I've been resisting writing anything during these tumultuous days. When everything is in flux it's difficult to resist making forecasts of one kind or another, even though one knows that the only reliable prediction is that events are bound to make a mockery of one's soothsayer efforts.
My first reaction to the share tumble at the beginning of the week was to think, 'Oh well, here it is at last. Now we can get on with a good market freefall and then pick ourselves up and nurse our bruises as we have done so many times before. Finally, the uncertainty is over.' But it seems that would have been a premature posting. The market has rallied, undaunted even by the astronomically appalling news from SocGen. So where do we go from here? Up? Down? Really, we are no better off in terms of understanding our fate than we were last year.
It's becoming quite frustrating, this hovering.
As for the SocGen rogue trader, the mind boggles. How could it happen? How is it investors seem so relaxed about this extraordinary development? €5 billion, lost by a low-ranking nobody. This modern world. I really am past understanding it.
Supposedly it can all be sorted out with a rights issue, and if not no doubt the French government will intervene a great deal more swiftly and effectively than our own in the case of Northern Rock. Nevertheless, it is staggering to see another major bank so critically wounded. I'm still getting used to the idea that Merrill Lynch and UBS - to private bankers, the great untouchables of our universe - should be forced by their subprime misfortunes to go cap in hand to the sovereign wealth funds. My ilk have tended in recent years to view the Chinese basically as newly-fattened prey, ripe for hunting - the same way we saw the Arabs for decades. The notion that Arab and East Asian governments now have a controlling hand in ivy league western banks is disconcerting to say the least.
So, no predictions. I for one have no idea what's going on. All I can truthfully say is it is indeed an interesting time to be a banker.
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Jonathan Guthrie, Financial Times, 12 April 2007
Business bloggers are worldwide and woeful
Business bloggers face a simple choice: write discreetly and bore readers witless, or reveal secrets and get fired. I imagine this latter fate, or the fear of it, has silenced Absolutely Confidential, an anonymous private banker who laid his industry bare in a series of droll posts earlier this year. It was a rare flash of talent in the over-hyped and overcrowded field of blogging. This recently marked its 10th anniversary, though the milestone merited little celebration. Bloggers too often combine awesome command of communications technology with an awesome lack of anything interesting to impart. Not so with wry, burnt-out Absolutely Confidential. He described how an American customer worth $300m (£152m) used accounts in Europe to direct secret payments to US senators. He hinted at the mob connections of an Italian client, whose hobbies included poisoning goldfish. And he detailed how a dear old English lady moved £14m of "undeclared money" to Singapore so that "Gordon Brown will never get his mitts on it".
This loose-tongued financial father confessor was equally compelling on the human comedy played out in the London offices of the Swiss private bank where he worked. Once, two rival rap stars who were customers squared up to each other in a double-booked meeting room. "My client's full portfolio was spread out on the table and he'd been making a [good] fist of understanding the little graphs," wrote our mole, "[But] he turned livid when he realised there was a witness to his financial prudence." Especially one who had impugned the honour of his momma in rhyme, alleging sexual misdeeds involving a spanner and a "piana".
The blogger's explanation for his indiscretions was that "it's curiously liberating to cross the line". Curiously liberating to toy with career suicide too, assuming Absolutely Confidential is not an elaborate hoax. Any hostile colleague stumbling on the blog could use it to have AC dismissed. The blogger might then rue comparing his bank's client reception facilities to those of a high-class brothel.
Most work-related blogs peter out because the blogger is bored or busy rather than jobless. These opuses resemble abandoned schoolgirl diaries of the kind that start with a 10-page outpouring on January 1, dwindle to a weekly one-line entry in February and cease in March with the words "Gary asked me out!!!"
The boardroom blogger Charles Dunstone, chief executive of Carphone Warehouse, began to falter himself last summer, as the company struggled to meet demand for its "free" broadband offer. His posts have been sporadic and apologetic since. But shareholders must be glad Mr Dunstone is concentrating on his day job, rather than writing articles a helot in marketing could ghost with equal skill and greater regularity.
Tom Glocer, chief executive of Reuters, meanwhile exhibits a reassuring command of geekspeak in his blogs, waxing lyrical over "published and extensible symbology sets". Travelling to Bangalore, "home to over 1,600 Reuters employees", he reflects, is "always an exhilarating visit for me because of the talent and enthusiasm of our staff". Exhilarating for Reuters' finance director, too, given low Indian labour costs.
It is hard for bosses of quoted businesses to blog except as happy-clappy corporate cheerleaders, which is dull for readers and easy for smart-arses like me to ridicule. This explains why few executives bother blogging in the cynical UK. The practice has taken deeper root in the US, where personal enthusiasm is not regarded as evidence of poor breeding, and bloggers include Bob Lutz of GM and Jonathan Schwartz of Sun Microsystems. There are, apparently, 70m blogs on the internet, although statisticians have yet to estimate how many are written by male IT contractors with poor personal hygiene and no women friends. My guess is 69m. Thanks to the internet, dweeb shall speak trivia unto dweeb. You know their schtick: "It beggars belief that Mandrill Software has re-released its package unbundler without fixing the bugs in the googleplexer!"
Outside the incestuous world of computing, professional arcana can be oddly compelling. Consider the amiable ramblings of the Savile Row tailor Thomas Mahon, who asks readers to identify a "jacket forepart" on his English Cut website. He then informs us with a flourish: "You won't be surprised to hear it's [part of] an Anderson & Sheppard coat, a classic DB of 11oz grey worsted."
Tupperware Man, a 40-something plastic container salesman, communicates equal enthusiasm for the "tower of Space Savers" accumulated by customers Leanne and Paul of Purley. There is even a photo. Another shows the blogger's "shrine" to the culinary icon Fanny Cradock. "I am back up there with the big girls," he crows camply. "In November I was Number Four Tupperware seller in the UK."
Mordant self-knowledge is absent from the musings of Cityboy, a bored London investment banker, who argues that anyone earning less than £500,000 annually in the City is struggling to make ends meet. Is a yearly holiday at the Sandy Lane hotel, Barbados, really vital to happiness, as Cityboy contends? I suspect Absolutely Confidential would have a pungent opinion. Come back AC. Us slack-jawed websurfers need you, even if your bank does not. The difference? We do not pay.
Copyright The Financial Times Limited 2007
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