h2g2 The Hitchhiker's Guide to the Galaxy: Earth Edition

I found an article in the London Times crediting ten people who saw our economic problems coming:

1. Vince Cable - deputy leader of the Liberal Democrats

2. Christopher Wood – chief strategist of CLSA, a broking firm in the Asia-Pacific Market.

3. Founders of www.stock-market-crash.net – website aimed at investors

4. Henry Weingarten - astrologer

5. Nouriel Roubini - economics professor

6. Nikolai Kondratiev - Russian Marxist economist

7. Founders of Housepricecrash.co.uk – property website

8. Lord Oakeshott - Liberal Democrat Treasury spokesman

9. Stephen Roach - senior executive at Morgan Stanley

10. Ron Paul - Republican Congressman

You can read the article at

http://timesbusiness.typepad.com/money_weblog/2008/10/10-people-who-p.html#more

I don't think that list is comprehensive, and would like to nominate other heroes and villains of the run-up to the “credit crunch”. They include:

HERO: Baron William Rees Mogg, former editor of The Times and co-author, with

FELLOW HERO: James Dale Davidson, of the books 'The Great Reckoning' and 'Blood in the Streets'

HERO: James Martin, author of 'The Meaning of the 21st Century' outlining the problems we're facing from a broader perspective

HERO: LBC, the London talk radio station that used to broadcast talks by

FELLOW HERO: Bob Beckman, an American economist (now sadly dead) who used to live in London, who warned that the British property boom was unsustainable, and predicted the problems in retailing and employment we're witnessing today. He also predicted the boom in pawnbroking you can see all around you. His books include 'The Downwave' and 'Crashes'.

HEROES: Founders of propertysnake.co.uk – property website

VILLAINS: Just about the whole of British mainstream media which has ignored the problems or helped to puff up the bubbles that are bursting all around. They've avoided public anger so far, as these online poll results show:

http://www.vizu.com/res/Business/Markets/money/credit+crunch/timesonline/poll-results.html?n=125015

A special mention should go to the BBC and Channel Four, ironically the two television companies supposed to have a public service remit, for producing programmes such as 'Property Ladder' and 'Homes Under the Hammer' which encourage dreams of easy money through home renovation, a type of television that became known as 'property porn'.

VILLAINS: The kind of journalists who claim to have told us in advance when actually they didn't. There's an article about them (also from The Times) by the excellent Matthew Parris:

http://www.timesonline.co.uk/tol/comment/columnists/matthew_parris/article5532550.ece

Anyone feel like adding to the list?

Bob Beckman. There's a name from the past. I used to listen to him every morning while I was getting ready for work.

Do you know the Mogambo Guru? A bit of a comedy act, but there's an impressive archive here

http://news.goldseek.com/RichardDaughty/

Lots of sensible stuff behind the gags.

Infie

You didn't mention the first two who predicted it-- Adam Smith and Karl Marx

I wouldn't put either Adam Smith or Marx on my personal list, Tumsup.

Neither of them were in a position to make predictions about our residential (and increasingly commercial) property bubbles, which with the insane credit boom have brought about the current crash.

Marx deserves special approbrium. Nikolai Kondratiev (number 6 in the Times list reproduced in post 1) died in a Siberian labour camp as punishment for daring to suggest that there might be economic and credit cycles that could not be controlled by central Marxist planning.

I'd go along with Infiniteimp about Marx. I don't know much about Adam Smith. I had a quick look round the internet, and couldn't find anything about his opinions on economic downturns.

Can anybody out there help with that?

Wasn' t making any direct and detailed connection to this crisis.

Adam Smith pointed out that a government by business interests was the worst possible kind. Neocons like to quote Smith where he points out that self interest is the basis of economic activity but they fail to notice that Smith also spelled out that the role of government is to govern in the steam engine sense ,ie to keep it from flying apart by its own overactivity.

It's supposed to be about industry and trade, it just keeps happening that shovelling money becomes the industry and wind is what gets traded.

Marx goes on endlessly in great detail but makes almost the same point.

Someone please correct me here, I'm no scholar and am working from memory.

I see your point, Tumsup.

The long-distance philosophical background is interesting, but what impressed me about the Times list, in particular, was that it referred to this recession/depression and that the politicians and bankers who led us into this trouble either failed to notice the work of those people or ignored it.

Even Kondratiev was pretty much on the button. He talked about a sixty year cycle of major economic contractions, give or take a bit, and this one could be the one that follows the depression of the 1930s.

As I understand Marx, which is nothing to boast about, his prediction was for a terminal collapse of the capitalist system that should have happened by now.

I was much attracted to Marx in my youth though, even then, his views of human nature seemed odd. I just put it down to his immersion in the Victorian world.

Capitalism's terminal collapse doesn't happen because there's nothing to replace it with. It crashes for about the reasons that Marx pointed out but then gets reinvented since it's the only workable (so far) system.

I personally am hoping for some kind of Mannaism.

Mannaism?

Rushes off to look on the internet

It's from the idea of manna, the stuff that god showered on his hungry people. It's just what you need but no more.

Of course, since there is no god the economy in whatever form would have to provide.

It's like what we do now in terms of government services except there is no bureaucracy of judgement. You wouldn't have to convince anyone that you deserved to eat. Just as now you don't have to convince anyone that you need medical care. (In civilized countries at least)

In the simplest form, the World Bank would issue everyone on earth a bank card and deposit x dollars each week to that account. The entrepreneurs of the world would jostle to get those funds from the people by offering goods and services.

The Bank would tax them to pay for it all. A steady state economy as opposed to the present one that has to endlessly grow by some mysterious means.

More on Chris Wood, number two on the Times list (post #1)

http://business.timesonline.co.uk/tol/business/industry_sectors/natural_resources/article2485085.ece

Do I get on the list? Or am I just not high profile enough?

Whats your track record, Br Stealth Azathoth? I've been banging on about the insane state of the UK property market for years, and the possibility of a share price collapse. One of my friends used to call out "we're all doomed!" every time he saw me (echoing Private Fraser in Dad's Army). The Times didn't seem to notice me, though.

I think that we can safely add the name of Professor Avinash Persaud to the Times list of people who gave us early warnings about the financial catastrophe that threatens all our futures. As long ago as November 2002, Professor Persaud warned that the explosion of growth in the credit default swaps market looked, “less like an exercise in sound risk-management and more a yearning for yield ... I don't need to tell you that whenever financial institutions go after yield as a group, regulators should sit up.”

“Risks are not better spread,” he pointed out, “they have just moved.”

It's a disgrace that no journalist or politician ever challenges Gordon Brown's claim that nobody in the world had any idea this financial hurricane was heading our way.

Avinash Persaud, incidentally, is the founder and Chairman of Intelligence Capital. Prior to founding Intelligence Capital and the GAM Persaud Investment Funds, he was Head of Global Research at State Street Corporation. He was Global Head of Currency and Commodity Research at JP Morgan. He is a Governor of the London School of Economics and a Trustee, a member of the Board of the Global Association of Risk Professionals and the Chair of the CBC Working Group on investment flows. He is the winner of the Institute of International Finance's Jacques de Larosiere Award in Global Finance and an Amex Bank Award.

There are two inescapable facts.

FACT #1 It's impossible to get something for nothing.

FACT #2 It's impossible to persuade people of fact #1

Even the top bankers, supposedly the brightest fiscal minds we have, believed that they could spin gold from straw.

>>even the top bankers, supposedly the brightest fiscal minds we have, believed that they could spin gold from straw.<<
No, they didn't. They don't particularly care, as Sir Fred Goodwin has demonstrated.

All they care about, is their salary!

Don't forget the bonuses.

My experience of bankers, at least young ones, is that they're absolute fantasists, ready to believe that the most far-fetched of ideas cannot fail.

All directors of large corporations know how to pay themselves huge salaries, turn them into bonuses for tax reasons and waterproof their own pensions.

>>My experience of bankers, at least young ones, is that they're absolute fantasists, ready to believe that the most far-fetched of ideas cannot fail.<<

Money, the most powerful hallucinogen ever invented.