HYDRA-HEADED WILFULNESS *

My Greek mythology is rusty to say the least, but I recollect the Hydra was a dreadful, scary monster. When its head was cut off, in an attempt to kill the beast, two more heads immediately grew back, to replace the head that had been decapitated. And so on. Or was that the Gorgon?

Anyway, the financial institutions remind me of the Hydra.

I've caught several snippets on the radio in the last few days. First, apparently there is now a market trading technique called 'nano-dealing' or something. It involves buying stocks or commodities and then selling them in a split second, presumably by computer, making a large profit. Then there's a report that the financial whiz-kids have started slicing, dicing, repackaging and selling-on carbon trading deals, just like the sub-prime mortgages, so nobody can ever trace where they originated or what they actually contain. Another example involving the banks escapes me.

You might have thought these guys would have been chastened by the global financial crisis. Not a bit of it. I wonder how Hercules (or whoever) eventually subdued the Hydra?

* (Shakespeare, Henry V, Act 1)

The Empire Strikes Back

The first tentative shots are already being fired by the banks. I've noticed this in recent advertising. Adverts suggesting Bank A is more trustworthy than Bank B. And the occasional banking spokesperson on TV has a go at excusing or half-defending the appalling behaviour of banks in recent times..

But my feeling is that people generally have been shocked to the core. Indeed, we are still in shock. What has happened in banking is almost unbelievable. It will be remembered for many, many years.

Nevertheless, the banks and financial institutions are ruthless and driven. They will use every tactic they can think of to regain control of events, and attempt to get back to 'business as usual'.

Disbelief, Fear and Anger

Many people I talk to are still stunned by the torrent of events in the past week. The so-called 'credit crunch' and the Northern Rock rescue were alarming, but we were almost learning to live with the crisis. That is, until other financial institutions and banks around the world began to go down like skittles.

There is utter disbelief that our banks should have been caught playing fast and loose - gambling frankly, with our money, homes, pensions and security. How on earth could all the brilliant economists employed by the banks have failed to see it coming? The best brains in the Bank of England monetary policy committee have for over ten years been meeting every month, fiddling around with interest rates - moving them up a bit, down a bit, up a bit - as the storm was brewing, while the Government looked on. And not only failing even to meet the inflation target, but seeming oblivious to the impending disaster. Oh, sorry, I forgot, that wasn't their job, they were only asked to do inflation. Disbelief as President George W. Bush, John McCain and Sarah Palin appear to blame everyone except themselves, their policies, and their own administration.

There is fear, as no-one seems remotely in control of events, panic looms and politicians run around like headless chickens. There is anger that blind faith in market forces, with their 'lack of confidence', unaccountability, with their 'toxic assets' in black boxes and all the rest of the mumbo-jumbo, has led us to the brink.