Money

At the top of this as a final afterthought, I should include this warning – I know nothing whatever about money. For fuck's sake, please don't take anything that I write here as financial advice. Erm things may go down as well as up. Your home may be at risk if you leave the gas on while you go to Munich for the weekend (yes, I really did that). The only piece of sound financial advice I can offer is “don't listen to anything that I say about money.” If you are in any doubt about this or want to see a grown woman cry and brandish sharp objects, ask my wife.

Money. Somebody wanted me to write about money. This is a tricky one because I really don't know anything about money. I'm not sure anybody does. But everybody thinks they do. I've got a mate who I bump into here in Caffe Nero in Muswell Hill who is a prof of Economics. And he was saying to me - “Hey, you know this money, it's really weird stuff!” That's probably why he doesn't get too many of those lucrative pundit spots.

So this could go anywhere, it go ranty, it could go very, very, preachy. It could go dull. Here goes.

Can I just ask – we all hate the bankers. Can anybody explain why? What have they done exactly that's so bad? Is it because they seem to be getting a lot of money for not doing very much? Surely there are a lot of people who get paid a lot for not doing very much. Are we really saying – they really deserve their money less than – say footballers?

OK, the banks needed bailing out. But was it obvious to everybody else that collateralized debt obligations were going to turn out to be so problematic to value and this was going to cause a massive surge in the LIBOR which in turn was going to cause a credit crunch? Were you warning them of this?

Oh and for Christ's sake. Don't use the G-word. Who's greedy? Well that's just about anybody who isn't you who's getting more money than you are. And, even sometimes, I know it's hard to fucking believe this. Even poor hardworking people who are actually earning less than you, they're greedy as well. Did you see that FRONT PAGE headline in the evening standard complaining that the poor, literally (yes, I'm actually allowed to use it in this context – and if you see Lynn Truss, kick her in the fucking shins, pedantic bitch) benighted tube workers, who are going to have to work through the heat of the Olympic fortnight when the whole of the tube network will have twice the number of confused foreigners pausing at the top and bottom of escalators and getting on the tube before everybody else gets off. They reasonable want an extra 500 quid for this. Which the Evening Standard seems to think is blackmail. How could we pay for it? I dunno, maybe take some money out of Sebastian Coe's big sack of fucking money given to him by the “Committee-to-dedicate-the-London-Olympics-to-giving-Sebastian-Coe-a-Big-Sack-of-fucking-money” (I told you this might get ranty). And their logo's shit.

I must admit the bit that really made my head spin was an article I read in the Economist (shortly before I had to stop subscribing to it because it kept on insisting that waterboarding was a good idea). They were talking about when the Swedish banking system nearly collapsed in the 1980's and had to be bailed out by the government. That article had one of the most amazing sentences I've ever read in it. “Most banking systems require about 5% of GDP bailout to rescue them when they fail.” I think I was sitting on the toilet when I read that, and it's probably a good job. I was thinking – hang on a minute? I though you shiny-headed glinty-eyed Michael Gove-a-likes believed in this capitalism stuff? You're saying that this is likely to happen every now and again? That's like buying a volvo for the safety record and the salesmen casually mentioning.

“this is a great car – the very best there is. We don't know of any safer. Of course every now and then, when you're travelling at 90 or so in the fast lane, you'll lost all ability to control it and get mangled in it's bare-recognisable wreckage. But don't worry, most times when that happens, you only lose and arm or a leg or an eye.”

What writing this has reminded me is that I have almost no fucking idea what happened in the credit crunch. The one book that I've read about this that makes any sense at all reads as if it's been written by one of those guy's you find in police stations with silver foil hats on their heads so that the aliens can't control their thoughts. It's written by one of my favour spoonerisms Buckminster Fuller and it's called Grunch of Giants when you find out that Grunch is a word that he's made up, you get and idea of the kind of ride you're in for. His central story is a pretty interesting one though.

At sometime around the renaissance, somebody, probably a Venetian came up with the idea of limited companies. Before that if you sent your boat out full of whatever Venice had to offer, whatever that was, hand-blown glass, blinds, cornettos and it either came back full of silks and spices and all sorts of other wonders and you made a mint, or it sank and you were ruined for life. So some smart geezers decided they'd invent the LIMITED company. What was crucial was that the company was responsible for the risks, not you individually. And if the company got into trouble, well you could just shut it down and start another one. Truth be told, this was a fucking genius idea because it meant that lots more people were willing to gamble on sending out a boat, ok which meant that most of the time, the boats came back full of good stuff. Ok, every now and then a boat sank, and some people who were owed money didn't get paid. But on the whole, these crafty bog-dwellers had come up with a scheme for distributing risk where everybody benefited and the people in Venice got so rich that their money actually started sinking the fucking city.

And so I think – to extend Buckminster's metaphor. What happened just recently was that the merchant banks started taking the piss. They started to set up funds where all the boats that got sent out were made of papier mache – or were actually sieves and the captains of these boats were like that bloke who kept having to be rescued because he was trying to circumnavigate Britain in a bathtub using and RAC road atlas. And if anybody dared to mention that maybe this was a bad idea the bankers would say “who cares – if the boats come back full of loot then we're quids in, and if they don't – good old limited liability, we don't give a fuck. And if you dare to try to regulate us, well, then you're an enemy of capitalism.” Actually, I think I've figure out why we should hate bankers.

Posted via email from The Ginger Mumbly