The Financial Misery

We're all going to die! Death, destruction, misery! The markets are going to collapse, and there's going to be complete mayhem!

Hang on a minute. I'm still here, you're still here. We still buy things which are expensive but affordable if you're careful about what you buy. Petrol's gone down in price. What's the problem?

I tell you what: The "misery" isn't in the supposed "crisis" that we're in. It's in the constant barrage of media hype that we're bombarded with day after day. I've been checking on its progress on Reuters. How long has the so-called "credit crunch" been the headline? Three weeks, a month?

But why? Have people stopped starving in the nation's poorest countries? Are the various altercations around the globe in a state of suspense? Is there no good news to report? (Don't tell me the standard line that no-one's interested in good news. This mentally disturbed minority are the sort who watch EastEnders and Celebrity Love Island, listen to vacuous music and use the word "cool" as if it actually means something. Enough said.)

Is it really such a bad a situation that everything else in the news has to be put on hold? Is it not suspicious that the term "credit crunch" is coined, and soon afterwards referred to as if it is real? (Credit to Channel 4 News last night, who ran a fascinating and off-beat cultural story about Lucian Freud campaigning to save a Titian painting.)

What is a "credit crunch", and where is it defined? If it is defined, was it defined by experts in the field - economists, philosophers, mathematicians? Somehow, I don't think so. If it were, then it has been very carefully hidden. Frankly, I find the politicians who must have come up with the idea laughable, and I find the people who are taken in by it laughable. I have to, because if I didn't laugh then I'd be depressed, which incidentally is what the people who make money out of market turbulence would like me to believe is happening to the economy. No doubt, that is the real reason for the invention of the term "credit crunch".

What a crap state of affairs that, not only does the news spread this tripe as if it's the end of the world, but people actually buy it, in more ways than one. Where's George Galloway when you need him?

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Update (30.10.08): Today's Reuters front-page headline mentions rising fears about the economy. Perhaps, just perhaps, media propaganda such as that same article might have something to do with it. Hmmm.

The Alleged "Oil Shortage"

The laws of profit and loss are simple. If you sell more goods or services, you make more money. If you sell less, you make less.

So why, in a world where we are supposedly facing an oil shortage, are oil companies making record profits? It’s all hype, and it’s all just crap designed to make powerful people more money. This week it was Shell (see main link on title). Even better – the first paragraph (at least, at the time of writing) says that Shell needs continual price rises, otherwise it will suffer a loss in profits. Aww, boo bloody hoo.

There are other examples from around the world of profits increasing over the last 12 months, occasionally even because oil output has increased:

Indian Oil Corp: 17% profit rise[1]
Shanghai Petro: 50% profit rise[2]
Canadian Oil: 400% profit rise[3]

Equally suspiciously, no-one in the media, nor in government, has uttered a single word about the gaping inconsistencies, either to say "haaaang on" or to rationalise them. The conspiracy theories are too obvious and numerous to be mentioned here, and it's getting bloody difficult to discredit them merely for being conspiracy theories, which seems to be the fashionable thing to do these days.

What's next? I predict that, as a result of the problems of Northern Rock in the UK and the so-called sub-prime "crisis" in the US, both countries will soon introduce a raft of measures to allow financial institutions to make lots more mon... I mean, to recover so that they do not adversely affect people's savings. I don't know about the US, but in the UK it's already happening: the government is thinking of allowing banks to be bailed in secret[4][5]. Who needs transparency when it's far simpler to hide problems behind people's backs? And this is despite Mervyn King's excellent statement that:

The only thing that will stop banks taking risky activities is the knowledge that if things go wrong, they, and they alone bear the consequences.[6]

Needless to say, if I go missing within the next few weeks and this Blog is suddenly shut down, then you'll have a good idea as to why.

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[1] Reuters. (31.01.08), “India’s IOC Q3 net profit rises 17 percent yr/yr”, http://uk.reuters.com/article/oilRpt/idUKBMA00028720080131

[2] Reuters. (31.01.08) “Shanghai Petro says 2007 net rose over 50 pct”, http://uk.reuters.com/article/rbssIndustryMaterialsUtilitiesNews/idUKSHA16615320080131

[3] Reuters. (30.01.08) “Canadian Oil Sands profit jumps on prices, output”, http://uk.reuters.com/article/oilRpt/idUKWNA784920080130

[4] Guardian. (31.01.08) “New Powers for Bank to Stage Secret Rescues”, http://www.guardian.co.uk/business/2008/jan/31/northernrock.bankofenglandgovernor?gusrc=rss&feed=business

[5] publicradio.org. (30.01.08) “Bank of England to save banks in secret”, http://marketplace.publicradio.org/display/web/2008/01/30/bank_of_england_bailouts/

[6] Reuters. (24.09.07) “Regulation stalled Northern Rock Rescue”, http://uk.reuters.com/article/personalFinanceNews/idUKNOA03409820070924?pageNumber=3&virtualBrandChannel=0