Financial Crisis – Putting it in perspective.

This graphic below shows the market values of a group of banks before the credit crunch and after. Phew!

The original graphic was from an email circulating and perports to come from JP Morgan. I moved the bubbles around to fit my blog better but the sizes and data remain the same. I published this yesterday and had immediate feedback from a enineer friend pointing out that the JPM graphic misrepresents the data. In the graphic below the same numbers are represented as circles. However it is the circle’s height, not it’s areas, which corresponds to the figures.

A pedant might argue that this is true of my bar chart above and that I have compounded the problem by making mine 3 dimensional. However, I think my representation is readily understood whereas the bubble version is misleading.

Perhaps the fact that a leading bank, such as JP Morgan, cannot even create simple graphics without misrepresenting the data goes some way to explain why the banks are in such a mess.

Bank Market Capitilisation

Bank Market Capitilisation

Brighton Peace Walk for Gaza

A Peace Walk for Gaza was held in Brighton on Sunday 18th January 2008. Due to start at 1pm from the town hall we eventually got started at 1:30pm after waiting for some people to arrive from out of town.

To begin with it looked like very few people had turned up but by the time the speeches were over and we’d got started there were a good number. Previous walks have been swamped with police but, thankfully, this time the police kept a relatively low profile.

Brighton Peace Walk foir Gaza

Brighton Peace Walk foir Gaza

Speakers included a Jewish man with relatives who had died in The Holocaust, a representative of the local MP, a representative from Amnesty International and a Palestinian. Sadly I did not record their names. We walked up North Street and along Western Road finishing up at Norfolk Square. A mad old man with an extraordinary beard and a stick provided balance by ranting that Palestinains were all shits, he knew one and every time he met him he ended up rowing with the guy.

In the past when I’ve attended these type of things there have not been enough Muslims. I am frustrated that British Muslims complain about Israel yet do not seem to get active in protests. This time there were a fair number of people who appeared to be Arabs and possibly Palestinians. They got involved in “free Palestine” chanting and this included “From the river to the sea” which could be construed as a call for the abolition of Israel. I thought the event organiser apeared uneasy that the chanting might cross the line into anti-Semitism but perhaps that was me. In the end the event went off well and stayed focused on helping Palestinians.

Brighton Peace Walk for Gaza
Brighton Peace Walk for Gaza

Palestine – Blaming the victims

The Israelis have now killed over 1,000 people during the current round of fighting in Gaza. Israel argues that they are responding to continued rocket attacks upon their citizens.

This sounds like a valid reason but Israel continues to expand settlements on Palestinians territory and operates racist policies to carry out ethnic cleansing of Palestinians in Jerusalem. It is difficult to argue that Palestinians should passively accept this.
In exchanges I have had with the Israeli embassy in London they are argue that Palestinian attacks would continue whether they carried out settlement activity or not. Perhaps but there is no way of knowing since Israel never stops expanding the settlements.

To my mind the root of the problem is that Israel considers itself as home to Jews and not to Palestinians. Palestinians, therefore, are considered second class citizens. Consider the use of live ammunition to control Palestinians during the first intifada and contrast this with the extreme care taken not to harm illegal Jewish settlers being removed from Gaza.

I am not claiming that Jews are somehow bad and Palestinians good but that if a society is constructed so that one group of people has all the power then they will abuse that power.

The Israelis consider Israel to be land given to them by God and they consider the Palestinians presence to be a problem. Thus they continue to steal land from The Palestinians while simultaneously blaming them for the conflict.

Now we hear that Israel is insisting that the isolation of Gaza be increased to prevent Hamas rearming as a condition for a ceasefire.

But will Israel also refrain from rearming during a ceasefire?

Gordon Brown backtracks once again

When this credit crisis really got going “Hank” Paulson, The United States Treasury Secretary created a US$ 700 Billion plan to buy up the “toxic debt”. The idea being that the U.S. government would take on the debt freeing the banks from the risk. The banks would then be able to resume lending. The U.S. government wouldn’t necessarily lose out as not all the toxic debt would default and they may even make a modest profit.

American congressmen didn’t like the idea of risking a lot of government money and it took two attempts to get their plan through congress.

Gordon Brown, the British Prime Minister, then started lecturing everyone about how what was really necessary was to inject liquidity into the banking system. His plan was to give the banks loads of cash so that they could start lending again. Brown postured that he was some kind of economics guru and strutted around telling the world that they should follow his lead. Without too much publicity The Americans changed tack and started giving the $US 700 Billion to the banks rather than buying up the bad debt.

On the 14th January The Daily Telegraph ran a story stating:

“The (UK) Treasury is understood to have asked the investment bank Credit Suisse to draw up a detailed plan for the logistics of creating a bad bank, in a bid to restore confidence in the sector and to kick-start lending to consumers and businesses.”

In effect Brown is admitting that, once again, he was wrong and he will now need even more money to start buying up the bad debt just as Hank Poulson had originally planned.

I am reminded of Gordon Brown’s boast that he had abolished boom and bust. Gordon Brown’s ego is only paralleled by that of Tony Blair. They both strut around the world telling everyone what to do and, infuriatingly, seem oblivious of the fact that everything they touch turns to shit.

The folk lore is that, though Brown is a hopeless buffoon, his one saving grace is that he understands economics.


It was Brown who helped screw our pensions, it was Brown who let property and stock inflation run out of control and it was Brown who dithered for months before bailing out Northern Rock.

He talks Bollocks and should step down.

But don’t stop there! Sign the petition on the Down Street web site:

Beijing Airport

Beijing Airport

Beijing Airport

I spent Christmas in Australia travelling there with Air China via Beijing. Beijing airport is fantastic. Massive, modern and new. Oh, and empty; well almost. By any measure Beijing airport is a great achievement but wandering around while waiting for my connecting flight I noticed just how under used it is. Shop attendants stand gazing into space in shops stocked full of designer bags or premium alcohol.

BBC Radio 4 news carried a story today saying that China may have overtaken Germany as the world’s 3rd largest economy and hopefully, once the current financial crisis is over and the world economy recovers, Beijing airport will start to fill.

However, I spent one night in a local Chinese hotel and saw the difference in quality between the airport and the hotel. It occurred to me that the airport runs well now because it is new but if the Chinese are like the rest of the world they will have rushed to get the airport built while neglecting preparations for maintenance. What will happen once the hand driers and the toilets start to break down? With so few travellers the temptation may be to let quality slide.

I am reminded of the Nigerians who, during the oil boom of the 1970s, began a project to build a new capital city. Abuja was built mostly in the 1980s and I visited in 1997. Like Beijing airport, it seemed massively over specified. It’s four lane roads carried very little traffic and the movement of government departments was still incomplete.

Let’s hope Beijing doesn’t go the same way.

Beijing Airport

 Beijing Airport