Anti-Wall Street protests rock corner of passageway beneath HSBC HQ

The Hong Kong edition of China Daily leads with the spread of anti-Wall Street protests across the developed world as ‘cities see rallies against corporate greed’. The other front-page story reports Mainland government intervention after an Internet sales platform raised fees ‘massively’ for small vendors. It is unclear whether we are supposed to infer that China does or does not have a problem with corporate greed.

Is corporate greed any different from the evolutionary impulse that leads a well-disciplined and well-fed dog to gobble up three unguarded steaks on a table? Demonstrating against company managements for trying to maximize shareholder value or giving themselves huge bonuses is missing the point. If the bosses have broken the law, prosecute them; if they haven’t, and their behaviour is unacceptable, blame the lawmakers and regulators.

The current financial crisis is being overshadowed by the nightmare following Europe’s utopian attempt to unify its currencies. But if we follow the problem back to its origins we get: already-indebted governments bailing out the financial system and virtually bankrupting themselves; this followed the near-death of the financial system after it created a mountain of toxic debt; this resulted from the unbridled spread of bizarre derivatives; these were derived from large amounts of securitized mortgage loans, which had received top-notch low-risk status from ratings agencies; these comprised large numbers of mortgages granted to often low-earning people to buy overpriced homes. And at the very end of the trail we get to the root cause of ever-rising property prices and low-earners’ temptation to borrow: low interest rates.

So the person who needs to be strung up is Alan Greenspan. He and his fellow monetary policy-makers thought things were fine because inflation as they measured it – the prices of goods and services – looked low. We now know that these indicators were being depressed by the one-off reductions in costs we enjoyed in the 1990s and 2000s thanks to Internet/telecoms technology and the contribution of low-wage labour in China and elsewhere. When urged to take prices of commodities and assets like property into consideration, he said it wasn’t his job – as if the debasing of a currency won’t show up in such areas. And in addition to piling steaks up on the table, he opposed regulating dogs left unattended nearby, saying after it blew up: “Those of us who have looked to the self-interest of lending institutions to protect shareholders’ equity, myself included, are in a state of shocked disbelief.”

He was warned, but he ignored his critics. The European leaders who naively unified their currencies because they liked the trendy symbolism had the economic flaws explained to them, but they dismissed their detractors as Eurosceptics. Here in Hong Kong Chief Executive Donald Tsang was advised against continued restriction of housing supply from the mid-2000s, but he waved such ideas away with his usual smug, bureaucratic arrogance.

Perhaps Hong Kong people know that blaming something as nebulous as greed, or assuming that companies can be guided purely by conscience, is pointless. At Exchange Square this morning, the sculptures of Ju Ming and Henry Moore are cocooned by potted plants (perfect, in some cities, for throwing through windows), and the place is packed with police and Hong Kong Land’s regiment of Nepalese security guards. A few media folk have also been stationed there, just in case, but they know better. The Occupy Hong Kong kids camped out at HSBC HQ overnight – and they were just a few dozen strong. They say they are the 99%, but the truth is that the 99% are the people who aren’t there. Even in New York and London, the Western world’s ‘Arab Spring’ is marked by its visibly small scale. If the protests pinned the blame on the genuinely guilty, a lot more of us might turn up.

(Not that I have any fondness or respect for investment bankers. My favourite I-banker moment was when in the mid-90s my mother and I were invited up to a palatial duplex on the Peak rented for HK$250,000 a month by the local boss of one of the Wall Street institutions. He and his family were away; the invitation came from their maid, via mine – her friend – so we could use the swimming pool. My mother soon combed the three-storey property and pronounced it virtually free of books, other than the domestic helper’s glossy tomes of recipes in the kitchen. “Peasants,” she concluded.)

 

 

 

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10 Responses to Anti-Wall Street protests rock corner of passageway beneath HSBC HQ

  1. Real Tax Payer says:

    Wow……… I need to re-read today’s posting a few times to digest it

    I actually thought of joining yesterday’s 99% protest but the Kiwi / Aussie semi -final was far more enticing – and as it turned out : much more entertaining. WHAT A MATCH !

    But Hemlock seems to have missed THE big news : SCMP is reporting that CY is on a winning streak. Guess Hemlock should subscribe on-line as I do, which gets the hot news at 05.30 AM .

  2. Sir Crispin says:

    This past Friday’s Real Time with Bill Maher had an interesting discussion on this issue and one or two of the panelists made the interesting point that the protestors should be blaming Fanny and Freddy Mac, both government institutions. This echoes your point Hemmers about blaming the regulators for letting it happen under their watch.

    However, I do agree with the protestors on the Wall Street points, like many others, that these fat cat bastards took the bailout money and just paid themselves obscene bonuses with it. They should have been allowed to fail in retrospect.

  3. Old Timer says:

    An indicator that few care about ideology any more is that the statue of MLK Jr that was just dedicated in Washingon DC this weekend was sculpted by a Chinese sculptor (who has previousy sculpted Mao) in Chinese granite (quarried in dangerous conditions by underpaid workers, some report) and underwritten by the Chinese government.

  4. Joe Blow says:

    Just like the Statue of Liberty, that was made by Frenchmen and underwritten by the French government.

  5. maugrim says:

    So much for the ‘flea party’ representing the 99% silent majority. The ‘99%’ are at work. Add to the list of those responsible Clinton for Fanny and Freddie and the krauts for including nations who could barely manage their own economies let alone strict economic conditions. Since Greece has had the drachma, 100 of those 200 years have involved some sort of externally imposed financial advice/restraints. It was bound to happen.

  6. The Regulator says:

    The PIGS have taken the afternoon off for two generations and have been presented with the bill.

    The USA has been at war for two generations and has been presented with the bill.

    The PRC’s technology is owned by foreigners who have presented the bill.

  7. Real Tax Payer says:

    Go to Youtube

    Search ” Bird and Fortune” ( John Bird and John Fortune)

    Go to ” Sub-Prime Crisis” skit, which is a CLASSIC, then note that this was made in 2007 ( ! )

    Then go to ” Funny Money” parts 1 and 2

    UNBELIEVABLE

  8. Foxtrotosca says:

    RTB – whilst I agree that the Bird & Fortune skit is brilliant and indeed classic, yesterdays game was a terrible bore-fest!
    Vive la France!

  9. Stephen says:

    An anti Li Ka Shing corporate greed demonstration perhaps?

    Alas I was forced into one of his shops last week as the product I wanted to buy was not available in my local chemist (presumably exclusive distribution through Watsons) forcing me to pay a 60% premium.

    Arrange it (after the Rugby WC) and they will come …

  10. Real Tax Payer says:

    @ Foxtroscosca : Remember that that that Bird and Fortune skit :Sub Prime Crisis” was made one year BEFORE the melt-down

    That- to me at least – as an amateur economist was the shocker

    But as a professional manager with 30 years experience in China I learned a lot from this year’s Rugby World Cup series , after I found out I could get the whole thing live from NOW TV for less than a pie and pint at Delaney’s .

    I was so ashamed at England’s performance vs France that I would have cringed had I been at Delayey’s. Awful.

    ZERO COMMITMENT from us brits. I am seriously ashamed .

    But at today’s semi : Kiwi vs Aussie – the COMMITMENT from the Kiwis was TOTAL.

    The video of those 2 matches : UK/ France +=+ Kiwi/ Aussie would make a classic management seminar

    Let’s bet on next weekend : If NZ wins YOU pay for an all-expenses paid meal . If the Foggies win – I pay

    OK ?

    ( what the heck – at least we get to meet each other and commiserate … either way ! )

    ____________________

    @ Stephen : YES I hate buying from LKS aka Park and Shop aka ” Fusion” But I must admit it’s so conevenient for general stuff, even though I buy in the local market whenever I can do so

    But that’s the EVIL of the whole thing : LKS = Govt + property developers collusion = property prices = ” if you don’t like it get out ” = SH1T

    But I am locked into the whole vicious cartel . HELP !

    So I am increasingly locked into CYL : if not now then certainly 2017 , and if 2017 I will join his campaign team

    I REALLY HATE THIS GOVT/ PROPERTY DEVELOPMENT COLLUSSION

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