House of Cards

Image: A house made of playing cards, seems stable at first glance, but it would only take a sneeze to bring it down!

The financial crisis was started by Wall Street financing companies whom were selling housing loans based on the high and ever-rising house prices. The high prices gave people too much equity, and creates, in financial terms, a house of cards. There were no further financial checks carried out and no company wanted to do more thorough checks in fear of becoming less competitive than other companies. Worse than this, some companies in the U.S. were cheating by rating the Collaterized Debt Obligations (CDOs) for loans too highly. The agencies doing the rating got more business if they offered more favourable ratings. This is because more of their customers, whom are the lending agencies, will go to the CDO loan rating that gives a higher average rating.

All companies took the same short-sighted greedy approach. I would like to ask why was the greed of a few allowed to devastate the lives of so many?


Protests this week in London for the G20 summit were important to express peoples' feelings. Here are some more images of the protests (click on an image for the link back to the original source).

World leaders from the G20 countries met in London to discuss what can be done for the worst world recession in 80 years, see some of the leaders pictured below.

French President Mr Sarkozy wants greater and tighter regulation on the financial markets as they have proved they cannot self-regulate effectively.

Perhaps, Capitalism, given a free reign, is not the way to go? From this economic crisis, we can see that, in the same way that Barack Obama believes the political world needs transparency and accountability, for the financial structures there is also clearly a need for transparency, integrity and accountability, supported by appropriate policy and regulation.

Sources: CNBC listened to 16.2.09, 'house of cards'. Aljazeera News Hour 1st-3rd/4/09; Aljazeera World News Website, the2009g20londonsummit, accessed 4.4.09

Thursday 1st April: Financial Fools day in London

Financial Fools Day is one of the slogans under which a great protest is forming ahead of the G20 summit where talks are going to be held between 20 of the worlds' country leaders. The protest is against capitalism, portraying the system unfair, unjust and therefore unethical in the model of business that it follows. The windows of the Bank of Scotland were smashed as taxpayers money went into helping the bank remain sustainable, whilst a large packet of money in the form of a pension went into the pocket of the CEO. That is whilst many members of the public are loosing jobs, homes & livelihoods. For this reason, bank employees were advised to wear casual clothes and not stand outside of their work place, and many banks and hotels have boarded their windows.

Police have been boxing in protesters and pushing them together. They will not let protesters leave and people got knocked over. There was a peaceful group of students waging a sit-down protest whom the police charged. Some of the students got hit on the head by sheilds and batons or were stamped on by police, and were helped and bandaged by ITN television crews, whilst an Italian female student was carried off unconcious.

Barrack Obama is said to have brought a security team of 200+ men, but most world leaders are relying on the British police for their security. Police are bracing themselves for a challenging two days. In addition to anti-capatalism protests, similar to those held in the 1990s in Britain, there are also two other main protests, one against Climate Change, being peacefully held in the Bishopsgate, and also Stop the War are holding their protest in London City Centre. It seems there is alot to protest about, in this current world climate, ahead of the G20 summit where world leaders hope to make firm decisions.

Sources: Aljazeera Newshour, 1/4/09, Aljazeera News website G20 Protesters Beseige Londons Bank accessed 2/4/09; Guardian Newswebsite G20 Protests: Riot Police Clash with Demonstrators accessed 2/4/09

Demonstrate at the G20 on 2 April

11 am, the roundabout at end of Tidal Basin Road, E16 1AD.

Nearest working tube/DLR: Canning Town.

Please bring shoes, baby dolls, photos and other symbols of the death and destruction wreaked by the world's leaders.

• Get the troops out of Iraq & Afghanistan
• End the siege of Gaza – free Palestine
• Create jobs not bombs
• Stop arming Israel
• Abolish all nukes

Called by Stop the War, CND, Palestine Solidarity Campaign, British Muslim Initiative

Turbo-Charged Capitalism

The backing system of our banking system was not strong enough to stand the 'winds of the hurricane' which is the global financial crisis, says the prior Prime Minister of Iceland, Reykjavik. Reykjavik was previously the Financial Minister in Iceland before becoming Prime Minister, a post from which he stood down after the crisis hit and the banking system went bankrupt in 2008.

The collapse of Lehman brothers in America affected the banking system worldwide and the systems to which Iceland are connected. The effects of the financial crisis in America that has swept around the world is a good example of how every country in our world is interlinked together. Although there were risks identified in Iceland's banking system that had been identified and were in the process of being addressed, Reykjavik thinks the Iceland banking system would have been able to survive if it had not been for the Global Banking Crisis. In Iceland alot of people lost their life savings and many people have committed suicide due to feelings of desperation.

Reykjavik says Gordan Brown and the U.K. authorities made inaccurate comments and by freezing Icelandic assets in the UK it affected the imports and exports of Iceland and had an extremely damaging effect on the Icelandic economy. Reykjavik says he has not spoken to Gordan Brown since, and when he was asked why not, he replied, 'maybe I should have'. Reykjavik has faced public outrage and has had eggs thrown at his house and has received personal threats. He is seen as an architect of a 'turbo-charged brand of capitalism'. However, Reykjavik says that against the odds the government managed to save the domestic banking system from complete collapse.

Meanwhile, effects of the global financial crisis can be seen in Spain for example, rows of houses that were in the process of being constructed however are standing half finished. In the U.S. alot of unofficial immigrant workers, a large number from Mexico that contribute to the economy are left without work and without access to the social support systems that permanent residents & citizens have access to. In America it seems it is possible to work and pay taxes without having permanent resident immigration status. Ten percent of the citizens and legal permanent resident population in America already relies on foodstamps to sustain their weekly food purchases.

It has also been warned that the global financial crisis is also putting women and children at risk of exploitation by illegal human trafficking rings due to the poverty in which they may find themselves. Meanwhile, some not-for-profit organisations are already suffering. In New Zealand, ASB Bank has cancelled it's first round of funding for the year, the second round not being until November. This puts organisations at risk, and one Auckland based organisation, Recreate, that provides services for disabled adults and children has just made its two staff redundant.

Sources: BBC WordNews broadcast, Witness broadcast 12.02.09, Aljazeera Inside story, broadcast, 'House of Cards' 11.02.09. See also 'A Financial House of Cards' by Mark LeVine, Aljazeera News website accessed 23/2/09 http://english.aljazeera.net/focus/outofwork/2009/02/200921712329491425.html.