Denying Reality: Financial Markets on the edge

It's not healthy to deny what is happening around you. Reality is more than just perception, it is what happens while you ignore it until some event forces you to reconsider that perception.

However, the financial markets are built on perception and that has given us the boom in property prices here in the UK and in the US, plus the dramatic "credit crunch" we are now experiencing. Northern Rock was the prelude, a little taster of what was to come. The real performance started this year on Wall Street: the collapse of Bear Sterns with its rescue with public money, the nationalisation ("Conservatorship") of Fannie Mae and Freddie Mac, and now the imminent collapse of Lehman Brothers bank and perhaps the buyout of Merril Lynch.

All these institutions got in to their current predicaments by short term thinking, using massive bonus to reward investments with no long term viability. This was fuelled by irrational group psychology of the trading floors, which in turn is fuelled by testosterone. This clouds the perceptions of not only the dealers but the executives who control the organisations. As one investor has commented "Lehman tried to deny reality until the bitter end."

"Competition and growth" are the bywords of free market capitalism, not "co-operation and sustainability." Competition is a masculine mindset, the same testosterone fuelled psychology that bought us the zero-sum game.

Will it change? That depends on how cynical you are. Hope is normally lumped together with Idealism by those who prefer the status quo. But if the credit crunch tells us one thing, it is that if you live by the market; you die by the market.

When all we had was our labour-power to sell, we banded together to form labour unions. They worked so well that by the 1970s they were too powerful for the ruling elites. The pendulum has now swung back towards the property owners. Capital, the financial markets are all powerful and it seems there is no way we can change things. But we can: We own the means of consumption.

We can choose to borrow. We can choose what to spend our money on. We can even save it. If this financial crisis proves anything, it proves we can take control of the financial markets by withholding our participation within them. By choosing how and where we spend our money, we can starve the markets of what they need: financially ignorant players from whom they can fuel their cancer-like growth.

Change is in our hands. What will we do with it?

An economic aneurysm

Channelnewsasia.com: "Some view the rise of China as 'simply an economic threat to the advanced industrial economies' and sought protectionism against Chinese imports.

'But let us be clear that this is only a sterile attempt to stop the clock and resist inevitable change.

'China has been responsible for keeping the world economy growing as the advanced industrial economies went into a downturn.

'Indeed, without China, trade growth which slowed more than at any time in recent world downturns would have ground to a complete halt or gone into reverse,' he said"

China's prodigious growth has kept global growth going even through the major down turns of the last 10-15 years.

But what will happen when China has its first depression? When this bubble, this aneurysm, bursts, the rest of the world will suffer -- and it will hurt us all.

It is time to stop the pyramid scheme of capitalism. Stop the osmosis of exchange value. We need to stop excluding people from life and start including.

Spreading the cult of the individual

Africans' new motto: 'Charge it' | csmonitor.com: "She also sees how credit cards might lead to the end of two support groups she belongs to. They're called kiamas - and are part of the communalism that dominates many African cultures. Every month, each member puts $15 into a collective pot. Then, on a rotating basis, one member gets the whole amount and uses it to improve their lives. Otieno has bought carpets, cutlery, and other household items. But someday she might not need the kiama anymore.

'The kiama thing is about relying on each other,' she says, 'but credit cards make you so independent.'"

Where are we going? We are indoctrinated to believe that we do not need others. We rent money with credit cards in order to buy individualism. We're are being turned into sociopaths for the sake of profit.

Steve Breyman: Against the Selfishness of the "Ownership Society"

Steve Breyman: Against the Selfishness of the "Ownership Society"