Lots To Lose

I am just a simple minded individual and I like the simple life. In my profession of engineering it always paid to keep things simple. When I think about banks I like the simple business models: borrow at 3%, lend at 5% and work part-time. It seems that today's financial institutions prefer something more complicated and yet supremely unreliable. Demonstrably, their computer generated operating business plans do not work. Every day seems to introduce us to a new level of incompetence and ever greater losses. Have these institutions agreed among themselves the order in which they will announce their results for 2008 so that we can gradually be conditioned to the scale of their disasters? Some of the numbers are so huge, so grotesque that, frankly, it is natural to assume that they have been exaggerated - only to find later that the true losses and potential losses are even worse. From today it will be difficult to imagine any single company being capable of matching AIG, which yesterday admitted to losses of $62,000,000,000. This is a lot to lose in one year; it is a lot to lose in ten years. But AIG lost this much in 3 months. I cannot see how any organisation managed by groups of people who were not certified as totally insane or suffering from the effects of a collective financial death wish could lose money at this rate day after day, month after month. The loss amounts to $28,700,000 every hour of every day for the whole 3 months. Whatever else this is, surely it is a measure of the magnitude of the funds stolen from ordinary people by these institutions and their senior staff to satiate their greed for money at levels beyond all comprehension. It is constantly said that these ludicrous institutions are too big to be allowed to fail. Soon it will be clear that no country on Earth is rich enough to stop them failing and the whole economic structure will collapse. But still they demand their ridiculous salaries, bonuses and contributions to pension funds. It is people living on ordinary real world wages, fighting to keep their jobs who are being asked now and in the future to stump up the cash to pay them.

I hope that Mr Brown and Mr Obama at their meetings in Washington this week will start to lay some foundations for running a banking system for the benefit of all the people and not just for these modern day robber barons.