Thursday, August 16, 2007

today : New car, caviar, four star daydream...what-ever

Be very afraid. It turns out that the people who are in charge of our money don't know what they're doing. Or more exactly, they do know what they are doing, but they are blinkered, short-termist, bonus driven fools with the average financial restraint of a student with their first Visa Card.

If the only way to increase your bank's earnings and get your massive year-end bonus is to lend money to people who can't pay it back, then -duh - sooner or later you are going to start hitting snags. Y'know, like, those people you lent money to despite the fact that they couldn't pay it back? Well, it is with shock and surprise for us to let you know. They couldn't pay it back. I tried it once, and the friend to whom I lent 50 quid to is no longer a friend. We drifted apart.

Of course, I just had to swallow my misplaced trust and get on with life. Unlike me, other people who get in trouble because they plan too optimistically i.e. Peter Ridsdale, (from whom I also drifted apart) the US banks simply go to the government for a bail out. And of course, like some giant bank of Mom and Pop, the government hands over bags of unmarked bills to salve the problems of their errant friends and cronies.

My real worry is that this is happening in a time of relative normality, stability and growth. A little fall in the average value of American houses and whoosh!. The big news is that the banks have been sailing this close to the wind ALL THIS TIME. It makes me wonder what might happen is something really bad occurs. A dirty bomb in London or New York, an earthquake in California. What would they do if the 5th largest economy in the world suddenly broke off and fell into the sea?

If it all goes completely and totally pear shaped how many of THEM will lose THEIR jobs and homes I wonder?

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