Financial Crisis? How bad are things? "J'ai tort" Alan Greenspan

Following on from my blog entry last weekend, Nadjib has sent me another link to a credit crunch story. This time the article is in French, from the liberal paper "Liberation".

The article is a report of Alan Greenspan confession:

"J'ai fait une erreur en comptant sur l'intérêt privé des organisations, principalement des banquiers, pour protéger leurs actionnaires."

i.e. we can not blindly trust in free markets. Emphasizing the point he stresses that the markets (and himself) are in a state of shock:

"Ceux d'entre nous qui comptaient sur l'intérêt des établissements de crédit pour protéger les actionnaires (en particulier moi-même) sont dans un état de choc et d'incrédulité".

"La crise a pris une dimension beaucoup plus grande que ce que j'avais imaginé".

Also he doesn't know just how bad are:

"J'ai trouvé une faille dans l'idéologie capitaliste. Je ne sais pas à quel point elle est significative ou durable, mais cela m'a plongé dans un grand désarroi."

He continue to blame those who blindly followed the false god of free markets and deregulation (personally I am angry at Thatcher and Bush and their followers who for years have been so consending to anyone who has questioned the wisdom of complete deruglation):

"La raison pour laquelle j'ai été choqué, c'est que l'idéologie du libre marché a fonctionné pendant 40 ans, et même exceptionnellement bien".

I was really interested that he is particularly concerned about Credit Default Swaps:

"J'ai eu en partie tort en n'essayant pas de réguler le marché des Credit Default Swaps"

I blogged about this last week:

In brief a huge market for insuring against corporate bonds defaulting, in fact the CDS market ($50 trillion) has become much bigger than the actual corporate bond market ($5 trillion). Worse still these products, originally insurance tools have become highly leveraged, speculative products. If this market was to partially collapse (one big financial institution collapsing bring down another?) would it leave a financial black hole? Or have I mis-understood?

The article finishes with Alan Greenspan comment that risk managment model and market have collapsed:

"Le modèle de gestion des risques tenait depuis des décennies. Mais l'ensemble de cet édifice intellectuel s'est effondré l'été dernier."

Given ths CDS (risk managment) market is $50 trillion dollars that sounds very bad.

Financial Crisis? How bad are things? The Nero awards ...

Nadjib (my partner) recently found a great article in the Guardian, touching on several aspects of the current financial crisis (aka "the credit crunch"):

http://www.guardian.co.uk/business/2008/oct/12/executivesalaries-creditcrunch

How bad are things? I recently heard a very freightening story regarding Credit Default Swaps. In brief a huge market for insuring against corporate bonds defaulting, in fact the CDS market ($50 trillion) has become much bigger than the actual corporate bond market ($5 trillion). Worse still these products, originally insurance tools have become highly leveraged, speculative products. If this market was to partially collapse (one big financial institution collapsing bring down another?) would it leave a financial black hole? Or have I mis-understood?

Returning to the article, it appears there are reputable academics calling for "promoting transparency in the financial system" and worrying about "opaque off-balance sheet structures hidden in secretive tax havens have helped to bring capitalism to its knees":

"Opaque off-balance sheet structures hidden in secretive tax havens have helped to bring capitalism to its knees, but no one can say they weren't warned. Three characters - Professor Prem Sikka, accountant Richard Murphy and former Jersey economic adviser, John Christensen, created from nothing an international network of academics, investigators and campaigners dedicated to promoting transparency in the financial system. Their organisation, Tax Justice Network has been adopted by charities, some sympathetic governments (Norway) and extends to heavyweight officials in the Obama camp who have promised to squash tax havens if elected. Unlike Gordon Brown."

Another re-occuring theme in the press at the moment, is how the UK has wasted it's fantastic natural resources (inherited wealth and north sea oil & gas), whilst partly true, blaming the poor and unemployed is bit too right-wing for me:

"Norway has emerged from the international financial crisis relatively unscathed. Virtually every country cut interest rates last week, but not Norway and billionaires are now stuffing their fortunes into Norwegian banks. Unlike the UK, it did not fritter its oil and gas revenues keeping citizens on the dole. Instead it ploughed receipts into what is now a £380bn sovereign wealth fund poised to snap up assets at knock-down, post-crash prices."

Personally I would prefer to blame a divided society, tabaloid culture and continual dumbing down ... are the upper and middle classes as much at fault here as the poor? Anyway one thing is for sure, our pension funds which were looking "worrying under-funded" now look a lot worse!

Lastly to the Nero awards:

"What do you do when billions are wiped off shares? Pull! Invesco Perpetual, one of the UK's biggest fund managers, took brokers clay pigeon shooting near Chichester, Sussex. Norwich Union held a major company conference earlier this month in Venice. Barclays flew 320 rich clients to Lake Como, Italy last week on an all-expenses three-day jaunt costing more than £500,000. AIG spent $440,000 on a lavish corporate retreat at one of California's top beachside resorts days after accepting an $85bn emergency loan from the US to stave off bankruptcy. Words are inadequate."

NB: "Nero's rule is often associated with tyranny and extravagance. He is known for a number of executions, including those of his mother and adoptive brother, as the emperor who "fiddled while Rome burned", and as an early persecutor of Christians." (wikipedia)

Red Wine and Lentils

Ever since having a Waitrose salad with some quinoa in it (a pulse / bean from South America?) and being blown away with just how well this worked (I surprise myself how excited I can get about good food) I have been experimenting with salads and pulses.

I now eat salads several times a week - often for my main even meal. They are delicious and extremely healthy. The main ingredients are:

1) Sauce / dressing

I always start with olives marinaded in oil (olive, hemp and / or sunflower). Sometimes I remember to add herbs to this marinade. Typically I make a large pot of this marinade about once or twice a week and then pop it in fridge.

As a child I didn't like olives at all, it is only since having olives marinade in oil that I realised that it was the brine the olives are preserved in that I don't like. I now drain and rinse my olives before preparing my own healthy marinade.

2) Protein

My favourites are quinoa or green lentils. Although recently I have been experimenting with mung bean and barley. Mung bean are a pain to cook (you have to soak them for 24 hours) but are worth the effort - they are probably really good for you and have a great sounding name.

3) Vegetables

Vegetable are good for you and the more variety the better, I will list a few of my current favourite.

Spinach - frozen, simply defrost in the microwave

Roasted Vegetables (Peppers, aubergines, onions) - frozen, again simply defrost in the microwave. A side issue here is the Tesco vs Waitrose value debate: I am regular being told that Tesco is better value than Waitrose? In my experience is that if you match items of similar quality, the two are comparable. One exception, is frozen roasted vegetables, both Tesco and Waitrose do tasty frozen roasted veg, and Tesco's is a lot cheaper (2/3 of price?). However after some months of Tesco frozen veg (in London - where Tesco is my local supermarket), I noticed that they have added mono-sodium glutamate to their product. I will still enjoy Tesco's product but I don't mind paying the Waitrose premium for a quality, wholesome product.

Broccoli - frozen, simply defrost in the microwave

Carrot and Onions - these I actually buy fresh and can be steamed in the microwave

Cherry Tomatoes - Borough Market at the weekend does bag of delicious cherry tomatoes and they are not expensive. But if I'm not in London then any Supermarket tomatoes will do ...

Apples - I love a chopped apple in a salad (is it a Waldorf salad which have chopped apple and walnuts in it?)

There are literally dozens of great veg out there to be savoured, I could go on and on but I think this is enough for now!

Peak Oil and the UK's first green MP

For a couple of years I have been hearing about "peak oil" - mainly from environmentalists who slightly surprising often quote reports and studies from their "enemies" in the oil / petrol-chemical industries.

I used to partly believe the stereotype that the green party was largely made of "left wing eccentrics", with passionate ideas but not always the most well-balanced and happy people (tree-huggers as Jeremy Clarkson or my brother would say). To my slight surprise, over my 6 years in Brighton, I have got to know several of our green activists, attended meetings, been to a House of Commons Select Committee (on Carbon charging) and I found the greens to be intelligent, realistic and surprisingly happy and balanced in their personal lives. Like a folk musician explained recently in an interview (Dick Gaughan on Mike Harding's Radio 2 show) - "I want to create a historical record ... to leave a foot-print in the sand ... that there those who fought against what was wrong". Going on there is an understanding that it is going to be very difficult to change the "majority tabloid driven" views however it is important to stand-up and say what you believe in and to start to make the difficult changes which it is human nature to resist. History has shown collectively we have a tendency to ignore tough problems until it is too late. Hard chance is going to be forced on us all in a "post-peek oil world", the general public may not accept this yet but the environmentalist and right-wing oil industry already know this.

One of the side effects of the current labour party collapse is to make the UK's first green MP in Brighton Pavilion a real possibility, the last general election (2005) was close

Labour 15427
Green Party 9530
Liberal Democrat 7171
Conservative 10397

in local elections since 2005, the green party have done stunning well. Caroline Lucas is a very impressive candidate, clear, well-spoken and stylish. She could well now become the UK's first green MP. Caroline was on the World Tonight (Radio 4) this evening - talking sense but it was not easy listening - we are going to have get used to a world with less and less cheap fuel and increasing oil production in the short term will (a) not solve the fundamental problem of peak oil and (b) not going help with CO2 emissions ...

Highlight of my day - bumping into an old friend :)

The highlight of my day was bumping into Michael from the Rainbow Chorus, walking along the Charing Cross Rd!

This photo (currently on the front of rainbow chorus web-site at rainbowchorus.org.uk) has both Michael and myself on it (both in green) and is from our totally amazing trip to Paris last summer! Although this photo doesn't really show it, Simon rather stole the day in terms of photos with the most incredible outfit ;-)

I really miss Brighton and although London is exciting, has fantastic galleries and restaurants and the best IT user groups - I want to move back to Brighton!

I've been in London for nearly a year now and I virtually never bump into people casually, and on the rare occasion I do, they are old friends from Brighton.

Still London is great for Nadjib's career - he is going to overtake me before very long! Mind you this is great by me :)

I also went to London Linux group tonight (www.lonix.org.uk). Some very interesting and colourful techies & eccentrics - a good night but I got out at the right time (i.e. before I got too drunk). This is doubled by the fact that I then bumped into Michael!

At the "Lonix meet" amongst other things I learnt about CP/M:

CP/M (Control Program for Microcomputers) is an operating system originally created for Intel 8080/85 based microcomputers by Gary Kildall of Digital Research, Inc. Initially confined to single tasking on 8-bit processors and no more than 64 kilobytes (64 KiB) of memory, later versions of CP/M added multi-user variations, and were migrated to 16-bit processors. ( en.wikipedia.org/wiki/CP/M)

All good techie stuff! Very nice and smart people but after two hours it was time to escape before I got too drunk - I do find London is too boozy!

Japanese in Brixton

Personally although I like Brixton, I also find it a bit intimating. It is extremely colourful and one of many things which surprises me about Brixton is the quality of Japanese restaurants! My favourite is Ichiban Sushi (quite simply superb food and pretty cheap as well), but this was shut today (Bank Holiday Monday) and so we went to Fujirama - another good Japanese! Both restaurant are great and are on Atlantic Road (near Electric Avenue)

Persepolis

I went to see Persepolis for a 2nd time today - the autobiographical "bande dessinée" by Marjane Satrapi, an Iranian, from a communist family but also with ties to an old Iranian Prince and fortunately educate in a French school in Tehran.

The 1st time I saw this film, was in Paris in May 2007, in a cinema next to the Centre Pompidou. Despite missing some of the detail the first time, I think I enjoyed the film even more the 1st time in French!

The film pushed all the right button for a left of centre, liberal audience but is also a great story. Highlighting how oppressive regimes operate, the casual violence of petty officials and the stupidity of such regimes and the frustration for intelligent people who must suddenly act in a subservient way to religious fanatic window cleaners... Unfortunately unlike our heroine manner of the characters to do not survive - many are tortured and/or executed!

The film also tells a lot about life in the West too, from apathy to teenage nihilism.

Everyone favourite character, is her grandmother, who is full of wisdom. Every-time she opens her mouth, she says something intelligent and insightful. My favourite is her counsel to a very frustrated Marjane, that she is "going to meet a lot of jerks in her life" (i.e. get used to it!). In another scene, she stresses the importance of integrity (Marjane has escaped trouble by dropping an innocent man into deep trouble) .

I couldn't help feeling lucky in life when I saw how tough her life was! But I still have to watch out too; for those jerks out there "waiting to trip you up" ...

There is much more to this film, I have seen it twice now but I know this is a film I am going to watch many more times :)

integrity |inˈtegritē|

noun

1 the quality of being honest and having strong moral principles; moral uprightness : he is known to be a man of integrity.

2 the state of being whole and undivided : upholding territorial integrity and national sovereignty.

• the condition of being unified, unimpaired, or sound in construction : the structural integrity of the novel.

• internal consistency or lack of corruption in electronic data : [as adj. ] integrity checking.

ORIGIN late Middle English (sense 2) : from French intégrité or Latin integritas, from integer ‘intact’ (see integer ). Compare with entirety , integral , and integrate .