This post is already at 2,500 words and getting rather too long. So I shall call it Part I of a post which was intended to witter on about the tide going out on ‘liberal democracy’ and the global rise of the right.It’s my fault because I kept side-tracking myself and then, getting back to writing it again committed my usual sin of adding bit here and there as I re-wrote it. So if you want to, come back in a few days / weeks for Part II.It cannot have gone unnoticed that in just eleven months and – at the time of posting – fourteen days, the world is in many ways being turned on its head and that the process is just starting.
And I mean turned on its head completely from top to bottom: what was once up is now down, what was right is now left and for many what was once ‘a fact’ is now ‘fake news’. Furthermore, this wholesale disruption will carry on for some years yet before the world has had enough and returns to a period of comparative stability and calm. The most recent development [and this occurred just
two nights ago, and after I first began writing this post] is Donny Trump bombing parts of Caracas and having a hit-squad ‘extract’ Venezuela’s president. Frankly, it was – is as the farce has only just begun – like the script for one of those screwball satires about ‘the President of the United States’ Hollywood produced when criticising the man was not fraught with danger.
Folk who read history will perhaps not be quite as surprised as most by this topsy-turvy turnabout in world affairs as some: they know that nothing is certain in this world except, of course, death.
Throughout history such upheavals, in fact, occur regularly: from the point of view of an ordinary Jill and Joe celebrating the the New Year on January 1, 1914, they will have had no inkling of the cataclysm that was to come just eight months later and ending in what a middle-brow historian composing a piece for one of the weekend paper supplements might call ‘the new world order’.
World War I was – again the line our middle-brow historian might use – ‘a watershed’, but there have been any number of such watersheds over the millennia, many of which in the smug ol’ West be unaware as we tend to think ’the West’ is the centre of the world and that’s where ‘the important things happen’.
For example, anyone a tad surprised by the current latent hostility of China and its leaders to the West should understand that, with a proud history going back several millennia, China was utterly humiliated in the 19th century, not least by Britain when it cynically set about getting more or less all of China hooked on opium to ‘create a market’ and make more moolah.
The lack of any certainties in life is something we are all obliged to learn sooner or later – some learn it sooner, others later thought the wise accept the lack of innate stability and certainty in this world sooner.
As pre-teens we will be upset when we realise that, for example, Santa doesn’t exist, and a little later in life that Mum and Dad – though it’s usually Mum – can’t put everything right as we once believed they could and would.
Then there’s that horrible moment when we develop our serious first crush – and chose to call it ‘being in love’ – but discover that inexplicably the object of our ardour simply does not feel the same as about us. That is when – I should imagine most of us – start to write truly dreadful verse (and chose to call it ‘poetry’).
These are trivial examples, of course, but those certainties are as unavoidable as sprouting our first pubic hairs. Were I writing for the Sunday Times or the Observer – if you live elsewhere in the world, please substitute the name of the middle-class, middle-brow Sunday paper of your choice on which you rely for your opinions – I would describe them and the other such shocks of ‘growing up’ as ‘rites of passage’.
But thank the Lord I’m not writing for one of our ‘serious broadsheets’ because writing a post for this ‘ere blog allows me to show off a little less and still hope to be cut a dash.
If you are unlucky enough not to live in the smug ol’ West but live in Sudan, Libya, Ethiopia, parts of Nigeria, Gaza, Southern Ukraine, Myanmar, the Congo, in one of the less salubrious parts of the United States (of which in that fabled land of milk and honey there are more than the American national myth cares to acknowledge), in Russia or in one of the many, many other global spots where life is not exactly a bowl of cherries, your certainties might be considerably harsher.
So you will have enough on your plate than to take time off to read my witterings. Your troubles will be a great deal more pressing than to cope with the anguish of discovering that Santa doesn’t exist – and what might that say about the Tooth Fairy? No, surely not, not the Tooth Fairy!
. . .
The problem is that all of us, including me, still can’t let go of some central beliefs, however much we like to think we can. So, de facto, do believe there are certainties, to the point that in the still comparatively safe old Western world, we are certain that in the long run ‘it’ll all work out – there might be a hiccup or two, but don’t fret!’
That is rubbish, of course, quite apart from how ‘long’ the ‘long run’ is. I wonder how certain German Jews were in 1933 that the danger had passed when at the November general election the number voting for the NSDAP had declined by just over 2 million compared to three months earlier, from 13,745,800 on July 31 to 11,737,000 on November 6.
Phew, they might have thought, rather too well aware of the murderous anti-semitism of rather too many National Socialist sympathisers, who finally got to give officially sanctioned expression for their hatred on the Kristallnacht.
What will then have been certain to them that they had to get the hell out of Germany and Austria if they wanted to stay alive, though of course, that was not easy all. The few who had already sold up or were trying to do so fell victim to the greed of their fellow Germans, many friends and neighbours, who knew of the desperation of the Jewish sellers and acquired many a valuable business at a snip.
So I wonder how certain Germany’s Jews were in 1933 that they would still be alive and as free as their fellow Germans in 1938? Completely, I should think – did any ever any of them really think they might carted off to be murdered? Of course they didn’t.
In just five years, hundreds of thousands of Germany’s half a million Jews who had not had the foresight to sell up move abroad found themselves banged up in Oranienburg, Esterwegen or Dachau, along with any number of homosexuals.
As I see it and as I fear for the worst in 2026, the world is again to find out just how fast it can be turned on its head. And ironically for that America’s Cretin-in-Chief, Donald J. Trump, can’t be blamed.
Certainly – no word play at all intended – his idiotic behaviour is perhaps accelerating and exacerbating the coming change, but the growing troubles which will hit the world in 2026 can’t all be laid at his door however much I’d like to do so. Most of it has been long brewing.
Forgive me for stating the obvious, but in a sense ‘history’ does not happen overnight and every development is a development of previous ‘developments’ in a long chain of such developments since mankind first fucked up the world.
In theory, a clever historian might convincingly be able to trace the collapse of the Soviet Union thirty-five years ago and thus the eventual rise of Vladimir Putin back to the signing of the English Magna Carta at Runnymede in 1215.
That is a ridiculous example, of course, chosen because it is ridiculous. But it does make a point and is not quite as ridiculous as at first blush it might seem: we can quite clearly trace various legal and political principles back to the Magna Carta and King John being forced to sign to avoid growing trouble with his barons.
Note, being the stupid dick John Lackland was, he more or less then ignored the promises he had made when signing up within months, leading to further trouble. As it was, he died suddenly just sixteen months later, but I don’t doubt that had he not died, the barons would have kicked him out sooner or later.
To flesh out my point, although the Magna Carta did not directly mention the principle of habeas corpus – that if someone is arrested and held, he or she must be brought before a court and to demonstrate what they have done to warrant their detention – but that principle went on to become a central tenet in all legal systems in non- authoritarian countries.
A similar ‘development’ of the kind that pockmark history and are seen as a ‘cause’ of later developments might be the dismissal of Otto von Bismarck in 1880 by Kaiser Wilhelm II, allowing that rather stupid,
tactless, arrogant and self-regarding man – a kind of German Donald Trump – to take over running Germany directly and make all the mistakes Bismarck would most certainly have avoided.
Bismarck was not necessarily a good egg, but he was canny, cynical, manipulative and intelligent, all attributes which Kaiser Bill wholly lacked, and we all know what a mess Kaiser Bill made of Germany and Europe when he took over ‘leading’ the nation.
Historians outlining ‘developments’ in the past leading to the crap which is about to unfold and who are hoping to establish a chain of cause and effect’ will certainly mention the mania of barmy investors of several centuries ago piling into Dutch black tulips.
It was simple: Holland’s black tulips suddenly became the ‘must-have’ for folk with rather more money than sense, so as more were bought, the higher the price rose.
In just five years, hundreds of thousands of Germany’s half a million Jews who had not had the foresight to sell up move abroad found themselves banged up in Oranienburg, Esterwegen or Dachau, along with any number of homosexuals.
. . .
As I see it and as I fear for the worst in 2026, the world is again to find out just how fast it can be turned on its head. And ironically for that America’s Cretin-in-Chief, Donald J. Trump, can’t be blamed.
Certainly – no word play at all intended – his idiotic behaviour is perhaps accelerating and exacerbating the coming change, but the growing troubles which will hit the world in 2026 can’t all be laid at his door however much I’d like to do so. Most of it has been long brewing.
Forgive me for stating the obvious, but in a sense ‘history’ does not happen overnight and every development is a development of previous ‘developments’ in a long chain of such developments since mankind first fucked up the world.
In theory, a clever historian might convincingly be able to trace the collapse of the Soviet Union thirty-five years ago and thus the eventual rise of Vladimir Putin back to the signing of the English Magna Carta at Runnymede in 1215.
That is a ridiculous example, of course, chosen because it is ridiculous. But it does make a point and is not quite as ridiculous as at first blush it might seem: we can quite clearly trace various legal and political principles back to the Magna Carta and King John being forced to sign to avoid growing trouble with his barons.
Note, being the stupid dick John Lackland was, he more or less then ignored the promises he had made when signing up within months, leading to further trouble. As it was, he died suddenly just sixteen months later, but I don’t doubt that had he not died, the barons would have kicked him out sooner or later.
To flesh out my point, although the Magna Carta did not directly mention the principle of habeas corpus – that if someone is arrested and held, he or she must be brought before a court and to demonstrate what they have done to warrant their detention – but that principle went on to become a central tenet in all legal systems in non- authoritarian countries.
A similar ‘development’ of the kind that pockmark history and are seen as a ‘cause’ of later developments might be the dismissal of Otto von Bismarck in 1880 by Kaiser Wilhelm II, allowing that rather stupid,
Bismarck was not necessarily a good egg, but he was canny, cynical, manipulative and intelligent, all attributes which Kaiser Bill wholly lacked, and we all know what a mess Kaiser Bill made of Germany and Europe when he took over ‘leading’ the nation.
. . .
Historians outlining ‘developments’ in the past leading to the crap which is about to unfold and who are hoping to establish a chain of cause and effect’ will certainly mention the mania of barmy investors of several centuries ago piling into Dutch black tulips.
It was simple: Holland’s black tulips suddenly became the ‘must-have’ for folk with rather more money than sense, so as more were bought, the higher the price rose.
As the price rose, greedy investors realised they might turn a pretty guilder by investing in a stock of black tulips, then selling down the line once the price had risen ever further.
As investors bought, the price carried on rising, leading to more greedy investors deciding they could wanted some of the action and they piled in, too. What was there to lose?
As investors bought, the price carried on rising, leading to more greedy investors deciding they could wanted some of the action and they piled in, too. What was there to lose?
Well, everything as it turned out. As was bound to happen, the price bubble burst and prices began to fall ever faster. I cannot establish why the bubble collapsed, but it is the nature of bubbles to collapse when the reach a certain size, whatever the City soothsayers and charlatans insist that ‘this bubble is different’. It isn’t and never will be.
As for the tulips, another universal truth is that fashionistas are fickle as fuck, and like all fashions, black tulip stopped being ‘must-haves’ to become ‘awfully last year!’).
As the price began to drop, the process went into reverse, with owners sitting on a stock of tulips (actually, probably buy contracts which they no longer wanted) selling up while they could and asking ever less just to get rid fo the bloody tulips. So the price fell even more.
That same process of a bubble being created was repeated a little later when stock in the South Sea Company caught the wind, started rising and everyone wanted a taste of ‘a sure thing’. They bought and bought, the stock price when up and up until suddenly no one wanted it.
As the price began to drop, the process went into reverse, with owners sitting on a stock of tulips (actually, probably buy contracts which they no longer wanted) selling up while they could and asking ever less just to get rid fo the bloody tulips. So the price fell even more.
That same process of a bubble being created was repeated a little later when stock in the South Sea Company caught the wind, started rising and everyone wanted a taste of ‘a sure thing’. They bought and bought, the stock price when up and up until suddenly no one wanted it.
So they sold and sold and many were ruined. At root, of course, was naked greed, that desire of ‘something for nothing’. Some, of course, were wise enough to accept a modest profit and got out in time.
A similar greed and neurotic fear of ‘losing out’ occurred in America in the mid-to-late 1920s when all stock
went up and up, then up even more as everything sold. Pretty much any stock they could lay their hands on was bought until of a sudden the market collapsed.
The same scenario played out at the turn of the millennium when ‘the information superhighway’ was sexy and everyone was ‘gaining a web presence’ though I’m not to sure that was how it was described them (and don’t both phrases sound very, very silly just 30 years on?) and America experience the ‘dot com’ boom. That stock bubble also ended in bust and many losing a lot of money
Then came the 2008 ‘financial crash’. At the heart of this was not a stock price bubble, but a house price bubble. Yet there was greed galore, and financiers and investors also lost the plot entirely. This consisted of banks, financial institutions and greedy jokers of every stripe turning a cheap dollar by collecting a commission for every sale of debt they made. Come again, you ask, selling debt?
Well, it had occurred to one wiseacre that there was a market in buying and selling debt – those who held the debt – were owed the money – did not really want to hang on for months, years and tens of years to collect their moolah, so they simply sold that debt to someone else – a dollar in the hand was worth two in the bush.
Then, of course, the various ‘debts’ thus bought were also sold on, and folk began to sell collate them and sell ‘debt packages’. These were known as ‘collateralized debt obligations’ (CDOs) and ‘mortgage-backed securities’ (MBSs). Why would they do this? Well, every time a ‘CDO’ and ‘MBS’ was sold, a commission was earned – the whole sodding point of the exercise.
The shysters in the city went one further: why not try a spot of recycling? So CDOs and MBSs were bought up, split up, repackaged and sold as new CDOs and MBSs and a new commission was earned. It was the mortgage element in each CDO and MBS which was the problem. Everything was fine and dandy while house prices were shooting up. And then, as it had to, it all suddenly went pear-shaped.
Why? As house prices had shot up, more and more folk wanted in on the action: the equation was as simple and as dangerous as with Dutch black tulips, South Sea Company stock and every other bubble – buy now, see the price rise, then sell again and pocket a tidy profit.
A similar greed and neurotic fear of ‘losing out’ occurred in America in the mid-to-late 1920s when all stock
On Black Tuesday in October 1929, this was the safest job on Wall St |
went up and up, then up even more as everything sold. Pretty much any stock they could lay their hands on was bought until of a sudden the market collapsed.
The same scenario played out at the turn of the millennium when ‘the information superhighway’ was sexy and everyone was ‘gaining a web presence’ though I’m not to sure that was how it was described them (and don’t both phrases sound very, very silly just 30 years on?) and America experience the ‘dot com’ boom. That stock bubble also ended in bust and many losing a lot of money
Then came the 2008 ‘financial crash’. At the heart of this was not a stock price bubble, but a house price bubble. Yet there was greed galore, and financiers and investors also lost the plot entirely. This consisted of banks, financial institutions and greedy jokers of every stripe turning a cheap dollar by collecting a commission for every sale of debt they made. Come again, you ask, selling debt?
Well, it had occurred to one wiseacre that there was a market in buying and selling debt – those who held the debt – were owed the money – did not really want to hang on for months, years and tens of years to collect their moolah, so they simply sold that debt to someone else – a dollar in the hand was worth two in the bush.
Then, of course, the various ‘debts’ thus bought were also sold on, and folk began to sell collate them and sell ‘debt packages’. These were known as ‘collateralized debt obligations’ (CDOs) and ‘mortgage-backed securities’ (MBSs). Why would they do this? Well, every time a ‘CDO’ and ‘MBS’ was sold, a commission was earned – the whole sodding point of the exercise.
The shysters in the city went one further: why not try a spot of recycling? So CDOs and MBSs were bought up, split up, repackaged and sold as new CDOs and MBSs and a new commission was earned. It was the mortgage element in each CDO and MBS which was the problem. Everything was fine and dandy while house prices were shooting up. And then, as it had to, it all suddenly went pear-shaped.
Why? As house prices had shot up, more and more folk wanted in on the action: the equation was as simple and as dangerous as with Dutch black tulips, South Sea Company stock and every other bubble – buy now, see the price rise, then sell again and pocket a tidy profit.
Brokers were only too happy to sell the punters a mortgage, pretty much no questions asked, of which the central question was ‘can I / you afford to pay back the premiums on this mortgage?’ Increasingly many could not, but the brokers didn’t care: if and when John and Jane Doe defaulted, they had already sold on that particular ‘debt’ to some other shyster, they had their money so and – well, what the fuck?
And said schmuck had also sold on, as had the next schmuck. Oh, and with a commission earned on each sale. As an increasing number of folk had taken on a mortgage way above their means on the ‘understanding’ that at some point they would sell their house as it had gone up in price and pay off it, the price of houses went into reverse.
As usual the whole number only worked when it worked: so when the price of black tulips, South Sea Company stock and now house prices fell as more and more folk defaulted on their premiums and the properties repossessed. Yet again, everyone was screwed (except those canny sods who had earned a commission every time the Good Lord farted).
One consequence of all this was that the market in debt ‘packages’ also collapsed and everyone with a huge stock of CDOs and MBSs held a fire sale. Except that no one was buying for the simple reason they had no idea what they were buying.
The problem was that the various debts and mortgages packaged and re-packaged many times into CDOs and MBSs were of several kinds – some were ‘top-quality’ debts where the debtor was most certainly able to settle when the time came.
But others were pure garbage, especially rather too many of the mortgages. And who wanted to spend good dollars on garbage.
The essence of the problem was that no one knew which of the debts in the package were ‘good’ debts and which were garbage. So the trade groudn to a halt more or less from on minute to the next as no one now could trusted anyone else to buy debt – even the seller holding the various CDOs and MBSs knew which, if any, were kosher.
That brings us up-to-date: we have a new stock bubble. Everyone and his god with a bit of spare cash is hoovering up stock in ‘AI’, in just about ten or twelve companies AI is the future, see, and AI will pay off.
The trouble is that to date none of these AI companies has yet turned a profit, let alone a worthwhile profit: the ‘attraction’ of AI is still 100pc ‘potential’.
The problem was that the various debts and mortgages packaged and re-packaged many times into CDOs and MBSs were of several kinds – some were ‘top-quality’ debts where the debtor was most certainly able to settle when the time came.
But others were pure garbage, especially rather too many of the mortgages. And who wanted to spend good dollars on garbage.
The essence of the problem was that no one knew which of the debts in the package were ‘good’ debts and which were garbage. So the trade groudn to a halt more or less from on minute to the next as no one now could trusted anyone else to buy debt – even the seller holding the various CDOs and MBSs knew which, if any, were kosher.
. . .
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Here’s a useful diagram explaining what goes on in a stock bubble and why almost all investors get their fingers burned. So will all the AI cheerleaders be the exception? |
That brings us up-to-date: we have a new stock bubble. Everyone and his god with a bit of spare cash is hoovering up stock in ‘AI’, in just about ten or twelve companies AI is the future, see, and AI will pay off.
The trouble is that to date none of these AI companies has yet turned a profit, let alone a worthwhile profit: the ‘attraction’ of AI is still 100pc ‘potential’.
Yippee, you might say. Well, perhaps more fool you. So far those holding AI stock are not exactly in the toilet, but it might any day be a whisker away from being awarded that honorific.
A side irony is that ostensibly Wall St is doing fine – ostensibly being the operative word. Look, folk say the S&P 500 figure is fantastic. Take a closer look, however, and it is just the AI stock price ‘gains’ made by that small handful of tech companies who are ‘doing well’.
‘Valuation’ is simply the stock price multiplied by the number of stock held, but the ‘value’ of a company is something entirely different (and rather harder to establish.)
A side irony is that ostensibly Wall St is doing fine – ostensibly being the operative word. Look, folk say the S&P 500 figure is fantastic. Take a closer look, however, and it is just the AI stock price ‘gains’ made by that small handful of tech companies who are ‘doing well’.
‘Valuation’ is simply the stock price multiplied by the number of stock held, but the ‘value’ of a company is something entirely different (and rather harder to establish.)
Because the ‘valuation’ of those companies is sky-high – a consequence of the ever expanding bubble oa folk jumping in on the AI ‘phenomenon) – it is skewing the actual state of health of the S&P 500. The other 488/90 in the S&P 500 are just bumping along in a pretty mediocre way, but ‘overall’ Wall St is ‘doing fine’.
It is, though, the health of those 498 non-stock companies which is a far better guide to the state of the American economy than the AI outliers.
Will it all end in tears? Stay tuned (but maybe lay off the AI stock).
If you want to read up on why AI might be nothing more than the lateest bubble try here, a piece by JP Morgan bank.
If you want to read up on why AI might be nothing more than the lateest bubble try here, a piece by JP Morgan bank.
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