Thursday, June 28, 2007

The Upside of the Downturn

Ever since I was a financial journalist in the early eighties I have watched in wonder as, every few years, a new oligarchy is formed around the conviction that a novel win-win way has been found of beating the markets. From Jim Slater to Michael Milken and the Web 1.0 entrepreneurs, they have come, made and/or lost their money and gone. Any theory that claims to beat the markets over anything but the short term must be wrong, but, of course, the theorists, if they are smart, always get out before their particular delusion is exposed. Perhaps now is the time for the latest oligarchs - private equity, hedge fund, meta-market operators - to pack their tents and retire to the tax haven with the best beaches. Disapproval of their activities is mounting. In America Warren Buffett and in Britain Sir Ronald Cohen have broken ranks with the super-rich to say they should be properly taxed. And, meanwhile, the Bank of International Settlements has warned of a possible crash - each previous big downturn, says the bank 'was preceded by a period of non-inflationary growth exuberant enough to lead many commentators to suggest that a 'new era' had arrived.' As Chancellor Gordon Brown earned massive political capital from this present phase. But, if the BIS is even half right, as Prime Minister he will be mortgaged up to his alarming eyebrows. It will, of course, be very painful for the not-so-super-rich, but at least I should be able to eat at the Mirabelle again.

11 comments:

  1. The odd thing about Brown, having watched the seamless transfer of the baton, is his utter unlikability. Your earlier posts re. helicopters, which I knew were for the comic, gave me pause. Twenty years ago, had you seen his mug rather than Gorbachev on the telly, would have one worried enough to start building and stocking shelters. Even today, picture him in one of the major EU capitals.
    It's time his handlers explained the smile concept to him, and not the one which has mothers picking their children into the arms, with fear he is thinking snack.

    While, the staff at the M PW restaurant must be nearing sainthood, as you say economic ups and downs and each one throws up its share of shits.

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  2. I think, Vince, his minders did explain smiling to him - so that's even scarier.

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  3. As I always say, the minimum we ask of our leaders is that they are some recognisable form of human being. Brown (like Heath before him) fails this test. He cannot last - unless (as I always say again) he takes advantage of the Tory implosion and holds a snap election. It would even look 'democratic'.

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  4. you're easily pleased, nige. anyway I don't remember Heath had any problem with smiling - quite the opposite!

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  5. It's time his handlers explained the smile concept to him, and not the one which has mothers picking their children into the arms, with fear he is thinking snack.

    Thanks, Vince. I was afraid that I was the only one who had that passing thought and had considered seeking professional assistance as a result.

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  6. Perhaps now is the time for the latest oligarchs - private equity, hedge fund, meta-market operators - to pack their tents and retire to the tax haven with the best beaches.

    I think so, Bryan. If not now, then soon. From what I've read, Buffett is convinced that hedge funds in particular are a disaster just waiting to happen.

    I'll join you at the Mirabelle when it does. If I'm feeling particularly ebullient at the time, I'll even pick up the tab.

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  7. Is it just me, Bryan, or has something terrible happened to your Thought Experiments? I'm getting bad withdrawal symptoms. No posts since Thursday and the comment counts don't change.

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  8. I was wondering the same thing, Chip!

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  9. Don't worry, Bryan. I'm now onto this. I've launched a campaign to free you. You'll see the logos appearing on blogs across the web and we're holding a protest next Friday in Whitehall...

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  10. Bryan, what can we do to get you back into your blog? Is it a password matter?

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