He who doesn’t know history is destined to repeat it…


In 1837 Andrew Jackson had just ended his second term as U.S. President and when asked what was the greatest accomplishment of his presidency he replied “I killed the bank” referring to the formation of a “2nd Bank of the United States” which was the second US Central Bank. Jackson had this to say about the bankers and it is every bit as true today as when he said it

Andrew Jackson Central Bank"Gentlemen, I have had men watching you for a long time and I am convinced that you have used the funds of the bank to speculate in the breadstuffs of the country. When you won, you divided the profits amongst you, and when you lost, you charged it to the bank. You tell me that if I take the deposits from the bank and annul its charter, I shall ruin ten thousand families. That may be true, gentlemen, but that is your sin! Should I let you go on, you will ruin fifty thousand families, and that would be my sin!

”You are a den of vipers and thieves. I intend to rout you out, and by the Eternal God, I will rout you out… If people only understood the rank injustice of the money and banking system, there would be a revolution by morning."

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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

Under the Microscope: AIG’s Second Chance


AIG says it will repay, in full, the $182 billion it was lent by the American taxpayer BUT it has a long way to go to rebuild its reputation…and the new financial world that they have created is a pretty uncertain place!

“I would not call [the bailout] a success,” says Wharton insurance professor Kent Smetters, “but the alternative is always hard to assess.” Even though the taxpayer may eventually not lose in this case, Smetters worries that the AIG bailout and other post-crisis government actions “have likely worsened the [too] big-to-fail problem”

via Under the Microscope: AIG’s Second Chance – Knowledge@Wharton.

Complexity lessons from nature for a better economic future…


Here is a very brief snippet from a recent article in ft.com. The writers, who form an, apparently, unlikely combination, are Andy Haldane, Executive Director for financial stability at the Bank of England, and Robert May, Professor of Zoology at Oxford University and former British chief scientific adviser.

You shouldn’t really be too surprised because, increasingly in “Corporate America” the realisation is that, rather than environmentalists and others who push a “Sustainability agenda” being the enemy, they have learned through their own performance that embracing Strategy for Sustainability IS transforming their results. And not just because “green washing” was so costly or that their “educated” customers are spending more but because it is genuinely better for their business, stakeholders and the environment.

Nor is this the first time that these unlikely bed-fellows have attempted to communicate a message so important that it is cultivating increasingly inter-disciplinary approaches – joined-up thinking. This is familiar territory for Ontonix. It highlights why Complexity Theory and systems-thinking are THE point at which a new understanding can be applied to begin the process of recovery…this quote may help your understanding of why complexity is so important:

”Imagine assessing the robustness of the electricity grid with data on power stations but not on the power lines connecting them”

.”..The present situation in banking is in many respects perverse. The magic of diversification, when assumed into banks’ risk models, means that large, complex banks often hold less capital than their smaller, simpler brethren. The rocket-scientists building models tell us this makes sense. But the rocket-scientists building rockets tell us it is nonsense. This error has cost the world dear. Through this year, the Financial Stability Board is leading the charge to boost loss-absorbing capital for the largest, systemically important institutions to correct this error. It is right to do so.”

Fund Strategy Magazine: Complexity lessons from nature for a better economic future… In case you thought that “complexity management” is just more mumbo jumbo from the financial sector I suggest that you read the following piece and any of my previous blogs on the subject of complexity. Complexity analysis, mapping and management is available NOW and, if a business leader is intent upon gaining a greater insight into their operations, making more informed decisions, managing more effectively, gaining competitive advantage and “st … Read More

via Get “fit for randomness” [with Ontonix UK]

Noam Chomsky: WikiLeaks Cables Reveal "Profound Hatred for Democracy on the Part of Our Political Leadership"


Cropped version of Noam chomsky.jpg.

Image via Wikipedia

Noam Chomsky , like another of my modern day hero’s, Nassim Taleb, tells it how it is and delivers this superb quote on the current WikiLeaks revelations:

“…one of the major reasons for government secrecy is to protect the government from its own population”

The transcript of the full interview and videos can be found here

However, whilst I interpreted that the above quote specifically related to revelations about US “Diplomacy” it could be that he also intended it to refer to US Fiscal policy. Judge for yourself. Here are his words on that subject:

 

What people are thinking is extremely interesting. I mean, overwhelmingly polls reveal that people are extremely bitter, angry, hostile, opposed to everything.

The primary cause undoubtedly is the economic disaster. It’s not just the financial catastrophe, it’s an economic disaster. I mean, in the manufacturing industry, for example, unemployment levels are at the level of the Great Depression. And unlike the Great Depression, those jobs are not coming back. U.S. owners and managers have long ago made the decision that they can make more profit with complicated financial deals than by production. So finance – this goes back to the 1970s, mainly Reagan escalated it, and onward- Clinton, too. The economy has been financialized.

Financial institutions have grown…

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