One imagines that the billionaire hedge-fund manager Louis Bacon may have had second thoughts about the wisdom of his contemptuous and remarkably frank boast made earlier this year, that in terms of 'global macro' finance his firm Moore Capital Management had been given "a kind of 007 license to do whatever we want". Quite so, Mr. Bacon. This was clearly no idle boast. The 007 'license to kill' has been put to effective use by MCM in the financial world. While there are many complex factors behind the appalling financial mess there is not the slightest doubt that Bacon et al. has had a major part to play, and apparently he continues to do very well out of it.
This is not a matter of speculation. In the same interview where Bacon spoke of the occasions where he had made the most money through speculation he also referred proudly, and one might almost say, shamelesly, to the subprime market where, 'we made absolute money...we made a ton of money". With the knowledge that there are millions of homeless and bankupt Americans now ruined by the subprime scandal this is hardly the sort of admission one would expect from the notoriously secret Bacon. Still less so when one contemplates that the subprime housing scam was perhaps, the most significant trigger in bringing about the present world crisis.
It is precisely because of Congressional concern about hedge fund managers doing 'whatever they want' that five of the more prominent billionaires, who have profited by their speculation, were last week called to account for their part in the collapse of the global financial system. Unfortunately, Louis Bacon was not one of these and therefore did not have to explain his 007 remark, not his involvement in subprime. George Soros, the hedge-funder who famously is said to have been the man who 'broke the Bank of England' was however, one of the quintet. Needless to say all five washed their hands of any real responsibility for the crisis but Soros, who has previously, and not without an element of hypocracy, warned about the dangerous excesses of hedge fund trading, admitted that such speculation in funds had been a major part of pricking the financial market bubble. Interestingly, insiders within Bacon's group confide that Bacon was furious with Soros' previous warnings about hedge funds, describing him as a 'traitor'.
One suspects that the 007 reference may be a little more revealing than Mr. Bacon intended. Certainly, the astonishing wealth accumulated through inflicting misfortune on American homeowners and others, has enabled Mr. Bacon to pursue a fantasy common to the schoolboy mentality. Apart from the well known obsession with secrecy, insiders report a fascination with the obvious Bond-like accroutements as a Global Express private jet, a Magnum boat loaded with Uzi machine pistols, and cocaine-fuelled parties attended by minor royalty and expensive call girls. Of course, all this is de rigeur for many billionaires but the purchase of islands, the secret dabbling in art, the reported use of electronic sweeping devices and an apparent propensity for exacting revenge for slights, real or imagined, indicates that there is more than a touch of Goldfinger about Mr. Bacon.
Indeed, we may be permitted to wonder the precise role which Mr. Bacon adopts in his mind as he creates his own Casino Royale. In a recent interview with George Soros, the British writer Alaine de Botton was told by Soros that "Money gives you power and that gives you freedom - and that's what I enjoy". To which de Botton wryly replied, "We are lucky that you are not an evil man". Let us hope that whatever fantasy was revealed by Louis Bacon's Freudian slip of the tongue, it was not of the Dr. No variety.
Monday 17 November 2008
Wednesday 12 November 2008
Snigger of the narcissus
One of the more ludicrous traits of some modern critics is to insist on collective guilt whenever something bad occurs. In the political arena this has even taken the form of insisting on apologies being extended to the descendants of an ancient crime, despite the fact that none of those alive today has even an iota of responsibility for inflicting past suffering. It may well be that there is a collective responsiblility to express sympathy, endeavour to correct the wrong, and ensure that it can never happen again, but that is surely as far as it goes. We cannot be guilty of a crime that occurred before we were born.
In a similar vein it is not surprising that there are some who want to argue that we are all responsible for the present economic crisis. Psychotherapist and former banker Lucy Beresford claims in this weeks The Spectator that the appalling financial mess the world faces is all our fault: 'No one can escape blame for what happened. We were greedy...we need to own our behaviour and accept responsibility...But we're all still suffering from too much narcissistic hubris to do that'. Speak for yourself, Miss Beresford. There are hundreds, nay thousands, of millions of people throughout the world who have not had the remotest connection with the greed and incompetence which has put the world in this situation. These are the many millions who toil and struggle just to live each each day. Even within the wealthy cities of the developed world the majority of people are humble waiters, blue-collar workers, bus-drivers, school teachers, shop assistants, policemen and nurses, few of whom have any opportunity for the type of greed Miss Beresford refers to. It is safe to say that none of these has manipulated stock markets, received obscenely large salaries, bought second or third properties, nor been the recipient of even one bonus. They have paid their taxes and their bills and trusted those who have wielded the power so disastrously.
And if Beresford is suggesting that some of these, perhaps even the unemployed, have used credit cards unwisely, obtained a mortgage or, as with millions of poor Americans, believed the seductive blandishments of bankers that they can own their own home, this is not greed. It is not hubris, still less narcissism. It is simply the wish to better themselves and build better lives for the families. While their wages have barely moved in line with inflation over past decades they have witnessed astronomical increases in the salaries of others; wages which are tens and sometimes hundreds of times the value of their own. And they were told this was necessary because the market demanded such huge largesse in order to attract and retain people of high skills and competence. Now they have seen just how skilled and competent these 'high-fliers' and 'Masters of the Universe' really are. Not merely have they failed dismally, but they are now requiring the ordinary taxpaying man and woman to bail them out and undo the dreadful chaos they have wreaked.
In such circumstances it is not narcissistic hubris to seek scapegoats and culprits. It is common sense and the natural desire for justice which dictates that failure should not be rewarded. Certainly this is the standard which has always been applied to them. Fail to pay your mortgage and you will be evicted. Fail to pay your bills and you will be prosecuted. Fail to do your your job and you will be sacked. They ask, 'why should those at the top of society not be equally accountable and pay the price of monumental failure?' Of course, the vast millions of people, many of whom now face unemployment, know all too well that they will almost certainly never receive such justice but they have the not unreasonable expectation that at least measures will be put in place to ensure that the excesses of the past will not be repeated.
One such measure, it is earnestly hoped, is international action to remove the many tax havens around the world where many of the billionaires deeply involved in bringing about this crisis, deliberately and disgracefully, avoid meeting any of the responsibilities required of ordinary citizens. This should embrace new regulations taking account of the outrage expressed by Senator John Edwards at a tax system 'allowing hedge fund and private equity managers making hundreds of millions a year (but who) pay taxes at a lower rate than their secretaries'.
Above all, however, is the need to confront reality and accept that virtually none of the people receiving these vast sums of money actually 'earned' it. None of them deserved their privileged and opulent lifestyles because of skill and extraordinary competence. They were simply lucky. They had the 'right' background and were in the right place at the right time. A prime example is the risible case of the UK Governor of the Bank of England who, along with his colleagues, have completely and hopelessly misjudged the nature of the crisis. Now, when it obvious to us all, he opines that a deep and long recession is predicted for the UK. He dismisses criticism of failing to act earlier by referring to 'hindsight' and the unexpected nature of the situation. Actually, there were pundits, such as George Soros, warning about precisely this threat. But surely the point is that the Governor, Mervyn King, was paid his vast salary to have foresight and either to prevent, or to see the significance of unfolding events in order to react appropriately and in a timely fashion. Given the events that are now occurring his comments and the actions of the Board he governs are obvious to any reasonably intelligent person. But such a person is not being paid a huge amount of money. King is and he has failed and failed badly.
The cure for the infliction of narcissicism can be found in the old story of the Emperor's clothes. The mythical Narcissus fell in love with his own reflection in a pool. The financial tsunami which now threatens is a brutal ripple in these waters of self-admiration. It reveals the distortion and illusion which is the true face of those who have such direct and indirect power over our lives. This is not to suggest in any way that these are evil people. But it is to say that they are people very similar to ourselves - flawed, full of foibles and naked. And it is also to ask whether a system which delivers such huge rewards to such ordinary people, in contrast to the bulk of the population, is just. If the answer is 'yes' then it is surely not unreasonable to demand that they at least be accountable for their actions and be obliged to accept that there are some personal and adverse consequences to their failures.
In a similar vein it is not surprising that there are some who want to argue that we are all responsible for the present economic crisis. Psychotherapist and former banker Lucy Beresford claims in this weeks The Spectator that the appalling financial mess the world faces is all our fault: 'No one can escape blame for what happened. We were greedy...we need to own our behaviour and accept responsibility...But we're all still suffering from too much narcissistic hubris to do that'. Speak for yourself, Miss Beresford. There are hundreds, nay thousands, of millions of people throughout the world who have not had the remotest connection with the greed and incompetence which has put the world in this situation. These are the many millions who toil and struggle just to live each each day. Even within the wealthy cities of the developed world the majority of people are humble waiters, blue-collar workers, bus-drivers, school teachers, shop assistants, policemen and nurses, few of whom have any opportunity for the type of greed Miss Beresford refers to. It is safe to say that none of these has manipulated stock markets, received obscenely large salaries, bought second or third properties, nor been the recipient of even one bonus. They have paid their taxes and their bills and trusted those who have wielded the power so disastrously.
And if Beresford is suggesting that some of these, perhaps even the unemployed, have used credit cards unwisely, obtained a mortgage or, as with millions of poor Americans, believed the seductive blandishments of bankers that they can own their own home, this is not greed. It is not hubris, still less narcissism. It is simply the wish to better themselves and build better lives for the families. While their wages have barely moved in line with inflation over past decades they have witnessed astronomical increases in the salaries of others; wages which are tens and sometimes hundreds of times the value of their own. And they were told this was necessary because the market demanded such huge largesse in order to attract and retain people of high skills and competence. Now they have seen just how skilled and competent these 'high-fliers' and 'Masters of the Universe' really are. Not merely have they failed dismally, but they are now requiring the ordinary taxpaying man and woman to bail them out and undo the dreadful chaos they have wreaked.
In such circumstances it is not narcissistic hubris to seek scapegoats and culprits. It is common sense and the natural desire for justice which dictates that failure should not be rewarded. Certainly this is the standard which has always been applied to them. Fail to pay your mortgage and you will be evicted. Fail to pay your bills and you will be prosecuted. Fail to do your your job and you will be sacked. They ask, 'why should those at the top of society not be equally accountable and pay the price of monumental failure?' Of course, the vast millions of people, many of whom now face unemployment, know all too well that they will almost certainly never receive such justice but they have the not unreasonable expectation that at least measures will be put in place to ensure that the excesses of the past will not be repeated.
One such measure, it is earnestly hoped, is international action to remove the many tax havens around the world where many of the billionaires deeply involved in bringing about this crisis, deliberately and disgracefully, avoid meeting any of the responsibilities required of ordinary citizens. This should embrace new regulations taking account of the outrage expressed by Senator John Edwards at a tax system 'allowing hedge fund and private equity managers making hundreds of millions a year (but who) pay taxes at a lower rate than their secretaries'.
Above all, however, is the need to confront reality and accept that virtually none of the people receiving these vast sums of money actually 'earned' it. None of them deserved their privileged and opulent lifestyles because of skill and extraordinary competence. They were simply lucky. They had the 'right' background and were in the right place at the right time. A prime example is the risible case of the UK Governor of the Bank of England who, along with his colleagues, have completely and hopelessly misjudged the nature of the crisis. Now, when it obvious to us all, he opines that a deep and long recession is predicted for the UK. He dismisses criticism of failing to act earlier by referring to 'hindsight' and the unexpected nature of the situation. Actually, there were pundits, such as George Soros, warning about precisely this threat. But surely the point is that the Governor, Mervyn King, was paid his vast salary to have foresight and either to prevent, or to see the significance of unfolding events in order to react appropriately and in a timely fashion. Given the events that are now occurring his comments and the actions of the Board he governs are obvious to any reasonably intelligent person. But such a person is not being paid a huge amount of money. King is and he has failed and failed badly.
The cure for the infliction of narcissicism can be found in the old story of the Emperor's clothes. The mythical Narcissus fell in love with his own reflection in a pool. The financial tsunami which now threatens is a brutal ripple in these waters of self-admiration. It reveals the distortion and illusion which is the true face of those who have such direct and indirect power over our lives. This is not to suggest in any way that these are evil people. But it is to say that they are people very similar to ourselves - flawed, full of foibles and naked. And it is also to ask whether a system which delivers such huge rewards to such ordinary people, in contrast to the bulk of the population, is just. If the answer is 'yes' then it is surely not unreasonable to demand that they at least be accountable for their actions and be obliged to accept that there are some personal and adverse consequences to their failures.
Saturday 8 November 2008
Dealing with 'Boss Hogg'
In modern times it has become customary to use inflated language and hyperbole. Thus every difficulty is described as a 'crisis' and every organisational inadequacy is portrayed as 'chaos'. This becomes a problem when we have a genuine need to use these terms to describe a very serious situation and it can be dangerous because of the sense of ennui evoked by the exaggerated and cavalier use of these terms. Let us make no mistake about the present economic crisis. It is a genuine crisis and President-elect Obama's decision to confront this immediately and treat it as his most important priority is undoubtedly the right one for America and the world.
In the broadest sense there are two obvious components to, as Obama puts its, 'digging ourselves out of the hole we are in'. A rescue plan for the economy and for those in imminent financial danger is clearly the immediate and most difficult task. But a strategy to minimise, if not prevent, such a situation reoccurring is also vital. This means tackling head-on the question of the irresponsibility of those who put America and the world in this dire situation. Again, let us make no mistake about causes. This crisis is not a natural event beyond the control of humanity. It was caused by the combination of a lax system, the self-interest of many of those responsible for regulating this system, and exacerbated by greed and incompetence. It is always incredibly difficult to control, or better, shut down a lucrative 'gravy-train' when so many of those carrying this responsibility are also aboard for the ride.
There are many carriages to this particular 'train' but one of the most important, if perhaps not the very engine itself, is the hedge-fund phenomenon. The German attitude has proved to be the right one - hedge-fund financiers are indeed the parasites of the world economy, not merely feeding on financial carrion (as some have tried to defend them) but actually infecting healthy financial institutions, bleeding them dry, and walking away from the corporate corpse many millions richer. Of course, as this scavenging involves a degree of gambling and risk there are many hedge-funders who have themselves miscalculated the financial situation and are suffering as a result. But equally, there are many other hedge-funders who have lost few of their multi-millions or billions, and some have even profited by the crisis, and continue to live 'high on the hog'.
And in this context, amongst this group of modern 'carpet-baggers' are, I am informed, the Bacon brothers who originally hail from North Carolina and who, as one economic adviser described it, 'are the representatives par excellence of this noxious breed of financial exploiters'. Chief amongst them or as one might put it, the 'Boss Hogg of the family', is Louis Bacon whose wealth was recently assessed as being in excess of one billion US dollars. Needless to say, this wealth is almost entirely built on hedge-fund gambling. And equally needless to say, much of Bacon's time is devoted to the avoidance of tax, an activity in which he has demonstrated considerable skill.
Although a US citizen, and one who has contributed lavishly to the Republican cause, he ostensibly dwells in his London mansion but actually spends much of time in his many other properties around the globe, particularly that located in Lyford Cay, one of the world's wealthiest enclaves found in the notorious tax Bahamas haven, a home to many Russian billionaires and financiers of dubious repute. These include the American expatriate billionaire Michael Dingman and his neighbour and business partner Viktor Kozeny, both of whom are subject to legal proceedings brought against them for serious financial malpractice.
Like so many other hedge-funders Bacon is invariably described as 'obsessively secretive' and very adverse to media scrutiny. From the information we have acquired regarding his financial activities and the considerable disparity between his private life and public persona we can understand this reticence. It is our intention in subsequent posts to throw a spot-light on some of the activities on which Bacon and other hedge-funders would evidently prefer to remain sub rosa, beginning with the curious reports of his acquisition of Austrian citizenship and his secret purchase of expensive works of art. As to suggestions that these might be related to the avoidance of tax we could not of course possibly comment. More to come.
In the broadest sense there are two obvious components to, as Obama puts its, 'digging ourselves out of the hole we are in'. A rescue plan for the economy and for those in imminent financial danger is clearly the immediate and most difficult task. But a strategy to minimise, if not prevent, such a situation reoccurring is also vital. This means tackling head-on the question of the irresponsibility of those who put America and the world in this dire situation. Again, let us make no mistake about causes. This crisis is not a natural event beyond the control of humanity. It was caused by the combination of a lax system, the self-interest of many of those responsible for regulating this system, and exacerbated by greed and incompetence. It is always incredibly difficult to control, or better, shut down a lucrative 'gravy-train' when so many of those carrying this responsibility are also aboard for the ride.
There are many carriages to this particular 'train' but one of the most important, if perhaps not the very engine itself, is the hedge-fund phenomenon. The German attitude has proved to be the right one - hedge-fund financiers are indeed the parasites of the world economy, not merely feeding on financial carrion (as some have tried to defend them) but actually infecting healthy financial institutions, bleeding them dry, and walking away from the corporate corpse many millions richer. Of course, as this scavenging involves a degree of gambling and risk there are many hedge-funders who have themselves miscalculated the financial situation and are suffering as a result. But equally, there are many other hedge-funders who have lost few of their multi-millions or billions, and some have even profited by the crisis, and continue to live 'high on the hog'.
And in this context, amongst this group of modern 'carpet-baggers' are, I am informed, the Bacon brothers who originally hail from North Carolina and who, as one economic adviser described it, 'are the representatives par excellence of this noxious breed of financial exploiters'. Chief amongst them or as one might put it, the 'Boss Hogg of the family', is Louis Bacon whose wealth was recently assessed as being in excess of one billion US dollars. Needless to say, this wealth is almost entirely built on hedge-fund gambling. And equally needless to say, much of Bacon's time is devoted to the avoidance of tax, an activity in which he has demonstrated considerable skill.
Although a US citizen, and one who has contributed lavishly to the Republican cause, he ostensibly dwells in his London mansion but actually spends much of time in his many other properties around the globe, particularly that located in Lyford Cay, one of the world's wealthiest enclaves found in the notorious tax Bahamas haven, a home to many Russian billionaires and financiers of dubious repute. These include the American expatriate billionaire Michael Dingman and his neighbour and business partner Viktor Kozeny, both of whom are subject to legal proceedings brought against them for serious financial malpractice.
Like so many other hedge-funders Bacon is invariably described as 'obsessively secretive' and very adverse to media scrutiny. From the information we have acquired regarding his financial activities and the considerable disparity between his private life and public persona we can understand this reticence. It is our intention in subsequent posts to throw a spot-light on some of the activities on which Bacon and other hedge-funders would evidently prefer to remain sub rosa, beginning with the curious reports of his acquisition of Austrian citizenship and his secret purchase of expensive works of art. As to suggestions that these might be related to the avoidance of tax we could not of course possibly comment. More to come.
Wednesday 5 November 2008
Obama - a defining moment
By whatever standard we judge unique and transforming moments in history the election of Barack Obama is decidedly one of these. Quite apart from the enormous impact this will have on the lives of all Americans, not least their politics and the aspirations of black Americans, it is a supremely important event for the world. Rarely has the election of a US President been greeted with such universal acclaim and the reasons for such approval and hope are not hard to discern. It is not just the facts of his charisma, background and personal abilities which inspire world optimism but that these are brought to the highest office in the world at a time when they are so desperately needed.
The gravest tasks facing Obama and his new administration are clearly those relating to the response to international terrorism and unprecedented economic instability. Regarding the former it is imperative that solutions be found to the dreadful quagmires of Iraq and Afghanistan while repairing America's seriously damaged reputation internationally. Addressing and containing the threats posed by terrorists and rogue states cannot and must not ever again produce such barbarities as 'rendition' and Guantanamo Bay. And if it is hoped that some degree of the higher morality implied by a civilized democracy can be brought to bear in the military and security arenas it is equally important that an attempt be made to apply such values when it comes to the fragmented world of finance. Whatever new economic Order may emerge from the present crisis every effort must be made to ensure that the economy of America, and thereby the economies of virtually every nation, are not at the mercy of uncontrolled greed, self-interest and sheer irresponsibility.
These are tasks of herculean proportions and of course it is completely unrealistic and wholly unfair to place the burden of resolving them on the shoulders of a single man. Indeed, the single, greatest challenge for President Obama will be managing the impossible expectations which Americans, and the people of the world, will have of him. Although it is inevitable that he will not be able to meet all, or even most, of the aspirations inspired by his victory, it is enough for the moment to celebrate the knowledge that this great democracy - the most powerful nation in history- will be led by a true man of the people.
The gravest tasks facing Obama and his new administration are clearly those relating to the response to international terrorism and unprecedented economic instability. Regarding the former it is imperative that solutions be found to the dreadful quagmires of Iraq and Afghanistan while repairing America's seriously damaged reputation internationally. Addressing and containing the threats posed by terrorists and rogue states cannot and must not ever again produce such barbarities as 'rendition' and Guantanamo Bay. And if it is hoped that some degree of the higher morality implied by a civilized democracy can be brought to bear in the military and security arenas it is equally important that an attempt be made to apply such values when it comes to the fragmented world of finance. Whatever new economic Order may emerge from the present crisis every effort must be made to ensure that the economy of America, and thereby the economies of virtually every nation, are not at the mercy of uncontrolled greed, self-interest and sheer irresponsibility.
These are tasks of herculean proportions and of course it is completely unrealistic and wholly unfair to place the burden of resolving them on the shoulders of a single man. Indeed, the single, greatest challenge for President Obama will be managing the impossible expectations which Americans, and the people of the world, will have of him. Although it is inevitable that he will not be able to meet all, or even most, of the aspirations inspired by his victory, it is enough for the moment to celebrate the knowledge that this great democracy - the most powerful nation in history- will be led by a true man of the people.
Monday 3 November 2008
Obama, hedge funds and moral bankruptcy
In a very short time it seems almost certain that America will be led by President Barack Obama. Janet Daley, columnist for the British newspaper The Daily Telegraph states today that 'America is about to elect the most inexperienced candidate at a time of great international risk and unprecedented economic instability'. In what appears to be a mere echo of the warning of Senator McCain that it would be 'too risky' to entrust the Presidency to Obama at this time, Daley has entirely missed the point. Putting aside the fact that the very same question could equally be asked of Bush and many other Presidents, it is precisely this 'experience' which needs to be rejected by the American voter.
The looming financial hurricane, which threatens to plunge millions of ordinary, hard-working Americans into poverty and hardship was allowed to occur by the current administration. Fuelled by greed, monumental incompetence, and an almost corrupt alliance with wealthy financiers, these so-called 'experienced' leaders have done more than any group of terrorists could ever hope to achieve in placing the USA, and indeed much of the world itself, into grave danger. Dreadful as the terrorist threat may be, it almost pales into insignificance when put alongside the scale of damage that has been, and probably will be, inflicted on countless millions of American families. This was not engineered by Bin Laden or crazed Muslim fanatics but by the folly, greed and colossal conceit of unscrupulous individuals who have made obscene profits and personal gains at the expense of the taxpaying man and woman 'in the street', the genuine 'Joe-the-plumber'. These individuals contributed nothing to the real economy but exploited lax or non-existent regulations to impose what was essentially a type of pyramid selling fraud on the financial systems of the Western world. Warnings from the more level-headed economists were routinely ignored while billionaire financial exploiters courted and feted the politicians, officials, and the leaders of hitherto reputable financial institutions who had taken leave of their senses in their desire for obscenely inflated salaries, bonuses and profits.
And of course it is the modest tax-payer who may well face financial bankruptcy to pay for the moral bankruptcy of these 'experienced' leaders. It is the school-teacher, the policeman, the secretary, the nurse and the taxi-cab operator who will suffer the consequences of this hubris and greed. These are the very same people who politicians have determined should pay a greater proportion of their small salaries in tax than the hedge-fund billionaires who reap millions of dollars in a year for manipulating the financial systems of the world. Within America, where the housing sub-prime scandal triggered the crisis, there are now millions of homeless and dispossessed people whose expectations for a better life were cruelly raised then shattered by the so-called 'Masters of the Universe' who have ruthlessly manipulated and exploited the world economy for their personal gain.
George Monbiot of The Guardian newspaper has colorfully referred to the rulers in Washington as 'gibbering numbskulls'. They are not alone. Indeed, they can be found to populate the elevated positions in many countries, and especially the boardrooms of many banks and other financial institutions around the globe. But it is not so much a lack of intelligence which has permitted and driven this financial catastrophe. Incompetence and negligence are certainly there in bucketloads but above all else there has been greed and ambition allowed to run unchecked in a moral vacuum.
The long suffering public cannot, alas, expect that those responsible will ever be held accountable but they can at least give their vote to those who have not been part of a tainted and discredited administration. They can demand that regulations and oversight prevent the financial 'snake-oil' salesmen and their dupes from again inflicting their crass greed, irresponsibility and incompetence upon them. And there is something else that can be done. While it may well that the financial exploiters and the grasping chief executives of many culpable institutions cannot be prosecuted or punished as they undoubtedly deserve, some of them at least can be named and shamed, if only to let the public of America and the world know just who these people are who have wreaked such havoc in their cynical gambling with the money generated by the hard work of millions.
What better place to start than with some of the unscrupulous hedge-funders? We intend to place a spotlight on some of these secretive people who have accumulated vast fortunes unfathomable to ordinary people, not by producing any useful product or service but by gambling with, and severely damaging, the money of genuine industries which are the very foundation of our modern society. As we shall subsequently see, these unscrupulous speculators frequently dwell in opulent tax-havens, develop complex systems for the avoidance of tax, seek and obtain political patronage in return for 'favours', and through wielding the enormous power and influence which their great wealth provides, circumvent the rules and conventions which ordinary people have to abide by.
The first of our candidates who will be scrutinised in subsequent posts is Louis Bacon, a controversial figure even amongst fellow hedge-funders and who, it is reported, is secretive to the point of being paranoid. Judging by the inside information provided by our sources this is hardly surprising. The disparity between private lifestyle and public persona, such as it is, shows that Mr. Bacon has a great deal to want to hide, not the least being his reported recent acquisition of Austrian nationality, despite being a US citizen who is much favoured by the current political administration. More to follow.
The looming financial hurricane, which threatens to plunge millions of ordinary, hard-working Americans into poverty and hardship was allowed to occur by the current administration. Fuelled by greed, monumental incompetence, and an almost corrupt alliance with wealthy financiers, these so-called 'experienced' leaders have done more than any group of terrorists could ever hope to achieve in placing the USA, and indeed much of the world itself, into grave danger. Dreadful as the terrorist threat may be, it almost pales into insignificance when put alongside the scale of damage that has been, and probably will be, inflicted on countless millions of American families. This was not engineered by Bin Laden or crazed Muslim fanatics but by the folly, greed and colossal conceit of unscrupulous individuals who have made obscene profits and personal gains at the expense of the taxpaying man and woman 'in the street', the genuine 'Joe-the-plumber'. These individuals contributed nothing to the real economy but exploited lax or non-existent regulations to impose what was essentially a type of pyramid selling fraud on the financial systems of the Western world. Warnings from the more level-headed economists were routinely ignored while billionaire financial exploiters courted and feted the politicians, officials, and the leaders of hitherto reputable financial institutions who had taken leave of their senses in their desire for obscenely inflated salaries, bonuses and profits.
And of course it is the modest tax-payer who may well face financial bankruptcy to pay for the moral bankruptcy of these 'experienced' leaders. It is the school-teacher, the policeman, the secretary, the nurse and the taxi-cab operator who will suffer the consequences of this hubris and greed. These are the very same people who politicians have determined should pay a greater proportion of their small salaries in tax than the hedge-fund billionaires who reap millions of dollars in a year for manipulating the financial systems of the world. Within America, where the housing sub-prime scandal triggered the crisis, there are now millions of homeless and dispossessed people whose expectations for a better life were cruelly raised then shattered by the so-called 'Masters of the Universe' who have ruthlessly manipulated and exploited the world economy for their personal gain.
George Monbiot of The Guardian newspaper has colorfully referred to the rulers in Washington as 'gibbering numbskulls'. They are not alone. Indeed, they can be found to populate the elevated positions in many countries, and especially the boardrooms of many banks and other financial institutions around the globe. But it is not so much a lack of intelligence which has permitted and driven this financial catastrophe. Incompetence and negligence are certainly there in bucketloads but above all else there has been greed and ambition allowed to run unchecked in a moral vacuum.
The long suffering public cannot, alas, expect that those responsible will ever be held accountable but they can at least give their vote to those who have not been part of a tainted and discredited administration. They can demand that regulations and oversight prevent the financial 'snake-oil' salesmen and their dupes from again inflicting their crass greed, irresponsibility and incompetence upon them. And there is something else that can be done. While it may well that the financial exploiters and the grasping chief executives of many culpable institutions cannot be prosecuted or punished as they undoubtedly deserve, some of them at least can be named and shamed, if only to let the public of America and the world know just who these people are who have wreaked such havoc in their cynical gambling with the money generated by the hard work of millions.
What better place to start than with some of the unscrupulous hedge-funders? We intend to place a spotlight on some of these secretive people who have accumulated vast fortunes unfathomable to ordinary people, not by producing any useful product or service but by gambling with, and severely damaging, the money of genuine industries which are the very foundation of our modern society. As we shall subsequently see, these unscrupulous speculators frequently dwell in opulent tax-havens, develop complex systems for the avoidance of tax, seek and obtain political patronage in return for 'favours', and through wielding the enormous power and influence which their great wealth provides, circumvent the rules and conventions which ordinary people have to abide by.
The first of our candidates who will be scrutinised in subsequent posts is Louis Bacon, a controversial figure even amongst fellow hedge-funders and who, it is reported, is secretive to the point of being paranoid. Judging by the inside information provided by our sources this is hardly surprising. The disparity between private lifestyle and public persona, such as it is, shows that Mr. Bacon has a great deal to want to hide, not the least being his reported recent acquisition of Austrian nationality, despite being a US citizen who is much favoured by the current political administration. More to follow.
Wednesday 29 October 2008
Why the abuse of power needs exposing
A senior official in a UK Intelligence agency once remarked to me, 'There is no point in having power if you can't abuse it'. No doubt his cynical remark was intended as humour but unhappily it is the unspoken mantra of a large number of powerful, wealthy and influential individuals who have the capacity, and often the will, to inflict suffering and hardship upon vast numbers of people who lack any power to resist. It is not usually the intention of these oligarchs, of course, to harm others deliberately but such is invariably the by-product of a desire to increase or protect their wealth, power, or reputation, regardless of the effects on others.
With one exception, there is normally little or nothing the ordinary man, woman or child can do other than to endure the often dreadful consequences of the ambitions of others. In the case of the current economic crisis there are many millions of people who are powerless to avoid the approaching economic hardship, and its associated misery, which are the direct result of an unmitigated greed coupled with extraordinary incompetence and a significant degree of political and corporate corruption.
Perhaps the only remaining redress and consolation available to those about to lose their employment, pension or their house is to see this abuse of power exposed to the world for what it is. Naturally, it is entirely naive to imagine that financiers, bankers, politicians and sundry other eminence gris will amend their ways in the glare of publicity but some public disclosure of their identities and the discrepancies between public and private lives can deliver some well deserved approbation, contempt and, hopefully, embarrassment. It is the very least owed to the average citizen of virtually every country under the economic and political sway of the often grotesquely overpaid, and frequently incompetent, group of ruling oligarchs.
The media already plays a vital role in exposing the worst excesses of a few powerful individuals whose abuse of wealth, power and position has been of such monumental proportions that their money and influence have not protected them. 'Lord' Conrad Black and the commodities trader, Marc Rich, are cases in point. But there is a staggeringly large number of equally guilty 'Masters of the Universe' who, through skill, luck or political influence, have evaded detection and the level of accountability expected of ordinary people working in ordinary jobs. And the media, which are frequently owned by the wealthy offenders, as was the case with Black, often have legal, political, and economic considerations which can limit their effectiveness in this regard.
Hence this Blog. There are, fortunately, very many such blogs dedicated to uncovering awkward secrets which the wealthy and powerful would prefer to remain firmly 'under the carpet'. But in the face of the immense power wielded by the political and finanical oligarchs there cannot be too many. Each brings to its readers a unique degree of insight and comment and each is informed, to greater or lesser degree, by its own sources with access to information that is not usually in the public domain. This particular Blog draws on the knowledge and views of well-intentioned people who have, or have had, access to some of the people who will be placed under our eye of scrutiny.
Cyclops.
With one exception, there is normally little or nothing the ordinary man, woman or child can do other than to endure the often dreadful consequences of the ambitions of others. In the case of the current economic crisis there are many millions of people who are powerless to avoid the approaching economic hardship, and its associated misery, which are the direct result of an unmitigated greed coupled with extraordinary incompetence and a significant degree of political and corporate corruption.
Perhaps the only remaining redress and consolation available to those about to lose their employment, pension or their house is to see this abuse of power exposed to the world for what it is. Naturally, it is entirely naive to imagine that financiers, bankers, politicians and sundry other eminence gris will amend their ways in the glare of publicity but some public disclosure of their identities and the discrepancies between public and private lives can deliver some well deserved approbation, contempt and, hopefully, embarrassment. It is the very least owed to the average citizen of virtually every country under the economic and political sway of the often grotesquely overpaid, and frequently incompetent, group of ruling oligarchs.
The media already plays a vital role in exposing the worst excesses of a few powerful individuals whose abuse of wealth, power and position has been of such monumental proportions that their money and influence have not protected them. 'Lord' Conrad Black and the commodities trader, Marc Rich, are cases in point. But there is a staggeringly large number of equally guilty 'Masters of the Universe' who, through skill, luck or political influence, have evaded detection and the level of accountability expected of ordinary people working in ordinary jobs. And the media, which are frequently owned by the wealthy offenders, as was the case with Black, often have legal, political, and economic considerations which can limit their effectiveness in this regard.
Hence this Blog. There are, fortunately, very many such blogs dedicated to uncovering awkward secrets which the wealthy and powerful would prefer to remain firmly 'under the carpet'. But in the face of the immense power wielded by the political and finanical oligarchs there cannot be too many. Each brings to its readers a unique degree of insight and comment and each is informed, to greater or lesser degree, by its own sources with access to information that is not usually in the public domain. This particular Blog draws on the knowledge and views of well-intentioned people who have, or have had, access to some of the people who will be placed under our eye of scrutiny.
Cyclops.
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