The hysteric and ‘expert’ laden media will have ensured that you know everything (that they know, which isn’t a great deal) about the unprecedented failures in the financial sector but I just wanted to put together a definitive list that would make Schumpeter get a bit of a rod on…here are the fallen, the bailed-out, the nationalised, the engulfed and the teetering, please drop me a line if I’ve missed any out…

• US Banks -Bear Sterns (bought by rival), Merril Lynch (bought by rival), Lehman Brothers (part bought/part administration), ING (government bail-out), Freddie Mac & Fannie Mae (government bail-out), Washington Mutual (bought by rival), Walcovia (bought by rival).
• UK Banks – Northern Rock (nationalised), HBOS (sale pending), Alliance & Leicester (sale pending), Bradford & Bingley (part nationalised/part sold), Derbyshire Building Society and Cheshire Building Society (sold to rival)
• UK Corporates – Joy, Rosebys, Hardy Aimes, XL Travel, Motor World and WorldSki (all administration) and MFI (MBO executed)
• Belgian Banks – Dexia, Fortis (both still being finalised, appear to be part govt bailout and part sale)
• German Banks – Dresdner (sale to rival) , SachsenLB, Hypo Real Estate and West LB (all govt or investor bail-out)
• Icelandic Banks – Glitnir (nationalised)
• Icelandic Corporates -Stodir (administration)
• Italian Corporates – Alitalia – bail out being discussed

On the related issue of economic pundits in the media, Robert Peston i.e the Horseman of Financial Apocalypse is popping up everywhere thesedays. I had the gross misfortune of reading a groveling, arse-probing of an article by one of his former underlings in the Independent this Sunday. The author only just stopped short of calling Peston the second coming, what an overt textual favour. My thing with Peston is that I just can’t decide if his on-edge demeanour is either a) him about to go Michael Douglas “Falling Down” or b) his cum face. Considering the pure delight he seems to get from the financial plight, I’m definitely going for a perpetual version of the latter. Here’s the cheeky chappy himself, see what I mean?:

We’re scared here at Worship Street Irregulars. We’re now in the shadow of a gigantic shard of glass known as Broadgate Tower or something equally unimaginative. Now we were kind of alright with that at the start, until they then quickly demolished all of the warehouses on Hearn Street/Plough Yard to build a 51 storey hotel. What the fuck!!!

Image courtesy of OPEN Shoreditch (please check out their website and get involved if you want to have your say in the development)

If this development goes ahead, it’s going to cast a significant shadow (literally) over the Shoreditch vibe and to be honest, I think the development and the ancillary developments will threaten Shoreditch High Street, Great Eastern Street and Curtain Road eventually. I agree with the sentiments on the OPEN Shoreditch site, there needs to be an incredible amount of care taken with this development, especially going into a recession.

Key Questions:

Do we want to feel claustrophobic every time we step out the house, being looked down upon by these cold and distant structures?

How do these barrier buildings affect communities?

Why not Canary Wharf or back towards Bank? Why must the City spread further East?

What do large scale office developments offer to the communities they are placed in? What do they give back other than the corporate pound?

Will local businesses be driven out as the corporate appetite arrives and demands more All Bar Ones and other such banal chain antics?

Also, according to the picture, we won’t have a fucking house/office. It’d be nice if someone had asked our opinion on this…don’t worry we are now mobilising the troops, the revolution will not be televised.

It reminds me of a poem I wrote quite a while back when I lived in Devon:

The Countryside was saved

Hoorah! The hedgerows have been saved
The bankers and lawyers and big city brawlers
Came and chased the tractors away.

Hoorah! The promenade has been saved
With their need for antiquities and organic infrequencies
They chased the fisherman away.

Hoorah! The Village Hall has been saved
Because it’d be frankly barbaric for Lucinda and Tariq
To have their birthday any other way
They chased the community away.

Hoorah! The future has been saved
With their second and third homes
Pushing prices out further than the old trombone
That the village band used to play
They chased the soul away.

You know the vibe, you walk in, it’s mobbed. Normally this is a good thing, everyone loves a busy bar/club but not when it’s 5 deep at the bar with generic ignorance with a general musk of arrogance and aggro lingering in the air.

You can deal with it a bit, get a drink, find your friends…engage in human interaction. Then it hits you, sometimes right in your face, sometimes through passing conversation: everyone in the place is a walking dollar sign (or should I say a non-dollar correlated currency in the current market?).

If the suit bar was an internet forum, it would be one gigantic, everlasting thread: money. Whilst there are superficial differences; holidays, houses, cars, suits, strip clubs, deals, promotions and trophy spouses – it’s all the same direction. It’s all about demonstrating value in currency, nothing else exists.

The saddest thing, the most soul-destroying thing is that girls actually go there to “bag a banker/lawyer/bricklayer pretending to work in Private Equity”. You don’t believe it? Well it’s not a secret, watch the dancefloor when “Golddigger” – Kanye West comes on, this is overt quasi-prostitution.

This is an actual conversation I had recently:

Girl: Hello! Good music in here isn’t it?
Me: Yeah, for me, Black Eyed Peas is pretty much the pinnacle of music. I just don’t think there’s much we can do to top it.
Girl: Oh, no way! It’s my favourite to. So are these guys (pointing to my friends) your team, like are you there boss?
Me: Yeah, these guys are my minions, I’ve actually outsourced dancing to a small team as well, they are currently ripping up the stage…
Girl: No way! You have two teams? So you’re a banker right? You must be loaded?
Me: Yeah I basically live in a house built of money, I actually throw away money just because it takes up the space where I could put gold.
Girl: Wow, can we go to your place because I live with my parents in Hertford and they said that I couldn’t come back until I found a rich guy to fund my cocaine and topshop addictions.

During this boom something weird happened, we all grew a conscience.

Walk with me down memory lane, cast your mind back to 2005 – 2006…

We’re all wearing bands on our wrists marking us as a benevolent tribe. Inviting our friends round to feast on fair trade products whilst discussing the hybrid car we are thinking about purchasing. We stop chatting about becoming carbon neutral only to watch Live 8 on the TV. We are staying awake at night worrying about Global Warming. We shake our heads at those not using a ‘bag for life’ or for the super chav/budding environmentalists those “I’m not a plastic bag” bags.

As an aside, imagine how ridiculous the World would be if everything was labelled with what it isn’t rather than what it is. For example on the front of buses “I am not the 214,271,8,242 etc ad nausem”.

Now it’s easy to be philantrophic when you’re rich, look at the huge amounts that Bill Gates and Warren Buffett can give away without batting an eyelid. 2005-2006 in the UK was a period when the population was feeling relatively wealthy (low inflation, low interest rates, increasing property values) and feeling more obliged to spread the wealth. In fact, over £10.9 billion was donated in total during this period.

You may have guessed but times they are a-changing, a few of the wheels on the economic bandwagon are coming loose and it’s not going to be about if the wheels come off, but whether they come off just as we roll into a Little Chef (and thus enjoy a stodgy and overpriced soft landing) or just as we’re on a hairpin (and in the words of the pikeys in Snatch, get proper fucked).

Now either way, with increasing commodity prices (i.e. higher household expenditure), the impact of the interest rate rises, slowing salary increases and other squeezes on household disposable income our charitable donations are likely to tame somewhat as individuals.

I predicted the biggest faller will be Fair Trade goods. Already, Fair Trade Coffee trades far in advance of the market rate (the whole point I guess) but this distorts the free market. There is surely an element of income elasticity of demand for Fair Trade Coffee (and Fair Trade products in general) to consider in a downturn, i.e. when income goes down, demand for these goods goes down as consumers switch to alternatives that are at market price. SO I guess the point that I’m getting at is that godliness comes at a price and that when the economy turns, I expect people to crawl back to their market equilibrium coffee. Check out this site on coffee pricing, it’s pretty interesting.

The interesting one is alternative-energy and self-sufficiency in a downturn. Whilst I expect activity in this market to reduce, the wise person should actually wait for the market to go down and then invest in kick-ass self-sufficiency to opt out of spirling energy costs…thinking about it.

Meanwhile Barclays (aided by Visa – pretty much Maestro’s nemesis) launched their ‘One Pulse’ card which combines a Credit Card, Oyster Card (London underground pass) and Contactless Card. The Contactless card allows the holder to make transactions under £10 without the need of entering a pin, simply by tapping it against a secure reader in participating stores. So not only is this replacing the need for loose change, it’s also bringing three cards together in one, madness I hear you say.

Whilst it can not be disputed that there has been a shift towards debit and credit card transactions in the last couple of years, Bank of England statistics show that between 2004-2006 M0 (coins and notes in circulation) has continued to grow.

So now that the scene has been set, I just wanted to highlight some of the points around this ‘cash is dead’ scenario.

1) Cash isn’t dead for the poor

The one misunderstanding that Maestro has made is that not everyone is squeaking in excitement about going ‘contact less’ because they are tired of fumbling for pound coins to buy their dry frappacino, vanilla shot, extra shot everyday.

Whilst changes in the welfare system have led to some of those excluded from the banking system being internalised (i.e. they must have a bank account to pay their benefits into), there is a big gulf between the basic bank account offering and a normal debit card in terms of usability. Some basic bank accounts (i.e. Solo accounts) are not accepted in many stores, creating yet another stigma and label for those who are at the fringes of the banking system.

Also there are people that are excluded from the banking system due to the fact that it is intrinsically more complex than having hard cash in the hand. There are pins to remember, limits to obey and various dos and don’ts around payment instructions. These are things that the people at Maestro take for granted, for some people this isn’t quite such an easy task vis-à-vis the simplicity of cash money. Whilst I acknowledge that steps have been taken by a number of Banks to ensure their literature is written in plain English and thus carries a Crystal mark, I still can’t help but think many people are a million miles away from cash playing a reduced part of their lives.

2) Cash isn’t dead for the independent store (but will the Independent Store die as a result?)

Whilst a checkout assistant at Tesco barely blinks at a request to buy a Mars Bar on debit card/credit card, it isn’t economically viable for small scale shopkeepers to facilitate such minuscule electronic transactions as the handling fee invariably eats into the net profit derived from the sale. If the customer doesn’t have the cash equivalent, they walk down the road to Tesco to complete the transactions and the shopkeeper misses out on the revenue. Whilst from a customer services perspective the customer acts rationally, I think at some point in the future we will need to take a step back and think about what type of Great Britain we are building for our children and our children’s children. The sad tale is told in the local press up and down the country on a weekly basis: ‘Jack Roberts, shopkeeper for 40 years (man and boy) pulls down the shutters for the last time due to lost sales to Tesco.’ It’s all just the accumulation of a missed mars bar sale here, a canceled paper delivery there which is the difference between one man’s livelihood and a future of generic, soul destroying consumerism.

3) Cash isn’t dead for the crooked

Dealers don’t take card, even Contactless ones. Migrant workers collecting cockles illegally don’t get a nice pay check put in their bank account from their evil troupe leader. Prostitutes lining the streets of Whitechapel don’t ask punters to tap in their pin before taking them back for a bit of ‘how’s your father’ in their seedy bedsits. Whilst the damage that the black economy causes is a strong argument for a ‘cashless society’, paradoxically, it’s existence is possibly the strongest argument for why it will never happen. The motivations of certain people will always require transactions to be hidden and no audit trail to be left. In the words of Jean-Paul Sartre

“It disturbs me no more to find men base, unjust, or selfish than to see apes mischievous, wolves savage, or the vulture ravenous”.

4) Cash isn’t dead for the crazy

Oh yeah, just when you thought it was safe to talk about something without a bible-wielding American wading in, in they charge like rabid crusaders! If you google cashless society, you unleash a torrent of madness. My favourite is this one, which in summary, suggests that the cashless society was predicted by God and it’s pretty much the Devil’s idea.

Whilst I have no revelations that have the shock value of Bret Easton Ellis’ novel, I just wanted to share with you the power that emits from the Blackberry and why it is what all mid-management crave.

For those not in the know, a Blackberry is a hand-held device used predominantly to receive and send e-mail, thus allowing owners to constantly be in touch with the office. The take-up of the portable has been phenomenal, with the second quarter of 2007 seeing billion dollar sales revenue and Research in Motion (the makers of Blackberry) preparing to sell their 20 millionth unit.

However it is not just the sales that makes Blackberry noteworthy, it’s the fact that it allows companies to tap into those staff that can’t switch off by giving them a tool that will allow them to work at any time and in any place. The persistent blackberrying by some users is so intense that it has been labeled ‘crackberry’, with the word being nominated in 2006 as word of the year.

Now from a rational point of view, who actually needs to be in touch with the office at all times? You can clearly see the benefits of the CEO, Executive Board and other key decision makers being permanently available; they have the knowledge, the skills and ultimately the remit to make decisions. If the CEO is skiing in Whistler, he needs to be contactable in case something needs sign off RIGHT NOW. In this day and age it isn’t acceptable to allow a deal to slip, a position to worsen or a customer to walk away because someone was chilling with a cocktail in Belize.

Also, the key decision makers need access to information, they need to be kept abreast of developments because simply, they live and breathe the company – if someone comes up to them on holiday and starts speaking about the breaking news on Bloomberg regarding their company, they need to know the inside line. Picking up on this concept of ’living and breathing’ the company, the likelihood is that the very nature of these individuals is such that they won’t want to be away from the company and hence the Blackberry may (perversely) facilitate them to act in a remotely normal fashion when on holiday.

In addition to the top brass, dealmakers should have Blackberries. These guys love work and boy do they work hard and to be honest, if they could, they’d sleep at work. It makes sense to give these guys Blackberries because they are your top 20% (see Pareto’s Law), they are probably carrying 20 people so why hold up their efficiency and drive? They want to get on, you want them to get on and your shareholders want them to get on. Again, still rational and efficient.

Also you have work folk who work from home or from multiple locations, these guys need to be tapped into something like a Blackberry just from a purely practical perspective.

So we’ve seen the rational and somewhat efficient manner in which a Blackberry should be allocated – i.e. to those that are business critical 24/7, the dealmakers and those whose working environment presents challenges. However, the allocation doesn’t stop there, it goes further down the chain and enters into an area where the dynamic of blackberry to blackberry owner changes.

Finally, we come to mid-management.

Firstly, the people who do a sterling job, but simply cannot sign anything off out of hours, therefore don’t really need a Blackberry. Even if this guy or lady is sitting at home finding the missing link at 8pm on a Friday night, they can do diddlysquat until their line has signed it off.  Frankly, if these guys can’t get their work done in regulation (i.e. normal working hours) then we should be looking at how they work not giving them Blackberries to spend longer doing the job and eating into their real life.

Secondly there are those that work in support areas where, although they do important work for the business as a whole, they don’t have much which is urgent at any given time.

These are two groups just love the Blackberry, they love the ‘prestige’, which is a real false consciousness. Whilst the CEO needs it to steer the ship in the right direction, the dealmakers need it to hit their targets and the project manager needs to stay on top whilst traveling, the mid-manager neither steers nor has deadlines, they just desperately, desperately want the Blackberry.

They look longingly at others with Blackberries, they imagine what it’d be like to have one and have toyed with the idea (more than once) of signing off a normal outlook-based e-mail “sent from my Blackberry wireless”. I actually believe that (whilst I have no empirical evidence to back this up), some mid-managers would forgo hard cash in order to get a Blackberry. They see it as a proxy for importance, which is counterintuitive in that a) those that are important don’t need a electronic proxy to tell people their important b) those in the same role but without a Blackberry can see instantly how much more work his Blackberry toting colleague as a result of the Blackberry now does compared to him, with no real impact on their relative abilities to achieve their objectives.

And what happens once they get them? Boy do they flaunt them! They wear them attached to their belts, they get them out in meetings and they become out of office Blackberry warriors – sending e-mails at ungodly hours that frankly are unnecessary and add little value.

So there we have it, a quick expose on Blackberries. We’d love to hear your tales of Blackberry warriors, Crackberry addicts, and ridiculous Blackberrying antics.