One view on the future of Christianity

In the last of the present series about the future of Christianity Cheri Blair, wife of former British longest serving Prime Minister and a practicing Barrister, asked the question, why is the Christian Church failing in Europe but thriving in the USA? Only 14% of the population in the USA claim to have no belief in any form of God whereas the percentage is 44% in the UK and 69% in Sweden.

In the programme Cheri did not address the question of the existence of God, or the historical validity of the Bible and the evidence for reported life of Jesus of Nazareth. She started from the basic assumptions of faith, of people with faith attending church. She asked questions of Anglican and Catholics Leaders in the UK and then went on a visit to the USA, speaking to such individuals as the Rev Jesse Jackson and the wife of President Bush.

Three things emerged from the programme. The first was not about Christianity but about Cheri Blair. The programme confirmed my hunch that she is planning a political career, on similar lines to that of Hilary Clinton, or perhaps she is even more ambitious with being Britain’s first elected President when after the death of the Queen Elizabeth, the country decides on radical reform with an elected head of State the abolition of the House as a chamber with titles and disestablishment of the Church of England.

The second is that instead of being a traditional Catholic she is at the forefront of arguing for women to have equality in the church and indirectly she questioned the continuation of the Church of England and even more indirectly the Monarch after Queen Elizabeth. It was evident from what was said that the Catholic Church with the present Pope is retreating even more into the establishing the purity of the faith and against modernism. An old friend from her youth in Liverpool who became a priest comments that the Catholic church has always been against change and that even to day if he took his ministry to prostitutes and gays he would expect to come under fire from within the church in contrast to the reported approach of Jesus of Nazareth. One British Church Leader could offer no explanation why the attendance and active participation was significantly falling.

Cheri suggested that one explanation has been the involvement of Europe in too major World Wars, with the occupations, the impact of the bombing of the civilian population, something with was not experienced in the USA and even in Civil war citizens woman and children, the elderly and sick were not directly affected in general. One has only see to the reaction to 9/11 to appreciate the difference between the experience of the two countries such as the decision not to take action to prevent the destruction of Coventry for example, despite having advance intelligence, because to do so would have revealed the extent to which we had penetrated their communications code. Several thousand were killed and injured un addition to the destruction of the city centre. Such actions, including the holocaust would test faith although there is little evidence in fact that it did, quite the contrary in fact as the churches thrived. Cheri argued that the change in the UK occurred with the freedom of the sixties which were significant greater than girls wearing short skirts and the impact of the contraception pill. For me issues such as the development of weapons mass destruction condoned by the Christian religions, the condoning of racial persecution and intolerance, the acceptance of Western wealth and third world poverty and sickness were also factors which challenged the authority of the older generation of the old order in the UK who I felt then and still do had become hypocrites unchristian.

In the United States various factors have created a different situation with perhaps the most important being the separation of the state from religious beliefs. This meant that traditional faiths could flourish with the establishment of Catholicism as a major force with the waves of immigrants from Italy, Ireland, Poland, Central and South America. Similarly there have been influxes of people of the Jewish faith in the early part of the 20th century and then again before the Second World War commenced and afterwards. Given that many of the early settlers went to the USA in order to achieve religious freedom it is not surprising that Protestants now accounts for over 50% of the population, that there are hundreds of different faiths and that many of the major new faiths originated the USA with each having several million of followers.

There has also been a strong movement, or movements is more appropriate to bring those with different doctrinal and practice preferences together

The consequence of this has been the growth over the past two decades of the mega church community, Cheri Blair visit one which was original established by a small group of young people who were dissatisfied with the religions of their childhood. To day they have created no one but several mega church buildings which from the outside look more like shipping malls or cinema multiplexes arena auditoriums with sating for 20000, cinema seats, large screens and full amplified audio visual presentations but proclaiming the basic and original Christian messages. The establishments provide places for a comprehensive range of activities and for a major involvement in all forms of charitable works. The positive aspects are the sense of equality and opposition to racial and other prejudices and the impression that participation is for as much or as little as individuals want, but the approach is to provide a total approach for life rather than just as religious fix once a week, not different to go to a football match or rock concert, opera and other forms of entertainment sport and group experience, However the feeling that this could be a weekly injection of religion which enabled people to go on with their life as before remained.

The cultures of post World Wars I and II Britain were very different from that in the USA in the same period, but the enlargement of the European Community and globalization does provide the opportunity for new approaches to become established. However I am not convinced that the older established churches, particularly the Catholic Church and the Churches of England and Scotland are able to adapt themselves, or that there is the momentum for the same kind of developments in the UK as in the USA. It would be necessary for the Monarchy and the Aristocracy to removed from government and the disestablishment of the Church of England.

I was awake in time for the Anew Marr Show where Greg Dyke was Greg Dyke and the discussion ranged from Bankers, MI5 and Torture, Margaret Thatcher and Jane Goody. There was a good and balanced piece on the death of Ivan Cameron and the approach to disabled children and support for their parents. I also enjoyed a piece of Radio Caroline and the disbelief some young people have that there was no popular music on the BBC radio and we had to listen to Radio Luxembourg.

I watched part of the League Cup where Manchester |United were not on form having rested a number of key players and Spurs had opportunities to win during normal time and then in the period of extra time, but were hopeless with the penalties kicks failing twice in the first three which Man United took successfully. Prior to this I watched Newcastle lose at Bolton 1.0 enjoying a lunch of roast pork joint and roast potatoes. Followed by grapes. Later I had a gammon salad

During the morning I had felt in the mood for Bach first with the Organ and the well known Toccata and Fugue which is the headline piece on of the first classical Long Play record in my small library, followed by a record of Cantatas, his Violin Concerto and then a two album of the Brandenburg’s. I listened to some Cantatas, a harpsichord concerto and some of the Brandenburg. I am listening to the cello suites 1-4 while writing.

Immediately after the Cheri Blair Programme I was transport to the late Victorian Countryside with Lark Rise to Candleford where the eldest sister of the dress store who was the at the cusp of polite good behaviour and scandal avoidance and the local policeman an authority figure in the community have a brief clandestine affairs during the period each year when the husband devoted himself to garden in preparation of the autumn show and his wife had taken to her bed in a form of protest at her dis-satisfaction with the state of their relationship. Mention of the dress shop reminded of an early episode when a piece of coloured ribbon was bought to brighten the life of the wife of the stonemason who was also feeling under the long marital weather and mothering. As a child I was also fascinated by pieces of coloured ribbon bought to adorn dresses made to pattern by my birth mother who became most skilled although it was an elder sister whop had stayed at home in Gibraltar to make the clothes for the family of seven sisters and four brothers. She used a pedal movement machine just after the war and then bought a small table top model which I learnt to use although only on sewing small patches of cut offs together.

The relationship is ended with the help of the younger sister and other good neighbours and other situations in the episode are nicely resolved to leave the audience with good feelings, including me.

Having complied that Lost had lost some of its integration and cohesiveness with the first episodes, last night was excellent with the back story on Locke’s suicide which was in fact a murder by guess who (Ben), and we find that Locke’s body along with the although Jack and Hurley, Kate, Sayid, Sun Hwa and Ben. The plane is hit by the white light turbulence that is moving the island in place and time and only Jack and Hurley and Kate find themselves back on the Island. In this episode the rest/some of the passengers have crashed on the island and one of them meets up with a female who has been under the custody of Sayid on the plane and mentions that she has found Locke who did cores not member being among the passengers. He says the last thing he remembers is dying. He then flashes back to when we last had knowledge of him after returning as part of the Oceanic six survivors, in Tunisia where he is contact by Charles Widmore who explains that he was on the Island but ejected by Ben and that the six need to return in order to prevent catastrophe with Ben at the heart of the trouble and offers to help him find and persuade the others to return together, giving him a false identity and a helper. Locke meets resistance from everyone contacted and then his helper is killed, (he learns by Ben subsequently) who comes to hospital where he has been taken after the shooting and subsequent car accident and where he is the process of committing suicide. Ben stops this, is given information by Locke where upon Ben strangles Locke and fakes his death as the suicide he was originally attempting. Back on the Island after the crash Locke goes to see some injured survivors and this includes Ben. One of the other passengers asks, do you know and him and Lock utters what will become of the great lines of TV drama. Yes. He killed me!.

The future of the Monarchy and Mr Paul Burrell

Is the UK heading for a Republic when Queen Elizabeth dies? Long then may she reign. This thought struck me not because of media interest in the inauguration of Barack Obama as the next President of the United States but the way the media has featured to attitude of Prince Phillip with his slitty eyes comment in days long since passed, then Prince Harry with his Nazi fancy dress and then suddenly bringing to light a three year old video of him calling a colleague a popular race name among a large section of British folk, then Prince Charles reported as doing something similar in relation to someone at the Polo club. Despite apologies and defences the matter has continued to be discussed, as it was on Question Time Thursday, and the behaviour condemned by heavy weights of the three main Political Parties. By coincidence, I presume, there was also an interesting, but purpose odd programme, on the former butler of Diana, former Princess of Wales, Paul Burrell during which serious allegations against a member of the Royal Family were resurrected..

British Politicians and media have always been understandably two faced on the issue of race. I say understandable because it is morally right and socially desirable that in principle everyone in the UK is treated with fairness and given similar opportunities regardless of their racial ethnicity, their country of origin, their parental background and present social status. It is wrong in principle for anyone to be handicapped because of the colour of their skin, because of their parents or other family members, because of their religious and political views, their sexual orientation, where they live, or how they spend their time and money.

I say in principle because their are some exceptions to everyone being treated with fairness and not handicapped by their behaviour. However this does not refer to their colour, or parental background for example but to what they have personally done or not done in the past. Someone who has committed murder should be viewed with continuing suspicion whether they are in prison or not. They should be given the opportunity to demonstrate that they have reformed and able to fit back into society and be eligible for its privileges. Because they have completed a prison sentence does not mean that their slate should be automatically wiped clean. Similarly if someone has been guilty of fraud or straight forward stealing money, they should understand ongoing caution about them being put into any position where they have access to or control of the funds of anyone other than themselves. Human beings can fundamentally change their behaviour, their beliefs and the language they use, but it is wise to be cautious about anyone with a pedigree of crime or anti social behaviour. There are issues in relation to their marital partners and their children which will affect ho society responds to them as parents.

What I object to, and believe is counter productive, is when politicians, the media and others in public positions try and pretend that the UK has not been a racist country or pretends that racism and other forms of prejudice has not only be ingrained into every aspect of British life but continues to thrive. I have met tens of thousands of people in my lifetime and I have not met anyone who is not prejudiced about something or someone. For a decade in Germany almost everyone was not just members of fascist organisations but supported Hitler and Nazism, just as the majority in Communist countries believed in Communism and supported the Russian style of state authoritarianism. And these beliefs did not just suddenly stop when Germany surrendered in 1945 or the Berlin Wall was demolished. A large number of people continue to hold their beliefs until the day they die, but also learn to keep their views private, preferably to themselves. Remembering the Jesuit principle of give me the child for seven years and I give you the adult, by the time most children started school in the UK in the last century their beliefs and attitudes were already fashioned and it is only within the past decade with the significant growth of nursery education that new generations will not be imbued with the beliefs and attitudes of their parents to the same extent as previously.

Therefore it is important that politicians, the media and those in authority continually reinforce what is acceptable and what is not, while understanding the extent of the problem and the nature of the change required. It is especially difficult for some whose lives are under constant scrutiny, and where a lot of money can be made by disclosure, to be always on their guard against saying or doing anything which will be interpreted as offensive or unacceptable to some section of society, or to their contemporary society in general. I am therefore surprised and disappointed that Prince Charles and one of his sons have not yet grasped that even in their private society it is important to avoid statements and behaviour which will cause offence and more importantly further undermine the likelihood of the monarchy surviving Queen Elizabeth. At a stroke all the good work of military service and good causes has been undone.

This brings me to the programme on Paul Burrell. There was an air of revolution in London and around Britain when the former Princess Diana died. It has taken a decade for the combined efforts of the Monarchy, Government, the UK media and two dodgy enquiries to reach the position when for the time being other issues have replaced nationally expressed concerns about her death. Even Mr Al Fayed appears to have dropped his efforts to establish the truth.

I have had and continue to have reservations about the way Paul Burrell portrayed his relationship with Princess Diana, having read the first of his two books and viewed his TV appearances, and followed what happened at the Trial. His semi banishment to the USA where it appears he is doing financially well, seemed a fair outcome for everyone and I assumed that was the end of his influence in the UK over the life and death of the Princess and the future of the Monarchy.

The one hour programme on Channel Four on Thursday Paul Burrell: What Really Happened, is part of a new series with presenter Jacques Peretti. Now who is Jacques Peretti?. I am always suspicious about individuals who poke their noses into the lives of other people in such a public way and yet do not reveal much about themselves if my Internet and Wikipedia search is one indication. To-date his TV programmes have been about sex and the effect of Hitler upon popular Culture; he has written, produced and directed one programme in the IMD database, written and directed a second and produced two others before this new series which I understand will also cover Michael Jackson and Amy Winehouse. The list of references in the Guardian to his writing is more extensive both in subject and quantity.

The focus of this what really happened is the trial where Mr Burrell was accused of taking without authority some 300 odd items belonging to Princess Diana from her home. In the programme Mr Peretti seemed to me to be implying but then backtracking that the main reason for the original police raid was a tape which was said to have been made by the Princess when she visited a former employee of the Royal Family who claimed he was raped by one of its member’s. Mr Peretti also implied but also backtracked that a deal had been done in which Paul Burrell left the UK and limited what was subsequently said to the public in exchange for the memory recall of her Majesty reported to the court shortly before he was due to be cross examined. The programme also reminded of what Mr Burrell was reported to have said following his appearance at the Inquest. The programme ended with Mr Peretti posing the question: Did Mr Burrell know something which would blow the Monarchy out of the water or was he a clever bluffer?

Mr Peretti revealed that the outing of Mr Burrell’s alleged relationship with a man living in Australia had come from the Palace. However he also stated that the reason why the British media turned their fury on Mr Burrell was not out of deference to Palace wishes but because he had sold his story to only one Fleet Street (national) newspaper. Mr Peretti also obtained interviews with the father and brother of Mr Burrell who were both upset at the lack of contact, especially the lack of any invitation to visit in the USA. Mr Peretti arrived at the shuttered home of Mr Burrell to find a car pointedly outside the garage to signal that he was home but not for you. One assumes that the programme did contact Mr Burrell or his agent in advance at some point. The programme did not say if there had been a private meeting subsequently, if the visit outside the property and the non appearance had been pre arranged. I was left wanting to know more about Mr Peretti and his methods. Oh you cynical you.

I was left with the feeling that something is going on within parts of the establishment in which the future of Britain as a Monarchy after the Queen is being best questioned, tested, and alternatives planned.

I have watched four hours of American Idol over two days. What is said to be the biggest season so far is being compressed. The problem is that people have become bored with the preliminaries. We are not impressed by sights of thousands of people surrounding the auditions and most of us are embarrassed by the humiliation of those who cannot sing, and disinterested by those who know they cannot sing but see the programme as the opportunity for personal publicity. Most of us can see through the formula of carefully selecting most of the possible finalists for exposure, especially if they have a moving story to tell, they are young, have some quirk such as being the brother of the third runner up of the last series. Those behind the programme need to devise a new formula for the preliminaries.
As I walked to Smiths on Thursday I attempted to count the number of paces and estimate that the total for the outing was between 3250 and 3500 about a quarter of the activity required each day. I am determined to maintain this quantity while the weather continues to be cold. I mark my intake of nutrition fair to good.

I was interested by a series of articles in the Daily Mail by Paul McKenna on the subject of sleep. Foe those who want to have a normal sleep pattern of eight or so while it is dark the advice not to have naps during the day is obviously a sound one. Going to bed only when you are sleepy and not staying in bed getting worked up about not sleeping is advice I have been following with good effect. What continues to upset is when I am in the half and hall zone tired but unable to sleep and tired but unable to work or become engaged in something worthwhile

When one eats and drinks and what one eats and drinks are important factors but alas the rule not drink anything with caffeine some eight hours before bed time is a definite no no. My present diet is a good one a d I have banned Pepsi Coke. If I drink alcohol my body reaction follows the standard pattern of being sleepy and sometimes sleeping well on the settee in front of the TV and then I usually am fully awake and mentally active,

I agree with not trying to sleep just after I have watched something interesting on TV or completed a piece of writing and I sometimes do the washing up and sorting out of food for the following day but making a list is usually counter productive. My sleep environment is a good one, dark and quiet although the air surrounding the bed is sometimes too warm when I forget to switch off the hearing about an hour before retiring. However for me the problems are mental as well as physical,. I am sure the techniques and exercises outlined in the four articles of varying length and quality will be helpful to many. In my instance it is about management enable the maximum use of waking time and just with the issues of weight and exercise it is a question of will and application.

What went wrong with British financial institutions

Last night there was the first of a BBC 2 programme covering the bank crisis which led to the collapse of the financial system and economic meltdown around the world. The programme commenced with how the banking system came from China to Venice via Marco Polo where he had found that traders used paper, ‘flying money’ to represent the value of goods rather than transfer gold and silver. It was a short step from the use of paper money to want to charge interest and this posed a problem for the Venetian Christians, for as every Christian knows, money lending and charging interest was prohibited by Christ as recorded in the New Testament. The Venetians got around this by getting the Jewish Citizens to undertake the system for them which became established in the stalls at the Rialto hence the term Banco for Bank and which I understand is the word for stall. It was later that fixed premises were established to conduct financial matters of this nature in Florence, Lombardy. (Lombard Street in the City of London became one to the key address in the contemporary financial world).

The Programme had commenced with the loss of the first Mars probe which resulted in the rocket space craft gaining speed instead of slowing as it approached the Red Planet and 125 million dollars disappeared into space. The cause was a communications human error by those ordering the craft and those making the craft misunderstanding the specifications. This reminds when in Cheshire 1971 1974 during the creation and development of the first social services department in the county, a new residential home for people with learning difficulties was purpose built and cloakrooms were included with wash basins but with without the toilets which had been intended.

Evans Davis, the well known BBC financial expert, and author and presenter of the programme, The City Uncovered, Banks and how to break them, used this example of rocket scientists losing the plot for two reasons as those who devised the complex trading systems on Wall Street became known as the Rocket scientists and in their case it was not a hundred billion dollars that was effectively wasted, but hundreds of billions. Was the 2007 and 2008 financial crash the result of human error, of greed or the system being too clever and too fragile for humans to master at this time?

Mr Davis then explained that how the banking system as it developed two arms which converged with the development of computerised technology. Most people are familiar with the activities of banks on the High street although it was not until my care mother was 90 and my birth mother 92 that they held cheque book accounts for the first time, having relied on the Post Office saving accounts when they first came to England and then the building society for the purpose of savings. For the every day payment of bills and settlement of monthly accounts they used cash which my birth mother kept in envelopes.

The High Street bank was regarded as one of the symbols of British steadfastness and security. You could deposit money from earnings for the regular payment of bills and through cheque books for one off expenditure items and transfers into savings accounts which earned interest. You could borrow money to buy a homes or a car although Buildings societies and specialist car loan firms where the more likely call for the average individual and family. Banks were seen more as places which handled the finance of businesses and large corporations and provided them with the funds for expansion and to covering operating expenses. The bank card and the credit card changed the position in relation to individuals and families.

The second development was previously explained in the Nial Fergusson Ascent of Money series that the investment banking system was established in France by a Scotsman, prior to the French revolution, trading in shares and then in stocks and currencies and how the merging of these two functions coupled with the use of increasing complex computerised mathematical systems created the present collapse.

The BBC 2 programme then looked at the collapse of banks, Northern Rock and Lehman Brothers, one a traditional building society which became a bank and then an investment and trading bank, and the other a traditional investment bank which became involved in the property mortgage business. The two former chief Executives have been called to account by the respective political bodies of their countries. Both financial institutions commenced in 1850, a significant period in the history of my maternal family in Calne, The Northern Counties Building Society was established in Newcastle with the purpose of taking deposits and lending out money for people to buy domestic properties. The Northern Rock as it became re-branded, remained basically doing this until 1997 when to had become a highly respected and significant employer in the North East.

At this point it is important remind the essential nature of this form banking which is to lend long and borrow short. The money is lent for long periods at a higher rate of interest than the banks is prepared to borrow money, which is short, that to take your savings with the promise to pay back on demand instantly, or with notice for which a higher rate of interest is paid, for a week’s notice, a month, a year or for longer but usually not for more than three to five years in the form of a bond and sometimes with an interest bonus designed to encourage the investor not to cash in before the required period. This however means that even though there is a flow of income from loans previously made should everyone who has lent short term seeks their money back, the bank in question could find itself insolvent because no bank or financial institution, or business for that matter likes to have capital in the form of cash, liquidity the technical term, held, and not earning some income

The banks also have share holders who expect dividends and the value of shares reflects the value placed on the bank by the financial market and which in turn is influenced by profits which the bank makes on the difference between the interest it charges and the cost of the cash it needs to issue further loans and ensure it can meet its operating costs and fluctuations between the level of income from investments and repayments and interests and the demand for new loans.

Given the principle of lending long which means it does not get its money back for decades, but it borrows short which means that if required to pay back suddenly and at less than long term value and with limited cash reserves banks are always at risk and vulnerable. This is not something generally appreciated by the public until recently, who I believe that the bank held the actual money which they had deposited with it.

Say a bank lends £100 million in mortgages to be repaid with interest in 20 years which will yield £200 million in total and does this every month. It has cash reserves of £10 million in relation to each month’s of new lending and capital assets but selling all its administrative buildings will mean the end of trading and take time to find a buyer and the if required because of an emergency the price obtained will be significantly less than at times of its making.
It order to finance new loans the bank has to borrow money which traditionally would come from money parked very short by businesses and public bodies such as local authorities, and individual savers.

Over the recent decade the volume of new savings was reported in the programme to have increased by 2% a year while the demand for new loans for properties increased from 10 to 15% approximately (I am not sure about these figures which I think applied in the UK rather than the USA), Moreover the banks had been searching for new ways to make themselves more secure especially as they were only allowed invest in the most secure of investments, I believe with a triple A rating which excluded investing is most if not all the stock market however much blue chip,

It is now appropriate to turn to Lehman Brothers which according to the programme commenced in 1850 as a store in Montgomery Alabama and which at the time of its collapse had a workforce of 28000, including 5000 in a tower at Canary wharf London. It had become one of great financial enterprises in the world, because early on in its history the brothers had started to trade in cotton, then moved into the railways, financing the once great store chains such as Woolworths, and into financing Hollywood Pictures with, RKO and 20th Century Fox, then the production of television sets and financing Intel the computer chip giant.

In the 1970’s there developed on Wall Street the way, it appeared, of lessening the risks which all banks are subject if the short term borrowers come knocking for the immediate repayment of their money. There are three steps in the process. First the bank borrows wholesale from other banks rather than individuals, say £100 million and this enables the bank to loan out to buy houses say at an average of £200000, that is to 500 customers, on a monthly basis. Under the old model it would retain the property deeds so if the loans went bad it had the property to sell. It established rules which attempted to identify potential bad risks and ensure that the value of the property, bought if immediately resold would bring in more than was lost in failure to make repayments and the interest.

The new development which I believe is called C.O.D Collateral Debt Obligations (the collateral is the property and the debt the loan) were then sold. The programme gave the example of David Bowie who on reaching his early sixties decided to sell his expected royalties over the next ten years from his previous work, calculated on the basis of returns over the previous decade. He did so for £55 million in the form of bonds which those purchasing getting royalties and interest. He preferred to have use of the funds now, less than he would actually come in while those buying Bowie bonds were promised a higher capital return and interest.

What banks did was to do this with mortgage loans, but to do so using the latest computerised technology devised by mathematicians some of whom once worked on the space exploration, The programme revealed that the prospectus documents can run into two hundred pages, Moreover the C.O.D were not just single packages of all the new loans made in a month graded according to assessed risk levels but mixtures which each C.O.D offering a different mixture. Working out if the promised investment return was likely to be realised and if there were risks was difficult to impossible.

Everyone started to make money, lots of money because the sellers, were getting in money immediately not just for the value of the loans repaid but also the interest that would be paid in, but they offered the paper at discount to allow for some bad debts and that the money would be repaid long. The banks also got rid of the bad debt risk which became the responsibility of the of the purchaser of the “securitization“. The selling banks had increasing amounts of cash to make further loans, to pay higher dividends and to reward employees with higher salaries and bonuses some as much and more than the basic salary. Those buying the C.O.Ds such as Hedge Funds and Local authorities thought they were getting a good bargain because they were holding the paper for assets which when repaid with interest was significantly greater than their current market value. If individual defaulted the property market was such that the asset sold would be worth more than the outstanding debt. The person or company that borrowed the funds to buy property, often to rent out in the UK was also not worried because even if the receipts were less than anticipated the asset was increasing in such value if sold they would have profit over the debt.
.
Then the situation became even more complicated as the financial rocket scientists worked out even more complex C.O.D which involved the reselling of packages of C.O.Ds known as C.O.D squares.

However even though there was a boom in getting loans for properties these were not enough to satisfy market demand and the profits and bonuses required. It was at this point the idea of giving loans to those previously denied them, called the sub prime in the USA was developed and using self certification of income, offering very low interest repayments over the first couple of years.

In 1997 Northern Rock became a bank with shares quoted on the stock exchange and all its savers were issued with shares which if sold gave a all profit. I was someone who had saved with Northern Rock and subsequently cashed in the shares. Northern Rock had a forceful creative shaper leader as Chief Executive who seized upon “securitization“, as they knew financial tool was called, and increased the banks share of the mortgage market from 2% to 17% making it the third largest mortgage lender in the UK. It offered a package of Mortgage for buying a home extra cash and a Credit card all with the same rate of interest.

Contrary to some media reports Northern Rock did not then issue loans to buy properties on the same basis as Lehman brothers and Bear Stems for example. What it did was to act as an agent for Lehman’s, for which it was paid a fee and therefore the high risk was taken by Lehman’s who made the funds available and by those who subsequently bought the C.O.D. Northern Rock was quite open about this saying in its annual report that among its services was to help arrange sub prime loans and self certified loans. It could therefore advise customers what to do if they did not meet the higher North Rock lending criteria.

A combination of developments created the crisis in individual banks. When banks offered a C.O.D they were offering a new paper security which was required to meet standards set by national governments through its regulatory agencies and with each security graded. The problem was that these regulation authorities were paid a fee not by the prospective purchaser for an assessment as we in the UK might use the A.A when buying a car or asking a valuer to assess a property under consideration, but by the seller; moreover instead of being able to lift the bonnet and inspect engine, or view the recent stock market history of a share or a stock, or examine the individual property being purchased, they were confronted with a detailed specification with mathematical formulas which it is now evident those creating them did not understand the risk. Next the banks themselves began to be buy the C.O.Ds thus getting profit twice. The profit from selling the C.O.D and the profit from buying it. Then the housing market plunged and those involved, the banks and their traders began to panic and rumours and fears bred fear not to be the one to be caught out first.

Then in September 2007 the great run on Northern Rock was created and the news programme showed lines of customers waiting outside its branches. One of the reasons why the customers became so visible was because of the shift away from lots of branches with lots of small and not so small savers to the issuing loans of via telephones, the internet and post buying in new money wholesale from other banks. I did this on my last loan and no face to face contact with anyone. Northern Rock was a target because of its runaway success, so when banks started to become more cautious about loaning money to other banks Northern Rock came under pressure and news of this led to demand to withdraw deposits and the government deciding to back depositors to a certain level leaving shareholders facing massive losses.

When The Chief Executive of Northern Rock was quizzed by a House of Commons Committee he was asked the question. When did you qualify as a banker? His reply was I did not qualify as a banker, and he could have added I trained as general manager and chief executive. I was reminded of the time at the International General Management Course attended in the mid 1980’s when asked if I was interested in becoming a Chief Executive of a local authority which then did not provide Social Services as one of its functions. I quickly thought about it and decided that I would stick to the knitting, doing what I had trained for and become an expert through long experience, but also decided to use the knowledge gained from the course to become a better manager and team colleague, and perhaps take on the challenge of a larger and better paid social service authority.

The former Chief Executive of the Northern Rock was also asked what could he have done, with hindsight, to have prevented the disaster and he was unrepentant, It was not his fault and this brought condemnation in the media. The former Chief Executive of Lehman’s adopted a different approach and admitted he spent his nights going over what happened and trying to identify where a different decision might have prevented the collapse. However this did not save him from the comment that he was regarded as the villain and not the victim, He and others are now to face a Grand Jury.

My understanding is that then reason why Bear Sterns was the first to nearly fail but was rescued and Lehman’s was allowed to fail is that they held more of the sub prime and self certified mortgages than other institutions and when the storm clouds gathered they were unable to offload as part of new C.O.Ds. I suspect the personality and approach of the both Chief Executive’s played their part, together the different approach of governments and different election time tables.,

But should the bankers alone be standing trial the media dock? The first question goes back to Pre Marco Polo Times and the fundamental point that what are people doing calling themselves Christian if one the of the main points made by Christ was that money lending for interest is wrong?

I am less convinced about the responsibility of governments whose functions is to provide for national security, to assist everyone to make money to provide for themselves and to provide help and care for those unable to look after themselves or their families. Given the economic failure of the communist/socialist model it is understandable if the democratic countries rooted in capitalism embraced financial innovations which appeared to eliminate boom and bust and to offer an ongoing economic growth which while enabling some individuals to become very rich provided the fund for the development of improving standards of living for everyone except at the lower 10 to 20% and with sufficient to also assist the less developed countries.

Similarly the function of Chief Executives and Boards of Directors is to protect and increase profits for dividends to the share holders. I can understand why traditional banks, especially those who were building societies became caught up the world of C.O.Ds and investment banking, and why investment banks became involved with the tradition functions of building societies and High Street banks and became involved in mortgage lending such has been the demand for mortgages.

I can also understand why salaries and bonuses escalated. If one successful firm pays x for the best managers, then it is inevitable that X plus 1 will be paid to attract the same calibre of managers to those firms seeking to achieve similar or better status and profitability.

Anyone who has lived in rented accommodation knows the difference in the sense of freedom to and the self confidence that paying to own property brings so, I have more sympathy with the USA approach to lend to the sub prime and for the right to buy local authority accommodation in the UK than I have for the development of the private landlord on either side of the Atlantic.

I also have sympathy with the position of the regulatory authorities and even for the financial rocket scientists who tried to work out systems which enabled everyone to make money while reducing risk. Individuals who knew what was going on and still went ahead or operated frauds clearly should be tried and judged as appropriate and when the crisis is over understanding what happened and where different choices might have avoided what has happened needs to be investigated in depth in order for everyone to learn for the future.

I am not in favour of scapegoating in principle I have argued that human beings tend to look for and need scapegoats to take away the blame from populations in general as in the Baby P case with the head of service, or the show trial which is the basis of the film- The Reader. However I also accept that the scapegoat can be a safety valve which prevents community disorder and revolution.

The emphasis has to be re establishing confidence and getting the economy moving forward again in concert with all other advanced economies. It struck me while writing that if the 28000 staff of Lehman’s had a total annual income with bonuses of only 100000$ that is close to 3 trillion dollars out of economy. A proportion of these will face loss of their main living accommodation and they will not longer be able to afford the other aspects of the current lifestyle, holidays, private education and medical insurance, new cars, lots of meals in restaurants and visits to top notch sport and entertainment events. But the 28000 at Lehman’s brothers is just the tip of job losses on both sides of the Atlantic and at 100000 job loess and then 1 million job losses one can begin to see the domino effect on economies.

Yesterday at Prime Minister’s Question Time the Conservative Party Strategy for the next 18 months before the next General Election became clear. Continually remind people who is to blame politically for the economic situation. not the bankers, the Hedge Fund managers and the public for borrowing too much, but the Government for not stopping what has happened. This is a valid attack if not fair because all government regardless of their party politics are in the same boat. It is a matter of debate if Barrack Obama would have become USA President if the financial crises had been delayed a year. Although in the .long run the absence from office may be upsetting to Republicans who would have been in the administration, from the longer viewpoint, they know that it will be difficult for a Democratic administration to survive the next four years and the worse it becomes the better politically for Republican party. The one difference is the personality of the next President, and if his party in Congress get behind him and his Ministers then an eight year term and further terms become a good possibility. Thus one can expect the Republicans to start to emphasise the political differences between them and the new administration.

This is the second prong of the Conservative attack. It is to argue that while Gordon Brown has set his stall out as a do something government, accusing the Conservatives of a do nothing party they are pressing him to show what his measures have achieved so far.

This is a very dangerous strategy and potentially damaging not just for his party but to the country. It is potentially not just unpatriotic but reckless, As one previous President said at his inauguration there is nothing worse than fear itself. By continually criticising everything that the government is doing regardless whether it brings immediate result or does not, the Conservative Opposition leaders are at risk of ensuring that the action does not work by spreading fear and the lack of confidence. They may gain popularity in the media polls but at what long term price?

I did a little work and have not mentioned before that I have achieve 8000 work sets and officially one third of the project has been completed.