Friday 10 October 2008

Turbulence and Trends

A trend is a trend is a trend.

But the question is, will it bend?

Will it alter its course

through some unforeseen force

and come to a premature end?

-- Sir Alec Cairncross

I’ve had a lot of meetings this week, and very little time to reflect on fast moving events. This entry may be light on cites and hyperlinks as I’m in a bit of a rush today. It will also lack much in the way of perspective or insight as I find it impossible to distance myself just now from the swirling turbulence around me.

Here in Britain, several banks were offered partial nationalisation as an alternative to private recapitalisation. Strangely, this seems to have encouraged them to more strenuous efforts to recapitalise. The plan is now being held up as a model as it seems to force managements to confront their undercapitalisation as a problem that they can solve to their advantage or that will be solved for them to their heavy personal cost.

Iceland collapsed. It was more of a hedge fund than a country, with it’s 200,000 population supporting a massive leveraged position in financial markets via risk loving bankers and financiers. There were approximately 200,000 British depositors in accounts offered by Icelandic banks. Local authorities (municipalities) and charities were also big investors, exposed for more than £700 million. As a result, the government has frozen Icelandic-owned assets in the United Kingdom – using terrorism legislation, naturally – to provide the basis for a partial recovery of the losses likely to be incurred. This is causing more stress between the two island nations than they have known since the Cod Wars of the 1980s. Also causing tension is a rumour that Russia might bailout Iceland with $4.5 billion of credit, leading to speculation that the Russians may be eying the vacant airbase formerly used by Americans. This is problematic as Iceland is a member of NATO, and so has spurred efforts toward finding European alternatives.

Europe continues to call for collaboration while each country unilaterally defines and acts on its self-interest. That is the way it should be, and I approve heartily. I would rather not have the European Union making hasty decisions or holding such concentrated powers that it can force a uniform resolution across all member states. Either the EU builds consensus for action in the common interest, or it remains impotent. Either is preferable to too much concentration of power in Brussels.

In an attempt to shut just one stable door in a barn full of bolting horses, the Treasury has laid legislation before Parliament to reform the treatment of UK bank insolvencies and deposit insurance arrangements. Roughly described, the Financial Services Authority will decide if a bank is bust, the Bank of England will be responsible for overseeing its resolution and ensuring financial stability of the system, and the Treasury will oversee a new deposit insurance scheme that no one can currently describe but will make permanent the rise in protection to £50,000 per depositor. Despite the massive failure of Lehman, and the huge losses incurred by investors and hedge fund prime brokerage clients in London, the legislation is completely silent on the insolvencies of investment banks and broker-dealers and other institutions of systemic importance to financial markets. My fear is that the failure to address the systemic issues as a whole will be a vulnerability exploited by US banks and authorities as they try to undermine London as a financial centre, gaming the fragile global markets.

There is still a touching confidence among many in the City that the US authorities will provide the “leadership” to reinforce collapsing markets. As John Plender of the Financial Times quipped, “Gaul votes for Rome to take the strain.” This seems to me to display a total incomprehension of the way US authorities operate to externalise pain and loss to the greatest extent possible in times of crisis. Gaul, after all, was an occupied state that was militarily and economically exploited to Rome’s advantage for centuries before Rome’s collapse. Saving Gaul was never a high priority once Rome was threatened.

Elsewhere in the world, bureaucrats continue to show up at the office in the morning and check to make sure all boxes are ticked, all forms are correctly ordered, and all initiatives in progress continue their stately way forward unimpeded by global chaos. I find this comforting, although much of their efforts will ultimately prove futile and failed.

Finally, an optimistic note. I was reminded yesterday that the vast bulk of “wealth” created during the Greenspan/Bernanke bubble years accrued to the very top percentiles of population – with many in the OECD middle class and lower class either stagnating or getting poorer as they mired themselves in unsustainable debt. While opportunity and employment grew strongly in emerging countries, there too the elites gained disproportionately as income inequalities surged. The crash of global financial markets therefore will have disproportionate effect on the elites, impoverishing them to a far greater extent, although it will be felt throughout society as employment, pensions, investments and public services contract.

Once we hit bottom of this downturn, some years hence in all probability, we may experience a democratisation of wealth and opportunity like none seen since the end of World War II when education reforms and unionisation laid the groundwork for the rise of the American and OECD middle classes. Those who have lost economic and political power during the boom years, are likely to organise and retake authority within economic and political systems during the bust years. The collapse of concentrated wealth in Wall Street will spur more collaborative capital formation and investment throughout the economy. This could provide reorientation of economic progress toward more equitable, sustainable and democratic outcomes in coming generations. I hope so, it’s the only bright spot of the week.

34 comments:

Anonymous said...

Sir, Thank you for the assessment. I am optimistic too, that many of the folks involved in this mania will ride the markets down to zero and the world will be rid of them and their influence.

The British Treasury's proposal is infinitely better than the cocked-up Super SIV idea of Hank Paulson. Bankers (both IBs and Traditional) need to have a gun beside their head. That's accountability which has been so lacking. If you take from the public purse it cannot be business as usual.

My last point and clearly this has something to do with the accelerating downdraft is the Lehman CDS'. How in the love of gosh could no regulator have intervened to stop the madness as all saw the volumes building? We have to wait til today to know winners and losers? Surely the 'netters' out there had to understand that the bets were larger than the ability to pay up?

I hope and pray we do not see the rise of fascism like the 30s. I do believe the pendulum will swing back towards a more even distribution of wealth and focus on the real economy.

I have tried to find Nelson Mandela's quote when he assumed power. I believe it went something like this:

"South Africa is a rich country and can do better to serve all of its peoples" [sic] Substitute US and OECD.

Have a great weekend all. Likely readers of this blog were in cash...

Anonymous said...

"education reforms and unionisation laid the groundwork for the rise of the ..middle classes": eh? I'll grant that the Butler education reforms in Britain worked very well, but unions were the bane of our economy, and eventually the power of the unions' "movement" undermined the the Butler reforms. Even Barbara Castle had realised by the late 60s that the unions were poison.

pej said...

Only bright spot but a major and welcome one. Deliveraging would also be a bright spot for me:
"Panics do not destroy capital; they merely reveal the extent to which it has been previously destroyed by its betrayal into hopelessly unproductive works." --- John Stuart Mill, 1867

I think it's a great quote. Let reveal all the malinvestment and lies that have been made for the past 10 years and start on new sound foundations.

Anonymous said...

Pej, that is a great quote, and particulary apposite as the FTSE falls are breathtakingly reported. People seem to forget that the majority of companies out there have costs less than their turnovers, and as such their shares hold value. A company with a 10% profit margin has not become bad overnight because of aggressive selling. 'The city reaction' is talked about in hushed tones; it was those in the city that got us here, lets not judge where we are now and how we recover by their actions. The shares in profitable companies will rise soon enough.......

London Banker said...

As Steve Phillips pointed out to me some months ago, I had the attribution for the quote wrong. It wasn't John Stuart Mill.

“Panics do not destroy capital; they merely reveal the extent to which it has been destroyed by its betrayal into hopelessly unproductive works.”

- Mr John Mills, Article read before the Manchester Statistical Society, December 11, 1867, on Credit Cycles and the Origin of Commercial Panics as quoted in Financial crises and periods of industrial and commercial depression, Burton, T. E. (1931, first published 1902). New York and London: D. Appleton & Co

pej said...

oops, my mistake on the quote. I thought I had found it on the net under stuart mill.

Seth said...

anon@02:58

"... the accelerating downdraft is the Lehman CDS'. How ... could no regulator have intervened ..."

In the US at least: because it was ILLEGAL to intervene.

Phil Gramm (top econ advisor to John McCain even now) played a key role in getting a little law called the Commodities Futures Modernization Act (CFMA) passed back around Christmas of 2000.

You might enjoy this article for the back story.

Knute Rife said...

"All the United Kingdom may be divided into three parts..."

You folks seriously need to rethink the "special relationship," because it has morphed into an especially pathetic form of codependency. I was going to throw in the only worthwhile line from Plenty (spoken by Sir John Gielgud of course) to describe the relationship between Blair and Our Glorious Leader, but I'll refrain. Suffice it to say that, while certain elements here have retained their ability to pull off games of three-card monte, the US at present couldn't lead a johnny detail.

Poor Iceland. There are actually a couple of sad things about this. First, it was all made possible by the capital built up from a century of Japanese-level saving. All gone now. Second, the Icelandic banks weren't even big players in toxic paper. They bought things (football clubs and retail stores, but still things). And now they're gone. Which I believe should show once and for all that the current troubles stretch far beyond over-valued securities.

Of course the placebo press is spinning the Iceland story to make people believe it can't happen here. After all, it's a small country with few people and produces nothing but paper. As opposed to a large country with lots of people that produces nothing but paper. It reminds me of an episode of Invader Zim where the Almighty Tallests are looking down at one of their invaders and saying, "But you're so...small." Meanwhile no one seems to care that General Motors stock (a company that used to dictate the health of the US economy and that I believe still accurately reflects it) has dropped to the level it was when my dad was my youngest daughter's age.

The Treasury's proposal to Parliament may simply be tracking the US commercial bank/investment bank division, marked at the FDIC's front door. Over here the players are jobbing the game, though. First, the trouble with the insured banks is huge, probably too huge. It's therefore important to at least pay lip service to keeping the FDIC operating lest there be a run on the bank just in time for the election. Consequently, second, there is no way to extend insurance to the uninsured side of the industry (Forget about the economic problems; it would be political death.). So, third, the investment side gets to queue up to be thrown under the bus. Unless you are a FOH (Friend of Hank), in which case, for a modest (and taxpayer funded) buyout of a few problem investments, you are moved over to the insured side. System jobbed.

As for deflation hitting the perps hardest, yes, five nines of the balloon juice leaking out of the system went to the Ueberklass, and that wealth concentration is disappearing. But there was also real wealth creation, and that too went overwhelmingly to the top 1%. And it isn't going away, so that wealth concentration remains. Given that concentration, the destruction not just of middle class wealth but of the mechanisms for creating such wealth, and the privatization of the mechanisms for controlling wealth concentration, I can not be as optimistic as you.

Anonymous said...

What do you think of
this
take on the situation?

Food for thought at any rate.

Anonymous said...

Great post. And yes, a great shining bright spot.

There seem to be many people - and many intelligent people in influential positions - who seem ready and capable to seize that moment of democratisation of the economic structure.

Entrenched power cannot survive arrogance and ignorance.

London Banker said...

@ Knute
I am hopeful, actually. Not for the USA maybe, but for the rest of the world. Having spent part of this week gaining insight into initiatives being taken in many places, I think there is going to be an explosion of innovation and productive collaboration. It will largely exclude the USA, but that is no bad thing given recent behaviour and dubious motives.

@ Shaken
I think there is a lot that is valid in Engdahl's observations.

What has emerged are the outlines of two opposite approaches to the unfolding crisis. The Paulson plan is now clearly part of a project to create three colossal global financial giants-Citigroup, JP MorganChase and, of course, Paulson's own Goldman Sachs, now conveniently enough a bank. Having successfully used fear and panic to wrestle a $700 billion bailout from the US taxpayers, now the big three will try to use their unprecedented muscle to ravage European banks in the years ahead. So long as the world's largest financial credit rating agencies-Moody's and Standard & Poors-are untouched by the scandals and Congressional hearings, the reorganized US financial power of Goldman Sachs, Citigroup and JP Morgan Chase could potentially regroup and advance their global agenda over the coming several years, walking over the ashes of a bankrupt American economy made bankrupt by their follies.

By agreeing on a strategy of nationalizing what EU finance ministers deem are 'EU banks too systemically strategic to fail,' while guaranteeing bank deposits, the largest EU governments, Germany and the UK, in contrast to the US, have opted for what will in the longer run allow European banking giants to withstand the anticipated financial attacks from the likes of Goldman or Citigroup.


Some few here are waking up to the Paulson game of Survior Bias, and are responding in national self interest to frustrate the plan. The Bush administration and its military/intelligence/finance cronies always underestimate the local population's capacity for resistance and insurgency (a.k.a. self defense and patriotism).

Knute Rife said...

@Shaken
I think Engdahl is over the top, especially in his historical account of a banking cabal manipulating US panics. The US was practically owned by London until the Panic of 1873. As for the current mess, I see a nebulous goal ("Let's get rich at other people's expense.") and a lot of opportunistic plays (effective ones, but still improvised), but I do not see the level of choreography Engdahl alleges.

@LB
Well, yes, other regions are in far better position to ride this out than the US, but you're in the UK. I am in the US and have no exit strategy beyond making a run for the border on a Montana logging road and hiding in Alberta. My focus on the US condition is therefore rather more than academic.

On another note, is the curtain being pulled back on The Great and Powerful Oz? Last night Moody's put a negative outlook on Goldman Sachs's Aa3 senior debt rating, ostensibly because of long-term market forces. I wonder if the concern isn't more short-term, namely that Paulson and Kashkari (How are people not calling him "Kash 'n' Karri"?) will have to leave Pennsylvania Avenue before they can cover all GS's plays.

Anonymous said...

Be very careful, Engdahl seems to be a typical conspiracy theorist - and liar - of the far right:

"Engdahl believes MKULTRA created the hippie movement. He calls George Soros a "Court Jew". Engdahl claims he's not anti-semitic - but he's clearly got a problem with certain "Jews who are not Jews". (The ones who run the International Jewish Banking Conspiracy? ;-)"

http://en.wikipedia.org/wiki/Talk:F._William_Engdahl

London Banker said...

@ Charlie
I haven't read Engdahl's other writings, but appreciate your caution. All the same, he is right that Europe is following a different agenda than the US has set for us - and will likely recover the faster for it.

@ Knute
You are in the US, and I am in the UK, and we both want our countries back from the financier criminals and war mongers who have corrupted them for too long. We have time to observe, consider and act as this tragedy plays out. There will be a reaction, and the key to coming out the other side better societies is to channel the inevitable anger at the right targets and ensure policies adopted serve the victims, not the perpetrators.

For now the government serves the rich and seeks to protect their wealth. There will come a time when that wealth is dissipated and government can be forced to serve the people again, if the people are focused and united and constructive.

Anonymous said...

@Knute

I'm not sure this is a choreographed event either,
but as events unfold opportunities present themselves to
those on the inside (in power) and they are changing the
soundtrack from Yo Yo Ma to Def Leopard. Funny you should
mention it but I am hiding out in Alberta.

One other thing that is curious to me in all this is how
JPMorgan has remained relatively unscathed in this whole
affair as they are the Kingpin of the derivatives empire.

Special privilege perhaps.

Anonymous said...

About the 50,000 banks'deposit guarantee,given Barclays fall on the Stock Exchange to-day,I wonder
whether this protection is extended
to sterling deposits at overseas branches of Barclays.

seekette said...

Daring innovation without US-resident scientists and entrepreneurs? Nada chance. A sharp downturn will sharpen the focus and increase the American drive to invent; a cultural drive, bred in the bone, supported by the funky 'Nine Lives' US education system. Until the rest of the world stops picking their thoroughbreds based on high quantitative skills demonstrated at age nine, the US will continue as the leading global innovator. Full stop.

The response to the collapse may not be coordinated, but the systematic, two-decade loosening and lowering of regulations, lending standards, interest rates, ratings agencies and securities oversight--that was absolutely coordinated. Too many pegs were pulled out in deliberate fashion. Too many swindles happened in broad daylight.

The real question: why pull the last pin in 2008? Balancing the oncoming power of China? Watch to see whether or not China is divested of it's treasury, one way or the other.

As for the 30s and the sinister rise of a great orator...hopefully the one taking the podium in the US is not corruptible and instead lives up to his Lincoln potential, (having patterned his career on Lincoln's).

PeterJB said...

LB and @ Shaken
I think there is a lot that is valid in Engdahl's observations.

I don't believe in conspiracy theories and I still don't. Call it opportunism and the nature of the beast, but

Yes, Paulson's bill was / is all about making the FedRes the sole Global Authority under which all would be subservient and controlled by the USA and above all, without any judicial review or rights to those outside; and a sideshow cash grab.

And, soo the mindless ones nationalize all and sundry thus proving the point that the depth of the coming depression will be directly relational to the ignorance of global leadership.

Of course, humans are opportunists and Paulson is no different.

The G-7 agreement has been finalized and pledged nothing more than more money for Banks.

So, expect more of the same... on the road ...'to hell and Beyond'.

Ho hum

Knute Rife said...

@LB
Yep, as you well know, I'm in the US of A, And I have no faith in the ability or the will of NASCAR Nation to keep this ship from hitting the rocks at flank speed. You're talking about people who think Obama is a terrorist because his middle name is Hussein. And yes, they are legion. I grew up with these people.

@Shaken
Special privilege indeed. I often wonder what the high priests of JPMC had to sacrifice to the dark gods to get away with what they do. I have watched two of their executive level in-house counsel pull stunts that would have gotten mere mortals such as I disbarred, and they walked away unscathed.

@chch
Being in the middle of ramming my four spawn through the US education system, having taught in it, being the child of two teachers, and dealing with its products daily, I find myself unable to be enamored of the system as you. The US has been importing its engineers and scientists for years, and now we're having trouble continuing to do so because we no longer have a competitive advantage over everyone else (Hmm, does this sound like, oh, every other aspect of the US economy?).

Jesse said...

I sincerely hope that your last observation about the democratisation of wealth is correct. I have had that thought, but the impulse of history shows a darkness descending over the earth. I must disclose that I am rewatching the excellent ITV series "The World at War" newly released on DVD, which may account for my own more pessimistic thoughts.

Here is a view of the bubbles btw that is rather stark.

http://tinyurl.com/4wglvt

London Banker said...

LB - your survivor bias in action:

What REALLY Happened

I hope my good friend Larry McMillan doesn’t mind me doing this. He has a terrific advisory service — The Options Strategist. In this morning’s hotline, He had this to say about the goings on yesterday:

The selling has reached historic proportions. There literally is a "run on the market," as investors worldwide are dumping stocks. It seems that the major catalyst for this selling is the fact that the newest large banks primarily J. P. Morgan, Goldman Sachs, and possibly Morgan Stanley as well — have issued massive margin calls to hedge funds and other professional traders who use these banks as prime brokers. These calls were not issued because of market losses, but more because the banks arbitrarily decided that they wanted their customers to use less leverage. Margin rates as low as 15% for broker dealers were raised to 35%; hedge funds who had been used to operating on high leverage were told that they had to bring accounts up to a much larger percentage of equity. In this illiquid environment, where all manor of exotic securities literally have no bids, the only place to raise the cash to meet margin calls was to sell stock. That is what really set
this market over the edge — as the first notice of these calls were issued on October 2nd and 3rd. There was something of a grace period to meet the calls, but funds realized they weren’t going to be able to meet them
other than by selling stock. There are rumors that the most massive of the calls are due Monday (October 13th). If so, this market could continue to decline through then.

There doesn’t seem to be any reason for this increase in margin. The most benign one is that the banks became overly worried that their prime brokerage customers could cause problems with leverage. A more sinister reason revolves around the fact that the banks issuing the calls will likely wind up the owners of some excellent inventory (relatively illiquid preferreds, bonds, etc., which are being sold at prices well below theoretical value). They are in effect confiscating from their prime brokerage customers.

London Banker said...

I cross-posted the above which appeared on Professor Roubini's blog.

Anonymous said...

"The reason for the sharp decline is massive selling from hedge funds — not because they want to, but because they have to reduce their leverage," says Kenneth Heebner, manager of CGM Mutual. "It's the biggest margin call since 1929."

yoyomo said...

I don't understand the reluctance to recognize or at least consider the existence of conspiracies. In 1933-34 there was a massive elite conspiracy to overthrow FDR and institute fascism and when it was discovered FDR conspired with the plotters to keep it a secret from the public and no one was prosecuted. Bush's grandfather was one of the plotters:

http://www.counterpunch.org/nasser10032008.html

I also agree with ChCh that the deregulatory oversights of the last 25yrs can't possibly the result of stupidity, this was deliberately unlocking the hyena cage and letting the pack loose to ravage the countryside. The massive margin calls in the middle of a market collapse just confirms it and in any case it's nothing new; it's been done before and had the same desired effect. GSachs is reportedly circulating a list of securities to be targeted (HT Jesse's Cafe). STS's link to CFMA is just one more piece of evidence amongst many out there.

Are we supposed to think that the rich spend all their time by the pool sipping martinis and discussing the weather. You can bet your tush they're up to a myriad of conspiracies that needn't be co-ordinated but, all having similar objectives, will necessarily follow similar strategies. The best example of this is AIPAC, it doesn't give direct marching orders to all the smaller zionist orgs around the country but it does set an overall agenda and the ground troops know what to do to achieve it.

Knute Rife,
WRT the educational system, are you familiar with the writing of John Taylor Gatto? He had an article in Harper's (Sept03, Against School) that contended that with the rise of industrialization TPTB redesigned the education system (with the help of psychology professionals) to produce pliable workers who easily deferred to authority and disdained thinking for themselves.

I know that he has on-line versions of this article but I don't have a link. If education interests you it would be well worth your time to try to access the Harper's article; the full title is:

Against School-How public education cripples our kids, and why

Anonymous said...

"There literally is a "run on the market," as investors worldwide are dumping stocks. It seems that the major catalyst for this selling is the fact that the newest large banks primarily J. P. Morgan, Goldman Sachs, and possibly Morgan Stanley as well — have issued massive margin calls to hedge funds and other professional traders who use these banks as prime brokers."

IMO, the funds deserve their fate. Anyone who has followed the story since the blowup of the Bear Stearns Hedge fund last summer, knew that the upheaval was coming. Anyone reading Roubini and others knew the risks even before last summer. A smart manager would have been reducing leverage, and thinking outside of his damn black box. Instead, the big money ran up commodities and made life difficult for the poor.The money managers had a year for god's sake!

So, now everyone is acting so surprised and having to sell under pressure. The stupidity of the so called intelligentsia amazes me.

Citori

Anonymous said...

Guys,

Remember how JP Morgan himself was the organiser of the incorporation of the Fed back on a very late night in 1913.

It should be no surprise that his firm is still controlling things.

The involvement of the G-Sax crew will come out eventually as a closer look is taken at some of the meetings that have taken place and who was in them. That Buffett joined in with this is something we still don't clearly understand.

How in 2004 the SEC conspired with the heads of the Inv Banks to offer voluntary regulation which one member completely opposed as unworkable.

I believe that some good can come out of this IF we take the opportunity to remove leverage from the system AND return the power to create money to Parliament which gave up that right in 1688.

The banking system has been nationalised in all but name.

LB, I don't know if you are aware of the Forum for Stable Currencies in the UK. It has met at the House of Lords for the last 10 years and in 2001 we laid the foundations for a series of Early Day Motions which can be seen here

http://www.forumforstablecurrencies.org.uk/


By taking back the sovereign right to create money, interest and debt free, directly into the economy and subject to strict targets on the overall money supply (as we do with CPI) we may be able to return our economies to a stable and productive footing.

The time has come for this to happen. I 'd be interested in your thoughts on that.

Anonymous said...

I have spend today with mowing the lawn, harvesting apples, and playing with my children. How wonderful the world can be even now if you forget about finance for a few hours.

Anonymous said...

If the selling has reached historic proportions, then why are we still far above the lows from 2003?

Anonymous said...

yoyomo,

Just wanted to pipe in here and say that I don't buy this financial crisis conspiracy stuff. Is there a concerted long-term effort by certain groups to grab more power. Yes. Will they do everything and sometimes anything to manipulate events to their favor. Yes. But real life events are too unpredictable and elites too disagreeable for large conspiracies to work.

The education system is a good example. As Ernest Gellner describes in his brilliant (and short) Nations and Nationalism, modern industrial society needed interchangeable workers. Linguistic and cultural barriers were an obstacle to a growing economy. Cities, regions and countries that implemented educational systems that produced a homogeneous population of workers developed a strong competitive advantage over those that didn't. No conspiracy needed.

Same with the Great Crunch of 2008...the forces that drove such a powerful misallocation of resources go much deeper than the petty schemes of Paulson, the Carlyle Group and the Bilderbergers. Larger forces are at work, such as:

1) Capitalism is prone to bubbles. This is well known and can possibly be managed but no one was trying.

2) Wall Street is corrupt. Banks have been cooking the books. Regulators have been looking the other way. Money has been made.

3)Lots of great financial technology was developed and deployed without proper testing.

4)Lots of smart people but very few wise ones.

Anonymous said...

@LB:

Right now the whole western world seems to follow the way the British Government has chosen: The state buys banks stocks and the bankers accept stricter regulation, financial support for middle class and SME and lower compensation for themselves.
It seems to me as if that might be a way you have proposed to the British Government - or that you have proposed to the Bank of England and the BoE to the government.
So: Did YOU save the global financial system?

Anonymous said...

@ Detlef
Thanks for the laugh this morning! There are many sensible people here in London, despite the evidence of the past decade or two.

The Bank of England is well stocked with sensible people, starting with Mervyn King, Charlie Bean, Andrew Bailey and Paul Tucker. They have been working tirelessly to regain control of the situation and impose some order and rationale on other actors.

The FSA, too, once awakened from its long forbearance, is now asserting itself in the right direction.

The City has 400 years of managing financial crises. We come together and collaborate very well under pressure.

Anonymous said...

"Just wanted to pipe in here and say that I don't buy this financial crisis conspiracy stuff."

Because you are an idiot. Check here:

http://www.freedomsphoenix.com/Find-Freedom.htm?At=039554&ref=patrick.net

yoyomo said...

ML,
I just wanted you to know that the above comment was not from me. Also, I use the expansive meaning of conspiracy. Many people who don't know each other and have never met or communicated can be co-conspirators by taking their cues from the same think tank or advocacy group as long they deny or camouflage their goals. If they are open about their goals then it is a campaign. You should learn more about Leo Strauss and especially about the methods of obfuscation and subterfuge he advocated.

yoyomo said...

P.S. Leo Strauss is the godfather of the neo-con movement; think of Cheney as his re-incarnation.