No one on the win­dow sills – yet

Auckland City Harbour News - - News -

How could they have screwed up so badly – all those self­pro­claimed Wall St money wizards and the guardians of the sys­tem who are there to pro­tect the mar­kets and the world’s mum and dad in­vestors?

The now-wise com­men­ta­tors say the signs have been ob­vi­ous for years.

How come then that the all-know­ing ones fell into a trap which yawned wider and wider by the month?

Not only top­pled in them­selves but took many of the world’s economies, bil­lions of dol­lars, pub­lic con­fi­dence in ex­perts and mil­lions of peo­ple with them, or tee­ter­ing on the brink.

Some of the top names are well-heeled vic­tims of their own in­com­pe­tence, like the big name ex­ec­u­tive of one cor­po­ra­tion who has “ex­ited” – as they say – with a “Golden Para­chute” worth nearly $500 mil­lion. For ex­ited, read es­caped. Mean­while, tens of thou­sands are fos­sick­ing through the de­bris he left be­hind hop­ing they’ll find some re­mains of what they trea­sured as nesteggs.

Some make no bones about their anger which is as deep as their loss.

An artist of some tal­ent and grief dis­played a big true-to-life por­trait of one of those ex­ec­u­tives out­side his cor­po­ra­tion’s pala­tial New York head of­fice.

It was named and la­belled Thanks for Ru­in­ing our Lives.

There was mul­ti­mil­lion sup­port for that from all the other ru­ined in­vestors.

But don’t ex­pect learned com­ment on this sit­u­a­tion from me.

Par­don my ig­no­rance, but I’m one of those who wouldn’t recog­nise a prime mort­gage if I tripped over it – or were of­fered one.

You may have recog­nised them in­stantly, but I’d never heard of Lehman Bros, the Amer­i­can In­ter­na­tional Group, Bear Stearns Cos, the site of that an­gry por­trait.

Gold­man Sachs rang a bell. So did Mor­gan Stan­ley.

It needed a typ­i­cal Dr Cullen smart crack to re­mind me that John Key once worked for Mer­rill Lynch.

Which drew me into Who’s Who re­veal­ing strangely that, as an his­to­rian, Dr Cullen’s un­usual qual­i­fi­ca­tions to be min­is­ter of fi­nance in­cludes a tome with this non-com­pelling ti­tle The Sta­tis­ti­cal Move­ment in Early Vic­to­rian Bri­tain. Riv­et­ing. But not nec­es­sar­ily rel­e­vant.

All this econ­omy up­heaval, mys­tery and de­spair took me back to my fa­ther’s life-long anger over sim­i­lar mis­judge­ments in New York sky­scrapers be­fore I was born that drove men to throw them­selves off their very high level win­dow sills. And, half the world away, had re­duced him to pick and shovel on De­pres­sion re­lief work.

Even those hard years wouldn’t have pre­pared him for the lat­est world­wide eco­nomic cri­sis in which two key play­ers sound like left­overs from vaude­ville days.

You’d think that peo­ple who pride them­selves on their Wall St cred should have been aware of the se­ri­ous weak­nesses which lurked and grew ex­po­nen­tially be­hind those seem­ingly friv­o­lous mu­sic hall ti­tles.

It’d be funny if it wasn’t such a per­sonal, na­tional and in­ter­na­tional dis­as­ter.

I mean, how could any­one take them se­ri­ously – Fan­nie Mae and Fred­die Mac?

If only some­one had. And ques­tioned their bal­ance sheets.

Mean­while, there are other ac­counts closer to home which could have done with an early au­dit.

Let’s not for­get thou­sands of New Zealan­ders whose cash cri­sis came months ago and still goes on.

They’re the con­tin­u­ing vic­tims of col­lapsed fi­nance com­pa­nies and pie-in-thesky de­vel­op­ment projects which en­ticed money from them – some­times up un­til the last hours be­fore the truth was told – with fine prom­ises and now crip­pling non-de­liv­ery.

Our very own $5 bil­lion­plus busi­ness bust.

Their pain goes on and could be wors­ened fur­ther by what­ever are the out­comes of the Wall St catas­tro­phe.

Who­ever is call­ing the fi­nan­cial shots in the Bee­hive af­ter Novem­ber 7 – the one­time for­eign ex­change dealer or the for­mer his­tory lec­turer with a thing about Vic­to­ria statis­tics – must act to see that bet­ter safe­guards are in place.

No more empty pledges to once again empty the bank ac­counts of peo­ple who – even if naively – took de­vel­op­ers’ words and in­vest­ment ex­perts’ ad­vice at face value and now pay the price in loss of cash and se­cu­rity.

It’s an ac­cepted fact that “the mills of God grind slow” – and that sub­ur­ban trains run slow.

But ev­i­dence sug­gests that nei­ther are as slow as New Zealand’s Trans­port Ac­ci­dent In­ves­ti­ga­tion Com­mis­sion.

The head­ing looked in­ter­est­ing: “Ru­n­away train sparks call for op­er­a­tional re­view.”

A sub­ur­ban train with 12 peo­ple aboard ap­par­ently ran half a kilo­me­tre be­tween Brit­o­mart and New­mar­ket without a driver.

He’d got out to check why the emer­gency brake had come on. Sounds pretty danger­ous. Called in to study the in­ci­dent, the com­mis­sion agreed.

“The po­ten­tial for a de­rail­ment was sig­nif­i­cant” as the train headed for a curved sec­tion of track trav­el­ling 60 per­cent faster than the speed limit, it said.

The re­port asked the New Zealand Trans­port Agency to “as­sess how wide­spread main­te­nance short­com­ings are”.

Good ques­tion. Very wise. But very late.

The ru­n­away in­ci­dent hap­pened in Oc­to­ber, 2006.

The NZ Press As­so­ci­a­tion re­ported the find­ings on Septem­ber 27 this year.

Which sid­ing had the re­port been shunted to in the nearly 23 months be­tween?

Are sub­ur­ban train driv­ers still run­ning af­ter their lo­cos af­ter get­ting out of their cabs to check the brakes?

How long might we have to wait for the sug­gested trans­port agency check on main­te­nance – 2011?

Who said sci­en­tists haven’t got a sense of hu­mour?

Dr Robert Mann, ap­plied ecol­o­gist, re­lent­less com­men­ta­tor and critic on sci­en­tifi is­sues like ge­netic en­gi­neer­ing, has taken a few mo­ments off from his spe­cial­ity to share this with us:

“My first $5 award for an item that got in the NZ Lessener me­dia-howlers col­umn Life In NZ was in 1975.”

Quote: There was no ques­tion of se­crecy re­gard­ing the En­vi­ron­men­tal Im­pact Re­port on the pro­posed Huntly ther­mal power sta­tion, said the Min­is­ter of Elec­tric­ity, Mr McGuigan.

But he con­firmed that it would not be made pub­lic. – Auck­land Star.

“Now Ra­dio NZ has moved into the same star ter­ri­tory and will surely get me the cur­rent award which th­ese days is, I be­lieve, a Lotto ticket. So, maybe RNZ is about to win me $1,000,000.”

Quote: The Food Stan­dards Au­thor­ity has de­tected the toxin me­lamine in some dairy pro­duce.

But the con­cen­tra­tion is so low that it falls be­low the limit of de­tec­tion. – Ra­dio NZ News, Septem­ber 30.

To con­tact Pat Booth email: off­ All replies are open for pub­li­ca­tion un­less marked Not For Pub­li­ca­tion.

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