sutton038

I have no family in the UK, so I always exhibit strange behaviour on Christmas day. Last year I wondered around the City of London and took photos of empty bank offices, after which I attended a wedding of two Occupy protesters on the steps of St. Paul's cathedral. This year I wandered around Brixton and took photos, including one of the  Space Invader mosaic above the chicken & chips shop on Coldharbour Lane, before going home to watch THREE whole films on the fall of Lehman Brothers. GANDALF VISITS MORDOR Lehman has always held a special place in my heart because I had two interviews there in 2008, mere weeks before it collapsed. I sat up on the 36th floor and was questioned by men whose job it was to ascertain the robustness of my character. One of them said "you may have heard things in the press about us being in the shit, but these are the exaggerations of melodramatic journalists". A week later I was having another interview there, but little did I know t...

[Note: An up to date blogpost about the book appears here , and the book's page is here ] This blog has been on the down low over the last few months because I've been writing a book. The book is now finished, 78 579 words aimed at   providing a gateway for an individual to gain access to the matrix of global finance. It's called The Heretic's Guide To Global Finance: Hacking the Future of Money .  It will be published in May 2013 by Pluto Press , a fantastic independent publisher based in Highgate, London, who have published such societal shitstirrers as Noam Chomsky , Edward Said , Vandana Shiva , Susan George, and John Holloway, amongst others. I've often found that I'll read an interesting book providing a critique of the financial system, but then I'll put it down and that's kind of the end of it. I store the info away somewhere and pull it out during a conversation maybe, but I don't really act on it. Thus, when Pluto approached me to write a b...

The ease with which the Libor scandal has brought down the towering figure of Bob Diamond, master of the universe and investment banker extraordinaire, is truly momentous. It reveals how small cracks in corporate structures can turn into gaping chasms that engulf whole management teams. For those that haven’t been following the scandal, the gist of it is that traders have been caught submitting inaccurate figures to manipulate the Libor rate – an index which tries to reflect the average rate that banks can borrow on the 'interbank market' (aka. from each other) – for various dubious schemes. Libor relies on banks submitting honest figures to the British Bankers Association (BBA), the organisation that calculates the index. Interestingly enough, I was at a debate a few weeks ago on the topic of financial sector corruption, which pitted investigative journalists Ian Fraser and Nick Kochan against a representative of the British Bankers Association. Kochan and Fraser argued th...

[Note: for my more recent article about bitcoin, see How to Explain Bitcoin to your Granny ] By now many people will have heard about Bitcoin. That’s the global, decentralised, online crypto-currency (check out this Wired Magazine article for some background). You can either buy it on online exchanges , or your can ‘mine’ it by running algorithms that are likely to cause your laptop to catch fire. You can then use it to buy things from vendors who’ll accept it, albeit Sainsbury’s still only accepts British Pounds. There are even mainstream currency traders who actively trade Bitcoin now . I’ll bet all the Bitcoins I have though, that very few people actually understand what the hell Bitcoin is. I myself do not understand it. Try listen to this guy explain it, and feel your mind frazzle. More than anything, I have the sense that Bitcoin is a cult . A strange cybernetic cult. An anarchic techno-pirate, quasi-mystical collective on a dystopian mission to subvert the global monetary sys...

Yesterday's Jubilee caused great jubilation, or at least that's what BBC was saying. I kind of missed it, but I did think it was fitting to at least commemorate the occasion by writing a modest proposal in Bright Green Scotland , entitled Securitise the Queen . I proposed that the British Government issue Monarch-backed securities. Here's a quote: "Monarch-backed securities are innovative new financial instruments that will securitise the Queen, using her as collateral against which the government can borrow money...  ...The technicalities of the monarch-backed sovereign debt could be ironed out fairly quickly. We put the Queen into an SPV (a special purpose vehicle, of financial crisis fame), which issues 20-year bonds to investors. The SPV is bankruptcy remote, which means that if the entity defaults, the investors can claim the Queen, but no government assets. Of course we tranche the returns: Risk-averse investors take the upper tranches, backed by the stable cash ...

If you were a bank employee with information about wrongdoing in your division, would you be happy to approach your senior management about it? The Whistleblower Improvement Act of 2011 would require just that, making financial whistleblowers report their concerns to company management rather than approaching government agencies directly. The act has been backed by Rep. Michael Grimm, a former FBI agent who spent a couple years undercover trying to bust dodgy stock brokerages for securities fraud. You’d think that experience would make him attuned to the problems of financial crime, but Michael Smallberg of POGO argues that “Rep. Grimm’s legislation would hobble SEC and CFTC enforcement, chill the flow of high-quality insider tips, imperil the safety and livelihood of whistleblowers, and give law-breaking companies an accountability escape hatch”. I don't know enough about the proposed legislation to hold any definite views, but in any case  GovTrack reckons that there’s only a 2...

Globalisation can lead to surreal situations. For example, several weeks ago I got a call from a Kenyan guy called Karim Ajania , who's based in San Francisco, and who runs a website for a Mozambican forestry project called Mezimbite. You'd think the website would be focused on, well, Mozambican forestry, but it features contributions on a variety of topics from some pre-eminent global economists, including Sir Partha Dasgupta and Oxford's Paul Collier . Karim told me that h e'd managed to get respected Harvard professor  and former economic advisor to Bill Clinton,  Jeff Frankel , to write him a short blog on commodity speculation. Karim wanted me to write a reply. Karim had seen a  previous article  I'd written on food speculation , where I'd suggested that excessive involvement of financial players in agricultural futures markets could distort prices of real food, potentially leading to negative impacts on the welfare of the world's most...