Thursday, 19 February 2009

A good summation of how we got here...

From Bruce Meredith, _NZ Business_ (Feb 09, p.70):

"There is only one place money comes from. Customers.

"The financial markets are not where the money comes from. At best, these markets are enablers - at its core, a simple concept and structure - as long as everyone involved both understands and knows how to play the game.

"Where the wheels fall off is when players in that market either fail or refuse to grasp that concept and set out with one, single minded objective, to use money to make money. Where money is not just the enabler, but is also the product and the result.

"That is when greed and avarice emerge.

"It has happened before in the history of the capitalist model and it will happen again. And it sure as heck is happening now.

"Business has become a dirty word. Capitalism has become a dirty word. profit has become a dirty word. Not because any of those concepts are, in themselves, flawed. Rather, because of in the way a relatively small number of greed possessed fat cats play the game. Their objective is always simple - to make money irrespective of the cost to, or effect on, anyone else.

"When that happens, eventually the model will crash and the little guy ends up paying the price. The assembly line worker at General Motors, the despatch clerk at Fisher & Paykel, the first time home buyer who has to find a significantly greater deposit, putting the purchase of a house out of their reach for the foreseeable future.

"The fat cats don't pay. They board their Gulfstream corporate jets and head to Washington to plead poverty and seek taxpayer handouts. And the most galling and unjust element of this whole sorry saga is that these effects have little or nothing to do with the trading performance of business as a whole. It is not poor business trading performance that has caused what we are currently experiencing. It is nothing more than the effects of spectacular greed and avarice on the part of those who are supposed to be the enablers of business performance - the money men - whether they be retail bankers, investment bankers, finance companies or money market traders. These are the men (and women) who must carry the can for this spectacular global economic mess."

Or, as the Front Lawn said many years ago:

Can you believe this place?
Well can you?
They're making money out of money here,
They're making buildings out of glass.
Their kids look like they stepped out of fashion magazines,
But none of it's going to last.