Monday, 16 September 2013

Finance Crisis Granularity and Psychology

There are pundits who claimed to have forseen the finance crisis of 2008, but realistically the same as the internet bubble and not the least  the great depression in its time, realistically it is only with hindsight that it became an obvious catastrophe waiting to happen.

What is the problem which cannot be cured? At the core of this is that there is a high degree of granularity- different transaction orientated processes and employees. No one person or institution could see the bigger picture, the wood for the trees. Some macro economists could do the sums and say that western society had loaned itself too much money, even without the need to delve into the transactions at the bottom of the house of cards, the sub prime mortgage fiasco. That only served to precipitate the down fall, any flap of a butterfly's wing in the system could have shaken it down.

The fact is that no one person, be them chancellor or proffessor, and no one institution can understand enough of the "markets" at any one time to predict where it is going. Economists should admit to being like the native American tribe who saw themselves as travelling backwards through life, with their faces only exposed to that which had been experienced. All in front of them, was mystery they were blind to.

In legislating then the issues revolve around this transaction oriented granularity: the tiny fiefdoms of stocks, derivatives, commodities and the more complex financial mechanisms which are the rot in the whole system. You cannot make one set of rules which fits all, and cog in the machine will defend itself against new laws which they see as unduly straining their resources and making them less competitive.

In economics classes, talking about the gold standard was either taken in kind of being prehistoric, an extinct dinosaur of early global economics, or as a bit of a naieve joke for children's hour. However it was seriously suggested by some prominent economists as a cure to the finance crisis, and actual bone of confidence for banks and countries to hold as their bedrock of fluidity. A lot of money moved into precious metals at the finance crisis only to find demand was also eroded in value and being victims of that "listen with mother" law of economics.

Governments are being scared off further legislation than in fact a simple extension of the gold standard principle of limiting money supply and loaning to a credit limit which has some relation to a liquidatable value. For each powerful transactional level in the great casino, there is a lobby firm and owned politicians and political parties. Each clips round its territory and hopes that legislation wont affect their little value chain while sound and prudent financial management happens at national bank and government level.

So that is the nature of the beast perhaps: it is a medusa which has no single purpose, no collective conscious, no single direction and is only seen as cohesive by each head behaving in a similarily grabbing way, dragging the physical body of wall street and the city of Westminster with them. If you cut off one head, the others will round on you afraid they will be next.

Monday, 2 September 2013

The Society We Live In

I live now in Norway, a society which is actually at a possible turning point towards the more conservative, racist, self centered view on life. I can understand, we have had problems with immigrants especially from islamic countries and criminals from eastern europe.

However the beyond the obvious lose points like assylum seekers getting free dentistry while pensioners don't, there is a possible change to greed and everyone wanting more than their fair share: ie a move to more like the conservative support in the UK. "I'm allright jack, and go do with some more!!"

What society has the UK and the US become? I feel the uk is ever more like the US with a growing obese drudge working class and an under class, while the only way to make any money is to be a legalised crook.

What example does the invasion of Iraq and the financial crisis set for citizens? These were quasi legal crimes, with elements of illegal actions from institutions which are supposed to be respected and seen as leaders in society.

Back in my old home town, a mixed old place of rich, poor and day trippers going down the seaside, there have been drug wars and there is an increasingly large number of skanky looking types in their twenties and thirties driving flash cars and doing steroids: ie drug dealing on the side of a normal job, or ducking and diving on the wrong side of the law, or just cheating to get bigger loans than most people on those incomes.

The left wing parties who strove for rights to weekends free, breaks at work, safe environment in the factory or office, 40 hour week, equal pay for women and so on, are now reduced to a side show with some once strong labour seats struggling with party membership in the tens and not even boasting 100 members for the constituency.

However it is inevitable that social strife, criminality and inequality lead to a rise in community movements and collective action. The conservative dream of everything being privatised and a small state is just what we had pre-war in the UK and other now EU countries- a large minority of society living in poverty like a third world country. During the war almost a third of the population in the UK eat a BETTER diet during rationing.

Britain has always been at its greatest during times of collective action: in war, in home defence and in rebuilding society.

The Puppeteers- Religion, Politics and Sex all in One Pico Rant

Pico rant time again:

I wonder how much the USA evangelical TV channels and media spend is compared to how much the "churches" actually give away in Christian Charity?

Why are we such terrible remote controllers, wanting to spread our message by word and not actions? The puppeteers, wanting to control the strings in religion, politics and sex but needing not to get involved in practicing what we preach?

I know that I spend right now more time blogging that doing anything for anyone in the wider community, but I feel very strongly associated to christian, egalitarian and very left wing views. Jesus was after all, a communist revolutionary.

The effort people make in influencing others by communication in the media or in the street rather than by action seems disproportionate and in fact at the root of the human condition- third reich and all in this one!