Comedy Double – Alan Coren* Memorial Edition

The best things in life are free… well yeah, but for the rest we need dosh. So today’s theme, yes you guessed it, is money and the economy.

Economists have a sense of humour? Who knew? Here’s the hilarious Yoram Bauman, who describes himself as “the world’s first and only stand-up economist”:

That economists apparently have a sense of absurdity does explain an awful lot about the state we’re in….

We’ve all got vastly different attitudes to money – some people have an almost visceral attachment to it, like Eric Idle in Monty Python’s’ classic “Money Programme’ sketch:

“>

Some people will do anything, and I mean anything, to get their grubby mitts on it. Do not watch what happens when a guy agrees to drink a bottle of ipecac on camera for money if you are at all of a delicate disposition.

Bleurgh. I need something to take my mind, or should I say stomach, off that image. What better than a selection of the stupidities people commit hen trying to get at other people’s money?

D’oh!

Oops, butterfingers…

Ooh, I so want this robber’s incredible shoes…

Or maybe not. Some people, though, just don’t have the gumption to be good bad guys. This may just be the most pathetic armed robbery ever:

But let’s look away from the seedier side of money for a moment, and towards the more profligate side of cash.

Some people have no regard for money at all. This young British guy gambled his entire life savings, about a hundred thousand pounds, on one single spin of a Las Vegas roulette wheel. Gulp.

Then there are those people who wager respectably on the stock markets, thinking that if it’s made complicated-sounding enough that we won’t cotton on to the fact that what’s known as international high finance is just gambling.

Eric Idle once again sums it up best:

Yeah, that’s pretty much how it sound to me too. High or low income, money may be the international language, but in the end isn’t it just more bloody trouble than it’s worth? Look at the rancour it causes:

Oy. But that’s life under capitalism for you.

Bonus clips:

Just one today but it’s a doozy – to get you in the right frame of mind for Hallowe’en, here’s Look Around You Module 4, ‘Ghosts’:

UPDATE:

* Alan Coren, the doyen of British satire, the former editor of Punch and mainstay of the BBC’s News Quiz, Cricklewoood’s most famous literary auteur, died this morning. Both Linda Smith and Alan Coren gone. Damn.

Here’s Alan in the 1992 HIGNFY election special.

RIP.

Oh. That’s Not Good News.

Daily Telegraph business section:

Fears of dollar collapse as Saudis take fright

By Ambrose Evans-Pritchard, International Business Editor

Last Updated: 8:39am BST 20/09/2007

Saudi Arabia has refused to cut interest rates in lockstep with the US Federal Reserve for the first time, signalling that the oil-rich Gulf kingdom is preparing to break the dollar currency peg in a move that risks setting off a stampede out of the dollar across the Middle East.

China threatens ‘nuclear option’ of dollar sales

I’m No Economist…

…and I don’t even play one on teevee.

But.

Northern Rock may have been essentially nationalised and made safe for now and Alistair Darling and Gordon Brown may think they’ve dodged a bullet. (Huh. They’d better take a look at the hail of bullets headed their way. Merkel is not going to be happy.)

Ditto the US economy and the Federal Reserve: after lowering interest rates as a spur to lending, for now they’re breathing a sigh of relief.

But it seems obvious to me, the non-economist, that if you have an unsustainable economic bubble, that pumping the bubble up bigger by putting more imaginary money into it to enable even more excessive consumption and dodgy lending might not be a good idea.

Surely it’s just blowing the bubble up bigger, which means that when it does burst, and it will because it has to (something Marx identified long ago but call it a positive feedback loop and economics bloggers discover it like it’s a new thing), then the debris will be spread over a bigger area.

Personally I reckon that this temporary boost of confidence is causing a glut of trading because investors are getting out of the market and there’s money to be made in the interstices of crisis trading, particularly in short-term currency speculation. But what do i know. I’m not an economist.

Global Research, basing its opinion on a WaPo article predicting a global market crash, alleges that because of it a crash is a done deal already.

Among those poised to profit from the crash is the Carlyle Group, the equity fund that includes the Bush family and other high-profile investors with insider government connections. A January 2007 memorandum to company managers from founding partner William E. Conway, Jr., recently appeared which stated that, when the current “liquidity environment”—i.e., cheap credit—ends, “the buying opportunity will be a once in a lifetime chance.”

That’s probably a conspiracy too far. But rapacious as some investment funds are, there are others that must be taking huge hits and as it becomes clear just how many banks and institutions in the US, Europe and worldwide are overexposed to almost worthless junk loan investments, it’ll become clear just how temporary the confidence boost is.

Already the big money appears to be cutting its losses and moving out of mortgages and other financial instruments and into commodities like metals and oil, where prices are rocketing and not dependent on untrustworthy rating companies. Big money wants certainty and solidity in its investments right now and to get it that means liquidity: calling in many of those junk loans and mortgages and converting the resulting cash, such as it is, into valuable commodities.

The word may have gone out to the media from the Fed and the Bank of England that confidence is up and must be maintained at all costs, but the market is saying otherwise as global nvestors rush to put their money somwhere safe.

In that you could argue that they’re doing no more than the customers of Northern Rock did – withdrawing their savings and stashing it under the mattress.

Solid… Solid as Northern Rock

What the run on Northern Rock shows is that the great British public has learned that valuable lesson Bush famously could not remember: shame me once… After Equitable Life, after Fairpak, people have learned not to trust reassurances that everything will be alright, have learned that when things inevitably go bellyup they are the ones left holding the ba and have learned not to trust the government to bail them out. So instead they all decide to withdraw their funds while they still can. In the process it seems they have forced the government to provide a proper bailout if Northern Rock does go bellyup, since it’s now guaranteeing a hundred percent compensation scheme.

I love it when a plan comes together.

“Don’t Panic Mr Mainwaring!!”

Is Northern Rock the new Credit Anstalt? .

It’s a spreading meme and I’m probably one of many thousands of bloggers making this comparison this morning.The British media is ramping up for a full blown panic – could the impending collapse of this overextendxed and undercapitalised bank be just the first of many dominoes to topple in our precariously-balanced economy?

Grimly satisfying as it is to see baby-boomers desperately trying to get their comfy pensions and the profits from their hiousing speculations out of a crumbling bank, unfortunately this won’t just affect the comfortable middle classes.

The knock-on effect will be broad and deep: so many are employed in the financial services and derivative industries that if the panic continues and more banks get into trouble, even if there is bailout and the situation stabilises there will be a massive retrenching and many, many people will be out of a job, from call-centrre operators to cleaners to copier technicians to consultants to sysadmins. If doesn’t stabilise… well, then all bets are off, so to speak.

The UK government’s spokesdroids and our laughable chancellor Alistair Darling are desperately trying to convince us in increasingly shaky voices that it’s not a bank crash – as the public sees right through their feeble protestations and continues to queue for its cash. Reportedly 6.1 billion 1 ibillion 2 billion pounds has been withdrawn over the last couple of days. It’s Financial Contagion in action

What is financial contagion

“When the thunderclap comes, there is no time to cover the ears” –
– Sun Tzu

A large number of bank failures occurred in the 1930s, accompanied by declines in asset markets, mostly triggered by common adverse business conditions. This seriously weakened the US financial system, and left it unable to support economic activity effectively through financing. Consequently, there was a continuing vicious circle of economic decline and financial weakness.

When asset bubbles burst, or economies suffer a severe downturn, weak banks can become insolvent, and their failure then further weakens other banks causing the problem to spread.

In testimony before the U.S. Senate Committee on the Budget on September 23, 1998 Alan Greenspan said:
“Developed countries’ banks are highly leveraged, but subject to sufficiently effective supervision both by counterparties and regulatory authorities, so that, in most countries, banking problems do not escalate into international financial crises. Most banks in emerging market economies are also highly leveraged, but their supervision often has not proved adequate to forestall failures and a general financial crisis. The failure of some banks is highly contagious to other banks and businesses that deal with them, as the Asian crisis has so effectively demonstrated.”

But regulation and supervision of individual financial institutions, however much they may be effective, may not necessarily guarantee the stability of the financial system as a whole. Problems in one bank may spread to other parts of the financial system by the common involvement of other banks in one particular risky business area that turns bad, through counterparty exposure to events such as the Baring Brothers crisis of 1995 or the Long Term Capital Management (LTCM) crisis of 1998, or loss of confidence in one institution may result in funding problems for other institutions if they are perceived to have something in common.

Banks are interconnected through interbank deposits, loans, payment systems, and common markets. An adverse event that drives one bank into insolvency may then cascade to other interconnected banks by generating losses for them. If the losses generated for the next bank in the chain exceed their availability of capital to absorb the losses, then a domino effect of contagion can occur that threatens the whole financial system.

In May 1931, the Austrian Credit-Anstalt bank failed after customers withdrew funds on worries over the soundness of the bank’s loans. A cascade of financial problems ensued, which contributed a great deal to the economic problems of the 1930s.

It started when the bank’s depositors grew concerned about the Austrian economy and the state of the bank’s non-performing loans. After it failed, general confidence in banks was damaged and there were runs on banks in Czechoslovakia, Germany, Hungary, and Poland. The top four banks in Germany declared themselves bankrupt and the Berlin Stock Exchange closed for two months. British investors in Europe and exporters lost money, the UK suffered a rapidly growing deficit, and foreign investors withdrew, deserting the Pound Sterling for gold and other currencies. The British government raised taxes to try to restore confidence, but investor confidence collapsed, and the pound was allowed to float, declining by over 20% against gold.
Comparisons have been made between the Credit-Anstalt crisis and potential risks in China’s banking system:”

More…

Even if the Bank of England does manage to maintain confidence in the short-term, this is a globalised economy and the US debt situation is so precarious that it could still tip us all into a worldwide depression.

Recession, resource wars and climate change, what a prospect.

I’m going out into my garden to sit in the last of the summer sun and to try not to think about it any more for today but perhaps I will think about investing in a wheelbarrow.