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No. 33  The Seven Deadly Sins - and today's world financial meltdown - 4th October 2008

  The Seven Deadly Sins - Envy, Lust, Pride, Sloth, Wrath, Avarice, Gluttony.   All seven make an appearance to some degree in the individuals that work in the finance houses around the world.   Of these, Avarice (Greed) is the most potent and dangerous, if unchecked.

   It would appear at first sight that the F.S.A. has failed miserably in it's task of overseeing the operations of the banking sector.   With hindsight it is fairly clear that the last few years saw the granting of credit cards with the minimum proof of ability to repay.   This phenomenom was also evident in the House purchasing  market.   Dubious proof of adequate income has led to the increasing repossession of properties of those that were desperate to get on the housing ladder during a time of unparalleled house price inflation.   The Estate Agents received their commissions although they must have known that many of the purchasers were bound to fall foul of the repossession machine.

    In the USA this phenomenom is known as the "Sub Prime Market".    The Americans always seem to have a name for everything to disguise the facts - in this case that the buyers are bound to fail !   They use euphemisms for various theatres of war, for example - collateral damage, extraordinary rendition, depleted uranium shells (meaning spreading cancer causing agents) in the theatre of war.

  The Blame Game - Where did the present problems in the financial sector have it's roots ?   Goods imported from low-wage economy countries have been slowly undermining Western manufacturing.   With the decrease in manufacturing jobs certain areas within the industrial areas in Europe and the USA, has led to less money in the local economies.   This has the effect of a slow cancer, seriously affecting the Balance of Trade - for example - the USA has the biggest trade deficit in it's history.   The result of these figures over several years has led to the drive to stimulate trade within the countries of the West, hence the proponderance of Credit Cards and easy Mortgages, to keep the wheels of finance turning.

   Could anything have been done to limit the house price escalation ?   Obviously, if the governments of the day wished to limit the problems of dealing with homeless people (particulary families) then legislation could have been introduced to require deposits on house purchase thereby having some control over sales.    The incumbent in No.11 Downing Street during the last decade did nothing to control the house price spiral.    If a large part of earnings goes towards the roof over one's head, then it is pretty obvious that there will be less money in the local economy - a five-year-old could tell you that.   We therefore have to ask ourselves why nothing was done ?    Was it purely carelessness on the part of the Chancellor of the Exchequer or pure incompetence.   Why was the "Sub-Prime Market" allowed to take place in the USA ?   It would seem that GREED was the motive.