The credit crunch, sub-prime, and opportunity

First published September 2008

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We know that sound business principles should have told certain institutions not to go out on a limb and borrow to support lending that might turn bad if the economy suffered a downturn.

We know that government did not impose regulations on lenders to rein in on extending credit to people who could only continue to meet their payments so long as the economy did not suffer a downturn, or the interest on the interest on their debt started to become unmanageable.

But all the same, why some few months ago, did the lenders who lend to the mortgage lenders, stop lending to them?

I understand that the mortgage lenders lend on long term loans, and in the absence of a default, they cannot ask for their money back early. And I understand that the lenders who lend to the lenders, lend on short term loans, of six months or so.

And I understand that the lenders who lend (or did lend) to the mortgage lenders might have looked with concern at the rising number of defaulting mortgagors. For it would make them realize their borrowers' assets were overvalued for the reason that the inevitable consequence of defaults would be to drive the prices of houses down.

And I understand that the lenders who lend (or did lend) might have looked at the rising jobless total, which would signal that there were likely to be more defaulters.

But I can't help thinking that some of the bigger fish saw all this coming and saw an opportunity to make a killing.

On the subject of how to be guided in what to do

As Robert Persig has said, it is quality that guides us, and quality will not be cut into pieces and made the subject of science or reason.  And as we all say, all you need is love.

I used to think of that when I lived in the centre of an old, historic town in England. On a holiday day, people would buy an ice-cream from the little van and stand in a reverie with a slightly lost and dreamy look. And I asked myself why they chose to stand there and not in the street where they lived.

And I think it was because of the Norman cathedral, the ancient castle, and the Elizabethan buildings that leant against one another in the square at the top of the hill.  Those buildings were put together by craftsmen who loved.  That single understanding helps anyone to sort the wheat from the chaff.

Russia, the West, sanctions, and the changing economies.

I wrote this in September 2008. Does it still apply?

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Just a few weeks ago Russia and the West were facing off against each other over Georgia and its provinces of South Ossetia and Abkahsia. And when the West told Russia that if it didn't back off and allow Georgia to regain those two provinces, it would impose economic sanctions. Russia responded by telling the West that any sanctions would hurt the West more than it would hurt them.

When Russia came out of the Soviet Era it was weak, and the West ripped it off by forcing it into deals that Russia had no choice but to make but over which it has been brooding ever since.

And the feeling in Russia was that now that it had a strong economy it wasn't going to put up with being pushed around with the threat of economic sanctions.

And that's what we heard from Russian diplomats and ministers. I love their plain speaking. When asked about the consequences of sanctions, the Foreign Minister said in that dry kind of Russian voice we all like to imitate, "we won't lose any sleep over it."

Oh how those past few weeks have changed things. The Russian stock market is heading for catastrophic failure and the government is pumping cash into its economy to stem a failure in the markets that must be making the U.S. and the West smile, and the Russians wishing they hadn't spoken.

Spot The Tune

That are a few things, that when I look back on them, make me chuckle. Even if I drag the recollections up from my memory with the intention of reliving that fun, they still start that wave, that ripple, that starts deep in my insides and spreads out into my shoulders and up into my head.

Even now, thinking of that funny recollection, I can feel my shoulder blades and my ears alive with a tingle like popping sherbet in the mouth. Oh it is so good to be alive to that feeling.

So here is one of the things that gets me every time. It's not even something I was involved in except as a listener.

It was on the radio. Two men talking. They are doing a spoof or take-off of Spot the Tune, a quiz programme where contestants would listen to the opening bars of a piece of music, and the first to identify the tune would win. Sometimes contestants could identify pieces after hearing just three notes.

So they are doing this spoof of the quiz. And the 'compere' played just one note.

And the 'contestant', seemingly searching his memory for the tune, said: "Give me a moment; I know that one. I think I've got that in the car."

It still gets me.

Nouns, adjectives, and other parts of speech

Ever have the feeling you know what you want but you are stuck for words? Well now you can leave all that behind.

Adjectivalist is pleased to supply unlimited numbers of words for all your needs. They can supply nouns, adjectives, adverbs and other parts of speech at discounted rates. Whole sentences supplied to order - just ask and I am sure they can meet your needs.

And the savings don't stop there - owing to their long association with carefully chosen language, they can supply gramatically correct and meaningful paragraphs and chapters. Chapter headings are extra.

A little bird told me they have, currently, a job-lot of mixed adjectives and adverbs only recently brought to the West. Some are not known to have been seen or heard in public before. Be the first to use them!

(Ask about their latest offers.)

Thoughts On Power and Position

There's a perennial question about power and equality and opportunity. In the 14th century during the Peasant's Revolt in England, the priest John Ball asked:

When Adam delved and Eve span, who was then the gentleman?

He was asking this rhetorically, of course. He meant - 'who made you the boss?' But of course, in the real world anyone who wants to grab the crown is free to do it.

Overall I believe that social and economic justice are preferable to an unbridled power grab and that we would all be better for it, even those who say they want to be boss.

Tuesday

It will be a Tuesday, around 11am. He (or 'she') will get up from his desk and walk out because he isn't going to do this any more. He will walk out onto the street. He will be struck by how strongly he feels that he is going to do this.

He is going to stop the merry-go-round of the office and this way of doing things. He sees the whole structure and he isn't going to be part of it. There has to be a better way.

He feels slightly dazed, but his heart pounds when he reaches the street and finds that many, many people are there on the street like he is.

Favourite Quote

My favourite quote is a long one - so if you are looking for something short and catchy, you might want to skip this.

The quote is from Isaiah Berlin's 1957 Herbert Samuel lecture on Chaim Weizman, in which Berlin said:

Weizman had all his life believed that when great public issues are joined one must above all take sides; whatever one did, one must not remain neutral or uncommitted, one must always - as an absolute duty - identify oneself with some living force in the world, and take part in the world’s affairs with all the risk of blame and misrepresentation and misunderstanding of one’s motives and character which this almost invariably entails.
Consequently .. he (Weizman) called for no compromise, and denounced those who did. He regarded with contempt the withdrawal from life on the part of those to whom their personal integrity, or peace of mind, or purity of ideal, mattered more than the work upon which they are engaged and to which they were engaged and to which they were committed, the artistic, or scientific, or social, or political, or purely personal enterprises in which all men are willy-nilly involved.
He did not condone the abandonment of ultimate principles before the claims of expediency or of anything else; but political monasticism - a search for some private cave of Adullam to avoid being disappointed or tarnished, the taking up of consciously utopian or politically impossible positions, in order to remain true to some inner voice, or some unbreakable principle too pure for the wicked public world - that seemed to him a mixture of weakness and self-conceit, foolish and despicable.

Number and Colours

Numbers and Colours: a teacher told me this that happened to him

He was working in a school that used a progressive approach to teaching mathematics to young children. One method they used was to assign a colour to each number. So '1' was white, '2' was blue, '3' was yellow, etc.

The idea was that children would see the colour relationships more easily than the number relationships because colours are more concrete.

The teacher's niece was a pupil at the school, and one weekend the teacher was at his niece's home, and she was painting a picture. She was looking a little worried so he asked what the problem was.

"I don't have green paint for the grass." she said.

"Oh, that's not a problem; you can mix paints. What do blue and yellow make?" he said.

"Five", she said.