It happens every day, yet the bitterness of love turning sour always takes those involved by surprise. Mark Steel was in his forties a respectable father of two when his relationship fell apart. This is histragicomic account of its sad unravelling
Wednesday, 24 September 2008
It must be a trial to live with a comic and their disconcerting habits. Only comics, for example, feel such inconsolable anguish in a curry house, because they're halfway through telling a hilarious joke and it's trodden on by the waiter interrupting with "Your starters, please" and delivering your onion bhajis. Only comics come away from a funeral feeling numb and hollow because another comic's story about the dead person got a bigger laugh than their own. So my partner would probably have been able to make a case that if you're going through a period of manic volatile anxiety, it may not be advisable to be living with a comic.
For around 10 years, our awkward moments remained an unwelcome nuisance that we could learn to live with, like diabetes.
But then they grew, like the engine noise you know you shouldn't ignore, but do anyway until it suddenly clatters with doom. In some ways the more dramatic episodes were the most manageable. But when there was a low level of rumbling discontent, it was tempting to deal with it as a genuine argument, for example by exhaling a puff of exasperation and saying, "But you asked for custard." And that way we could descend into the world of the classic bickering couple, boiling with a sense of injustice while enunciating one word at a time with tensely bent fingers and a galloping heart, "You said turn left so I turned left."
There'd be the gruelling moments following a chilling exchange when neither of us would speak as we brushed past each other, each of us leaving a trail of unsettling frostiness.
Then a neighbour would call out "Hi, yoo-hoo, anyone there?" and my partner would suddenly abandon her scowl and cheerily discuss the latest episode of Buffy the Vampire Slayer. Which makes you even more livid, unable to de-clench a single muscle while wanting to shout, "OY. We're supposed to be GRUMPY here. You might have been faking it for effect so you can switch it off as soon as an outsider arrives but I really fucking MEANT it er, sorry, Barbara."
Or we'd play out that dreadful scene in which you've snapped at each other with particularly malicious venom but you're not really in a position to leave the room to allow the acrimony to cool down. For example, having just been described as "a selfish shitty lump of shit", you've still got to sit next to each other for the foreseeable future because you've just turned on to the M6 at Lancaster.
From time to time we'd hold a series of informal summits, after the children went to bed, involving discussions that went on until about one in the morning, so that each session was probably longer than the United Nations take to discuss the crisis in Kashmir. And because I fidget, I'd make things worse by getting up to change the CD, which must be exasperating if you're midway through a heartfelt soliloquy about feeling unappreciated.
At one point my partner and I were referred to a doctor who might be able to help us out, but he couldn't find the key to his office so we conducted our discussion sitting in the corridor as hobbling men and kids with broken arms walked past us. Without looking at either of us he muttered, "Hmm, it may be depression" in a way that suggested that if you'd complained about chest pains he'd say, "Ahh, the problem is you've got an illness." After 10 minutes of questions like "What makes you angry?", he took me to one side and said, "Do you have sex?"
"Now and then," I told him hesitantly. "Try to give her more sex," he said, then walked off. And I got the impression he'd prescribe a similar remedy for food poisoning or bee stings.
One problem when a relationship is fraying is that the words that come out are difficult to decipher, as both parties find it hard to articulate the underlying cause of their anxiety. I'd hear, "The PROBLEM, as you well know, is what you KNOW it is and if you can't even KNOW what you've done, well then DON'T you think I don't KNOW." This is a delicate situation for anyone, but a comic has the overpowering instinct to say something like "That's the question for your philosophy exam you may turn over your papers and begin NOW." Which, I can testify, doesn't help.
Trying to answer the points raised, with however much sympathy, is just as useless because such anguish has its own language.
Reassuring someone that you haven't done what they're crying you've done is worthless, because that's not what they're really crying about. It even makes them more frustrated, like when you present a yelling toddler with a bottle of milk when they really want their teddy but can't say the word.
If there was an immediate solution, I couldn't find it, so I entered one of the most negative phases of life in which, despite having a house, a partner, children and middle-aged respectability, you find yourself sleeping every night on the settee. The question for any couple reduced to long-term settee status is how much bitterness must there be to make the settee preferable to the bed?
Settees are uncomfortable. You sleep at best fitfully and every morning a different bit of you is crunched and twisted. You wouldn't choose to sleep there when there's a specially designed piece of sleeping apparatus a few feet away, just because you'd had a row or were in a sulk. You'd have to feel as if you were two North Poles on a magnet, so that even if you were pushed into the bed, you'd ping backwards, twizzle round and land on the settee.
And somehow you get used to it, the journey from overwhelming love and passion to repulsion happening in such gradual increments that you accept it as normal.
I realised my life was in trouble when I started envying couples who had normal ferocious rows. They would be sitting opposite each other on a train, he fuming ahead, lips tight together, breathing heavily through his nose, while she turned each page of a magazine with a violent flick as if swatting away a strange green insect, when without looking up she would snarl, "I can't believe you're going to Dublin on my mum's sixtieth, Sean, you bastard." He'd give it two more snorts and a fume and splutter, "He's my mate, right." And I'd think, "Aah, how sweet." Because my rows had no logic and no plot. If anyone had overheard them, they'd have complained "I didn't enjoy that, there was no beginning, middle or end." They'd get going with an abstract complaint, such as "Oh yes, that's TYPICAL" and move rapidly on to random complaints such as "How DARE you? You couldn't even stand my CAT."
And yet to leave altogether seemed an awful, unimaginable prospect at every level from trying to calm inconsolable kids to having to set up a new broadband account. There's the stench of chaos: legal documents, financial agreements, access arrangements, finding somewhere to live, buying a new settee. And the dreadful finality and acceptance of failure. Despite the high number of families that break apart, each one is categorised as a "failed marriage". Aligned to this sense of failure is the humiliation of giving up. You used to gaze at each other across a table splashed with takeaway curry and communicate with tiny twinkling facial expressions, affectionate puffs and grunts, and it's achingly mournful to accept it's gone. You feel it must still be there somewhere, if only you look hard enough, in the same way that you search through the house over and over again, refusing to accept you've lost your favourite jacket.
To part in your forties with children in tow is so different from doing it in your twenties with nothing more to row about than who gets the blender. All continuity will be lost for ever; in 20 years' time there will still be awkward arrangements about who goes where at Christmas and there will be no time when everyone sits together joyfully recalling the years until now. So after a few months on that settee, it took only a half-decent week without a major cacophony to convince us to give it another go. I left the settee, and everything was marvellous. We held hands on the way to the shop, and some people came for dinner, and we had the floors done up, and we saw Crystal Palace get promoted in the play-off final. But of course it wasn't really marvellous, because nothing had been repaired. We were like an old car that's packed up, but then suddenly one day for some reason when you turn the ignition splutters along again for a while.
One night, after a particularly fraught five hours, I realised the front and back doors were both hidden behind a tower of chairs, planks of wood, buckets and assorted useless objects from under the stairs. "We've barricaded you in," said my son and daughter, "because we were afraid you might leave." These are the issues that are weighed up before anyone takes the decision to finally part from their family. Around this time, the Government and opposition were both suggesting financial incentives should be offered to families who stick together, to curb the blight of broken homes. Even that, they believe, comes down to money. They really haven't got a clue.
The final moments of a failing relationship are usually pathetically ordinary. Unlike in films, where there's a last brave embrace amid the hubbub of an Italian railway station, or a drunk but eloquent liberating speech delivered to a stunned family gathering, the last words are more likely to be "I think this is your mug."
There was a minor grumble, something to do with shopping, one sunny Saturday afternoon, that I think involved cat food, delivered with the intonation Al Pacino would have used if there'd been a cat food issue in Scarface. And immediately I knew that was the end. I had no idea a few minutes earlier that we were one small-to-medium-sized snarl from termination, but when it happened I just knew. I'd run out of tolerance, and it seemed as definite and beyond my control as if I'd gone to make a cake but discovered I'd run out of flour.
"That's it," I said, surprised. Just as there must be a definite point when someone knows, absolutely knows, "I am going to try to swim the Channel" or "I am going to explode myself in a public building" and they become mentally prepared for all that their decision entails. I knew right then that I'd soon be packing records and reassuring children, contacting the gas board and telling people they couldn't get me on that number any more.
One of the weirdest moments after moving out was the first morning I woke up in the new place. Not only was it chillingly still and quiet, this was what the place was always like. Before, there had been moments of quiet when everyone else was out, but it was always a slightly anxious quiet, a brief calm to be inhaled before doors crashed open and the natural beat of childhood urgency ricocheted once more round the building. It was the quiet of a stadium before the starting gun for a sprint final. Now there was a different quiet, a permanent quiet. I could make some artificial noise by putting on the Wu-Tang Clan, but there was no organic thud-thud "Aaagh" "Get OFF" "Dad can I have a Twix" "pewaaa waaa kachakach COOL I've shot a ZOMBIE on level 2."
Another thing that is odd is not having to tell anyone where you're going. You just leave the house, and don't have to call out, "Just nipping out for some Sellotape." To start with I'd wander up the road slightly disconcerted, as if there was some procedure I hadn't been through, perhaps a form to complete when I left the house, to send to the Town Hall. Quite simply, finding yourself on your own for the first time in 13 years is lonely. And the irony with loneliness is it can make you feel that all you want to do is be alone. Then, disaster I couldn't get cable. It wasn't available in the road for some reason. Surely there was a law somewhere that said if someone is lonely cable has to be provided as a basic human right.
Once you're no longer surrounded by the everyday torment of a fractious relationship, it becomes possible to view the squabbles and conflicts from a distance. Even in the midst of wrath and fury, you realise it isn't aimed at you, it's aimed into the air somewhere, at the universe, for being a bastard of a universe. But somehow there seemed to be no way of preventing the frustration from booming and crackling us into court.
As I walked towards the court on the day, I saw her through the window of Starbucks, reading the clinical legal documents of the case. And in that image lay the potential for total despair, the triumph of cynicism. What was the point of hope or love or the tingle of expectation if it could end sitting in Starbucks amending "related" to "pertaining" with a pink marker pen? Can there really be people who stride into court for a case against their ex-partners pumped up with the craving for victory, like American wrestlers? If so you have to wonder whether they ever were in love in the first place. My own overwhelming emotion in the courtroom was bewilderment at how this happened.
How do you end up dreading a visit from the person you used to drive all night to see briefly in the morning? You don't want to spend the rest of your life looking back with disgust at every picnic and curry you shared, regretting the times of ringing in sick to spend the day in bed together, recalling festivals, boat trips, backstage passes, crazy French bars, trips to the all-night beigel shop at five in the morning, the night the Tories were kicked out, the bewildered newspaper man in the snow, as merely part of a marathon mistake.
Of course those moments were as strikingly real and electrifying as you remember them. Which is why the only true victory in this kind of court case would be one in which both of you were sentenced to stay locked in the room until you could remember, for the last time, the thrill of the first glance, the gulp at the first eye contact, the smell of the hopeful decaying function room where you first met.
However vindictive either side may appear, what most shattered couples really want, I suspect, is to smile at each other one last time and mean it, and in that moment salvage all the memories of hope.
Wednesday, 24 September 2008
Terminal Velocity
By Chan Akya
On the back of my last article on the undoing of the American/Western financial system (see Waiter, there's a banker in my soup, Asia Times Online, September 18, 2008) I had intended to write a follow-up on the implications for Asia. Events over the weekend though spell the very end of capitalism for the US and its European allies, pushing lifeboats on their decrepit financial sector even as the rest of the economies represented by the Group of Eight (G-8)leading industrialized countries come unstuck at breathtaking pace.
Perhaps the epitome of this decline was the coordinated support for the US dollar, combined with the provision of some US$200 billion of funds for the banking system last week. No matter all that, and the price of gold at the end of last week was still higher than at the end of the previous week.
US Treasury Secretary Henry Paulson seemed to have hidden his metaphorical bazooka for one weekend only (see Pareto's Bazooka, Asia Times Online, September 13, 2008) only to quickly unleash its fury in coordination with the Fed and the SEC last week once his favorite firms of Morgan Stanley and Goldman Sachs were threatened with bankruptcy.
Last week was quite far from the ordinary. The collapse of Lehman Brothers, the hastily arranged and seemingly shotgun marriage of Merrill Lynch with Bank of America as well as the breathtakingly immoral rescue of American International Group (AIG) by the Federal Reserve, which wasn't even that company's regulator, all point to the moral bankruptcy of Washington. The Securities and Exchange Commission (SEC) banned 799 stocks from being shorted for 10 days on Thursday night, in effect moving the goalposts once again (see A stone for Chris Cox, Asia Times Online, July 19, 2008) for my views on the sheer idiocy of banning short sales in financial markets).
In its defense the SEC, along with affected firms such as Morgan Stanley, pointed to the deep and serious risks being presented to the financial system by these unscrupulous short-sellers. Well, my heart bleeds for the investment banks but as it turns out, only 2.9% of Morgan Stanley was "on borrow", that is being used for short sales, at the beginning of last week. The rest of the decline in the company's share price - it fell 40% on one day for example - was basically good old genuine panic; the type that has not yet been banned by the SEC but is surely under consideration by some jobsworth or the other.
Just 10 years ago it was the very same luminaries from the US government, investment banks and the rest who pilloried the stock market intervention of the Hong Kong and Malaysian governments in 1998, arguing in favor of allowing the free market to establish itself. In editorial after editorial, these amazingly intelligent folks castigated the actions of Malaysia's then prime minister Mahathir Mohamad for banning short sales on the Kuala Lumpur Stock Exchange. The level of hypocrisy displayed by the US government - free-market professing Republican led, no less - in recent days brings to mind George Bernard Shaw's famous dictum that the "ordinary Britisher believes that God is an Englishman".
Much as Shaw foretold the end of the English empire, Paulson and his motley crew have brought forward the end of American and even Western economic power. As some wits remarked on television, there are even rumors that the Federal Reserve will guarantee personal happiness for the next few weeks, if so desired.
Call that triple-A?
Even away from the mumbo-jumbo of qualitative intervention, actual dollars being thrown around stack up nicely. There is firstly the $8.6 trillion in contingent liabilities that the US government has accepted within two weeks and without any apparent authority to do so - $5.2 trillion of liabilities guaranteed by Fannie Mae and Freddie Mac and $3.4 trillion outstanding at the country's money market funds that now enjoy a Federal guarantee.
For anyone keeping score, all that adds up to 160% of US government debt at the beginning of September. Add to these monstrosities the $700 billion that "Hank" Paulson now demands as new government funding to purchase every manner of decrepit mortgage-backed asset that US (and presumably European and Asian) banks wish to sell, and the total debt has increased by around 175%.
Against the gargantuan increase in total debt of the US, likely tax receipts will decline for many years to come as the combination of slower economic activity and historically built up tax-adjustable losses help individuals and companies to avoid paying taxes for many years to come. Indeed, one of the key tangible items for any bank to purchase its investment banking counterpart (Bank of America buying Merrill for example) is the billions in tax losses that can be absorbed in the event; these would more than pay for the purchase prices alone, leave aside the potential for revenue additions a few years down the line.
When debt increases and income declines, it is usual more difficult for the borrower to repay their debt. That is what creates a ratings event, ie for credit rating agencies to downgrade the borrower. The US government is now in the peculiar position wherein its debt is still rated at the triple-A level but there are very few quantifiable reasons for it remain so. While the overall situation is still better than that of the demographically-challenged European countries, I still cannot accept the notion that the US government is triple-A after last week's events.
A downgrade of the US government's debt will render much of its borrowings - Treasury bonds, agency bonds and the rest - unviable for holdings by the rest of the world. Alone, this could push up costs for the highly leveraged US economy at exactly the worst time in its cycle, and pummel growth for another couple of quarters by itself.
Of course, two of the three major credit rating agencies (Moody's, Standard & Poor's and Fitch) in the world are American while the third is European. Not to put too fine a point on it, I believe that it is quite unlikely that these agencies will proactively look to downgrade the US government - or indeed the governments of the UK, France, Italy et alia on the back of the most recent financial crisis. Whether the folks buying their bonds - Asian central banks and savers - will quite buy into that logic remains to be seen. Call me a cynic, but somehow I do not expect they will eat this "triple-A because we say so" nonsense twice. Then again, perhaps Asian central bankers ARE that stupid. We will find out soon enough.
Psst ... want a bailout?
The demand for Congress to pass some $700 billion in new purchasing power for the US Treasury acting in its own capacity goes beyond the dictionary definition of chutzpah, by making the very people responsible for driving the US economy aground also most likely to benefit from its recovery. It seems that there is hardly enough time to man gravy boats one last time in Washington, every lobbyist has gotten something valuable in the past week.
My views on the agency bailouts were aired previously (see And now for Fannie and Freddie, Asia Times Online, July 12, 2008) so perhaps it is apt to look at the other beneficiaries of last week's actions. Firstly, money market funds, where trillions of US savings are deposited by individuals and companies. These funds invest in short-term assets with strict ratings guidelines, therefore the chances of losing money are seen as minuscule. Yet, that is precisely what happened when Lehman Brothers declared bankruptcy last weekend.
Some funds had been holding hundreds of millions in Lehman short-term paper, which promptly went from being valued at par to being worthless from Friday to Monday. This led aggregate losses to eat into total capital, that is after accounting for interest received, creating a situation called "breaking the buck" - when the fund will return less than par to its investors. Alarmed at the potential for money deposited in these funds disappearing and taking with it any chances of a financial system recovery, the Fed quickly stepped in last week to guarantee the deposits.
People putting their money into such funds aren't the sort that would bother with neighborhood banks; they are the very rich across America and the rest of the world. Thus, the bailout wasn't intended so much for the investors as the borrowers, that is US financial and other companies.
If even this made sense to you - and it doesn't to me - the second bit of moral hazard thrown out by Paulson boggles the mind a bit more so. His proposal for Congress to approve within a week a package of some $700 billion in funding for the US Treasury to directly purchase mortgage-backed securities (MBS) from financial firms has all kinds of danger signals popping up.
Paulson seems to believe that buying these securities and removing them from the public arena would create breathing room for the financial sector to re-emerge from the ashes of the financial crisis, but in so doing he will sow the seeds for the next few bubbles in the US and European financial systems.
These MBS that the Treasury intends to buy are the very same securities that private sector financial firms - investment banks, their commercial counterparts, insurers, credit rating agencies - all failed to properly understand or value. This wasn't a uniquely American problem either, as the rest of the world is also caught up in the same whirlpool of losses.
If profit-seeking folks couldn't understand these securities and figure out what they were worth, what possible hope is there for a government body to do so? The idea is to relieve the banks of these messy assets so that they can get back to their usual functioning, but it is more likely that the banks will simply sell all their dud assets to the Treasury and walk away with all the good stuff.
In any event, the Treasury initiative addresses only the parts of the leveraged market that have failed so far; these assets all based on mortgage lending were but the first to decline. Looking ahead, there are the hundreds of billions in leveraged loans made to companies buying other companies, billions of money lent to project finance for a global economy that is simply not likely to have the same kind of steam, and so on. If banks believe that they have put a couple of dud financial years behind them, the willingness to lend into the next bubble will increase.
This is the return of socialism with a vengeance. The very people who tut-tut the record of the Bank of Japan and the lost decade have implemented its rule book in double quick time. Japan continues to face a recessionary environment. Europe has gone back to its shell with poor economic data, mounting job losses, significant financial sector declines, widening pension deficits all helping to destroy its economic innards. The only part of G8 that was doing well - Russia - has also entered crisis mode due to its government's mishandling of corporate governance issues as well as the silly geopolitical maneuver in Georgia that helped to evaporate investor confidence in the country.
G-8 is thus a spent force, with the final chapters coming rather more quickly than I had predicted in a previous article (see Dear Dinosaurs, Asia Times Online, October 20, 2007). The icing on the cake is that when looking at the political landscape in these countries, no change appears imminent. European leaders all appear fairly secure in their jobs with even the UK's Brown postponing leadership challenges; so does the Russian dictatorship after all its recent misadventures. Japan faces the potential demise of the Liberal Democratic Party, but without any significant ideological change being espoused by the Democratic Party of Japan, I am at a loss to explain quite what will change for the country in enough time to pull out of its terminal economic decline.
Leaving the best for last, I am deeply entertained by polls showing that the Republican candidates are likely to win the US presidency once again. John McCain exhorted the strength of US fundamentals last week, clearly showing quite how in touch he was. When challenged, he praised the "fundamentals of US workers", presumably referring to the same folks who produce cars / machine tools / capital goods and the like at double the labor cost and triple the product faults of their Japanese and European counterparts.
As for his running-mate, Sarah Palin, her statement on the AIG rescue said it all:
Certainly AIG though, with the construction bonds that they're holding and with the insurance that they are holding (is) very, very impactful for Americans, so you know the shot that has been called by the Feds - it's understandable but very, very disappointing that taxpayers are called upon for another one.
Don't worry if that statement flummoxed you with its arcane references to construction bonds and insurance holdings; I couldn't understand it either. To think that Americans are willing to repose their confidence in these two characters after the level of economic destruction carried by the Bush-Cheney team points to their deeply forgiving and almost saintly nature.
For Asian countries looking to supplant the US as the pre-eminent economic engine of the world as well as muster up the occasional dance on the grave of the sole superpower, the return of the Republicans would truly be a godsend.
On the back of my last article on the undoing of the American/Western financial system (see Waiter, there's a banker in my soup, Asia Times Online, September 18, 2008) I had intended to write a follow-up on the implications for Asia. Events over the weekend though spell the very end of capitalism for the US and its European allies, pushing lifeboats on their decrepit financial sector even as the rest of the economies represented by the Group of Eight (G-8)leading industrialized countries come unstuck at breathtaking pace.
Perhaps the epitome of this decline was the coordinated support for the US dollar, combined with the provision of some US$200 billion of funds for the banking system last week. No matter all that, and the price of gold at the end of last week was still higher than at the end of the previous week.
US Treasury Secretary Henry Paulson seemed to have hidden his metaphorical bazooka for one weekend only (see Pareto's Bazooka, Asia Times Online, September 13, 2008) only to quickly unleash its fury in coordination with the Fed and the SEC last week once his favorite firms of Morgan Stanley and Goldman Sachs were threatened with bankruptcy.
Last week was quite far from the ordinary. The collapse of Lehman Brothers, the hastily arranged and seemingly shotgun marriage of Merrill Lynch with Bank of America as well as the breathtakingly immoral rescue of American International Group (AIG) by the Federal Reserve, which wasn't even that company's regulator, all point to the moral bankruptcy of Washington. The Securities and Exchange Commission (SEC) banned 799 stocks from being shorted for 10 days on Thursday night, in effect moving the goalposts once again (see A stone for Chris Cox, Asia Times Online, July 19, 2008) for my views on the sheer idiocy of banning short sales in financial markets).
In its defense the SEC, along with affected firms such as Morgan Stanley, pointed to the deep and serious risks being presented to the financial system by these unscrupulous short-sellers. Well, my heart bleeds for the investment banks but as it turns out, only 2.9% of Morgan Stanley was "on borrow", that is being used for short sales, at the beginning of last week. The rest of the decline in the company's share price - it fell 40% on one day for example - was basically good old genuine panic; the type that has not yet been banned by the SEC but is surely under consideration by some jobsworth or the other.
Just 10 years ago it was the very same luminaries from the US government, investment banks and the rest who pilloried the stock market intervention of the Hong Kong and Malaysian governments in 1998, arguing in favor of allowing the free market to establish itself. In editorial after editorial, these amazingly intelligent folks castigated the actions of Malaysia's then prime minister Mahathir Mohamad for banning short sales on the Kuala Lumpur Stock Exchange. The level of hypocrisy displayed by the US government - free-market professing Republican led, no less - in recent days brings to mind George Bernard Shaw's famous dictum that the "ordinary Britisher believes that God is an Englishman".
Much as Shaw foretold the end of the English empire, Paulson and his motley crew have brought forward the end of American and even Western economic power. As some wits remarked on television, there are even rumors that the Federal Reserve will guarantee personal happiness for the next few weeks, if so desired.
Call that triple-A?
Even away from the mumbo-jumbo of qualitative intervention, actual dollars being thrown around stack up nicely. There is firstly the $8.6 trillion in contingent liabilities that the US government has accepted within two weeks and without any apparent authority to do so - $5.2 trillion of liabilities guaranteed by Fannie Mae and Freddie Mac and $3.4 trillion outstanding at the country's money market funds that now enjoy a Federal guarantee.
For anyone keeping score, all that adds up to 160% of US government debt at the beginning of September. Add to these monstrosities the $700 billion that "Hank" Paulson now demands as new government funding to purchase every manner of decrepit mortgage-backed asset that US (and presumably European and Asian) banks wish to sell, and the total debt has increased by around 175%.
Against the gargantuan increase in total debt of the US, likely tax receipts will decline for many years to come as the combination of slower economic activity and historically built up tax-adjustable losses help individuals and companies to avoid paying taxes for many years to come. Indeed, one of the key tangible items for any bank to purchase its investment banking counterpart (Bank of America buying Merrill for example) is the billions in tax losses that can be absorbed in the event; these would more than pay for the purchase prices alone, leave aside the potential for revenue additions a few years down the line.
When debt increases and income declines, it is usual more difficult for the borrower to repay their debt. That is what creates a ratings event, ie for credit rating agencies to downgrade the borrower. The US government is now in the peculiar position wherein its debt is still rated at the triple-A level but there are very few quantifiable reasons for it remain so. While the overall situation is still better than that of the demographically-challenged European countries, I still cannot accept the notion that the US government is triple-A after last week's events.
A downgrade of the US government's debt will render much of its borrowings - Treasury bonds, agency bonds and the rest - unviable for holdings by the rest of the world. Alone, this could push up costs for the highly leveraged US economy at exactly the worst time in its cycle, and pummel growth for another couple of quarters by itself.
Of course, two of the three major credit rating agencies (Moody's, Standard & Poor's and Fitch) in the world are American while the third is European. Not to put too fine a point on it, I believe that it is quite unlikely that these agencies will proactively look to downgrade the US government - or indeed the governments of the UK, France, Italy et alia on the back of the most recent financial crisis. Whether the folks buying their bonds - Asian central banks and savers - will quite buy into that logic remains to be seen. Call me a cynic, but somehow I do not expect they will eat this "triple-A because we say so" nonsense twice. Then again, perhaps Asian central bankers ARE that stupid. We will find out soon enough.
Psst ... want a bailout?
The demand for Congress to pass some $700 billion in new purchasing power for the US Treasury acting in its own capacity goes beyond the dictionary definition of chutzpah, by making the very people responsible for driving the US economy aground also most likely to benefit from its recovery. It seems that there is hardly enough time to man gravy boats one last time in Washington, every lobbyist has gotten something valuable in the past week.
My views on the agency bailouts were aired previously (see And now for Fannie and Freddie, Asia Times Online, July 12, 2008) so perhaps it is apt to look at the other beneficiaries of last week's actions. Firstly, money market funds, where trillions of US savings are deposited by individuals and companies. These funds invest in short-term assets with strict ratings guidelines, therefore the chances of losing money are seen as minuscule. Yet, that is precisely what happened when Lehman Brothers declared bankruptcy last weekend.
Some funds had been holding hundreds of millions in Lehman short-term paper, which promptly went from being valued at par to being worthless from Friday to Monday. This led aggregate losses to eat into total capital, that is after accounting for interest received, creating a situation called "breaking the buck" - when the fund will return less than par to its investors. Alarmed at the potential for money deposited in these funds disappearing and taking with it any chances of a financial system recovery, the Fed quickly stepped in last week to guarantee the deposits.
People putting their money into such funds aren't the sort that would bother with neighborhood banks; they are the very rich across America and the rest of the world. Thus, the bailout wasn't intended so much for the investors as the borrowers, that is US financial and other companies.
If even this made sense to you - and it doesn't to me - the second bit of moral hazard thrown out by Paulson boggles the mind a bit more so. His proposal for Congress to approve within a week a package of some $700 billion in funding for the US Treasury to directly purchase mortgage-backed securities (MBS) from financial firms has all kinds of danger signals popping up.
Paulson seems to believe that buying these securities and removing them from the public arena would create breathing room for the financial sector to re-emerge from the ashes of the financial crisis, but in so doing he will sow the seeds for the next few bubbles in the US and European financial systems.
These MBS that the Treasury intends to buy are the very same securities that private sector financial firms - investment banks, their commercial counterparts, insurers, credit rating agencies - all failed to properly understand or value. This wasn't a uniquely American problem either, as the rest of the world is also caught up in the same whirlpool of losses.
If profit-seeking folks couldn't understand these securities and figure out what they were worth, what possible hope is there for a government body to do so? The idea is to relieve the banks of these messy assets so that they can get back to their usual functioning, but it is more likely that the banks will simply sell all their dud assets to the Treasury and walk away with all the good stuff.
In any event, the Treasury initiative addresses only the parts of the leveraged market that have failed so far; these assets all based on mortgage lending were but the first to decline. Looking ahead, there are the hundreds of billions in leveraged loans made to companies buying other companies, billions of money lent to project finance for a global economy that is simply not likely to have the same kind of steam, and so on. If banks believe that they have put a couple of dud financial years behind them, the willingness to lend into the next bubble will increase.
This is the return of socialism with a vengeance. The very people who tut-tut the record of the Bank of Japan and the lost decade have implemented its rule book in double quick time. Japan continues to face a recessionary environment. Europe has gone back to its shell with poor economic data, mounting job losses, significant financial sector declines, widening pension deficits all helping to destroy its economic innards. The only part of G8 that was doing well - Russia - has also entered crisis mode due to its government's mishandling of corporate governance issues as well as the silly geopolitical maneuver in Georgia that helped to evaporate investor confidence in the country.
G-8 is thus a spent force, with the final chapters coming rather more quickly than I had predicted in a previous article (see Dear Dinosaurs, Asia Times Online, October 20, 2007). The icing on the cake is that when looking at the political landscape in these countries, no change appears imminent. European leaders all appear fairly secure in their jobs with even the UK's Brown postponing leadership challenges; so does the Russian dictatorship after all its recent misadventures. Japan faces the potential demise of the Liberal Democratic Party, but without any significant ideological change being espoused by the Democratic Party of Japan, I am at a loss to explain quite what will change for the country in enough time to pull out of its terminal economic decline.
Leaving the best for last, I am deeply entertained by polls showing that the Republican candidates are likely to win the US presidency once again. John McCain exhorted the strength of US fundamentals last week, clearly showing quite how in touch he was. When challenged, he praised the "fundamentals of US workers", presumably referring to the same folks who produce cars / machine tools / capital goods and the like at double the labor cost and triple the product faults of their Japanese and European counterparts.
As for his running-mate, Sarah Palin, her statement on the AIG rescue said it all:
Certainly AIG though, with the construction bonds that they're holding and with the insurance that they are holding (is) very, very impactful for Americans, so you know the shot that has been called by the Feds - it's understandable but very, very disappointing that taxpayers are called upon for another one.
Don't worry if that statement flummoxed you with its arcane references to construction bonds and insurance holdings; I couldn't understand it either. To think that Americans are willing to repose their confidence in these two characters after the level of economic destruction carried by the Bush-Cheney team points to their deeply forgiving and almost saintly nature.
For Asian countries looking to supplant the US as the pre-eminent economic engine of the world as well as muster up the occasional dance on the grave of the sole superpower, the return of the Republicans would truly be a godsend.
Cambridge Admissions - read the letters from readers also.
September 23, 2008Applying for Cambridge: The colleges and subjects which give you the greatest chance of success There is less than a month to the deadline for applications to Oxford and Cambridge, but many sixth-formers are still agonising over their choice of college and even of subject. John O'Leary, editor of the Good University Guide, explains how to maximise your chances..."Competition is going to be stiff at either university – most successful applicants have at least three As at A level, or their equivalent – but it helps if there are only three candidates to the place, as there are in a number of subjects and colleges at Oxford and Cambridge. Today I will offer some pointers to demystify the admissions system at Cambridge before moving on to Oxford tomorrow. All the figures are available on the universities' websites, but some remain surprisingly little known. Do schools realise, for example, that one Cambridge college took more students than it had applicants last year? New Hall (soon to be Murray Edwards College) had only 111 initial applications but eventually made 145 offers of places. More than 100 of those who received offers came via the pool, which provides a second chance for promising candidates who either make open applications or do not get into their first choice of college. T The pool lowers the stakes for those who apply to the most selective colleges – nearly 3,000 applications were pooled in 2007 and 752 received offers of places. But the right choice of college still makes a difference. Only 44 of those who made New Hall their first preference actually received offers, but that was still more than one in three – a much more encouraging ratio than the one in five success rate at Pembroke. The other guide to college strengths – albeit a rough and ready one - is the success of their undergraduates in final examinations. At Cambridge, this comes in the form of the Tompkins Table, which was topped this year by Selwyn College. Although the small number of students taking finals each year can make for big swings in the table, it does reflect the standard of the intake. It is (marginally) easier to get into a college in the lower reaches of the table than one at the top. Competition for places also varies widely between subjects – from a success rate of more than half in classics in 2007, to less than one in eight for architecture. Of course, it is a bit late to switch to classics if you are taking science A levels, but the figures could still influence some decisions. More than a quarter of those who applied to read history received offers, for example, compared with less than one in five for social and political sciences. Naturally, there is more to choosing a college (let alone a degree) than the odds on winning a place. But the schools that have a strong track record in Oxbridge admissions all have a strategy for choices of college, building up relationships with tutors and trying to spread their applications to maximise their students' chances of success. Those who do not have such advantages would be wise to do their homework." Cambridge Colleges: Applications, offers and success
 The Tompkins table 2008: 1. Selwyn (4) 2. Emmanuel (1) 3. Trinity (6) 4. Gonville and Caius (10) 5. Magdalene (13) 6. Churchill (15) 7. Jesus (9) 8. Christ's (2) 9. Corpus Christi (8) 10. Pembroke (7) 11. St Catharine's (5) 12. Downing (3) 13. Clare (17) 14. Sidney Sussex (12) 15. Trinity Hall (16) 16. Queens' (11) Last year's positions are in brackets. Read School Gate on: The reality of your first term at university The top 20 most popular places for students Learn to cook, on a student's budget. The soft A levels universities don't want you to take. The new universities: Ebbsfleet and Accrington anyone? Is it good or bad for universities to be named after big donors? TrackBack
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Tuesday, 23 September 2008
Man marries two sisters, three are 'happy'
| IANS |
|
KOLKATA: In a one-of-a-kind incident, a 36-year-old Hindu married two sisters simultaneously at the same venue on the outskirts of the West Bengal capital. |
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When the gamblers bail out the casino
By Spengler
Why should American taxpayers give US Treasury Secretary "Hank" Paulson a blank check to bail out the shareholders of busted banks? Why should the Treasury turn itself into a toxic waste dump for their bad loans? Why not let other banks join the unlamented Brothers Lehman in bankruptcy court, and start a new bank with taxpayers' money? Or have the Treasury pay interest on delinquent mortgages, and make them whole? Even better, why not let the Chinese, or the Saudis or other foreign investors take control of failed American banks? They've got the money, and they gladly would pay a premium for an inside seat at the American table.
None of the above will occur. America will give between US$700-$800 billion to the Treasury to buy any bank assets it wants, on any terms, with no possible legal recourse. It is an invitation to abuse of power unparalleled in American history, in which ill-paid civil servants will set prices on the portfolios of the banking system with no oversight and no threat of legal penalty.
Why are the voices raised in protest so shrill and few? Why will Americans fall on their fountain-pens for their bankers? If America is to adopt socialism, why not have socialism for the poor, rather than for the rich? Why should American households that earn $50,000 a year subsidize Goldman Sachs partners who earn $5 million a year?
Believe it or not, there is a rational explanation, and quite in keeping with America's national motto, E pluribus hokum. Part of the problem is that Wall Street, like the ethnic godfather in the old joke, has made America an offer it can't understand. The collapsing the mortgage-backed securities market embodies a degree of complexity that mystifies the average policy wonk. But that is a lesser, superficial side of the story.
Paulson's dreadful scheme will become law, because Americans love their bankers. The bankers enable their collective gambling habit. Think of America as a town with one casino, in which the only economic activity is gambling. Most people lose, but the casino keeps lending them more money to play. Eventually, of course, the casino must go bankrupt. At this point, the townspeople people vote to tax themselves in order to bail out the casino. Collectively, the gamblers cannot help but lose; individually they nonetheless hope to win their way out of the hole.
Americans are so deep in the hole that they might as well keep putting borrowed quarters into the one-armed bandit. They have hardly saved anything for the past 10 years. Instead, they counted on capital gains to replace the retirement savings they never put aside, first in tech stocks, then in houses. That hasn't worked out. The S&P 500 Index of American equities today is worth what it was in 1997, after adjusting for inflation (and a pensioner who sells stock purchased in 1997 will pay a 20% capital gains tax on an illusory inflationary gain of 40%). Home prices doubled between 1997 and 2007 before falling by more than 20%, with no floor in sight.
As it is, many of the baby boomers now on the verge of retirement will spend their declining years working at Wal-Mart or McDonalds rather than cruising the Caribbean. Some of them still have time to tighten their belts and save 10% of their income (by consuming 10% less), plus a good deal more to compensate for the missing savings of the 1990s.
Altogether, they'd rather gamble, and if that requires a bailout of the house, they gladly will chip in to pay for it. After all, today's baby boomers won't pay for the bailout. The next generation of taxpayers will pay for Paulson's $700-$800 billion. If that enables the present generation to keep borrowing rather than saving, it is no skin off their back. If home prices continue to collapse, the baby boomers will die in debt anyway, working at low-paying jobs until the day before their funerals.
The homeowners of America hope against hope that somehow, sometime, the price of their one only asset will bounce back. The character of Mortimer Duke in the 1983 film Trading Places comes to mind. After losing his fortune in the frozen orange juice futures market, Duke screams, "I want trading reopened right now. Get those brokers back in here! Turn those machines back on! Turn those machines back on!" If a reverse takeover of the US government by Goldman Sachs is what it takes to turn the machines back on, the American public will support it. Sadly, there is no reason to expect the bailout of bank shareholders to have any effect at all on American home prices, which will continue to sink into the sand.
Contrary to what the Bush administration says, it is not the case that banks' troubled mortgage assets cannot be sold in the private market. Those are the so-called "Level III" assets that banks say they cannot value. But that is only a dodge that the banks use to postpone taking losses. There is a ready bid for these assets from hedge funds, in multi-hundred-billion-dollar size. The trouble is that the market bid is 25% to 30% below the prices that banks carry these assets on their books. Traders at Wall Street boutiques who specialize in distressed securities say that US regional banks regularly make discreet offers to sell private mortgage-backed securities (not guaranteed by a federal agency) at prices, for example, of 75 to 80 cents on the dollar. Hedge funds bid, for example, 55 to 60 cents in return.
On rare occasions, the bank seller and the hedge fund buyer will meet in the middle, although very few transactions occur. Although many banks are desperate to sell, they cannot accept the offered price without taking losses over the threshold of mortality, for write-downs of this magnitude would destroy their shareholders' capital. Investment banks typically hold about $30 of securities for every $1 of capital, so a 3% write-down would leave them insolvent. Lehman Brothers classified 14% of its assets as Level III at the end of the first quarter; Goldman Sachs was at 13%. Why is Lehman bankrupt, and Goldman Sachs still in business? If Secretary Paulson, the former head of Goldman Sachs, had not proposed a general bailout last week, we might already have had the answer to that question.
For the Paulson bailout to be helpful to the banks, it must buy their securities at much higher prices than the private market is willing to pay. Otherwise it makes no sense at all, for the banks could sell at any moment to the hedge funds. But that is a subsidy to private banks, administered at the whim of the Treasury Secretary, without oversight and without the possibility of legal recourse.
Some Democrats in Congress are asking for some form of oversight, but it is hard to imagine how they might use it, for a Treasury with $800 billion to spend would constitute the whole market bid for low-quality mortgage assets, and would set whatever prices it wished. Professionals with years of experience set prices on these securities with great uncertainty. How would an overseer determine if it had set the correct price? And if the Treasury decided to bail out one bank (say, Goldman Sachs) rather than another, how would the overseer judge whether that decision was judicious, politically motivated, venal, or arbitrary?
Opposition to the Treasury plan is disturbingly thing. Bloomberg News on June 21 quoted the Democratic chairman of the Senate Banking Committee, Christopher Dodd, saying, "I know of nobody who is arguing over the amount of money or even about that the secretary ought to have the authority to purchase these toxic instruments, these bad debts."
Why the taxpayers of America would allow their pockets to be picked in this fashion requires a different sort of explanation than one finds in economics textbooks. My analogy of gamblers taxing themselves to bail out the casino is inspired, in part, by a remarkable new book by the Canadian economists Reuven and Gabrielle Brenner (with Aaron Brown), A World of Chance. In effect, the Brenners re-interpret economic theory in terms of gambling, showing how profoundly gambling figures into human behavior, especially in such matters as so-called life-cycle investing. The 50-ish householder who has not made enough to retire may take outsized chances, considering that as matters stand, he will work until he drops dead in any case. The Brenners write:
If people reach the age of fifty or fifty-five and have not "made it," what are their financial options to still live the good life? Except for allocating a few bucks to buy lottery tickets, it is hard to think of any other option. If people find themselves down on their luck and see no immediate opportunities to get rich, what can they do to sustain their hopes and dreams? Allocating a fraction of their portfolios with a chance to win a large prize is among the options. And when people are leapfrogged - that is, when some "Joneses" who were "below" them jump ahead - how can they catch up? They will tend to challenge their luck for a while, taking risks that they might have contemplated before in business, financial markets, and other areas but did not follow up with action.
A World of Chance undermines our usual view of "economic man" and substitutes the angst-ridden, uncertain denizen of a world that offers no certainties and requires risk-taking as a matter of survival. I hope to offer a proper review of the work in the near future. As my marker, though, permit me to leave the thought that for providing a theoretical foundation for the counter-intuitive behavior of American taxpayers, the Brenners deserve the Nobel Prize in economics.
Alas for the gamblers of America: they will tax themselves to keep the casino in operation, but it will not profit them. Where, oh where, is America's Vladimir Putin, who will drive out the oligarchs who have stolen the country's treasure and debased its currency?
Why should American taxpayers give US Treasury Secretary "Hank" Paulson a blank check to bail out the shareholders of busted banks? Why should the Treasury turn itself into a toxic waste dump for their bad loans? Why not let other banks join the unlamented Brothers Lehman in bankruptcy court, and start a new bank with taxpayers' money? Or have the Treasury pay interest on delinquent mortgages, and make them whole? Even better, why not let the Chinese, or the Saudis or other foreign investors take control of failed American banks? They've got the money, and they gladly would pay a premium for an inside seat at the American table.
None of the above will occur. America will give between US$700-$800 billion to the Treasury to buy any bank assets it wants, on any terms, with no possible legal recourse. It is an invitation to abuse of power unparalleled in American history, in which ill-paid civil servants will set prices on the portfolios of the banking system with no oversight and no threat of legal penalty.
Why are the voices raised in protest so shrill and few? Why will Americans fall on their fountain-pens for their bankers? If America is to adopt socialism, why not have socialism for the poor, rather than for the rich? Why should American households that earn $50,000 a year subsidize Goldman Sachs partners who earn $5 million a year?
Believe it or not, there is a rational explanation, and quite in keeping with America's national motto, E pluribus hokum. Part of the problem is that Wall Street, like the ethnic godfather in the old joke, has made America an offer it can't understand. The collapsing the mortgage-backed securities market embodies a degree of complexity that mystifies the average policy wonk. But that is a lesser, superficial side of the story.
Paulson's dreadful scheme will become law, because Americans love their bankers. The bankers enable their collective gambling habit. Think of America as a town with one casino, in which the only economic activity is gambling. Most people lose, but the casino keeps lending them more money to play. Eventually, of course, the casino must go bankrupt. At this point, the townspeople people vote to tax themselves in order to bail out the casino. Collectively, the gamblers cannot help but lose; individually they nonetheless hope to win their way out of the hole.
Americans are so deep in the hole that they might as well keep putting borrowed quarters into the one-armed bandit. They have hardly saved anything for the past 10 years. Instead, they counted on capital gains to replace the retirement savings they never put aside, first in tech stocks, then in houses. That hasn't worked out. The S&P 500 Index of American equities today is worth what it was in 1997, after adjusting for inflation (and a pensioner who sells stock purchased in 1997 will pay a 20% capital gains tax on an illusory inflationary gain of 40%). Home prices doubled between 1997 and 2007 before falling by more than 20%, with no floor in sight.
As it is, many of the baby boomers now on the verge of retirement will spend their declining years working at Wal-Mart or McDonalds rather than cruising the Caribbean. Some of them still have time to tighten their belts and save 10% of their income (by consuming 10% less), plus a good deal more to compensate for the missing savings of the 1990s.
Altogether, they'd rather gamble, and if that requires a bailout of the house, they gladly will chip in to pay for it. After all, today's baby boomers won't pay for the bailout. The next generation of taxpayers will pay for Paulson's $700-$800 billion. If that enables the present generation to keep borrowing rather than saving, it is no skin off their back. If home prices continue to collapse, the baby boomers will die in debt anyway, working at low-paying jobs until the day before their funerals.
The homeowners of America hope against hope that somehow, sometime, the price of their one only asset will bounce back. The character of Mortimer Duke in the 1983 film Trading Places comes to mind. After losing his fortune in the frozen orange juice futures market, Duke screams, "I want trading reopened right now. Get those brokers back in here! Turn those machines back on! Turn those machines back on!" If a reverse takeover of the US government by Goldman Sachs is what it takes to turn the machines back on, the American public will support it. Sadly, there is no reason to expect the bailout of bank shareholders to have any effect at all on American home prices, which will continue to sink into the sand.
Contrary to what the Bush administration says, it is not the case that banks' troubled mortgage assets cannot be sold in the private market. Those are the so-called "Level III" assets that banks say they cannot value. But that is only a dodge that the banks use to postpone taking losses. There is a ready bid for these assets from hedge funds, in multi-hundred-billion-dollar size. The trouble is that the market bid is 25% to 30% below the prices that banks carry these assets on their books. Traders at Wall Street boutiques who specialize in distressed securities say that US regional banks regularly make discreet offers to sell private mortgage-backed securities (not guaranteed by a federal agency) at prices, for example, of 75 to 80 cents on the dollar. Hedge funds bid, for example, 55 to 60 cents in return.
On rare occasions, the bank seller and the hedge fund buyer will meet in the middle, although very few transactions occur. Although many banks are desperate to sell, they cannot accept the offered price without taking losses over the threshold of mortality, for write-downs of this magnitude would destroy their shareholders' capital. Investment banks typically hold about $30 of securities for every $1 of capital, so a 3% write-down would leave them insolvent. Lehman Brothers classified 14% of its assets as Level III at the end of the first quarter; Goldman Sachs was at 13%. Why is Lehman bankrupt, and Goldman Sachs still in business? If Secretary Paulson, the former head of Goldman Sachs, had not proposed a general bailout last week, we might already have had the answer to that question.
For the Paulson bailout to be helpful to the banks, it must buy their securities at much higher prices than the private market is willing to pay. Otherwise it makes no sense at all, for the banks could sell at any moment to the hedge funds. But that is a subsidy to private banks, administered at the whim of the Treasury Secretary, without oversight and without the possibility of legal recourse.
Some Democrats in Congress are asking for some form of oversight, but it is hard to imagine how they might use it, for a Treasury with $800 billion to spend would constitute the whole market bid for low-quality mortgage assets, and would set whatever prices it wished. Professionals with years of experience set prices on these securities with great uncertainty. How would an overseer determine if it had set the correct price? And if the Treasury decided to bail out one bank (say, Goldman Sachs) rather than another, how would the overseer judge whether that decision was judicious, politically motivated, venal, or arbitrary?
Opposition to the Treasury plan is disturbingly thing. Bloomberg News on June 21 quoted the Democratic chairman of the Senate Banking Committee, Christopher Dodd, saying, "I know of nobody who is arguing over the amount of money or even about that the secretary ought to have the authority to purchase these toxic instruments, these bad debts."
Why the taxpayers of America would allow their pockets to be picked in this fashion requires a different sort of explanation than one finds in economics textbooks. My analogy of gamblers taxing themselves to bail out the casino is inspired, in part, by a remarkable new book by the Canadian economists Reuven and Gabrielle Brenner (with Aaron Brown), A World of Chance. In effect, the Brenners re-interpret economic theory in terms of gambling, showing how profoundly gambling figures into human behavior, especially in such matters as so-called life-cycle investing. The 50-ish householder who has not made enough to retire may take outsized chances, considering that as matters stand, he will work until he drops dead in any case. The Brenners write:
If people reach the age of fifty or fifty-five and have not "made it," what are their financial options to still live the good life? Except for allocating a few bucks to buy lottery tickets, it is hard to think of any other option. If people find themselves down on their luck and see no immediate opportunities to get rich, what can they do to sustain their hopes and dreams? Allocating a fraction of their portfolios with a chance to win a large prize is among the options. And when people are leapfrogged - that is, when some "Joneses" who were "below" them jump ahead - how can they catch up? They will tend to challenge their luck for a while, taking risks that they might have contemplated before in business, financial markets, and other areas but did not follow up with action.
A World of Chance undermines our usual view of "economic man" and substitutes the angst-ridden, uncertain denizen of a world that offers no certainties and requires risk-taking as a matter of survival. I hope to offer a proper review of the work in the near future. As my marker, though, permit me to leave the thought that for providing a theoretical foundation for the counter-intuitive behavior of American taxpayers, the Brenners deserve the Nobel Prize in economics.
Alas for the gamblers of America: they will tax themselves to keep the casino in operation, but it will not profit them. Where, oh where, is America's Vladimir Putin, who will drive out the oligarchs who have stolen the country's treasure and debased its currency?
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(This is to ignore the fact that if many applicants seek to play the numbers game then any perceived advantage will cease to exist and an applicant would have been better off applying to a college with a high number of applicants to places which, in the next year, will have fewer)
As with other guides for Oxbridge entrance, this one seems to have no basis in experience of what actually occurs. Having read all the books on the market, NONE of them give an accurate portrayal of the decision-making process.
As for the idea that schools have relationships with Colleges - this is at least twenty years out of date. The only schools which have an advantage are those which do not produce the bland pro forma references for applicants. Such references are entirely worthless.
This article isn't worth the server space it is hosted on.
Due to the pooling system, any attempts to 'play the game' when choosing colleges won't work.
The best advice? If you're good enough for Cambridge, apply to either a college that you really like, or a college with a good reputation in the pool.
Another New Hall friend of mine applied there because she actually likes the place. She is a very happy and active member of the college.
When I applied, I did all those stats for college, like the above article. My school teacher wanted to apply a certain college that I was not keen about, because he knows someone there. At the end, I didn't use these tricks. It's not just the 'getting-in Cambridge' part that is important; it's the 'three-years at Cambridge' part that is. So I went for the one I really liked and got in. It felt great to know that I got in because of my abilities, not what kind of tricks I used.
What happened? I got there on interview day to discover there was only one place on offer that year, and fourteen applicants for it... I wasn't the only one to have done the math and tried to game the system.
Yes, I got the place. But I hated the course and ended up switching to something else after just two weeks - arguably I would have been much better off at a bigger, less cliquey college.
I'd recommend you pick a subject you feel passionate about, that you've properly researched, at a college you feel most comfortable at.
To sum up, I believed those who do have the potential to be an oxbridge should just choose whichever they like. This article is quite futile and there is very little point to believe in what it says. TO THOSE WHO WANT TO APPLY OXBRIDGE: Just shows those interviewers that you are an interested person. BE YOURSELF.
The real star would always shine through the crowds.
My advice to anyone wanting to apply then, would be to do so, and to ignore all this nonsense. Picking a course and a college should be down to passion and gut feeling. Go to an open day, find a place you like, and apply. There is nothing to gain by trying to cheat the system, and ultimately, you'll only be cheating yourself out of what you want the most.
And it's Queens' with the apostrophe after the 's'. An apostrophe before the 's' is Oxford's Queen's College.
Moreover, as a Cambridge student myself, I should stress that choosing your college by what's least competitive is potentially foolish. Despite what you may have heard, not all colleges will suit everyone perfectly: there are many variances between colleges, including the Fellows' areas of expertise; you have to do your research to find out what (and who) suits you.
And anyway, who wants to spend three years of their lives at a college they chose because it seemed easier to get into? Where's the integrity in deliberately not going for what you feel is the best?
Another person selling his take on the supposedly secret knowledge behind getting to Oxbridge.
The reason why it more candidates get in to do history than social sciences may be that history is undersubscribed. Or it may be that the people applying to do history really want to do history and have got good scores at the right A levels. A bright student who is perfect for economics isnt magically going to improve her chances by applying to do history, if she has no interest in history and cant show a spark.
Improve your chances? go to the open days yourself (not your mum), talk to the tutors, do the A levels they tell you to do and learn to love your subject.
And dont waste any of your hard earned cash on any course that promises to sell you insider knowledge.