This Week’s conspiracy theory

The announcement this week that two small, regional banks have gone under due to the credit crunch, and were promptly snapped up by Mutual of Omaha leads many to believe that the entire ABCP crisis was engineered, or at least encouraged. While I like a good conspiracy theory as much as anyone, I think that there is a far more easily digestible siuation going on than a hands on market manipulation: It’s called human nature.

Firstly, what would someone gain from allowing a situation  such as the US credit crisis to get out of control. The answer is property. Let’s say you have won the lottery, and are looking to take a $40 million stake and double it. If your immediate reaction to that idea is “Why would I? Isn’t $40 Mill enough?”, then you aren’t thinking like a company. So let’s throw another obstacle in your way. How about if you had to look after a gigantic extended family? Twenty people are relying on you to look after them – a small shareholder pool, but you can suspend your disbelief for a while. After all, this is Superhero movie season, so you may be used to doing this on a weekly basis.

You have your $40 Million, and you notice that there are five properties on your street up for sale, and another five that you know the owners are out of work. You talk to your local real estate agent, and he says that the interest rates are about to go up, so you snap up the 5 empty properties, and go and have a chat with the five unemployed owners. You offer to lend them money, if they need it, because you want to give some away, and they take it. You also tell them to stay in their houses because interest rates are going down. When rates rise, you call back your loan to these five familieis, and when they can’t make the payment, you start legal proceedings knowing that the only way they can give you anything is by selling their houses. You snap them up at a low price and you have manipulated this market to now own 11 properties on your street (including yours), and your extended family is happy. What was the distasteful part of that? Lying to home-owners that you know cannot afford much? Starting legal proceedings against them knowing it would lead to their being homeless? Looking after your shareholders? The choice is yours, but what you actually did was correctly predict what people would do in a certain situation. You now own 10 run down properties, but you own them at a point where their value is only going to go up, so sooner or later your shareholders will be selling them at a huge profit for you.

Back in the real world (or what passes for a real cyberworld in international debt-financing circles), this could certainly be achieved ignoring a couple of warning signs. If you can see that someone is going to buy debt from homeowners automatically because their debt earns your portfolio money, you are going to encourage them. Obviously, the only logical end to this is massive amounts of foreclosures, but when you are earning money, who cares about logic? There are more and more obscure, debt-laden investment vehicles around that are being traded at the speed of light by computers (and their operators) globally. Soon, these trades will purely be between computers, and they do not see the human cost at the end of the rainbow. President Bush is home shopping in Dallas, apparently, and that city’s foreclosure rate is about 25% of all residential properties, so he should have quite the choice.

If a large bank sees what the logical end will be, and has the money in the bank to buy several smaller banks, would it stop this lightning-fast financial impending auto crash, or would it say to it’s shareholders something like this:

“We can see this global ABCP trading process will not only make us money in the short term in trades, it would open up a situation where many properties are owned by small banks that would not survive a run. If we bet big now, knowing what the end product would be, we could see their demise as a positive for us. We buy them out, and we have inherited a couple of million residential homes, that we can afford to sell at a lower price now, and they will rise in value over the next 20 years”.

So, where is the wrongdoing here? Because major banks are using their knowledge to make money now, and later, or the fact that they are cutting down the amount of consumer choice in the future? Perhaps it is that they are simply fulfilling their shareholder’s expectations twice or three time over.

Mutual of Omaha did not do this. The shareholders that are making money did. It is us who are the dark shape in the background manipulating markets as a single voice. Our company stocks made this happen. The major stock holdings held by individuals in the World are those over 50 years of age. When they are retiring on their stock earnings, what will everyone else be living on? If you are looking for a bad guy, it’s probably you.

The bees, the butterflies…and the heat

More and more often we are being told of the collapse of the natural world.

Of course, no-one can tell you why, for instance, North America has lost almost one third of it’s bee population. Is it because of subtle changes in heat? The spread and level of pesticide spraying, perhaps. Whatever the reason, it is happening, so the time for blame is over. By that, I mean that the time where we find out exactly why, and who is to blame, then mete out the appropriate punishment is a waste of time that just holds back what we need to do – replace that population. Without the pollination that this area of the food chain gives us, we can kiss goodbye to most of our crops – not only to sell overseas, but to eat ourselves. Perhaps this is part of the global food shortage, another facet of the increasingly bleak mosaic we are facing in the Third World today, that will affect the Western world sooner than we think – about a week next Wednesday, probably.

Butterflies are in a similar precarious position. This important, fragile creature has seen it’s usual habitats under threat. Not only due to a warming climate, but also to the man-made disaster of woodland thinning and the planting of only profitable crops in vast swathes of North America. There are over 43 species of butterfly now extinct, or getting there, and the rate of the collapse of this creature globally is exponentially increasing year over year. If you think about it, haven’t you noticed the amount of butterflies you are used to seeing have at least thinned out over the last five years? Many experts believe that butterflies aren’t dying off, they are simply moving to new areas to better their chances of survival. Of course, in the next few years this is exactly what human beings will do – they will follow the cooler climates North. In 2007, it was announced that the change to the climate in the 40 degree North and South area of the globe would be a rise of about 1 degree. You could almost hear the sigh of relief: “One Degree? Hell, that’s nothing.” Unfortunately, it isn’t these areas of a warming globe that is the problem, but it is the refuge area that lots of humans will try to get to in a hurry in the next Decade or so.

You can forget 40 degrees South, because the only habitable areas down there is the South Island of New Zealand, and Southern Australia, with a tiny mountainous sliver of South America. It is the areas of North America and Western Europe that will feel the brunt of this exodus: Time to get out your atlas.

There is a band of deserts and ‘too hot to live’ areas  North and South of the equator. Either side of this is a desert zone that takes up most of the Southern Hemisphere. No-one lives in a desert in any great numbers, and the Rain Forest area is going toward a desert-like temperature. You can forget anyone living in any great comfort there very soon. This means that anywhere South of Denver, Kansas City, Charleston and Newport News Virginia will be too hot to live. While cities like Las Vegas has shown that you can import water and make an oasis livable, a choice will have to be made between feeding H2O to Vegas, or Los Angeles. There WILL be riots.

In South America and Africa, you can say goodbye to vast metropolises like Buenos Aries, Sao Paulo, Rio de Janeiro, Mexico City, et al. Where will these people go? They will all head North to survive: That’s Billions of people, pople. How about Africa and Asia? All of the North African coast, Israel, Arab nations, and the major hubs of Sub-Saharan Africa, including Johannesburg, Kinshasa, Kampala, etc. Asia? India, Pakistan, Sri Lanka, Bangladesh, Thailand and the rest of S. E. Asia. All will empty and come North. How far North? Using the same latitude marker as we did with North America, that mans goodbye to Spain, Italy, Greece, and Turkey, and the majority of the Muslim and Islamic republics. In other words almost two-thirds of the population of the planet will try to fit into one third of it, while their citizens are getting older, unable to move.

It is these very areas that right now use labour from the Southern hemisphere, latin America, and beyond as it’s cheap labour. We have to get ready for this gigantic shift. Very soon, there won’t be a chance to patrol a border, the very crush of the poor will be too great. With our birth rates almost at a standstill, the face of the entire planet is about to change, and wars wil be for water, food and shelter, nothing more. Of course, there will be less of these three items, too.

The idea of butterflies and bees disappearing may be a tiny detail in your life,. but they are – literally – the canary in the coal mine. It’s past the time to find out who is to blame. It’s time to face the new global paradigm, and start making changes. In a future with less pollination, the God your neighbour prays to becomes a tiny detail. Get used to changes, and start doing something about it, now.

High Gas Prices – The Roll of the Dice

During coffee on the smoking patio of my local ‘Blenz’ last week, I eavesdropped on a conversation. Not tough to do, either, given the volume of what turned out to be a lecture along the lines of: “When I was a lad….”. Among the butts, discarded cups and peeling steel tables, this guy began with the history of gasoline prices, and the exact and only reason why we have fuel prices that very soon will have to be mortgaged, to be afforded.

This caffeine-guru’s answer isn’t the point for this Post (But, in case you are interested, it was Oil Futures traders -Bastards!), but rather how odd that there has to be one answer. Ever since I have lived in North America, I have been disturbed by this logical way of looking at life. In sports, the MVP (Or Man of the Match, as we used to call it in the UK) in any sporting occasion, is simply the guy that throws the winning ball, or makes the winning score. I am used to unsung heroes being MOTM: The plucky midfielder whose runs into the other half of the field were undefendable, or the hard-as-rock defender that held up the opposing strikers enough to put the opposition out of position on every possession. Over here, though, there has to be one reason why your team won, and this is it.

Likewise, Elections are called way before the final ballot is cast, so that everyone can see the result in Prime Time, instead of waiting until tomorrow morning. It is instant gratification that, therefore, can be pegged to one reason, one moment, one state, that someone won and someone lost.

I miss my British all night, overnight parties that we held to see who was going to be called winner around breakfast next day. They were exciting to see the tides turn gradually, then sweep back again in a vast organic tide, like a pile of autumn leaves blowing over your driveway. Made up of thousands of individuals, it sweeps back and forth as one, fawn, wave.

I often have fun looking at the build up of soccer goals, to see where the ‘killer touch’ occurred in the move – the clever fake, the short pass, the misplaced defender, looking at the scorer as a part of a team effort, not an individual – still, that’s the Socialist in me, I guess.

Oil prices are this high for many reasons and, while I blame the society that let Futures traders get so out of control, we aren’t also counting in the rise of the middle-class in developing countries, the loss of the ozone layer, greenhouse gases, the inability to make and sell a car in the US that does all the right things, rather than one that sells only on gut reactions of shape, colour, and speed.

In fact, it’s almost like rolling a hand of poker dice. You are only going to count three out of five, but it is the array of all five that you are looking at, and the decision process becomes way more complex very quickly.

I have thought for the longest time that coincidence is much more of a primary mover of human affairs than anyone thinks. When I look at the string of situations that led to me flying to Los Angeles 20 years ago, it makes my heart beat faster to think that one change somewhere along the way, and I wouldn’t have got a look in. Recently, my wife and I were shown ‘The Secret’, and it says mostly the same thing: It’s all going to hit the fan, no matter what you do – just get out of the way and keep your head down.

For an outlandish and entertaining look at this subject, Leonard Mlodinow’s book on the illogical turning of our World and universe: “The Drunkard’s Walk” . It is a revealing, and very entertaining look at how we cannot look at one answer for every single situation in out daily lives. Just as molecules fly through space with all the wayward grace of well-oiled drunk, so too, do we stagger through our uncertain world mistakenly believing in cause-and-effect, purpose and direction.

There are lots of reasons for every situation in life that we can now look back on and unravel like a troublesome knot in a skein of wool. The trick is to learn from these disparate strings of chaos to ensure that they don’t happen again.

It’s a pity that our own need for transportation highs over the last 150 years in Europe and North America have trumped the sensible voices for restraint that would have helped us get out of this knotty oil situation long before this.

 

G8 – What is the point anymore?

We have another exciting G8 meeting this month, this time hosted by Japan. Big deal!

This is another photo op designed to have certain World leaders show that everyone is getting on well with everyone else. It’s the annual chance for the World’s most powerful states to sit down together, and discuss the hard-core issues that are affecting the globe together, and then…..do absolutely nothing about it. Considering Russia fought so hard to get into this club a few years ago, their inclusion hasn’t meant anything to the overall projects follow through and concrete result. It just means another voice at the table, defending it’s own dubious record.

When these summits began 30 years ago, it appeared to be a move forward from the Cold War stalemate that the world was in.  It appeared that everyone that mattered outside of the Evil Empire could actually sit down and talk about how to work together to make the planet a better place, and to find answers to the two major problems of the 1970’s: High Oil prices, and poverty. That rings a bell.

Despite the addition of Canada (There’s a World power for you!), and now Russia, the G8 have failed to do anything about these two evils. In fact, energy prices a higher, stocks are thinner, and Poverty has grown. Thanks, boys! Having expensive meetings every few years, and being able to speak informally to each other about what is really going on globally, not only has nothing been acheived, things are actually worse. I think that this group is simply a get-together so that everyone can introduce themselves to the new Italin Prime Minister -after all, they go through governments almost on a monthly basis! My car lasts longer between services than most Goverments in Rome. Another reason may be to laugh at Japan’s economy – one that has been in recession, technically, for about 15 years. This is one of the 8 greatest nations on earth? A country that hasn’t balanced it’s chequebook since Mike Tyson was World Champion?

Of course, if you peek behind the curtain, there is something else going on here. It’s a bunch of old white guys (Apologies to Germany’s Chancellor Merkel), of basically the same religious backgrounds that meet to ensure that the status quo remains the same, and that no-one with a religion different, or a skin tone darker than theirs gets a look in. It reminds me of the British Empire in the years after WW2. It was ‘in charge’ in name alone, and did the right thing by dismantling the entire edifice, leading to something quite extraordinary: A global collection of diverse countries that pooled their talents to make life better for their citizens. The British Commonwealth is a collection of about one-third of the World’s population that recognise their colonial background, and still request help from the old tyrant. They are in the club of their own free will, and see it as a place where evrone (except the UK) is the same because of what they have gone through.

The G8 no longer reperesentative of the World’s most powerful nations, nor the greatest producers. If that was simply the entry fee, there are about 5 other countries that are far and away more productive than the Old Boy’s Club. Are they the greatest populated countris? Not even close. They are the ones holding the strings of ebvery other nation, and they are determined to stay that way. What work are they doing that The United NAtions, World Bank, or NATO not doing?

There is talk of expanding this to a G13 or a G20 – in fact any size that would recognize the changing face of the world, AND keep them in the decision making chairs.

If we need an overseeing group that can make global decisons, and follwo throguh onthe, it’s time to double the size to include the BRIC countries that are the bioggest and fastest moving. How about the Northern European and Scandinavians that have taught the world how to feed and medically aid their peoples, save money and manage their resources beter than most. You could even rotate membership as the World changed. Hows that for ripping the whip from the same old driver’s hand?

If everyone stopped meeting after Yokohama, they couldn’t do any worse to the World than they have done since we were all dancing to disco. We have gone through a thirty-year period of fabulous wealth, growth, and opportunity and what do we have for it? The same old white Christian guys talking the same game, and their inaction has led us to a world in worse shape than it was before they began.

Nationhood in your ‘Hood?

The first week of July is very important to those in North America. Both the U.S.and Canada celebrate their Special Day, when everyone takes a day off work (or more) to celebrate their unshackling from an Imperial past with beer, sausage products, and fireworks. To me it often feels more than just a birthday; almost a groundswell of thanks for everyone that has ever lived in those countries, it is a celebration of the human spirit, more than just a Federal decree that everyone should enjoy baseball.

So should those that were born in these countries feel the same, no matter where they are? Obviously, this modern world is now home to millions of people born in one place, and now living or working abroad. Should those take their own special day, and celebrate how clever and industrious their forefathers were, no matter where they are on the planet? Of course: Coming from a country that doesn’t have a ’special day’ like this, I wouldn’t begrudge anyone the chance to spend a weekday at a sporting event, clutching suds and hot pork. How about those people not born in that country, but a passport holder of there? Same rules, I guess – everyone else has the day off, so why not? But the more the global borders come down, the more the entire issue of nationhood and belonging has changed.

Canada announced this week that there are more than 3 Million passport holders that were born on foreign lands and have moved back, or elsewhere, on the face of the earth today. For the U.S., I imagine you could at least triple that figure. At the same time there are more than that amount of illegal workers in America that, if they were rousted and left the country, would affect the economy negatively by $1.8 Trillion dollars. It may be an unspoken truth, but rich countries in the First World needs it’s modern slave labour in order to simply keep the wheels turning on the hamster cage of Commerce.

Last summer, Israel’s attack on Lebanon resulted in a cadre of hundreds of Canadian citizens scrabbling at a steamy, sunny port to get on a ship out of there. Because they were passport holders, the Canucks sent a ship in at huge expense to save them, but it became obvious that most of these people hadn’t been born anywhere near the North. It is almost as if it no longer matters where you were born, unles it gives you an edge in something. It only matters who you declare you are a citizen of when it suits you – crossing a border easier, or having the Navy coming in to get you out of perilous mortar fire.

I am British. That’s what I am. I am still a passport holder of that country, but I don’t pay taxes there. I pay taxes to my new country, but refuse to change my citizenship. Believe me, it’s a bitch getting over the border to the States, too, so I know it causes me a level of discomfort to be this person.

But, I wouldn’t hit the British Consulate if something violent happened to the city where I live, because my partner for life is Canadian, and she is the reason I am here in the first place.

If it doesn’t really matter where you were born because you are welcome elsewhere for your skills; if it doesn’t matter what passport you hold because you can change it like an outfit for a special occasion, and it doesn’t matter where you work, becasue you know you will never be a part of that country, what is the use of a nationality at all?

The wired world means that you can run your life from anywhere with a lap-top and a cell phone. Your language skills can be brushed up to appear in any country you wish, with whatever language you want.

If none of it really matters, and you are part of a community purely due to your great-grandparent’s heritage and a certain striking flag, it shouldn’t really matter who your neighbour is, or which God they pray to.

What matters? I remember watching January 1st, 2000 unfurl across the Globe from my seat on the Pacific coast – the penultimate place on earth that it did. From simple ceremony in some countries to a complete waste of cash in our hemisphere, I saw everyone in the World celebrate one day in a manner that we will never see again. This is what we should be celebrating annually: A day for all of us despite where we were born, where we are, what we do, or how we speak.

In my global travels, the one common denominator that tied everyone together no matter which country they were in was the need to keep a roof over their head and food on the table. Isn’t our nationhood one of being human?