By the train station in Harrow a solitary crane rests as a bookmark in what will hopefully one day be completed flats. Meanwhile TfL are putting fares up by 12.5% next year to fill the gap in revenues created by all the unemployed ex-commuters. Banks won’t give us any more mortgages, and the UK is massively in debt.
Apart from what I can see and read of this recession I feel very lucky not to have been too adversely affected. I went into this recession with no money, pension or house to lose and I feel relatively safe, for now, in my pseudo- public sector job (famous last words). I even feel quietly optimistic. So much so that on Saturday the family went to the theatre, followed by dinner, to celebrate my mum’s birthday.
Can you tell what we saw yet?
We saw David Hare’s The Power of Yes.
The Power of Yes is a story about a playwright trying to understand and make sense of the financial crisis. It is, as he says in his Lunch with the FT interview, not about ‘banker bashing’ but the ‘culture of banking’ – caveat emptor – if someone gets burnt by a deal then it’s their own fault. Too right.
It is a fascinating story that Hare tells with fast paced humour and a suprising clarity given the complexity of the subject. To think, the whole idea of buying up debt and calling it an asset to be able to gain leverage to trade in more debt is fascinating. It also goes some way to debunk the idea of a grand conspiracy by bankers. Hare shows that bankers genuinely believed they were eliminating risk from these trades by divorcing the origin of the debt from the holder, and that if in the right place at the right time you could have made millions.
The characters of the story, the financial regulators, the politicians, the bankers, the Harvard/Goldman Sachs/FT triumvirate, all have a chance to defend themselves or pass the blame onto another “tribe”. It is more like a lecture than a story but here the line is blurred. It is an entertaining lecture nonetheless.
Mr Hare himself comes across as an interesting person in his Lunch with the FT. I am intrigued by “his interest in turning business into literature”. To read the FT during the week certainly does require a suspension of disbelief on my part as I try to fathom what goes on inside their heads when people make deals. The FT has attuned my sensibilities somewhat. It strikes me that there is a great capacity for someone create, out of nothing, ways of making money as long as other people are willing to go along with it. I guess this whole credit crisis is the prime example.
Anyway, The Power of Yes is worth going to see to be entertained. I think it’s too late for the country to avoid a winter of discontent but we know not to expect any christmas cards this year.
This article appeared in the FT on October 21st 2009