David Hirst's celebrated international column on the global financial crisis and its aftermath.



"In an age where most business journalists have become little more than cheerleaders for the Charles Ponzi Memorial Football Club, David Hirst calls the real shots in business with acerbic wit and Dickensian disdain for the financial follies of our modern age. He called the Subprime Crisis before the Bubble burst (and sold his own property at the peak), foresaw the carnage that would flow from the collapse of Bear Stearns, saw the manipulations beneath the 2009 rally as the TARP was pulled over the eyes of the herd, and has a deep sense of the real economic forces that lie beneeth the veneer.

Seldom wrong and always entertaning, David Hirst is my first point of call for the real news of our day."

Tuesday, February 2, 2010


The anger on her face took one on a journey to the darkness of the human soul. I was reminded of the “hate sessions” of Orwell’s 1984 when the public were brought, through a combination of dope and propaganda to express their hate of the enemy, Goldstein.

Before me was the face of a very dangerous and sick woman who would kill and kill again. At her left, her husband was almost on the same pitch of pure ferocity and rage. Both had the arms stretched before them their thumbs emphatically down. If they were not dressed as average, ordinary, white American working class stereotypes they might be passing judgment on the French aristocracy. They sure weren’t knitting. Wall Mart joins the Paris mob. Lower-middle class American’s reduced to howling anger over, of things health care reform.

The picture was selected by the BBC to illustrate popular sentiment against health care package that currently flounders in Washington.

But it seems to spring from George Orwell’s two minute hate sessions. Let us recall; “The Hate had started. ..In its second minute the Hate rose to a frenzy. People were leaping up and down in their places and shouting at the tops of their voices in an effort to drown the maddening bleating voice that came from the screen. The little sandy-haired woman had turned bright pink, and her mouth was opening and shutting like that of a landed fish. ..

The dark-haired girl behind Winston had begun crying out "Swine! Swine! Swine!" and suddenly she picked up a heavy newspeak dictionary and flung it at the screen. It struck Goldstein's nose and bounced off; the voice continued inexorably. In a lucid moment Winston found that he was shouting with the others and kicking his heel violently against the rung of his chair.”
But the photo was not of this imaginary event but of an ordinary part of ordinary America demonstrating, probably for the first time in their lives against, of all things, a system designed to improve the health of the nation and directed especially at working class American’s. Not that the demonstration involved standing in the burning sun or freezing rain while police practiced with their batons – I am sure there were off duty cops throughout this comfortably seated, deeply disturbed assembly.

Although Obama no doubt seeks to help the almost 50 million Americans without health the administration more profoundly want to reduce spending. With the health care system eating 17% of GDP and the prospect of reducing that to the average of 7% in the rest of the advanced world there is no better place to start. We all know the facts – but why the frenzy of hatred.
Texas is truly different but why with only two-thirds of the population having health insurance and over a fifth of all children have no cover at all, is opposition to the legislation is currently running at 87%.
Coverage by the BBC was of a “tea party” of the kind that have sprung up all over America at first is a testament to rejection of Obama and whatever it was they thought was happening in Washington. Some six months after the dawning of the “Tea Party” movement it has been galvanized to represent the face of American hatred of socialized medicine.

The specter of socialism, an anathema to the American political and financial class, the old Chamber of Commerce world where Government intrusion was acceptable only in the fields of taxation and regulation, (which most American businessmen accepted and in the later case had long feared) now seemed to stalk the country.

The middle class and working class in the year 2010 has galvanized to these tea parties (a bizarre parody of the events in Boston 235 years when, rather that throw out a dead Kennedy’s replacement in the Senate, revolutionaries to be, some disguised as Mohawk Indians, threw a few hundred of tea bags (big ones but without the string) into the drink. It was in important development on the road to overthrow of English rule and a terrible waste of tea.

Today’s lumpen bougesious (If that’s not a contradiction in terms) have gathered in “tea parties” sans the Mohawk attire - and their anger seems to exceed that of their forbears in Boston. The town hall type movements that had sprung up across the land have long been despised by the Liberal elite and the media scoffed at such ill-informed populism. Astonishingly the political punditry did not even smell the fires burning across the land. White rage was dismissed as a creation of the ravings of such as Russ Limbaugh, a fully paid up member of the establishment who made his living out of taunting it.

The faces we see are of One thing’s for curtain – these people surely don’t like the expansion of public health.

The BBC captured the unrestrained fury, explosive and dangerous while trying to come to terms with a movement the US media would prefer to ignore. Naturally the BEEB dragged out some sociologists and people paid to understand other people to explain why these fold would fight with such ferocity something that is clearly in their interests. The BEEB wondered “why there is often such deep opposition to reforms that appear to be of obvious benefit to voters?”
The town halls meeting, we were told by the BBC, gave Americans the chance to debate President Obama's proposed healthcare reforms but what “what happened was an explosion of rage and barely suppressed violence”.

But why? Why can health care lead to rage and barely suppressed violence.
One pundit opined; “It is striking that the people who most dislike the whole idea of healthcare reform - the ones who think it is socialist, godless, a step on the road to a police state - are often the ones it seems designed to help.

Again why?

Another; “To many of those who lose out under the existing system, reform still seems like the ultimate betrayal.
Of what?

And in what seemed almost silly; “It might be tempting to put the whole thing down to what the historian Richard Hofstadter back in the 1960s called "the paranoid style" of American politics, in which God, guns and race get mixed into a toxic stew of resentment at anything coming out of Washington.”

I don’t think so.

Then we get the theory that people resent having their interests decided for them by politicians who think they know best.
Yet they send their kids to war!
Other reasons discovered by the BBBC are “there is nothing voters hate more than having things explained to them as though they were idiots… in politics, when you are explaining, you are losing.

But every other nation blessed with Democracy expects explanations.

The BEEB cited The Political Brain, a book by psychologist Drew Westen, an exasperated Democrat, who tried to show why the Right often wins the argument even when the Left is confident that it has the facts on its side.

He uses the following exchange from the first presidential debate between Al Gore and George Bush in 2000 to illustrate the perils of trying to explain to voters what will make them better off:
Gore: "Under the governor's plan, if you kept the same fee for service that you have now under Medicare, your premiums would go up by between 18% and 47%, and that is the study of the Congressional plan that he's modelled his proposal on by the Medicare actuaries."

Bush: "Look, this is a man who has great numbers. He talks about numbers.

Thomas Frank, the author of the best-selling book What's The Matter with Kansas is quoted saying, "You vote to strike a blow against elitism and you receive a social order in which wealth is more concentrated than ever before in our life times, workers have been stripped of power, and CEOs are rewarded in a manner that is beyond imagining.

"It's like a French Revolution in reverse in which the workers come pouring down the street screaming more power to the aristocracy."

About the best argument I found in the BBC report was that the Democratic Liberal left doesn’t fight dirty or even lift it’s dukes. That Obama from day one should have said; “we are fighting the Bush Depression – it will be tough. But we’ll get their.

But all Street bonuses would soon turn that argument against him.

None of the above explains the question of why people so violently hate something that is constructed over years for their deepest benefit.

So much has been taken from poor Americans that health care has come to mean much more than the sociologists can explain. It is almost synonymous with a good, steady job.

“Do you have health care?” is a defining question for working class Americans. It has become one of the last definitions of success. If you have it you have cause for pride – you are valued. Hand it out to all and your personal self esteem your very identity becomes unstuck. Without it you are no different from those at the bottom. The poor blacks and Hispanics and your fellow white trash.

And the more expensive health care becomes the more valuable you are. So telling people with health care, still the majority, money will be saved by handing a life giving benefit free to all strikes where it hurts most.

The subject of the 2 minute hate sessions, Goldstein, did not exist. The Party, Big Brother, created him to create an object of hate. Their interest was creating hate and thereby maintaining power. The Party had created a world where humanity was the enemy to be discovered and destroyed for Big Brother was capable of looking after all needs. To achieve this Big Brother had to teach the public to hate their own humanity.

As Goldstein talked the telescreen constantly showed the marching troops of the enemy of Eurasia – a reminder of the permanent state of war and the constant threat from a vague far away army that was made terrifyingly real for the hate session.

If we think of the tea parties as hate session we might understand what’s happening here. A class is losing the remnants of what it had, the dignity of labor, the dignity of retirement through generous pension funds, credits cards that had worked like magic wands all their lives, and lots of other things. They owe more on their house than they own and they seem to have been paying for it all their adult lives. The kids want to move back in. A polished gifted black man who is far more articulate then anyone they even know is telling them what’s best. And having established in the public mind the Government will determine who will be your doctor it’s not hard to have people believe that a black president will have a black doctor examining my white wife.
The mood of America has changed since Bill and Hill (two for the price of one) tried to bring health care to more American’s the rejection, manufactured by Madison Avenue, was more one built on frustration rather than anger and hate. The good jobs were going – but the real assault on jobs was yet to come. NAFTA was but a twinkle in Wall Streets eye. Bill and Hill finally rolled over. There was too much money at stake.

For if we look at health care costs being some 17% of the US GDP and consider they could be cut to 7% if a system like Canada or Australia was implemented that’s 10%of US GDP being lost to big Pharma, hospitals and HMO’s. Of that, if we deduct duplication of paperwork we still get at least 5% profit. That is a huge chunk of profit.

In a federal budget two numbers stand out as fearful, for the way they may change American politics and American power.

The first is the projected deficit in the coming year, nearly 11 percent of the country’s entire economic output. That is not unprecedented: During the Civil War, World War I and World War II, the United States ran soaring deficits, but usually with the expectation that they would come back down once peace was restored and war spending abated.

But the second number, buried deeper in the budget’s projections, is the one that really commands attention: By President Obama’s own optimistic projections, American deficits will not return to what are widely considered sustainable levels over the next 10 years.
Health care is the best place to attack – the other defense is a question for another time.
But this rejection of health care by many it is directed to help is not entirely contrived by those who will profit. I expect they are delighted with the current rejection for this time the Administration definitely had the mandate to implement change and a compelling economic reason to do so.

No one reckoned a home grown backlash by those the scheme was designed for.
That is why I think the BBC is barking up then wrong tree. The sociologists spotted the anger but not the hate.

When working class people scream about socialism they are taking slogans from the right wing shock jocks like Rush Limbaugh who know exactly why such people they hate free, universal health care. Because it is free and universal.

When I managed to break my neck in California 6 years ago I was on a gurney and being wheeled out to an ambulance having been “stabilized” at one of the finest hospital in the land but, as there was no evidence of insurance and I was unconscious I was ready from the scrap heap. In the US that is County Hospital and in my condition I would have been “toe tagged” and left to die. In my battle to drag myself across the desert I had lost my wallet and ID and my Blue Cross insurance card.

Minutes before I was unknowingly being passed into the land of the dead my partner arrived carrying a identical copy of my card.

The gurney immediately was reversed and I was returned to the emergency ward of the top private hospital where, under law, I had been sent to be “stabilized.” Once achieved the private hospitals can then thrown one out and they do – to all without these precious cards. Today I have one of the best broken necks in the world. Without that card I would almost certainly be dead. The cost was in the millions and I calculated about one third of that was profit, duplication and payments for the best surgeons money could buy. For the finest private hospitals compete for the terribly injured but well insured. With that Blue Cross card I was worth millions without it I was worthless.

I suggest these people do not want to see health insurance extended to everyone and, until they have more hope and certainty in their lives will continue to hate the idea.

Which makes Obama’s task that much harder. For now he must reverse thirty years of decline. Thirty years where the middle class has slipped to working class levels and the working class is far approaching the maxim “I’d be working class if I could get a job.”

And then these same people, or their children must be educated so they are not subject to the fear and prejudices that build the hate so they never think straight.

Health care reform means whole scale reform of America, the reversal of what has become a doctrine, that Government is Inherently bad and socialism inherently evil.

More importantly he must take America to a place where they see the advantage of their fellows as being their personal advantage. That no one is a rock or an island. Health care is the best way to do it for the advantages are so obvious so soon. The Government must be steadfast and drive through the reforms or future governments will not be able to survive. The costs of letting the health care industry look after America will prove too much for America.

Once America gets health care it will never give it up. No advanced nation ever has.


By Robin Maxwell from Huffington Post

It recently occurred to me that, as an author who's been writing since 1997 (The Secret Diary of Anne Boleyn), I'm living through the most mind-boggling upheaval in the publishing industry since Gutenberg's printing press. I've gone from the ponderous national "on the ground" book tour to a virtual book tour; from newspaper features to a Facebook fan page; from an author photo in a press kit to an author video on YouTube; from print advertising to an iPhone app. My titles are not just in print in 14 languages, but are audio books and e-books. Most gratifyingly, I've seen the end of isolation from and competition with other authors, to the new, delightful "one hand washes the other" school of cooperation.

Starting in 2003 (The Wild Irish) things began to change. I was plodding along doing things the old-fashioned way, quietly aggravated that I was not getting publicity, advertising or support of any kind from my publishing house. My lovingly researched and passionately written book was dying on the vine because the reading public was simply unaware that it had been published. Newspaper and magazine reviews were becoming more and more scarce. Beloved independent bookstores were starting to go the way of the dinosaur, and if readers didn't happen to be in a Borders or Barnes & Noble during the two weeks my novel was on a New Releases table, that was it! The poor creature was quietly moved to languish in the shelves, spine facing out, where no one could possibly find the thing unless they were specifically looking for it.

But sunk as I was into the writing process of my next book, I was only vaguely aware of the violent tremors rocking the publishing world. Of course I used the Internet more frequently for research, but I didn't know that any writer worth her salt had her own Web site. A musician friend began nagging me incessantly about having one built, insisting that anyone who was running a business or selling themselves in any way had to have a Web site. That if I didn't jump on this I'd become completely irrelevant.

One day I finally caved in to the idea. And in one of those wonderfully serendipitous moments, the very next day an artist friend recommended a Web designer who'd created a beautiful Web site for her. Linda LaZar was running a very affordable special, and by the end of the week, my webmistress (doesn't that sound a bit kinky?) had secured me a domain name and built me a fabulous interactive site, http://robinmaxwell.com, that had a page for each of my six books and looked like a Renaissance jewel box. And suddenly -- seemingly out of thin air -- the Robin Maxwell "brand" was born.

Immediately I started getting fan mail through my Web site's email, from all over the world. It seemed lots of readers knew who I was and wanted to communicate. I wrote back to every single person, and in that way began collecting an email address book of people interested in what I was doing and hearing news about future books.

Meanwhile I had made friends with two much younger historical fiction authors - the talented and vivacious Michelle Moran, whom I'd been mentoring since 2001 and whose debut novel, Nefertiti had hit two bestseller lists; and C.W. Gortner, whose superb first historical novel, The Last Queen, had taken the literary world by storm. These two were both firmly entrenched in cutting edge promotional campaigns with not only their own Web sites, but their own blogs, membership on historical fiction forums, and well-organized virtual book tours. They coordinated their tours with blog advertising on unlikely sounding sites called ICanHasCheeseburger.com and PerezHilton.com. Michelle and Christopher had recently become friends with each other. They could see their pal was floundering around in the murky waters of the old paradigm and decided to fish me out.

With publication of Signora da Vinci looming, they encouraged me to spice up my Web site (I added eight colorful, chock-a-block bonus pages I called "Passport to the 15th Century," one of them a mouthwatering grape and olive compote recipe. They got me to send out a newsletter to everybody on my recently expanded email list, begging them to take notice of my book and "daisy chain" it along to all their friends.

They also convinced me to forgo the exhausting, antiquated "on the ground" book tour (an expense my publishers were no longer willing to pick up) and organize my first virtual book tour. I was skeptical at first, but not for long! No more schlepping around from city to city worrying about whether the bookstores would have enough copies of my books to sell, or being humiliated in "The Bookstore of the Living Dead" when two people showed up for the reading.

The entire promotion for Signora da Vinci was accomplished -- glowing reviews, in-depth blog and magazine interviews, guest posts, giveaways of signed copies of the book, and remote reading group appearances -- sitting at home in my pajamas.

What a revelation!

Even in the midst of the 2008/2009 economic meltdown and the resulting bloodbath in the publishing industry, Signora da Vinci sold more than respectably, and the number of bloggers who had nice things to say about my books not only expanded exponentially, but suddenly went viral. Bloggers were starting to find me, rather than me hunting them down.

With a new title, O, Juliet, set to publish in February 2010, I was ready to go for broke. I girded my loins and prepared for a wild extravaganza of shameless self-promotion.

I made a decision that for my O, Juliet promotion I would do absolutely everything in my power to make the book a success. It was the first of my titles to cross so many genres. This was not simply an historical fiction novel (though it had plenty of historical fiction elements). It was a retelling of the greatest love story every told, so I reckoned romance readers would like it. And its protagonists were young people being thwarted in love by parents and society, so I guessed it would appeal to the YA crowd as well.

At the same time, I was facing up to an industry that had changed radically since 1997 when Secret Diary of Anne Boleyn came out. My publishers and agents had urged all their authors to use every online method possible for publicizing and promoting their titles, and I decided to take it 100% to heart. The publishers (Penguin/New American Library) got the ball rolling with a stupendous double-cover for O, Juliet. The front is gorgeous flowers clinging to a period marble balcony, and the "step-back" is Frank Dicksee's famous and achingly romantic pre-Raphaelite painting of Romeo and Juliet in an embrace.

My trusty Web dominatrix, Linda LaZar, redesigned my http://robinmaxwell.com home page and built me links to a "chapter sneak peek" of Romeo and Juliet's famous balcony scene. I bought the rights for one year to the Dicksee painting so I could legally use it however I needed it. Then I planned an enormous blog tour (interviews, guest posts and reviews), to commence in January, the month before the book's publication. O, Juliet will also be hosted on the cool new blog, http://HistoricalFictionRoundTable.com for a week-long blast of publicity by lovers of that genre.

I hired young, Web-savvy friend and neighbor, Tasya, as my West Coast publicist. She opened a Facebook personal page for me, as well as a Facebook fan page, and started inviting people to them. Within 24 hours she'd found me 200 fans. With help from one of my new blogging buddies, Allie Greenwald, I created a blog of my own (http://robinmaxwell.blogspot.com).

The blog's purpose was (what else?) promotion of my book, and to that end I birthed my wild brainchild, the "O, JULIET Love Games." With it, I hoped to open a forum for my fans and new readers to discuss and play with every angle of everyone's favorite emotion -- love. With the Dicksee image of Romeo and Juliet as my blog header (and guardian angels) I conceived of chats, challenges and giveaways, culminating in a love poetry competition, the winners to be announced on Valentine's Day. Then I asked Tasya to create a beautiful newsletter, and appropriated every address on my email lists. She did our first mailing Dec. 2, announcing the sneak peek and the upcoming "Love Games."

By this time my publishers were quite impressed with my efforts and decided to support them in several ways. On my urging (and with suggestions by the author and gifted advertising maven, M.J. Rose) they designed a cool blog ad, (a two-frame animated .gif), that the bloggers participating in my virtual blog tour could run on their blogs. Then the publishers agreed to my requests for a two-week blog ad campaign the weeks before and after publication.

Finally, they surprised me with the announcement that O, Juliet had been chosen for their exclusive "Penguin iPhone App Program." My book was going to be only one of four Penguin titles to have its very own app in February! I'm red-faced to admit that when I got the good news, I had no idea what an app was. The very next week, every other TV commercial I saw was for (what else?) iPhone apps. I was beginning to feel very hip. The other day I actually found myself giving a friend tech support on how to create her own blog. Will wonders never cease?

As of today, two of my O, JULIET Love Games giveaways are up and running, and lots of people are playing (and appearing to enjoy themselves). It doesn't hurt that the prizes are some pretty cool bling (three heart necklaces) and signed copies of the book.

My backside is permanently glued to my computer chair, my husband only ever sees the back of my head, and there's no chance that I can do any other work until the promotion is over. But I'm happy. I may write about the 15th and 16th centuries, but when it comes to promoting my book, I am most definitely an author of the 21st.


Returning from overseas to Australia might not be a sobering experience but perhaps it should. Like that scene in Missouri Break’s when Jack Nicholson commiserates with Marlon Brando and tells him he didn’t want to wake him but “I just cut your throat.”

Is it possible for an entire nation to sleep through an economic cycle and not have its throat cut?

“Too easy,” says a nation deep in sleep.

For no nation is more complete in its vanity. Nor have the people who have come to populate it been so lacking in their fulfilment. “Far too easy” and “absolutely no worries” have become mantras of a nation without purpose. It is, given the fact that most of the world is attempting to face a global crisis that affects all differently synonymous with the child on a new bike crying “look no hands,” as his parent watch in delighted wonder and the banking sector cheers from the sidelines.

There was a time Australia cared about its wealth and therefore its future. It was huge with Whitlam’s Government and found sad and salutary expression in such things as superannuation and future Australia or some such thing. There were people who cried, “give me men to match my dreams” the future often on their minds.

No worries about the future of modern Australia. It is all “Too easy.”

While the nations of the world eye the future with grim forbearance and fear Australia has, unique amongst them all remained utterly thrilled at the prospects of tomorrow. For now we shall sell the farm and hold onto the good bits like BHP and Rio. Can anyone tell me who actually does own Rio or most the swag? We do! “No worries-too easy”.

IRA’s Chris Whalen gave something away yesterday at Institutional Risk Analytics when he wrote about “keeping the game going on a few weeks longer.”

The game is the money shuffling we call the world economy and Chris has been watching it pretty closely those past twenty years or more. And he likes, and knows his Rolling Stones. Keeping the game going for a few more weeks really means keeping the game going for as long as possible.

I don’t think many; even the most savage critics want to see this thing come apart.

It will be worse than the thrill and spills of the events of the Phoney War of September-November 2008.

The bubble the Government has used as ammunition is running out. The belief structure is being battered as never before.

There are too many agendas at work, to many competing forces being unleashed. We have to concede that no matter what the outcome of the eventual meeting of the buffaloed buffoons of the upper house of US politics has made a merry mess of their job. The entire Bernanke re-appointment fiasco was (as this column pointed out many weeks ago) a disaster waiting to happen. He will be the headless horseman of the Fed.

The political class can deliver its masters in the financial class their man but they might as well do it with his head on the plate.

“No worries,” replies an Australia that it blithely unaware of the massive dogfight surrounding all positions in the US financial hierarchy – except, of course those who control the To Big Too Fail Banks who are “forever young.”

Australia can walk through the next stage of the GFC as, it can sell stuff to China, has a solid banking system, er its raining again somewhere, and nothing happened last time. Why the entire financial crisis is, as the Murdoch press is good enough to point out a contrivance of those who so falsely bought us climate change.

Three weeks ago The Australian newspaper listed all major (and a lot of minor) stocks - on an entire half page as buys or buy-specs.

You cannot lose money here. It is physical impossible for Australia to ever be troubled by hardship. In the following weeks all those buys were sold off.

But “she'll be right, no worries, too easy."