Seeing REDD 

In 1992 at the Rio Earth Summit we thought that saving the Rainforests was the number One Priority.

Early Sixties is when the threat was identified – No Hippy rhetoric but real Earth Science made the people to start protecting this fragile Environments.

Rainforest warriors were creative. Anthropologists and Earth Scientists worked in tandem to save it…

First they tried and used the tribes and the habitats of the Rainforest ecosystem as a first effort to save the Rainforests…

Deforestation is clearly terrible for the living earth – Ask the Yamamono indians to tell their story. Destruction of Rainforest kills people.

But is far more damaging for all species (despeciation), for all the humans, for the wildlife, for the indigenous peoples of the forests, and for the benefits of ecosystem services, which forests provide, such as micro-climates which bring rain and cooling along with protecting soil from erosion.

Even the sense of people going into a primary rainforest and seeing the environment of where we came from originally and visiting the place that was our home for millions of years – the return to the roots, the spiritual comfort and the therapeutic value is immense. 

Ask anyone who has been out in a Rainforest – They have been changed.

STAY OUT IN THE RAINFOREST A DAY AND IT CHANGES YOU 

STAY IN THE RAINFOREST A WEEK AND IT CHANGES YOUR LIFE

STAY IN THE RAINFOREST A MONTH AND IT CHANGES THE WORLD

 

But the whole process of saving the world’s Rainforests still seems impossible.

Such a vast undertaking, and the huge socio-economic forces behind deforestation in the developing countries being so intractable,  it seems impossible that anything could be done to stop it or even slow it down. 

Or so we must have thought…

For more than fifty years we have been wringing our hands.

Things have changed, and the change can be summarised in a single concern: Greenhouse Carbon.

As the threat of climate change has become more and more clear, there has been a growing perception that the biggest benefit of all the rainforests provide; is their function as a giant Carbon Bank.

Carbon storage at that vast scale, is unprecedented. But the biggest danger from the Rainforest destruction is the release of all that carbon dioxide into the atmosphere when they are cut down and burnt. Plus the loss of the recurring Carbon storage benefit in the cycle of the Rainforest’s Life.

Yet this destruction of the Rainforests is happening on a tremendous scale. Mainly slash and burn wildly, is the preferred method to clear cut the Rainforest land and replace the felled giants with GM agriculture, cattle ranching and biofuel cultivation. This is where the issue gets muddied. In the tropical belts, about 13 million hectares of natural forest are being slashed and burned with purpose set forest fires, often running wild for months. Or the Rainforests are cleared through tree harvesting, or chainsawed and burnt every year. But what happens to the soil and for how long does it stay productive? On the average only three years in the Amazonas and a bit longer or even less elsewhere.

Each year an area greater than the size of England  or even France represents the total Rainforest land that is cleared through slash and burn worldwide.  

Enough to make you mad. Really mad.

THE SIZE OF FRANCE – EACH YEAR – SLASHED & BURNED

This human action is turning the greatest Carbon sink storage known to earth; from saving and storing CO2 at the greatest possible rate in forests – to actually producing about a quarter of the CO2 emissions released worldwide each year. Actually a total of about 6 -7bn tones of CO2 annually.

This is more than the emissions of the US or China, the two biggest carbon emitters; it is nearly 25 per cent of the global total.

This is far more than the whole of the military and transportation sectors combined emissions pollute across the world.  And here is the crux of the problem – humongous size of CO2 emissions – which has always been considered one of the major difficulties in dealing with climate change.

The deforestation emissions of Indonesia and Brazil, for example, are now so great that they propel those countries to fourth and fifth place respectively in the world emissions table although, if their places are based just on burning fossil fuels, they are way-way much lower.

But the size problem is also the giant opportunity to climate forcing. Since with a simple solution to the Rainforest problem we can save a quarter of the global emissions – we are on the road to gravy land. The opportunity of saving the Rainforests is so gigantic and the benefits of such value, that no sane method can be overlooked.

This has dawned on some politicians too, as it has become clear to the rest of us that the goal of reducing global emissions by 80 per cent by 2050, is the only hope of keeping the rise in global temperatures to two degree Celsius above the pre-industrial temperature levels.

Although two degrees rise in temperatures is still catastrophic for the Equatorial belt and although it is the Barkely line limit, it can still serve us. The thought of 2 degrees as desirable is a danger in itself now that we’ve woken up. But the same 2 degree Celsius temperature rise seen as the danger threshold  will be impossible to achieve without solving the Rainforest problem and it’s resultant emissions.

Coalition of Rainforest Nations, is a grouping of 40 countries with substantial Rainforest holdings from Costa Rica to Papua New Guinea, Indonesia, Brazil, Philippines and African countries like Congo. They proposed that there could be an economic agreement to preserve their forests, when the wealthy nations of the world subsidize them to do so. The idea was met with a few smiles, some encouraging words from concerned politicians but with No dollars and No logistical support of any kind. 

Naturally it met with No-success.

This method is known as REDD. REDD stands for Reducing Emissions from Deforestation in Developing countries. It is currently discussed as part of the roadmap and you will be hearing about it at the Copenhagen meetings this December.

For REDD is now a key part of the COP15 climate treaty negotiation process – under which, the developing countries will agree to tackle their own, mushrooming greenhouse gases, with binding commitments similar to those of the developed world; in return for billions of dollars of new aid, through technology transfers, carbon markets and foreign climate aid – flowing from North to South and from West to the East.

The principal objective of the REDD agreement, put forward by the EU, with Britain leading the negotiations, is that all parties should collectively aim at reducing gross deforestation in developing countries by at least 50 per cent by 2020 compared to current levels…

That goal is widely supported by environmentalists. But another phrase in the objective, more supported by tropical nations with big logging industries, is also that “all parties should aim at halting forest cover loss in developing countries by 2030 at the latest”. To decode the text, “reducing gross deforestation” means in essence slowing the rate at which you cut down your virgin, natural forests.

But “halting forest cover loss” means you can cut down the forests but replace them with other trees, so that “forest cover”, the general area covered in trees, remains the same.

These other trees are likely to be commercial monocultures such as eucalyptus or oil palms, not remotely as valuable ecologically, or as a store of carbon, as virgin forest, and although it might be better to have those trees growing than bare ground, many environmentalists would stress that not cutting the virgin forest down in the first place is the best option of all.

The text is still up for negotiation, but the fact that two potentially conflicting stances can be part of the same first sentence of the proposed treaty shows what a difficult matter it is on which to reach agreement.

Even so, both parts of the objective constitute an ambitious aim, and the use of the phrase “all parties” indicates that we are all in this together; if they are going to stop deforestation in the developing world, we in the rich world have got to help them.

One of the key aspects of REDD is that is conceived of at a national level; before, attempts at preventing deforestation tended to be local projects. Now whole countries are being asked to lower their deforestation rates, if we finance it. How are we to do so?

There are three options. The first is to supply substantial new aid funding; the second is to let countries with high deforestation rates generate “carbon credits” from the forests they preserve, which could then be sold on the growing international carbon market; the third is a mixture of both.

Using the carbon market is the most controversial, because some policymakers feel this will provide a vast pool of emissions credits which western countries can buy and thus escape much of the obligation to cut back on emissions of their own.

Brazil’s rule of thumb is that a hectare of forest holds a tonne of carbon.

There are further objections, such as the “permanence” of the forest which has generated a carbon credit by being left uncut. What happens if it is subsequently cut down, or burnt, or even dies off because of climate change?

The carbon market will be an essential tool, not least as the total funding needed is likely to be very substantial.

According to the UK government estimation, this substantial cost lies between $18bn and $26bn annually, with perhaps $7bn of the necessary funding coming from the carbon markets. The rest would have to be found by the developed countries or by expanding the Carbon markets and allowing them to do their job well.

Saving forests is the most critical job today for tackling climate change. The same as it was in the sixties and in 1992. What are we going to do. Without action on deforestation, avoiding the worst aspects of climate change will be next to impossible.

Al this is enough to make you start seeing REDD.

What do you want to do?

Yours,

Pano

What are we gonna do ?

Are we going to wring our hands till we all start seeing RED ?

Or we gonna get off our butts and do something about it ?

CCSS = Carbon Capture Storage and Sequestration is a really dirty job. Uncertain and unproven has a lot of money chasing it. But in Canada the provincial government of Alberta has given to the oil companies already 2 Billion to clean up it’s act. Yet they spend it instead on general green PR and publicity Greenwash claiming that CCSS will be coming for the tar sands… and is the answer to clean tar. Same as it is the answer to dirty coal. 

Sadly it isn’t so.

Now we know that even capturing and storing some of the carbon that is released in the processing of Canada’s tar sands may not clean the industry up. To turn the vast but dirty resource into useable oil, Canada’s tar sands factories spew vast amounts of CO2 and other even far more toxic, greenhouse gases. Far more energy is used and CO2 produced than the caloric energy output generated by the tar sands oil. Of course that is only when all inputs costs and output costs are estimated and accounted for including the Environmental costs. Including the subsidies Alberta’s provincial and the Canadian federal governments provide for the oil companies running the tar sands to oil projects…

Never mind the free water and free land and energy grants given the companies and never mind the abundant ground  pollution and the ashes in the air and the toxic rain and the ground water  fouling…

That’s the conclusion of a new study on the potential of so-called carbon capture and storage technology to reduce carbon emissions from tar sands operations.

The Athabasca tar sands of north-eastern Alberta, Canada, hold more than 170 billion barrels of recoverable oil, second only to Saudi Arabia’s reserves. However, the oil is in the form of tarry bitumen that requires a great deal of energy to extract and turn into usable oil – some three to five times as much as conventional crude. The greenhouse gases released during the processing of tar sands make it an environmentally disastrous proposition.

No wonder, then, that the government of Alberta is putting much emphasis, and billions of research and development dollars, into carbon-capture technologies that aim to remove carbon dioxide released by the tar sands industry and store it safely underground.

But a new analysis published this week by the UK consumer cooperative and the UK branch of the environmental group WWF proves that CCSS – carbon capture will be too little, too late. Using the oil industry’s own best-case estimate, that 30 per cent of carbon emissions could be captured by 2030 and 50 per cent by 2050, the analysts note that this falls far short of the reduction needed to make tar sands oil compare favourably with other fossil fuels such as dirty coal and especially the conventional crude oil commonly used.

Therefore adding all the costs the tar sands oils are the dirtiest and should be the costliest dirty fuel of them all.

Go Canada…

CANADA DIRTY – will be the new name of the country.

Yours,

Pano

PS: To the greenwash comes the government operators…saying that carbon-capture technology is still experimental, as the spokesman for the Alberta government’s energy department Jerry Bellika said. To do a paper analysis and suggest that it can’t work is a great hypothetical exercise. We’re trying to do the practical application and get results. But the relity we know from Vattenfall’s experience of over several months running a CCSS program are dismall.

Add to that the dirty Coal factories – Canada is operating and we will be swamped the soonest. Sea level rising is directly related to these moronic projects. Moose floating off into the sunset. Canada dirty really.

Is it a bank? Or is it a giant vampire squid wrapped around the face of humanity?

Thus wrote Boris Johnson – Mayor of London – Conservative :

If you pressed a rifle into the hand of the man in the street and asked him to choose between two targets – an MP or a banker – who do you think would get the bullet?

Tricky, eh? It is hard to know which of these two formerly respectable professions has fallen further in public esteem.

Some people might hesitate, the rifle barrel weaving indecisively between two such luscious hate-objects. Most people would simply call for two bullets.

But then let me ask you a slightly different question. Which of the two species has steered most effectively through the crisis? Which cockroach has scuttled through the nuclear blast of public disapproval? There is an obvious answer, and it is getting more blatant by the day. Most of the MPs I know seem to be in a state of nervous collapse. Some of them are on suicide watch. Some of them face the task of sacking their wives and selling the house, or possibly vice versa. Some face penury. Never has Parliament been subjected to such protracted humiliation at the hands of the people.

Then look at the bankers, whose high-rolling risk-taking triggered the recession that has so exacerbated public rage at MPs.

The bankers seem to be waltzing off with a song on their lips and their hands in their pockets – at least, their hands would be, were the pockets not stuffed with money. And when I say stuffed, I mean bulging, bursting, ballooning with the biggest bonuses you ever saw.

London real estate agents cannot believe the wheelbarrows of dosh that are suddenly crashing through their doors. Savills says the number of buyers from the financial services sector has risen by 48 per cent in the third quarter of this year, purely in the expectation of yet another ginormous Christmas bonus.

A knuckle-cracking realtor in Knight Frank’s Kensington office says he has never seen anything like it: email after email from the boys and girls at Goldman Sachs. ”We did our first Goldman’s deal in June,” he tells the Financial Times, ”and we are now doing five times as many for its employees as for any other bank.”

I read these words with amazement. Of course, it is good news that cash is going into the London housing market, shoring it up and helping millions of people retain their equity in property whose value might otherwise have collapsed. Yet it doesn’t exactly help make housing more affordable for everyone else; and the real question is, how did these bankers come by these new fortunes? How on Earth, having been so heavily implicated in the credit crunch, are they suddenly able to lash out on more stuccoed schlosses in Notting Hill?

The BBC has officially gazetted me as the last politician in the country willing to stick up for the bankers. It is a badge I wear with pride. We need a strong, competitive financial services industry and we need London to be open to talent from around the world.

We need to remember the damage that is caused by protracted high marginal rates of taxation and we need to fight off poor regulation. But for banks to hand out bonuses as though nothing has changed is unbelievable. These bankers are still in jobs because the taxpayer bailed out the system.

I don’t just mean RBS and Lloyds. Even the mighty Goldman Sachs would have gone down the tube, because it was a counter-party to so much of the debt. Now, millions of hard-working people face being asked to work even longer and harder to pay for the economic crisis – and ensuing fiscal nightmare – these banks helped to cause.

These banks can no longer talk glibly about the need to offer competitive salaries to star bankers and the operation of the free market. Their irresponsibility almost brought the free market to its knees.

How can they pretend the world hasn’t changed? What blindness, what deafness, what Asperger’s afflicts them? The banking sector now stands in a completely different relation to the wider public. Their interests, and the interests of the community, have been intertwined by state intervention, and they need to show they understand that.

People who work at these banks are individually talented, charming and generous. But they need to grasp why Goldman’s was recently described as a giant vampire squid wrapped around the face of humanity and why so many people nod approval at that description.

Instead of planning to hand out gigantic bonuses to their masters and mistresses of the universe, they should be lending that money to liquidity-starved British businesses.

It is monstrous that good businesses are going to the wall for lack of credit, while bankers are using taxpayer-funded bonuses to pile back into the yachts and the villas.

They should also find some way – preferably collectively – to show that they understand their duty to the wider community. There is a huge divide between rich and poor in London. The banks could give much more vivid proof of their willingness to bridge that gulf – if they do nothing, if they carry on pretending that it is business as usual, public anger will rightly be irresistible, and politicians will be driven to act.

George Osborne dropped the hint of a windfall tax in his conference speech. Now, Labour is said to be planning some act of confiscation. How can any politician be expected to oppose such measures, when the banks refuse to learn? If they act now, if they show they understand, if they direct those bonuses now to the good of society, they may be able to avert their comeuppance in the form of tax or regulation.

And it is absolutely no use their complaining that they are all paying a price for the bad behaviour of a few: believe me, that is exactly what the MPs think. 

The main and most vital safeguard to protect the world’s rainforests from being cut down and exploited for agricultural forestry, has been deleted.

The main protection of Rainforests from the destruction and the charms of the biofuel farmers, the palm tree growers and the forestry wood and paper companies, has been dropped from the global deforestation treaty due to be presented and signed at the climate summit in Copenhagen this December.

 The Rainforest  proposal due to be ratified at the COP15 summit in December will benefit those countries and companies which cut down destroy their Rainforests – instead of protecting them…

Smart lot the Diplomats of the EU and Britain – They are given a Remit to save the Rainforests as a bulwark against global warming and they manage to promote their destruction.

David Milliband wants to be Europe’s Foreign Minister and He is the main man responsible for the actions of these Diplomats that deliver us the Rainforest carnage…

Not a likely able man and certainly unfit with a pair of scissors let alone Europe’s foreign policy. 

Destroying the forests He is charged to devise a plan to protect?

Sack him – along with his boss Blair – the toothy cockroach of  Haliburton.

Really Daft and Antisocial behaviour you would think. No?

Yet this is what the British EU leadership at the talks is engaged into.  

They plan to reward the forestry managers who cut down primary Rainforests and convert them to plantations of oil palms and other trees that are the neat harvestable varieties. Now we will be paying for these agricultural and forestry plantations and the companies and miserable countries would still be able to classify the result of their greed as forest. Consequently they could receive millions of dollars meant for preserving Rainforests after they destroy them…

Only under British leadership such stupiity could arise….

An earlier version of the  proposed Rainforest protection text ruled out such a conversion. But it was suspiciously removed. Not only the Rainforest protection text has been deleted, from the accord documents, but the EU delegation, headed by Britain has fiercely rejected it back in. They actually and incredulously, blocked its reinsertion. 

Reasonable British Diplomats and the EU bureaucrats reasoned :

Why, we don’t need any Rainforests…  

but we want  plantations of trees. 

They thought more:

Why, we don’t need species and biodiversity…

but we want single manageable (GM preferably) one species to manage.

Genius. Palm trees

I reccon:

Hell why don’t we just burn down the whole lot and make it charcoal  to use for barbeque. 

Then I think:

We should call Dr Hannibal Lecter and let him invite the smart diplomats on the barbie…

Dammit – Idi Amin  has left the house.

Then again – they will all meet in Dante’s giant barbie in the sky, along with the rest of us cooking slowly down here, in preparation for the inferno.

Yours,

Pano

PS: Any and all Scientists know that Rainforest preservation is vital. They all clearly state that plantations are in no way a substitute for the lost natural forest in terms of Carbon sinks, wildlife, water production or, crucially, as a store of the carbon dioxide which is emitted into the atmosphere when forests are destroyed and intensifies climate change.

Love is daft and sweet and sad but then why do we read poetry or listen to sad songs…

The attention span of public fame is less than the tenth of second it takes to react. Feed it at your own peril….

Amnesiophobia is for Lovers and Geeks

Logodiarrhea

 Economic Gross domestic product (GDP) is the world’s most impotent number. 

Grossly diminished point = gdp

So much weight has been piled up on it and yet so little value it carries that is the similar to the (gdp) grading debt points of S&P values assigned to the Toxic Bank Debt before this last bubble.

United Nations statisticians, economists and world wide politicians use it to rank states in order of production, and to guide policies to maintain their place in the pyramid of nations. The famous pecking order of countries and tribes and flags of colours. But yet it is the GDP’s year-on-year changes; that tell us whether our economy is in a recession, or a depression or in an inflationary growth face… and also the measurement, which in turn influences what you pay for the loan to buy your home or run your business – and, indeed, the price of food and shelter or services for the people.

But look at the factors that feed into the calculation of GDP and you’ll see some strange things going on. For one thing, it’s full of virtual production and trading. People who own their houses, for example, are supposed to pay themselves rent, which is included in GDP; it has to be this way, to keep the books tidy. Have you ever paid rent besides your mortgage i a home you own. Or have you ever heard of this inanity before?

Then there are the important transactions that are not included. No attempt is made to value the services provided by the state, for example. Fees charged by private hospitals are included, but when it comes to state-run hospitals only the goods and services they buy in are deemed to contribute to GDP.

Also unaccounted for is activity in the “informal” economy. As well as dubious or downright illegal activities, this includes things people make and do for themselves, their families and their neighbours without cash necessarily changing hands.

The most important lack of inclusion is for the Natural Services of  the Environment and the Atmosphere and the resulting degradation through unnatural and greenhouse toxic emission generating industrial and economic activities.

Failure to account for what I call the Gift Economy is criminally foolish if not outright daft…

Crucially, existing measures of GDP also fail to reflect the fact that some of the activity that contributes to GDP does harm rather than good. This distortion can encourage false choices and even real conflict, between idly promoting GDP and growth vs protecting the Life Capital and the environment, as amply demonstrated in countries like China and Indonesia. So traffic jammed roads increase GDP through the increased sales of fuel that is wasted, but do nothing for people’s quality of life. And for anyone concerned about air quality, statistics which ignore air pollution produce an inaccurate estimate of public well-being.

This clash between the economic measures of socio-economic phenomena and public perception of the same phenomena spurred President Nicolas Sarkozy of France into action. Early last year, he asked economists Joseph Stiglitz of Columbia University in New York, Amartya Sen of Harvard University and Jean-Paul Fitoussi of Sciences-Po (the Institute of Political Studies) in Paris, France, to set up the Commission on the Measurement of Economic Performance and Social Progress (CMEPSP).

The commission’s report was published last month, and the onset of global recession – as determined by old-style GDP – means it is likely to be read more widely than it might otherwise have been. The report itself says that some members of the commission believe one reason the economic crisis took many by surprise is that “our measurement system failed us and/or… market participants and government officials were not focusing on the right set of statistical indicators”. As a result, accounting systems “did not alert us that the seemingly bright growth performance of the world economy between 2004 and 2007 may have been achieved at the expense of future growth”.

The report’s 12 recommendations centre on changing the emphasis from measuring economic production to measuring human well-being, on the problems of defining well-being and – perhaps the thorniest of issues – how to measure environmental sustainability. The report notes that this last goal will require indicators of crises such as those linked to climate change or to the depletion of fishing stocks.

Measuring quality of life directly is not going to be easy. In passing, the report cites such gems as the finding that women in Columbus, Ohio, surveyed about their feelings, or “affect”, while carrying out different activities, felt better walking than when they were having sex. Puzzlingly, the same researcher, Alan Krueger of Princeton University, has also discovered that “the correlation between life satisfaction and net affect is only 0.44″: people’s description of their separate experiences does not predict very well how they feel about their lives.

Yet “hedonology”, as the study of pleasure is called, remains more interesting than the accountant’s standard way of measuring well-being, which is to ask about our willingness to pay cash for an equivalent experience. Other efforts, such as the UN’s Human Development Index are, say the commission’s authors, too closely tied to GDP.

And what shall it benefit you to have cash or hedonic experiences now, if you know it will soon be all over? Proposing a sustainability index brings us up against the core of standard economics, from Adam Smith in the 18th century, right up to the present day: the zero value normally ascribed to natural resources.

Environmental groups promote the idea of the “carbon footprint” or general “resource footprint” as an index of sustainability. But it has been left to the World Bank, often seen as conservative, to develop a more radical measure it calls Adjusted Net Savings, which treats resources as capital…

The authors of the CMEPSP report stress that treating resources as assets or capital goods “does not mean at all that we consider that these assets should all be privately owned or submitted to market forces”. Rather, many of them are “collective assets that cannot be managed efficiently by market mechanisms”. Have we returned to the 17th-century English activist Gerard Winstanley’s insistence that resources are “a common treasury for all to live comfortably upon”?

Any index of sustainability is bound to have little in common with the after-the-fact accounting that produces GDP, because it is, essentially, modelling the future. Here, we collide with the most miserable tool in the box of economics tricks: the measure of people’s pessimism known as the discount factor.

If I offer you either £5 today or £10 one year hence, you are likely to take the £5. On this basis, your discount factor with respect to me is 50 per cent per year. Even using a modest 5 per cent discount factor for future environmental damage, a million units of damage done 100 years in the future has a net present value of few thousand units. The future simply disappears from capitalism’s books.

Whatever index is used, reducing an entire economy’s performance – and especially its sustainability – to a single integer is bound to lose a great deal of information. The CMEPSP report therefore envisages a “dashboard” of measures. As it argues, “a meter that weighed up in one single value the current speed of the vehicle and the remaining level of gasoline would not be of any help to the driver”.

The report nevertheless acknowledges that if politicians do accept an alternative index, it will have immense power to drive policy. And prospects for acceptance turn out to be good. On 8 September, the European Commissionissued a communication committing itself to “working to complement GDP and National Accounts (which presents production, income and expenditure in the economy) with environmental and social accounts”. The European Commission has already adopted many of the report’s proposals.

Despite such hopeful signs, GDP isn’t going to go away any time soon. The ratio of GDP to national debt may be meaningless, but it looks seductively like real accounting. Currency traders won’t feel well-informed if they express national debt as a multiple of happiness or green prudence. Producing useful tools for guiding policy – never mind ideal ones – is going to take a while. But at the very least, exploring the CMEPSP report’s recommendations will promote an interesting social and scientific discussion of what “sustainable” and “happy” mean to each of us.

An alternative Green Development Index will help us all to find the road map to the low carbon economy future and drive us and our policies forward.

New Millennium + New Understanding + New Tools = New Economic Indexes are needed to give us strength for proper Public Policy.

 

Yours,

 Pano

 

PS: GDP – Noah would have left that one behind

Same like He did with the Dinosaurs….

What would you do?

Would You take this sucker on to Mt Ararat?

 

 

For 15 years the financial world had been suffering from an acute case of overconfidence. Assisted by the Clinton era loosening of any safety regulation and turning bankers into brokers and gamblers…

Poor Banks – Yes they were sickly and pale with stomach ulcers but they never knew how sick they were…

The real trouble began when banks started selling debt to one another. That a regular bank debt could originate in one institution and be owned by another looked like a smart idea. All research was curtailed. If debt came from Goldman’s it must be good… same if it came from BofA or Lehman’s or Merrill or a number of now defunct and alsmost forgotten banks and financial institutions.

They reasoned…

Who needs research and replacement value assessment anymore. Somebody must have done research up the line… So who wants to spend the time for such foolish activity as basic research in values. It was a game. The smart and cynical bankers act always in a pack – like vultures. Similarly they fight to feast and overfeed.

Naturally they overfeed and can’t fly no more. The game they indulged made them sicker and unable to get up from the Craps table. An extraordinarily hazardous and peril at your shareholders and clients game.

But the recently impoverished clients of the bank – they understand what the banker wankers didn’t see. If you buy a debt you own a liability.  

But the bankers sleight of hand changed the facts: It still is a liability but it appears on your balance sheet as an asset. Proper research will tell that its value depends on the debtor’s ability to make the repayments.

So the system relies on the accuracy of the debt gradings.

Now if these researchers were part of the same wolf pack, they have a common interest…

So they produces research seen through the lenses of rose coloured tinted glasses. These assessments of debt were wildly over-optimistic. But that optimism seemed like sanity. The fundamentals seemed to have changed in the 1990s. Economies had stablised. Markets were secure. Inflation, the great cancer of the 20th century, appeared to have been driven out for ever by those sturdy Chinese hordes toiling away for 46 cents an hour. Bankers were feeling chipper about risk and they assumed that the new credit swaps were really safe.

Remember those rose tinted glasses of optimism…

The same glasses that snowed us under in an edgy optimism when pooling debt in opaque structures, as financiers call the debt swaps; would make the market even safer.

Naturally it did the opposite – a crash…

A coke fuelled suicidal crash. You know the kind of drivers wrapping their Ferrari round the trunk of a tree after the party – driving under the influence of the snow-lines.

Capitalism crashed around the same trunk. Markets stumbled, people got poor, lost their homes and jobs, hell some even lost their lives – but markets really burst, like the soap bubbles; as they will occasionally, and then they got back on their feet by doing the same thing. This is what they do best.

How where they resurrected? This season not being Easter – They got up by finding out new sources of leverage. The banks managed to strong-arm the governments into rescuing them by borrowing from our future.  

The dawn of a new era: Socialism for the rich.

Hell – Communism for the Banker wankers. The new Politburo that doesn’t even pay taxes on their bonuses and gross out inflated salaries….  

Personally, am mad about the bail-out but can’t put this indignation on print, because the losers; as is everyone who pays taxes are You. You who read this and know your real feelings…

Then too are the leaders and the general populace and the diverse and impersonal group of corporate and ethical Leaders that function as participant audience in this blog. They are as much a leadership entity as the recipients of bank bonuses.  But even if you are reading this blog – being a banker, remember that just because you work in an ice-cream factory – you can’t have all the ice-cream you want. Besides, you’ll get sick all over again…

But the Bank leaders tell us that the bonus system isn’t immoral, it’s just an efficiency measure. They say it’s used to keep banks honest. The leaders tell us: A trader who boosts your balance sheet by three million quid deserves a 5-10 per cent tip. If he’s denied that he’ll embezzle this and a lot more or go become a competitor and set up a rival bank. Daft illogical thinking… as even the BNP Nazis learned early on.

One hopes the Bank’s leaders will read this and weep and change their errant ways…

And maybe swine flew to the moon and then the bank’s bonused workforce will return their indulgences en masse. But don’t hold your breath…

Bankers will pay attention and learn to never, ever to let it happen again. Right?

Oh, sure. The curious thing about a bubble is that ‘bubble’ is the perfect word for it. A sweet, harmless, lovely-looking thing floating through the sky.

Then it goes ‘Pop!’ and there’s a lot of noise but nothing has been destroyed. Skin and contents are scattered temporarily awaiting the formation of the next bubble.

Try to unravel that crashed Porsche from the tree trunk now…

Here cometh the sand man…

Or is it the bubble man now?