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Pill rotten and plain

"If the people really understood how banking works, there would be a revolution tomorrow."
- Henry Ford 

This article is machine translated by Google from Norwegian

Joris Luyendijk:
Swim with sharks
Arneberg Publishing, 2015


Joris Lyendijk is a Dutch digging journalist and author with a long time in the Middle East, including in Gaza. Before the Guardian newspaper asked him to appear in London's financial world, he knew as little about banking and financial institutions as most people; that the banking world consists of shady, greedy men in dark blue Boss suits and polished black shoes, who are constantly seeking out new ways to earn rich at our expense. Lyendijk knew that this business was different today than when Mark Twain described the banker as a person who "on death and life will lend you his umbrella – but who wants it back as soon as he notices the first drops of rain". Lyendijk knew that he was entering an arena where secrecy and business go hand in hand, and where the frivolity and revelations about how the system actually works, not just right, but guaranteed vile cost you the job.

Off course. For almost two years, Lyendijk spent studying London's "soul". This was no easy task: Wherever he went, he met locked doors. Written inquiries were either not answered or politely rejected. It took time before Lyendijk understood that if he were to get any personal and candid stories about how the money world works, it had to be done "in the back room" – discreetly, and with complete anonymity.

More than 200 interviews later, Lyendijk concludes that people's mistrust of the financial sector is justified. He draws a nightmare-like scenario: “You sit in an airplane and find it burning in one engine. You try to say something, but the flight attendant reassures you and says everything is fine. You almost believe her, she is so calm, but it just burns out the curse. You strive loosely to the cockpit to say the least. But there it is empty, no one is sitting there. "

Finance people hoarded food, invested in gold and planned evacuation of themselves and their families; some bought weapons to defend themselves if the community machinery collapsed.

On the inside. Through the media, we learned what happened when the finance and brokerage house Lehman Brothers collapsed in 2008. The Lehman bankruptcy showed us that "a small tuft can overturn a large load". Everything in the banking sector is built on trust. We saw how this confidence suddenly disappeared and how bankers, central banks and politicians were in a hurry to provide the necessary credit to stop a financial collapse. In Norway, we got a small glimpse of the panic through DNB CEO Rune Bjerke's frantic text messages to Prime Minister Jens Stoltenberg.

Lyendijk takes us inside this crisis of confidence that arose. He tells of the financiers who understood very well what was about to happen, who hoarded food, invested in gold and planned the evacuation of themselves and their families; how someone bought weapons to be able to defend themselves if the social machinery broke down.

Gekko echo. For those of us who have already seen the movie T or read the book Liars Poker, both penned by former bond broker Michael Lewis, Lyendijk's revelations of greed, extreme cynicism and unlimited loyalty to authority figures come as no surprise. According to him, Lyendijk's description of this ruthless, rigid and never forgiving hierarchy of power is worse than we can imagine. After reading Swim with sharks are you left with a feeling of fear and hopelessness: Are these the people we have given the responsibility of managing our payroll account and savings? Was Gordon Gekko's famous statement that "greed is good" as true as it was said? Or is it Lyendijk's pilotless plane we are facing? Maybe a combination?

Lyedijk's description of the people in power in the City brings to mind a story about Lewie Ranieri, the head of Mortgage Backed Securities at the brokerage house Solomon Brothers in the 1980s. A trainee remembers that Ranieri went up behind one of the young forward-thinking brokers, Andrew Friedwald, to hear how it went. While Andy explained about a business he was doing, only Ranieri stood there smiling. While Andy was talking, Ranieri held a Bic lighter under his balls until his pants caught fire.

You are left with a feeling of fear and hopelessness: Are these the people we have given the responsibility for managing our payroll account and our savings?

Either or. What makes Lyendijk's book good and well worth a few evening hours is that it is personal and credible. Lyendijk exposes the financial world to what it is: secretive and at times pill rotten. But Lyedijk is still not convinced that City consists of evil people. On the contrary, the vast majority are quite ordinary, and victims of a system that seems impossible to change. Either you follow the banks 'and financial institutions' strict business code and secrecy, or you are "doomed to eternal damnation".

Perhaps the most important conclusion Lyendijk draws is that a financial crisis such as the one in 2008 can, and probably will, come again. We have obviously not learned from history, and as long as the money power governs the central banks and politicians in a world laden with debt, the fire in the drone could become a reality faster than we realize. In the meantime, the "flight attendant" – our politicians, the central bank governor and the bank leaders – will tell us that everything is ok, and that we can sit comfortably in our seats.


Olav is a regular financial journalist at Ny Tid. heolav@nytid.no

Hans Eirik Olav
Olav has a long time from the financial world behind him.

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