Friday, 25 November 2011

Heresy in the shadow of the City: Max Keiser sacrifices the sacred cows of finance

London banks were on high alert last week as Max Keiser – the dark lord of financial hellraising – arrived in London to do what he does best: Sacrifice the sacred cows of finance orthodoxy. It’s fitting that he chose to do so in a pub down an alley in London Bridge – The south bank has long been a place of covert speakeasies where villains, pirates and heretics might slag off the king and preach rebellion among the drunken rabble. The event was a fundraiser in aid of Resonance FM, London's alternative arts radio station. Needless to say, it was awesome, and yes, I was drunken rabble.

Max Keiser is in intriguing guy. I don’t claim to know his background in any depth, but the quoted back story says he was 1) initially a stockbroker, 2) then an entrepreneur that started the Hollywood Stock Exchange, (a platform for buying and selling film rights, later sold to the huge brokerage Cantor Fitzgerald) and 3) an entertainer that carved out a media career in fiery financial commentary. For those who haven't seen Max in action, he's one of the most outspoken critics of banking practice. He cuts a compelling figure, using a background in the financial industry as a platform from which to advance ideas that are serious no-go areas in mainstream finance chat… stuff like questioning the entire basis of modern monetary systems and advocating that senior bankers should be burnt at the stake. 

If this stuff was coming from the standard academic commentator, it would probably sound crap, but Max has made an artform out of passionate advocacy of deeply heretical points of view. Where some people would sound preachy and self-righteous, Max just sounds indignant, pissed off, and funny to boot. He has what many critical academics lack – an opportunistic flair and a talent for entertainment. It’s very seldom that someone can make stand-up comedy out of financial commentary, whilst simultaneously making you deeply question things. He’s both a joker with a mischievous flame and an underdog hyena who cares about injustice. He doesn't claim to be pure, and the fact that he’s been out and tried the system gives him clout.

Financial terrorists
Max is certainly controversial. In fact, he's pure leveraged controversy. He likes to refer to senior bankers as 'financial terrorists'. He shoots political correctness in the head with disturbing stories of financial rape and epic incompetence. He told us about 'the suicide trader', a concept he's been dreaming up as the basis for a potential upcoming production: The story goes that there's this trader in the World Trade Centre, watching the planes coming and deciding to stay in his chair betting against aeroplane stocks instead of trying to escape. Methinks that could cause a stir...

I met a hedge fund manager a few months ago who knows and loves Max. This probably supports my point, made in a recent Guardian article, that some of the best hedge fund managers are those that do not give a flying f**k about what they’re supposed to think. Max himself has dabbled in some interesting hedge fund ideas. Back in the early 2000s he started Karmabanque. Although it’s suggested that Karmabanque was a  hedge-fund in and of itself, Max has characterised it as a ‘broker of dissent’ – a middleman between hedge funds looking to bet against companies, and activists looking to target companies with campaigns. I haven't been able to drill down into the exact structure of Karmabanque and how effective it was, but it's a thought-provoking idea: Betting against companies with poor social and environmental records and then making them targets of activism to drive down their share prices. Some would call that idea 'market-manipulation'. Others would call it sweet justice, a scheme in the spirit of Robin Hood and other underdog rogues (see Greenpeace article). Theoretically speaking, money made in the process could be steered back into doing something positive, like investing in renewable energy, but in the end it seems Karmabanque was shelved. It now provides an interesting model to consider when designing any future activist hedge funds.

Calling the emperor's new clothes: Buy silver, crash JP Morgan
More recently Max has become known for his 'Buy silver, crash JP Morgan' campaign. Max believes that JP Morgan is deeply exposed to a huge naked short position in silver. If it is true, it means JP Morgan is seriously vulnerable to the price of silver going up too much. He reckons that if enough people try buy silver to force the price up, JP Morgan would be forced to try cover its short position (i.e. reverse it's bet against silver), leading to a runaway 'short-squeeze' (in which they scramble to buy silver to get out of their trading position and in so doing cause the price to skyrocket even more) causing JP Morgan to go bankrupt. Here is the dramatised version:

It’s an interesting theory, and not one that I know enough about to have any particular view on it. Max seems pretty sure of himself though, and the campaign goes on. In any case, he advocates the possession of precious metals as a much better alternative to fiat currencies, which he thinks are all going to shit. 

Time will tell if Max is right or wrong, but regardless of what you think of his ideas, it’s great to a have an original voice of dissent challenging orthodoxy. I'm always a supporter of muckrakers that keep the system on its toes, and after an hour or so of standing there listening to him I was cheering like a maniac and thinking ‘ah shit Max, you’re cool, can I come talk to you?’ Then he was swamped with fans and I decided against doing that. Maybe I'll meet him one day and we can compare notes.

Wednesday, 23 November 2011

Financial Psychogeography: Suitpossum joins forces with CurioCity London

It’s a pleasure to announce that I will be syndicating out blog-posts to the website of the great new London-focused magazine CurioCity. CurioCity was started by Matthew Lloyd and Henry Elliot in early 2010, originally as an informal handmade pamphlet to distribute to friends and family. Back then, a group of us wrote articles and put together the first issue in Henry’s lounge in Kennington. It’s come a long way since then, and the first professionally printed version is now being stocked in iconic London outlets such as Foyles and Rough Trade. The website has now been set up to provide a regular flow of high quality pieces centered on London, suggesting ideas for experiences that are fun, educational, and that encourage a deeper engagement with the city.

Urban adventures in financial landscapes
My main focus is going to be ‘Financial Psychogeography’. ‘Psychogeography’ is a word that means different things to different people, but I’m taking it to refer to:
  1. the exploration of cityscapes with the deliberate intent to break down oppressive or hegemonic ideas embodied in, or implied by, the physical space
  2. and in the process seeking to reinvent or replace those ideas with unorthodox visions and alternative viewpoints… or something like that
Psycho-geography is about trying to identify the subconscious mental programmes that get installed in us by our physical environment. It’s also about creativity. It’s about trying to hack those programmes and reconfiguring the codes of mental DNA that condition how you perceive something. A greater awareness of physical space allows one to take mental control of it, and to re-enchant the cityscape with new perceptions. So basically it's an excuse for me to wonder around financial landscapes and reflect on them, considering what they might teach me about the world, how they might affect the way I think, and then maybe how the dominant ideas they impart can be challenged. This might be an epic waste of time, but if nothing else, it should provide a couple of fun outings and opportunities to embarrass myself.

A brief history of psycho-geography

If you look up the Wikipedia article about psycho-geography, you get some background history which says that psycho-geography was something developed by the Lettrist International, who broke away from some other group (also called the Lettrists) in France. It was spearheaded by a guy called Guy Debord, coming out with classic quotes like ‘the most urgent exercise of liberty is the destruction of idols’. Guy later wrote ‘The Society of the Spectacle’, a classic piece of ‘fuck-you authorities’ literature. By all accounts he and his mates were something like the French equivalent of Jack Kerouac and Alan Ginsberg, promoting a type of avant garde Marxism-meets-art sensibility, getting involved in the May 1968 wildcat strikes, and inspiring a generation of Gaulloises adverts and films like The Dreamers. Certainly, psycho-geography does bring to mind intense French students sitting around in cafes chain-smoking and fiercely debating the nature of the world. At its worst, it’s a load of pretentious bullshit, but if it’s done right with a bit of tongue in cheek, it can be a lot of fun. If it’s done really right, it can be transformational. Later generations of psycho-geographers like Iain Sinclair and Will Self have done a lot to bring to life the hidden codes of landscapes, and hopefully I can do the same in CurioCity.

Here is some footage of the launch party. I’m playing guitar in that.

Tuesday, 1 November 2011

Fun things to do in London's Financial Heartlands: Fusing Canary Wharf with the Real Economy

The financial sector is frequently contrasted to the ‘real economy’. The ‘real economy’ is seen to involve the production of goods and (non-financial) services, while the financial sector is seen to act as a facilitator of, and gatekeeper to, investment flows into those industries. Banks and funds are in the business of predicting which businesses to back, steering debt and equity based on future perceptions of the real economy. The financial sector runs ahead of, or parallel to, the real economy. In some conceptions, it isn't connected to the real economy at all.

The usefulness and accuracy of the traditional distinction can certainly be questioned, but if ever there was a place in the world where the distinction made visual sense at least, it would be London. London is one of the few cities where the financial sector can literally be seen from a distance, most notably in the stark concrete and glass of Canary Wharf. London is also home to many decaying remnants of the old manufacturing economy, with monuments such as the Battersea Power Station a testament to both abandonment by the financial sector, but also attempts to re-connect to financial flows through regeneration proposals.

Visual mediums often tell stories a lot more effectively than words and pundits do. That’s why I'm an enthusiastic supporter of financial visualisations and infographics. A walk along the South Bank of the Thames though, offers some interesting opportunities to experience the visual divide between the financial sector and real economy directly, especially as one approaches Canary Wharf. Arranging the views to tell a story, and then capturing those stories on camera is a worthwhile way to spend a Sunday afternoon.

The abandoned pub

Here’s a simple scene that I found quite poignant. The pub was abandoned and boarded up, with the towers of finance looming behind. I don’t know exactly what one would want to read into it, but to me it could highlight the stark divide between an old English working-class docklands culture, and a new international financial culture gradually pushing it out.

The construction yard

This was one of my favourities: A construction yard just past Greenwich on the Thames Path. If you find it on a Sunday you can climb over the broken fence and play in the rubble. Again, there are a number of stories to be told. The construction site could be seen as a product of the financial sector - only existing through the provision of capital - or as the real underlying activity that the financial sector relies on to survive. Perhaps this rubble is a future financial centre. I personally just liked the visual contrast.

The spontaneous garden

Here’s a fun one. If you pay attention along the way, you can find fresh wild tomatoes growing in the industrial zone approaching the O2 arena on the Thames Path. The interpretations are endless. The financial sector connection to the farming industry? Small scale organics vs. large scale synthetics? The ancient agricultural roots of society holding out like a renegade against the ultra-modern world of derivatives and virtual food speculation?

The barbed-wire fence

A visual arrangement need not be literal. This just looked really cool to me, but maybe it could be seen as a play on entry into the financial sector. Is the financial sector guarded by barbed wire and a giant river moat? Not if I have my way about it.

The reclaimed pier

This old pier has been transformed into a mini ecological sanctuary to be used by nesting river birds: We arrived here as the sun was setting, but I’d like to read into it a message of future sustainability in finance and  the creative use of the old to make a new dawn. Damn, I got to get out my notebook now and write poetry...

Just do it
It’s going to take a lot more than arranging images to build financial sustainability, but it’s an interesting exercise in the mean time, and a potentially thought-provoking one. There are hundreds of opportunities for this. How about starting at Stave Hill in the Rotherhithe Eco-Park, a great place to juxtapose the green with the blue-grey of global finance. I’m sure there’s a photographer out there who can do this a bit better than my HTC mobile phone camera can. Anyone want to collaborate? Please do send photos of your docklands journeys, along with possible interpretations, and I can put them up.

The Thames Path area between Deptford and North Greenwich and is also a hotbed for graffiti artists. It would be great to use the site for the development of financial graffiti - a living exhibition reflecting on the huge skyscrapers across the river. I’d personally like to stencil a QR code on one of the walls (p.s. these codes require a  smartphone barcode-scanner app to read). I kind of had this one in mind...