage means that their opponents are calling them a speculator rather than a company, potentially adding weight to allegations of market manipulation, over which Porsche are already being investigated by financial watchdog Bafin.

Frankly, it sounds awfully like sour grapes from the loss-making hedge funds, though they may have the last laugh even if their legal challenges don’t amount to anything. It’s not known how heavily Porsche is leveraged over their acquisition of the VW stake, but we do know they bought the shares at €117 each. That looks favourable when you see that the current share price is nearly €250, but compare it with that of other European car companies this morning: Renault: €16.33. Peugeot: €14.68. Fiat: €4.38. As the FT notes, VW haven’t ruled out a loss for the first quarter – their own sales are faltering, Audi sales are down, Porsche too, with only Skoda proving a success over the last couple of quarters. Give them a year or so in the current climate, and that share price could easily dip below what Porsche spent.

Porsche were legally obliged to buy out Scania after the VW buyout, but that deal has gone through without a hitch – they’ve passed on the shares to VW for the same price they bought them for. What’s more worrying is having to sort out the refinancing of a €10bn loan in less than a month, which even if they manage they’ll still face major increases to their rates of interest, which they’ll pay for… how? 

According to an analyst that the FT spoke to, Porsche had €31bn in stock liabilities last summer. Considering they’re dealing in a product that people are buying a lot less of these days, they could be the next company to have overextended and overexposed themselves at just the wrong time. Still, at least they can go and look back on the good times in their new museum. I can see their CEO Wendelin Wiedeking stumbling around it at night, drunk and Kane-like, stroking an 80’s 911 before shouting incoherently about oil prices and recession…

The owner, Maria-Elisabeth Schaeffler (who rocks hairspray and shoulder pads like Dynasty never happened), is asking for state aid to bail the company out, acknowledging that she will have to tap the family’s own wealth to pay their debts. Just like the Big Three in America being scorned by Pelosi, her first request was denied and she was told to come back when she had a better business plan outlining what the company was going to do with it. They can expect to give up a large chunk of equity whatever happens, potentially handing over the control of the company entirely if state aid fails and the banks move in.

Sound familiar? It’s exactly what happened to Adolf Merckle, fellow German industrialist and former head of all sorts of things like Heidelberg Cement, before he lost big. He was having to front his own personal wealth as collateral against loans after a short sell in VW shares went badly wrong, and went on to ask his local state government for aid to save his companies. His bid didn’t work, he saw his company being taken on by banks and equity dribble away to nothing, prompting him to take his own life.

So what went wrong for Schaeffler? Rather than a stock gamble, they took an equally big risk in making a highly leveraged acquisition at the peak of the market. As RBS, Baugur and many others now realise, this wasn’t wise. Schaeffler took on a minority stake of tyre makers Continental last summer, originally agreeing for a 49.9% stake to be built up over a few years. But then Lehman Brothers collapsed, the world went mental, and Continental’s investors decided that they’d accept Schaeffler’s earlier asking price of around €70 per share. OK, so Schaeffler were getting shares for cheaper than they had been, but the price was dropping all the time, and we were clearly entering a recession – what were they thinking? They ended up acquiring 90.2% of the shares; Continental’s share price has fallen ever since the first buyout at €75 per share – it now stands at €15.48 after going as low as €13. Schaeffler’s stake has lost €8bn in value since the buyout.

All this was funded with debt, and they also took on Continental’s debts that were amassed buying out Siemens’ VDO unit. Now no-one’s buying cars anymore, it all looks very, very bleak. At least, as the FT notes, lower raw material prices coupled with a greater demand for replacement tyres might help them out. Maybe Maria should cut out that article and frame it on her wall to gaze at while the vultures circle…

Peston was blamed for the queues outside Northern Rock after he revealed the bank’s woes to the nation, as well as for the rise in HBOS’s share price after Peston revealed they were going to be taken over by Lloyds. More specifically, he was accused of being a pawn in some insider trading scam, with a mole feeding him information that would affect the markets. It was an accusation that George Osbourne ratified and then Peston, with typical aplomb, deflected with the Deripaska-Rothschild-Osbourne yacht scoop, while the FT defended Pesto to the hilt.

Still, the criticisms haven’t gone away. “Newspapers have the same sort of obligation as they do during a war”, said Simon Jenkins on the media’s role in the crisis, i.e. shut up and not “scare” people. Jenkins of course chose instead, on the day of the worst stock market fall in years, to romp up Cader Idris and uncork his babbling, Biblical prose. How responsible of him!

So Peston faced the committee yesterday, and he rebuffed the criticisms in a hyper-Pestonian manner. This was Pesto off the leash, allowed to roam free over vowels and clauses, a style described politely as “loquacious” by the Guardian and perhaps more accurately as having “sentences like giant sausages” by Quentin Letts in the Mail. “I know lots and lots and lots of people, including you, and, y’know, I talk to lots and lots and lots of people”, was his version of refusing to outline his sources. Slick.

The main thing is that Northern Rock was screwed even if Peston did create a run on it, something that the other journos at the hearing all concurred with. Jenkins’s wider notion of not reporting financial stories to maintain market stability is flawed too, as transparency moves to the front of the agenda. Jenkins, for his part, kept pretty quiet at the meetings, only piping up to tell the assembled committee kettles that they were black: ”By an extraordinary coincidence you have all five journalists here who predicted the credit crunch. What have you been doing all the time?” Well, at least they haven’t been telling people to “invest in sanity” and buy “shares in kindness, with a side bet on courtesy and brotherly love”. If only we’d just given Fred The Shred a nice big hug, then none of this horridness would have happened!

Peston, meanwhile, nailed the whole conundrum when he says that impact upon share price is “peripheral” to the provision of information to the masses. That’s what journalism is – can you remember that far back, Jenkins?

While Reuters gets all po-faced and semi-poetic (“On Tuesday pale blood stains still dotted the snow along the railway track where he died. The area looked deserted apart from a police car nearby”), let’s look not at his death itself but rather at a rather cruel juxtaposition of events today, considering the circumstances of Merckle’s downfall.

What really stung his businesses was a hedge on the price of VW shares going badly wrong, making a massive loss after Porsche revealed that they were well on the way to owning 75% of VW and spiking the share price; Merckle had hedged on a fall, and lost big. Previously Porsche announced its employees were making out like bandits from selling their shares, just as Merckle was entering talks and putting up his personal fortune as collateral; the two companies’ fortunes bifurcated even more sharply today, as while Merckle’s family mourn and try to save their family business, Porsche increased its stake in VW to more than 50%. It must now make a bid for Swedish truck manufacturer Scania, 69% of which is owned by VW; it’s also challenging, in the European courts, the block on it owning 20% of the company currently owned by the state of Lower Saxony. 

Not that Porsche is being crass in doing this, but the fallout from that one share announcement is astonishing. It’s testament to the strain placed on companies by highly leveraged speculation, and the potential enormity of gains and losses, both financial and emotional, from playing with such high stakes. If Merckle’s death can bring anything, it’s a moment of sobriety and reflection from those dancing between the poles of absolute poverty and unimaginable wealth, who often, as Merckle had, have a thousands-strong workforce relying on your judgement. I don’t want to do a Time and suggest that Merckle’s death symbolises or means anything outside of a personal tragedy, but I think it’s inevitable that he will come to represent the end of wild hedges, as the fund industry contracts and the party of the last few years comes to a sad end.

Back in September Becht sold off the first bunch of his Reckitt shares at a price of £28.60, which made him£1.4m, then saw them rise only a wee bit more before they fell big time in October, reaching a low of £23.14. Now they’ve bounced back up again, and Becht clearly feels the time is right to sell more off, raising £2.85m from the sale of 100,000 shares. He’s still got 1.2m left, which a quick calculation at yesterday’s price says are worth £33,360,000. And he gets £22m a year as salary. Sigh.

Maybe this is all to free up shares as part of his effort announced last week to allow employees to buy shares in the company, “to focus the efforts of staff in 42 countries behind the company’s overall performance, rather then their own local business units”. Shares will be offered at 20% below their listed price for a short period, like an M&S pre-Christmas sale.

He’s especially targeting India’s emerging aspirational class, with MD CM Sethi saying: “We expect a very high take up rate of the share plan from employees in India”. Constant fear at fluctuating share prices may seem like an evil way to stimulate hard work, but surely it’s a more of a sound investment than pouring your money into the failing print media company you work for.

Reckitt has been enjoying 7% growth per year for seven years, against an industry growth of 3-4%. They spent £65m on advertising last year, helping us print media types out no end. What they actually do is make all sorts of things that end up at the back of cupboards, like Dettol, Lemsip, Finish and Cillit Bang, which gives us an excuse to tell you to go check this out, an oldie but a goodie…