Category Archives: credit crunch

Evaporating the goodwill.

As a Lib Dem, the past few months have been a living nightmare. And nothing comes any worse than the tumult over tuition fees. I may not be a student any more (those days are long gone) but I understand the dismay that they feel, knowing that in the future, the burden of paying for university will be placed on those that attend, rather than the taxpayer.

I also supported the protests when they were announced. We talk a good game in this country, but when it comes to direct action, we’re not always the best at walking the walk. However, it’s been astounding the size and amount of demonstrations, both in London and around the country. The sour taste that sits in the mouth though, and that will continue to do so, is the violent element to these protests.

Now trying to unpick the propaganda is easier said than done. It wasn’t hard to see there was a hardline element willing to cause as much damage as possible when they broke away to Millbank, and some of these were aiming for damage not just to the buildings, but the police, or bystanders. And once the police’s underwhelming response was noted, the stage was then set for ugly repercussions. We’ve seen it all before. In the G20 demonstrations, where the Met Police stated that trouble was ‘inevitable’ beforehand, thus giving them the perfect excuse to kick off. We all know what happened that day.

And so it came to pass again on the day of the vote. While many students were aiming for peaceful protest, the minority, just like the police’s pre-justified actions, will know that, since violence is ‘inevitable’, then they have the perfect excuse to disrupt and grab all the headlines from those trying to uphold the tradition of peaceful protest. Watching the scenes on tv it was pretty appalling. The police stated the protest strayed from an ‘agreed route’, thus justifying their first overreaction. With the violent few then pushing at the barriers, the first baton charge was their pre-prepared reaction, and after that, the rest of the events were almost pre-ordained.

Sights of a wheelchair user being dragged from their chair were disgraceful, as were those of a policeman being knocked off their horse, and the barricades being flung at riot police. Seeing Winston Churchill’s statue defaced, and idiots swinging on the remembrance day’s flags on the Cenotaph were flashpoints that will go just as far (especially with older generations) to evaporating any sympathy that students may have garnered over the last months.

There are no winners here.

The students, protesting in a battle they surely knew they’d lose (and did, just). Their futures and those of students that will see the first hit of the new fees in 2012, pitched into a system that puts the epmhasis on mere higher education attendance rather than excellence and focus on academia.

The police, who, while they are often in a no-win situation in scenarios such as this, were brutal, heavy-handed, untruthful, and have shown themselves to have learnt little since the G20 other than to make sure their ID numbers now show as they bring the batons down on the skulls. Mounted police charging a kettled crowd (students, rather than rioters) was shameful, and the myth that protesters (some young kids or old) were allowed out when this wasn’t possible is one that should be exposed. Kettling the last group until midnight on Westminster Bridge was a story that seemed to get scant coverage. It deserved more.

The press, who covered in an often hysterical and biased way, reporting on the police hurt and never the students, until much later in the day. What happened to impartiality?

And lastly, the politicians, who through their thinking got us into this ghastly mess in the first place.

This may be the death knell of the Lib Dems. Personally I hope (and think) this isn’t the case, but like the case for Iraq for Labour, this may haunt them for years to come.

And with the dire economic future showing little sign of improving, this may be the start of a very long, violent winter of discontent.

When something sounds too good to be true….

It usually is.

Bernie Madoff

Take Bernie Madoff. Financier to the stars, the rich, the cream of America’s (and the world’s) elite. A genius player of the money markets, a former chairman of the NASDAQ, a Wall Street legend. What better pedigree could you choose? And who better to invest with? The perfect high-rolling individual with whom to invest your millions. Or so it seemed. An investment return that defied the markets. And yet, in the end, no more than a Ponzi scheme.

Despite the intelligence of many of his clients, it was the oldest trick in the book. There was no capital, merely the payment of money to investors using other investors’ money. A paper profit but a puff of smoke. A house of cards. Arguably the biggest private fraud in history – $50bn – and perpetrated by an individual with an aura of invincibility that allowed him to convince those willing to make a seemingly staggering return to part with their life savings. There was the rarefied air of the Palm Beach Country Club, home to most of his investors, who he personally chose. There was no application to this exclusive group, you were invited by Madoff, adding to the air of elitism.

But the sad fact was many of these were older, couples, many charities that saw his philanthropy and followed it for the benefit of their charitable purposes. Big banks suffered as well – investors at BNP Paribas, Banco Santander, and HSBC were among the heaviest hit. Amazingly, the SEC investigated Madoff’s organisation eight times in the last sixteen years, and, incredibly, found no evidence. Similarly, a rival firm, determined to replicate his amazing results, concluded they were impossible, and in 2005, a report to the SEC still resulted in no findings. In the end, the credit crunch was what took the rug from under his manicured feet. Wishing to withdraw 7bn, Madoff couldn’t cover the cash. The end was nigh.

This week he pleaded guilty to 11 charges of fraud, and may face up to 150 years in jail. He’ll most likely die there. But while he admits his role, and remorse, only he will know why he did it. It is, in a time where greed is laid bare to us all, a staggering conceit, and one that probably says as much about personal greed (and, at the same time, the willingness for people to accept anything in order to make money) as any. Gordon Gecko would be proud.

New Year? Out with the new and in with the old….

While New Year’s Eve continues (like Valentine’s with it) to be as much of a shameless money-spinner as a reason to live it up into the next 365 days and propose a few shaky resolutions while wobbly on your feet, New Year’s Day seems to be the where the smart money lies in terms of a decent night out. And there’s no better place to add to the previous night’s hangover than in a distinctly credit-crunch free environment of a pub. And that pub is the Old Queen’s Head in Essex Road.

Home to Bugged Out‘s party for a few years now, it’s an odd contradiction in terms. Shoreditch scenesters and glammed-up Londoners shuffle outside the front door waiting for the one-in-one-out to allow them entry (this is to a free night, remember, and upstairs, when entry is finally gained, it’s not Berlin-tinged techno you’ll be hearing but everything from 10cc and Phil Collins to Donna Summer and Take That. In the hands of Tayo and Johnno Burgess (he of the most entertaining Resident Advisor podcast of the year in 2008), you won’t find a more entertaining way to bring in the New Year, and anyone that turns up their nose at the thought of compromising their artistic integrity need not bother making the journey. After all, isn’t it just about having fun? It certainly is here. Roll on 01/01/2010!

Just how close we came….

For a bit of end-of-year ‘cheer’, you only have to read the latest entries of the BBC’s Robert Peston’s business blog to realise just how lose we came to disaster in October. HBOS (Nat West’s owner) and RBS were hours away from closing for business, only kept alive by their substantial deposits.

In an extraordinary interview, the always readable Peston shows the distinct underestimation of the crisis from the Bank Of England that was responsible for the slow reaction and lack of foresight in the road to our current financial status. Maybe that will be the turning point, or just another blip in the downward arc that will see us strike much lower before recovery starts. It’s another piece in the ever-complex account that, had it been a novel, would be essential reading, but is sadly reality.