Friday, 30 December 2011

New Year's Message - 2012

2011 has for the world at large been a time of angst. Economic and social shifts have fundamentally altered the western world as was known. Whilst the EM regions, and China specifically have witnessed a new lower growth era, a seeming about turn from previous heady highs, yet adding much needed GDP equality and social stability in the course of doing so.

Efforts to try and stop a systemic seizure of European capital markets as a result of the sovereign debt crisis resulted in a seemingly desperately slow roll-out of meetings between national leaders to create a tenable plan. As meetings flailed so capital markets lurched, in turn pressuring the very cost-bases of most arguably 'over-inflated' EU countries relative to broad world commercial cost structures. Yet that re-balancing process is unavoidably lengthy, and the decimated trading levels generated a near Euro funds seizure after what has been 20 years of ever flowing liquidity. As seen, the ECB stepped-in with its E489bn 3-year soft-rate loan, for the 523 banks seeking assistance, yet even that long-awaited injection failed to steady the market. As a result Euro belief is still tenuous, and a subsequent long-term drop in the Euro's value the only true remedy for the blighted periphery countries, and a welcome FX incentive for high-value exporters, especially of course Germany.

The US perhaps politically overplays the homeland impact of European woes, perhaps doing so to subtly highlight what it may believe as itself as the well placed, natural recipient of investor angst elsewhere around the globe. Since the bursting of its financially driven credit bubble, its own corporates were well placed to benefit from previously buoyant export demand of many of its products and services, whilst having been first in the relative 'race to the bottom', may now be able to regenerate the domestic economy via home-grown policy initiatives at Fed and state level. Not quite in the manner of the work-camps seen after the 1929-33 Great Depression - which concentrated low-cost labour efforts – but in today in a more 'networked' manner of its broad and varied labour force. This in turn to kick-start investor appetite, CapEx renewal, inter-company activity and thus in the medium term to renewed stable consumer demand.

Societal attitudes in the West have expectantly altered, given recent failure of economic policy-makers to recognise the fault-lines created by untrammelled market exuberance; indeed the seeming blind avarice of corporate and personal egos in certain quarters.

The high profile, though somewhat misdirected, efforts of the 'Occupy' Wall Street', other US city 'sit-ins' and the 'St Pauls Protest' in London, personified like little else in the past the “time for change” simmering anger; and by virtue of their very existence probably acted as emotional transmission vehicles for the wider populace, so possibly avoiding larger episodes of more destructive unvented national unrest.

The growth of such a disparity of wealth between what is described the priveliged elite and the broad masses was made almost reminiscent of Victorian times, yet unlike those times whilst there is an undeniable underclass throughout the US and Europe, life for most has been increasinglt prosperous and comfortable, though those benefits obviously traded against a loss of personal time as workloads rise and increased personal and family stress as a result.

Ironically it was exactly such a trade-off – though to far greater extent than the average person – that those “money-(wo)men” made in their own lives, swapping much of the autonomous control of their own lives for a seemingly glamourous jet-setting lifestyle which in reality shackles them near 24-7 to a punishing corporate schedule that rarely sets one free from the boardroom table, internal and external meetings, a heavily orientated social life, and of course never-ending pressures that most 'average' people would view as anything but a 'life'.

Yet, those 'masters of the universe' will have their shoes filled in turn by their underlings seeking the apparent heady heights that provide large expense accounts, a private bathroom and the ability to purchase the dream the lifestyle.

The Financial Crisis may well be laid at the feet of those miscreant 'others' but the desire for professional, personal and social success will not disappear; such leanings seem interwoven into the DNA of many human beings, and unfortunately, when the economy once again starts to thrive, so will the drive of those who seek status and / or personal satisfaction. The platitudes of today will in time be forgotten and a new cycle will begin. This is very necessary, and 'animal spirits' undoubtedly have their role, but must be tempered by individuals' questioning themselves, and by a rebalanced value system in society that broadens its own definition and recognition of achievement.

Whilst the finance truism writ large by ex-Citi's Chuck Prince largely remains world that “as long as the music is playing, you've got to get up and dance”, it is perhaps prescient that it was the child's eyes and unfettered 'mature' mind of Alice (in Wonderland) who questioned the wisdom of such unthinking participation, when she sang the Lobster Quadrill.

For it was she, who under pressure from her 'betters' (the adults) to sing another song accompanied by the seemingly inescapable fervent tick-tocking of the metronome, not only stopped the 'clock', but sang “Will you, won't you join the dance?”.

"Will you walk a little faster?" Said a whiting to a snail
There's a porpoise close behind us
And he's treading on my tail.

See how eagerly the lobster and the turtles all advance.
They are waiting on the shingle.
Will you come and join the dance.

Will you, won't you,
Will you, won't you,
join the dance?

Ultimately, the New Year Message at the beginning of a very fragile 2012 must surely be about questioning the expectancies of professional, personal and social participation, and creating conditions for a more worthy and satisfying 'dance' for one and all.