Horseshit

What in my upbringing or education or my career as a parent, technologist, sportsman or company CEO would make my opinion particularly interesting to anybody? Indeed, I tend to find that I have the strongest opinions about that which I know the least about. But, I've finally come to a chilling decision. It doesn't matter.

In any case my opinion does count, if only because I am a voter in a democratic country. Thus the current state of the democratic world must be dancing to the tune of ordinary people with ordinary opinions like mine - there's a scary thought. And, if the state of the world is my (our) fault, or at least my (our) responsibility then I say it's time to fix it. And I invite you, dear reader, to roll up your sleeves and get stuck in with me!

Since we're taking on the world today, let's lay the economy bare. Recession, depression, inflation, deflation, markets, meerkats, derivatives and toxic assets should do the trick.

But, since I don't know what any of those terms really mean, I will share with you "Ogbe's theory of Redrum". If we can agree on the "theory of Redrum" we can then get to work setting things straight!

Redrum was a very successful racehorse, and he ran round and round a track faster than most of the other racehorses and won a lot of races. Redrum invigorated the "market" and punters bet on him to win races. People won and people lost and the market was buoyant. The racetracks, bookies, jockeys, grooms and trainers were paid, and Redrum's owners were richly rewarded. Redrum was worth millions. And, he sustained a market worth millions upon millions.

If anyone had stopped to ask "What does Redrum actually produce?", his product could have been seen being shovelled off the track and the stable floor and used to fertilise your rose-bushes. But, it is probable that nobody asked - because that would have been missing the point.

And, if it were asked whether the millions that Redrum was "worth" could be redeemed in horseshit it would probably have been found to be impossible - but that too would have been missing the point. Welcome to the Redrum economic bubble.

Now, what happens if a horse like Redrum becomes too successful? Well the payoff on a winning bet becomes poorer and poorer until it's really not worth betting any more. And, the punters go home. Welcome to the Redrum slump.

It would seem that when this happens there's only one thing to do to re-invigorate the market. Shoot the horse, and make room for new blood. And the punters come back. Call me naive if you will, but it seems to me that in world markets several such metaphorical horses, Worldcoms and Enrons have been shot over the years and the markets have revived.

So what's new? What's different about this round of shootings? What's different about Leman Bros, AIG, Northern Rock, RBS, etc?

The difference is that we, the people, have suddenly felt cheated, deceived, hoodwinked. We are all indignant about the fact that these companies and the assets they were investing in were never worth and were never going to be worth their weight in horseshit (or other noxious assets) - but that was missing the point - wasn't it?

If I'm not mistaken there's no difference between trading horseshit and diamonds - the markets decide their value as a function of demand, and I don't think that's cheating. After all markets can go up as well as down - right?

So I would have suggested that we get off our high horses (bwahahaha) and buy stakes in those "toxic assets", but Barack's beaten me to it. Apparently US policy is working on de-toxifying these parcels of sub-prime investment assets and will be re-introducing them into the meerkats. Excellent! I for one would love to buy some – for my rose-bushes.

Nuff said.