Short Cuts

Short Cuts – John Lanchester

It is all together fitting and proper that the metaphorical spectacle we started with culminates in the actual spectacle complete with some naming and shaming and jaw dropping figures!

This deal with Northern Rock and Virgin Money! Whichever way one looks at it, it is the profit machine at work here and at the expense of the hardworking taxpayer too. We pay £1.4 billion for a reckless bank, we may get £1 billion back depending on profits increment (I wonder if profit means before or after lavish bonuses?) and the new bank will be 15% less safe than the former. What happens to the spare capital? The taxpayer has to lick his wounds and forget that a penny of the spare capital will ever cross his/ her sight?

The MF Global scandal accentuates the perceived recklessness of financial institutions and could serve as a preamble to global financial crisis. Irresponsible and greedy speculations of a few people based on hypotheses alone left countless more dangerously exposed to financial ruin. And as if that is not enough, to ‘mislay’ customers’ money, $1.2 billion of it? This is hardly a needle in the haystack scenario.

Jon Corzine, former governor and erstwhile Master of the Universe was swaggering all the way to the end. Vanity Fair dissects Corzine's MF Global debacle in its February issue, and adds this little tidbit: Corzine and wife Sharon went chateau shopping in France -- two weeks before MF Global filed for bankruptcy.

For those of you who didn't take French 101, a chateau is not a fancy hat but a triple sized McMansion with provenance. Sacre bleu!

Corzine resigned from the leadership of holding company MF Global days after it filed for bankruptcy – the eighth largest bankruptcy filing in U.S. history. The company's troubles were rooted in its bets on European sovereign debt.

Corzine testified before Congress that he did not know what had happened to the $1.2 billion in investors’ money that investigators found missing, earning him the dubious distinction of being The Star-Ledger’s 2011 Knucklehead of the Year. (http://www.nj.com/njvoices/index.ssf/2012/01/jon_corzine_and_the_mf_global.html)

Wow indeed!!!

The Olympus scandal again highlights the difficult prospects of the individual against the collective with Woodford bearing the brunt of it all. Was he wrong to have raised concerns or is the board determined to keep the lid on a much more sinister activity? To have lost three-quarters of its value in less than a year may suggest that Olympus is perhaps going for a Henry Ford (Tin Lizzie – Dos Passos) 1920s style financial manoeuvre but to arouse suspicions of involvement with criminal activity, leaves more questions unanswered.  

Again, suggestions offered by Badiou and Eagleton will prove very pertinent to disseminating this ‘vicious obscurity’. There is an urgent need for both political and ideological rupture where new forms of belonging which are multiple rather than monolithic, can challenge the status quo and create a very different order of things.