Sunday, 9 February 2014


Bay At The Moon

In March 2012, Reuters, among others, reported that Lehman Brothers had exited bankruptcy and that the former mighty banking institution was still operating in Manhattan, albeit with a much reduced staffing compliment of 350.

What is left is a little spark of flame chasing, what they see as, the bank's debtors to try and recoup money for those creditors who were left high and dry by the bank's collapse.  Lehman Brothers, in case you didn't know, still has access to billions of dollars worth of assets, which it is trying to sell to make good it's debts.

Of course, the question still on everyone's lips and whispered around dark rooms where brandy is poured over wealthy throats - should Lehman Brothers haves been saved?

Lehman Brothers has long been considered the catalyst for our global financial winter.  As it toppled over it took with it many household names in the US before the contagion spread to other shores.  American Insurance Group, Merrill Lynch, the near collapse of Goldman Sachs and J.P. Morgan, and then the Royal Bank of Scotland fiasco, the bailout of HBOS and Lloyds.

PHENOMENAL sums of money were plucked from the pockets of unsuspecting taxpayers to shore up the crumbling edifice of one bank or financial institution after another. As LEhman Brothers was left in the desert without water ( costing 25,000jobs), $186 billion (£117 billion) was found to save. AIG, yet some have suggested that had Lehman Brothers been saved, the American taxpayer would have been saved a great deal of financial grief.

Larry McDonald, former Lehman employee and author of New York Times bestseller 'A Colossal Failure of Common Sense' - a book I would highly recommend - told me that Lehman Brothers could, and should, have been saved with $30 billion.  This is comparable to the $31 billion (£20 billion) the British government found to save Royal Bank of Scotland.

There is a whole book that could be written on Lehman Brothers and many more stories from what Larry McDonald told me, or in his excellent book if you read it.

And yet, there are more stories around those who worked for Lehman Brothers, what happened to them and those associated with the banking collapse - many of them still doing very well thanks very much - and that is maybe another story...

 (Written on a train, well mostly, from Glasgow to Edinburgh- sorry to disappoint ,Robin.)

Sunday, 26 January 2014

After The Fall:Should Lehman Brothers Have Been Saved?

After travelling through space for 40 light years, Bill finally arrived at the end of the universe and found religion.

Part One

So, you thought Lehman Brothers were dead and buried? Think again.

In the twilight world of finance, they are resurrected, moving 'zombie-like' through the global capital world, still operating in the rarified atmosphere of a universe still trying to catch its breath from recession.

Lehman Brothers, mired in debt, leveraged over its head, filed for chapter 11 bankruptcy on September 15, 2008.  It was the largest banking meltdown in history.  Over-leveraged the company had $600 billion (£377 billion) worth of assets when it filed, no longer able to pay their creditors.

The dark vultures of Wall Street and the City were soon circling, Barclays Bank swooped to purchase Lehman 's investment arm for a knockdown £250 million ($396 million) while, at the same time, Bank of America overpaid for Merrill Lynch.

Close to collapse Merrill were sold to Bank of America for $50 billion (£31.5 billion), though the latter soon became aware of the moribund state of its acquisition.  Bank of America did attempt to back out of the deal but found they were legally compelled to complete business, takeover Merrill and it's massive debts.

Bank of America, of course, did consider taking over Lehman Brothers, but unable to get assurances from the US government took their attentions elsewhere.

Also worth remembering that the much maligned UK prime minister Gordon Brown blocked Barclays bid for the collapsing giant at the last minute.  Astute?

Most of us were bemused by the events of September 2008, how could anyone with such assets leverage themselves out of business? But no matter what any of us thought, we all knew things would never be the same again.

The human cost of that dark day was huge, with around 25,000 people losing their jobs.  There were images on the evening news of people carrying their belongings out onto the street.  But...'The end of a banking giant' ... as one reporter put it, has proved premature.

In March 2012,Reuters, among others, reported that Lehman Brothers had exited bankruptcy and that the former mighty banking institution was still operating in Manhattan, albeit with a much reduced staffing compliment of 350.

To be continued

(Written -Starbucks, Buchanan Street, Glasgow, January 25, 2014.)

Sunday, 12 January 2014

How Soon Is Now ?


Money In The Ice

I am in a fast - flowing supermarket queue rapidly moving toward automated checkout stations. In this particular shop there are 12 machines, any one of which will check-out my groceries, provide me with a receipt and give me change from the £10 banknote I am going to use. If I wanted to I could use my credit card.

Iam convinced, far from being automated 'robotic' machines, they are actually manned by small people, who quickly work out how much money you require to be returned, and who quickly type up each item you have purchased as they pass over the scanner...

Think about it.  There are 12 of these bays here, which one person looks after and ensures that any problems encountered by customers are sorted out quickly. This represents 12 check-outs no longer manned by employees.  Now if this supermarket chain has say 500 stores with automated sections of 12 bays of these 'robotic' sensor/scanners,  then that adds up to 6000 check-out areas which no longer needs a person to operate them. Okay, each battery of automated machines will need one person to troubleshoot, which means that for every 6000 'robotic' employees the company will require 500 human minders. It also means that 5500 employees will no longer be required.

If all modern supermarkets operate on this technological basis thousands of people could be at risk of finding their jobs redundant.  This is what, I believe, is part of the readjustment we all now face.

Underlying this workforce transformation is the rapidly moving disconnect between employment and productivity, in simple terms we can produce far more and generate greater profits with less people than ever before.

Consider for a moment, that in recent history, huge corporations required huge workforces in labour-intensive businesses to bring their products and services to the market. This is no longer the case, massively successful corporations like Apple and Google have a joint market capitalisation of around $850 billion ( £516 billion, €624 billion), and yet, between them, only employ 126,000 people worldwide.

An even more chilling development is the introduction of labour-reducing technology to organisations who still depend on large numbers of humans.  FOXCONN, who employ 1.2 Chinese and who offshore a great deal of their work to impoverished labourers in developing nations, are in the process of buying one million robots over the next three years.

This will, of course, shake out many of those Chinese employees and globally reduce the need for human capital, which, in turn, will increase profit margins and allow the organisation to accumulate capital at a faster rate.  Machines Don't have to be paid, they don't stop to eat or sleep, and they don't have to be accommodated, they don't even require rest breaks or smoke breaks while working.

It is a developing scenario which will impact on the global economy and will have related social and political aftershocks across the world.  Businesses who would have provided food, accommodation and leisure facilities for FOXCONN workers will lose out on a huge chunk of their trade, some may go out business altogether and create more unemployment.

Marry the above with the drop in revenue required to buy this fast-developing technology(s) and we can begin to understand why the giant corporations are interested. Remember, as we have discussed, capitalism does not exist to meet the needs of people, but simply to accumulate capital to...accumulate even more capital quicker. In this sense our need for food, shelter and work (to provide food and shelter) are irrelevant.

But this is only the tip of the iceberg...

Robotics is only one of the developing technologies that will change our working lives, and poised to alter our social, economic and political universe in a relatively short period of time.  Some analysts estimate that new socio-economic-political drivers will reshape our world by as soon as 2030.

As well as robotics, the introduction of 3D printing,synthetic biology, nanotech, and what is called Big Data, are all set to revolutionise our world.

We either go along with it or rethink priorities.

(Written in Franco's Coffee shop, Glasgow Central rail station, Saturday January 11, 2014)

Sunday, 5 January 2014

On The Dog Road To Findout

It's A Dog's Life

Dogs, I say with some envy, don't need to work. Buster, a rescue who has been with us since he was nine weeks and is now a grand old 15, watches me from the comfort of his well-padded basket as I dress. It is a little after seven and I have the news on the television. Weather warnings are everywhere. Winds of up to 80 mph, flooding, tidal warnings.

Buster, oblivious, stretches in his basket, makes himself cosy and sighs with contentment. I pat him on the head as I leave and he replies with his eyes 'so long, sucker, don't forget to call by the supermarket and pick up my special senior dog food, you know the one, full of nutrition for the older mutt?'

I hope he is thinking, 'drive safely', because my trip south will be into the teeth of heavy wind and rain.

In capitalist society we have to work, it is the way the system is designed and it does benefit most of us, to a certain extent. As we have said previously the driving force of capitalism is not to meet people's everyday needs but simply to generate profits at an ever accelerating rate.

In this respect, work is no different. So, while people 'need' work to survive, to provide for their families and to support their chosen lifestyle, there is no guarantee that an individual will always be able to find paid employment. That, always, depends on demand and supply and 'needs' of the market.

Something which is about to change profoundly.

Young people, for example, do a great deal of planning around their future career. They have to meet certain standards to qualify for university and may need specific subjects to get onto the course they want. To give themselves the best chance of succeeding they have to plan ahead. But, while we are all planning our futures, the world moves on.

The young lad who served his apprenticeship as an arrow-maker is dismayed to discover that someone has invented the gun, putting most of the fletchers, as they were called, out of business.

Which means at any time in any of our lives we should be evaluating our situations, taking cognisance of changes, re-directing or re-structuring our plans, or simply ripping them up and starting again if necessary.  Especially, in these times, of rapid labour market change.

It is the same with the more mature among us. For some strange and esoteric reason there is a bizarre belief that when an individual gets to a certain age they have become less than useless. To think this, is to be more than a bit shortsighted. Some of the sharpest minds I know are over retirement age, and I always think when attending retirement functions, that's a heck of a lot of experience and savvy walking out the door.

That is not to say, of course, that some people don't just want to draw a line under their working lives and go off and do the things they have waited so long to have the freedom to do. Yet, for others, the automatic ejection from the workforce comes too soon and is not welcomed - it is a very individual moment.

There are many who tell me that they are ready to wind the pedals a little slower but that they don't want to stop all together.

But, as we intimated above, the poltico-economic system that rules all our lives is not designed to meet our individual needs. Instead it is geared to meet its own voracious appetite for generating ever-increasing amounts of money at a faster speed, hence we don't really count at all.

Our feelings are of no concern to the system, whether we want to work full-time or part-time mean nothing, our lives are configurated by the demands and supply of the system we belong to and inextricably linked to health, social care available, welfare and pensions ( all of which are government interventions).

As I intimated above, I believe we are now living through a time of rapid change - see No Sleep Till Future. Not change or the cliched recovery we hear about all the time, but, in fact, a readjustment of the capitalist engine which will change all our working lives quite profoundly in the near future and that will be one of my next blogs.

As I leave the house I am immediately caught by a gust of wind and then as I make my way to my car, only a few yards away, I am subject to cold, heavy, driving rain.

I clamber into the car and look up. My dog is at the window, he is waving his little paw, and then he signs to me that he is still sleepy and going back to his bed, tilting his head to the side supported by his paws. How I wish I could join him, why it's barely light...but I have work to do....

(Written at Westmorland Services ( I pulled off when the traffic had slowed to a crawl and found that everyone else had the same idea, it was packed), M6 Motorway, Southwaite Services M6 Motorway, Crosby, Liverpool January 2,3 and 4, 2014)

Monday, 30 December 2013

Just Wondering About The Re-Evolution....

Re-Evolution 13 : Makeshift 2013

Just Wondering About The Re-Evolution

Thinking about the idea of 'capitalism', it is difficult to imagine that it won't always be around? It is like the telephone, how many would have predicted, other than the most visionary sci-fi writer, that one day we would walk around making calls on cordless cell phones from absolutely anywhere in the world?

I don't know why, but it came as a surprise to me that capitalism has been around for a really long time. The label 'capitalism' emerges around the 1860's, though the word, apparently, was used around 1848 - 1849 but only became currency in the 1860's.

Some believe capitalism per se, as a system, emerged as long as 500 years ago.

Of course, as a system of market exchange and profit making it has evolved, so when we speak about 'capitalism' we are actually referring to a group of 'capitalisms' as it has changed over time.

But that is the important point, it is only a people manufactured system so it can be sculpted, changed and altered as it unravels - yes we are a long way from the stream engine and, interestingly, within touching distance of the cashless society. Mobile phones, for example, are already taking trade from games consoles ( a relatively new technology). Amazing to think, that in some locations, and with technology adjusted mobile phones, you can even buy a cup of coffee without cash or credit card.

This had me thinking that what we are experiencing in the USA and the UK and, in fact, across the globe, is the beginnings of a readjustment and not, the much trumpeted, recovery smug politicians are always telling us about.

Two things immediately strike me.

One : Huge companies once employed giant workforces, now gigantuan businesses by market capitalisation don't always employ giant workforces. Google, for example, is worth $373.64 billion but only employs some 46,000 souls while General Motors (market capitalisation $56.8 billion) who have had such a traumatic times since the recession of 2008, still employs over 170,000 people. Apple, another example, with a market capitalisation $503.93b only employs 80,000, while the Ford motor company still employs some 213,000 but only has a market capitalisation of $60.38 billion. Blackberry had a market capitalisation of around $80 billion back in 2008, as of September 2013 it is now worth $4.3 billion. In September 2013 they laid off 4,500 from 12,700 and once employed 20,000.

Two : The configuration of the labour market in advanced western economies is also changing (re-adjusting). More and more people are working on temporary, freelance, sub-contract, part-time or zero hours agreements and less are now plugged into traditional contracts which covered holidays, sickness and pensions. There is an increasing mantra in these developed societies that continually explain that welfare, healthcare and pensions are no longer affordable. Cutting across this, the traditional job is disappearing and with it the former certainties of millions of middle class workers. New technological advances ( as always), demographics and leverage are all regurgitated by lacklustre governments as the reason for these automatic and very necessary re-alignments.

Both the above, need, of course, to be examined closer to discover if we are really entering a re-evolution, which I think we are. But time is against me as I sit with a primo Americano in Costa Coffee at Central 12, Southport.

The young girl who served me earlier approaches.
"Excuse me sir" she says in a high pitched voice. "Just to let you know because of re-adjustment, from next week a Primo Americano will now cost two hubcaps, but if you paint the front of my house you can have two Lattes and one Ristretto."

"I need me bedroom wallpapered," an old lady to my rights states. "It's worth an Americano Grande and a raspberry and almond slice for you to do it."
"I can fix your car for a couple of Expressos!" A middle-aged man shouts his offer as he jumps to his feet.
"I have three Batman comics from the 1970's, for anyone who will buy me a Cortado!" a young lady with a child in her arms calls out as she clmabers to her feet.
The room falls momentarily silent before people are leaping to their feet and shouting at each other across the room.
"Two Cortados!"

Later the Financial Times made interesting reading. Batman comics of the 1970's had moved up to two Cortados and a Cappuccino, while wallpapering a front room was now worth two Grande Americanos and a raspberry and almond slice...mmmmmm.  Hub caps, unfortunately, had passed their peak and fell by two Lattes....

(Written in Costa Coffee, Central 12 ,Southport, December 30, 2013.  Wishing you all the very best for 2014)

Thursday, 26 December 2013

And So This Is Christmas...

Return Of The Ice Hare : Makeshift 2013

And, so this is Christmas/2014 And All That.....

And, so this is Christmas and what?...war is over? ...People are joining hands and what?...Dancing around a circle as one?... Are united in liberty, fraternity, equality?

John Lennon's words may be visionary but as we move toward 2014 Syria, South Sudan and, of course, Ukraine are all showing unrest. We always hope for these things, war being over and people having resolved their differences but we know even Father Christmas can't bring us that.
Image of a rather large man in white trimmed red suit sitting looking despondent shrugging 'Well I tried, believe me folks I tried'.

Unfortunately, we know in the year to come, people will still go hungry despite there being plenty of food in the world, the homeless will not be provided with shelter despite there being plenty of empty homes and the impoverished will still have to carry the burden of austerity despite the fact that there is plenty of cash sloshing around ( and not only in David Cameron's pockets) bankers will still pick up 30 per cent bonuses and politicians will take their 10 per cent plus cut.

Of course, neither can we blame starvation, homelessness and poverty on people who don't work hard or are, somehow, less intelligent than others.

Last week I reminded you all that huge armies of people in work in the USA have to depend on public assistance. A similar situation also exists in the UK where many people who have jobs still have to depend on welfare to get by.

Next year I plan to do more work on my thesis that the UK, in particular, but the USA as well are both on the road to 'readjustment' and not 'recovery' and in 2014 I want to tell you why.

And, before we mention it people are not hungry, impoverished or
homeless because they are no - smart, unemployment among graduates has never been so high, but really there are number of luck factors involved. Right place, right time sort of thing.

The people who live by Jakarta's grabage dump at Bantar Gebang work on and around the fly-infested rubbish tip from morning to night, seven days a week. They build their homes from materials scavenged from the dump, before the bulldozers arrive, and feed their families and themselves from the meagre daily pickings they get from working out there.

They are not lazy, they can't afford to be, and they will never, ever, have access to proper education so we can't tell if they are smart or no - smart.

Their situation is not something they happily volunteered for pre-birth.

"I want to be born into a family who lives by the rubbish mountain at Bantar Gebang...please!"

From all the possible families they could have been born into - and the possibilities are almost infinite pre-conception - they become the sons and daughters of the people of Bantar Gebang and their infinite possibilities pre-conception become finite post-birth.

So, from any possible combination of parents taken from the billions of people on the planet, at any time, in any period anywhere, they become : 'An Individual Born At A Particular Time In A Particular Period Of History In A Particular Geographical Location' - and probably within a particular religious grouping.

What do you say to that Santa?

"Ughhh? Well, let me think" shrugs shoulders. "Erm...."

Thought so.
 (Written on a train travelling south to Liverpool Boxing Day 2013)

Sunday, 22 December 2013

What If...

Look What Santa Brought : Makeshift 2013


In a funny way, I kind of feel the world can be such an absurd place. Sometimes, I am convinced the way the socio-politico-economic universe glides on and evolves is somewhat surreal. I have never been convinced of the argument that economics is a science but rather, like our global financial system, it is, in fact, an art.

Master that my friends and you - master the universe - thank you Tom Wolfe ( author of Bonfire of the Vanities, fantastic read and recommended if you haven't already worked your way through it.)

I like thinking about these kind of complex features, these really intricate nuances of existence and I like to think sometimes way out beyond the universe to other places, social, political and economic....

So, you sometimes have to think, what if?

What if the world suddenly lost all of its power sources?

Outages are nothing new, of course, but can you imagine if suddenly, in the middle of a blizzard ( let's crank up the tension here) everything failed, but not only failed, but never ever actually return. No more power of any description at all?
The lights on the Christmas tree blink off, the family gathered around the modern shrine of the television utters a collective 'awwww'. 'It is not Christmas without the Christmas lights' you might mumble to yourself. This all happens as we are gathered around that magic box, and then just at our favourite part of our favourite sit-com, when the star prepares to deliver his most famous, belly-laugh catchphrase...'Well bless old'...everything is reduced to absolute blackness.

In that instant, we might have been typing a rather long and rambling email to a distant friend we have not heard from for years...'damn' we'd probably hiss having just lost all that effort.

Pubs everywhere would fall momentarily silent as everyone thought at the same time what's happened? Football (soccer) games would have to be abandoned as floodlights failed.

The whole world goes into meltdown, including the cell and land phone apparatus. Text fingers working at the speed of light to no avail as every battery in every mobile phone is rendered useless. Neither will there be anymore deliveries of petrol...

Cars would become rusting sculptures to what was. Their streamlined features pointing, in muted fashion, to a new, unknown tomorrow.

Without power there will be no more email, text, television. No more brand advertisements, no more sickly sentimental and multi-million pound John Lewis ads at Christmas with bears and hares and sweet little, innocent, tearjerking, children who plead to get what they want with a really schmaltzy twist and it all works, it really does. In fact it is quite brilliant.

The adverts start a stampede. People in their droves rush off to John Lewis as if their frontal lobotomies depend on it and willingly part with their hard earned wonga.

"No, please John Lewis Saleperson, take my cash - I simply love that little animated cartoon of the bear and the hare - I'll have that coffee maker please, just think John that will do Auntie Bessie."

"Look at the price of it woman, £864!" John the husband replies in alarm.
"Oh John! Don't be a grouch, she'll love it! It has come from John Lewis, and you know you can't get better than that, it is written all over their ads. I think the bear and the hare one is my favourite." and then she sings a few bars of Somewhere Only We Know , "Isn't that just wonderful?"

Without power we would be reduced to depend on fire for light and warmth. We would have none of our modern technologies which make our lives so much easier, no white goods like microwaves, washing machines, fridges, or entertainment and communications equipment, music would stop playing unless, of course, it was live.

The coloured lights that flicker across computer screens would black out...the market capitalisation of Google would go from $367.70 billion (£224.97 billion, €268.84) to zero in a split micro-second. Stocks and shares would no longer exist, they would be gone in a flash.

"What was the latest price on Starbucks? Hey buddy, latest price on Starbucks, say what ? You are saying $77.66 (£47.51,€56,78) are you sure... I mean how are we going to check that out?"

Would there be violence? Looters raiding retail outlets for what? Stealing the latest gaming consoles, the Xbox One? Plasma televisions? Don't you think that's just a bit shortsighted, if not weird, even for thieves?

Without power there would be no more leverage, all computerised records would be gone. At last the damn house belongs to us and there is no bank breathing down our necks, there is no longer any record of a mortgage... Who would bother flicking through paper to find out?

Would we need money? If...

In the darkness of your home, you shiver in the cold, pull an extra coat around you, stare out your front room window at the snow falling. In your sleeping bag you fall asleep to wake on Christmas morning and open your presents.

"This one's from Aunt Gillian," You tell your partner.
"What have you got?"
"An? Electric toothbrush..." You groan in the realisation you won't be able to use it....
"Oh that's nice..."
"And you?"
"A DVD..." Your partner frowns, you look at each other.

And say in unison - "Useless"- and throw your presents down and sigh...

Outside, in the snow, two mice shelter from the biting wind near to an empty plant pot.

"What's the drama?" One says to the other. "What are all these humans whinging about?"
"I don't know, all they ever do is moan, so the lights went out so what? You haven't got an Xbox have you Roberto?"
"No senor, never had one..."
"Well then...Merry Christmas Roberto"
"Feliz Navidad, Miguel."

(Can't promise that our philosophical mice will re-appear. Written at home 21/22 December between Christmas shopping.
"Excuse me" I call over the sales assistant, frustrated because I can't find what I am looking for. "Have you got that really expensive perfume with the price pumped up eight-fold because a z-list celebrity puts their name to it?"
The sales assistant thinks for a moment. "Ah, you mean ; 'You Can Fool The Public All The Time'?"
"That's the one!" I clap my hands in delight. "Yes, that's it, my wife loves it." ")