I’ve always been a words kind of person.

Numbers have never really floated my boat.

I can get by when it comes to maths and the self-employed life has certainly seen me using the number-crunching part of my brain far more in the last two and a bit years than in the previous two decades.

But the reason I’ve spent an awful lot of time scratching my head over recent stories involving the credit crunch, interest rates, the housing market, Northern Rock and most recently Bradford & Bingley doesn’t have anything to do with my rather simplistic attitude towards numbers and maths.

The figures just don’t add up.

Various experts trotted out on TV, radio, online and in print all seem to be saying the same thing.

It goes along the lines of: “Well, of course, the banks and financial institutions knew they were involved in a high risk strategy. In many respects the writing has been on the wall for some years. If things started going badly, then it was always likely it could take everything else down with it.”

If the writing was on the wall, then they were using invisible ink. Either that, or no-one understood the language it was written in.

Everyone now seems incredibly wise with the benefit of hindsight.

They seem to be adopting a “told you so” attitude.

The problem is, they didn’t actually tell us anything until it was too late.

It seems quite a few people – including our political leaders – could see the potential damage of some of these high-risk strategies, but they were more interested in the rich short-term pickings to be had. Equally, those commentators and analysts now telling us they could see such problems arising were fairly silent when the decisions were being taken.

There is an interesting summary in The Guardian today by Larry Elliott and Dan Atkinson.

They are releasing a new book this week – The Gods That Failed – a critical look at the world’s major financial players and the decisions they have taken and strategies they undertook. Plus they have launched a blog where they further explore the impact of the big banks and financial institutions on the markets and us.

They haven’t provided all the answers to the questions I’ve still got and there are still a fair few holes I want filling.

But it is becoming clearer that the figures never really added up, so why is it only now that we’re hearing dissenting voices?

Numbers still give me a headache. But it is the lack of words that I’m finding really difficult to understand.

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2 responses »

  1. Ursula says:

    Paul, if you had gone fishing with the piece you wrote you couldn’t have hooked a bigger catch than this one.

    Let’s leave aside that, until twelve months ago, I had a mortgage with Northern Rock. As you say, the figures do not add up and the hysteria over what, to anchor on just one of your points, was a hugely inflated housing market has the hall marks of the usual siege mentality of these isles.

    What rocks my boat is that the big banks who – judging by their charges – must include me into their every night ‘s prayer: “Please let Ursula go over the agreed overdraft limit tomorrow morning – that’ll net us a nice £38.00 a shot.” I’ll spare you the sob of this story.

    Yet as soon as the banks’ own koffers are empty they send a begging letter to the government and, what do you know, they get bailed out without so much as a tear stained tissue, and the taxpayer coughs up to soften the blow.

    Paul, I could tell a story that is so mind boggling as to what the financial sector is capable of it would probably make headlines, a small fortune for me and secure me a seat on the sofa of some breakfast programme.

    Unfortunately I can’t since I don’t want to embarrass my son as to his mother’s glory – now derailed.

    U

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