Working Men

Fridays P&L: GBP 1,200

Fridays Booze: 8 pints of Stella Artois, 1 bottle Tinto Pesquera 1994

What a strange day. The markets continue to believe that everything is good. A year on in and the crisis is over. Yet something doesn't sit right. Was this financial crisis so temporary? Could it really be solved by just injecting unlimited capital into the banking system? The politicians in the UK have been on holiday and seem focused on dealing with the troublesome issue of their expenses when they return. The part conferences have shown that deep down and despite whatever promises they make, non of the politicians have any idea how to address the gaping whole in our national finances. The American Politicians are basking in the reflected glory of Obama and his Nobel prize, (for which he was nominated after just 11 days in office).

Its the Americans I feel sorriest for. They seem unable to accept their new role in the world and hope things will return to normal, but how can it? The securities houses of Bear Stearns, Lehman Brothers, Merril Lynch, Morgan Stanley and Goldman Sachs are all gone. OK, they still exist apart from Lehmans, but they have all been forced into unfavorable mergers or converted into FDIC regulated bank holding companies. These companies that survived the depression, both world wars and all the recessions of the last century just collapsed under the weight of their own hubris and greed. The same thing happened here in the UK. RBS, the biggest British bank with total assets exceeding the GDP of the country floundered, so did HBOS, the biggest mortgage lender in the country. These banks were rescued at an unknown cost, (the full cost to the country will never be revealed), because what was the alternative? The banks not opening the next day, people unable to withdraw cash from ATM's salaries not being paid into bank accounts, businesses unable to pay suppliers. In effect the complete meltdown of the modern society we have grown to depend on. We were literally hours away from this happening. and yet when I walk around London most people seem unaware.

It isn't the case with a lot of the trading community, I spoke to a few ex-colleagues who have come close to committing suicide. Its easy to distract the general public with stories of huge bonuses and yes, many investment bankers and traders earned huge salaries, but these were earned, contracts were established and generally bonuses were similar in percentage terms to top salespeople in other fields. Just the revenues were exceptional. Anyway, the bubble has been reinflated, but the future consequences are unknown. One thing is for sure, things will never be the same again.