FT.com: Financial institutions stare into the abyss


An illustration depicting the shaky situation of financial institutions

The world economy once again stands on a precipice. Finance ministers might want to look straight ahead, but investors are forcing them to peer down to the abyss.

As advanced economies slow sharply and emerging economies wonder whether inflation or recession is the greater threat, the need for finance ministers to find a way to achieve their ambition of “strong, stable and balanced” global growth has rarely been more urgent.

Christine Lagarde, the new managing director of the International Monetary Fund, has urged countries make necessary adjustments to restore confidence.

“I believe there is a path to recovery, much narrower than before, and getting narrower. To navigate it, we need strong political will across the world―leadership over brinkmanship, co-operation over competition, action over reaction,”

Could it be that it takes for the global economy to, once more, stand on the very brink of collapse before common sense prevails?

An institutional culture driven by Greed, Fear and Ego brought us to the edge and has been allowed to prevail as the people who created the problems were “trusted” to resolve them!

Trillions have been “wasted” on sustaining a false market, supporting failed Financial and Political institutions whose flawed philosophies and (morally) corrupt culture were exposed long before the 2008 collapse. They have been allowed to, essentially, micro (mis)manage – nationally and regionally – issues that required an holistic perspective (across domains), clear decisive leadership and macro management. Read more of this post

How complexity spilled the oil


Satellite image showing us the sun reflected b...

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Notice for regular readers (thanks!) I did not write or influence this headline in any way. If you follow the link you will see it is all the work of one of the most authoritative sources global research companies, Forrester, via the, ever reliable, Computerworld who will keep you up to date on IT and general “geekery”.

If the subject matter looks familiar that is precisely because IT IS! I have written about this specific incident in the blog on several occasions and from a couple of perspectives, going back to the days when it wasn’t fashionable NOT to have a daily dig at BP and poor wee Tony Hayward: a man whose, now legendary, gift for miscommunication, could have been learnt at piñata finishing school!!!

They had just placed themselves, respectively, in the positions of “Big bad Corporate” and “sacrificial lamb” for an outraged global population and US administration desperate to find someone to BLAME. WE already suspected that so much of that rhetoric was about deflection…we ALL knew, from the collapse of global banking, that, when it came to Corporate activities, regulation was a fallacy, only an effective smokescreen and that risk management perceived a mere drain on potential profit and bonus potential…therefore tax revenue!

Current societies…are characterised by their extreme complexity at a moment in history in which traditional political institutions have lost much of the power, a power which has now passed into the hands of multinational companies with their relocation strategies. In this situation, a growing deregulation can also be observed which, in turn, redounds in the appearance of new risks and uncertainties.

Ulrich Beck

The best any of us concerned citizens could hope for was that this incident would be, not so much a disastrous oil spill as an inglorious watershed.

The Gulf oil spill of April 2010 was an unprecedented disaster. The National Oil Spill Commission’s report summary shows that this could have been prevented with the use of better technology. Read more of this post