Things were a little unsettled when I called into the Diogenes Club last week. There was a certain restlessness in the air, due in no small part to the fact that many of our number work in the City. The unprecedented turmoil in the world financial markets had even reached into the sanctury of the library. Manton was holding forth on some subject dear to his heart, and getting increasingly irritated by Travis fidgeting and looking nervously at his watch every 60 seconds, until the inevitable eruption occured.
"For God's sake Travis, you are like a ..." at which point Travis's phone rang, robbing us of yet another of Manton's colourful metaphors. Travis put the phone to his ear, listened, and with a muttered oath, ran out of the library. We watched through the window as he hailed a taxi and climbed in.
"Did my eyes deceive me, or did his face actually turn as white as a sheet?" said Abrahams, to no one in particular.
"It did. I thought that was just a figure of speech."
"It looks like it might be a busy day in the City."
"Treworthy, I've never thought of you as a master of understatement, but I can see now that we are in the presence of greatness" said Manton.
"Well, I know things are a bit lively at the moment.."
"A bit lively? I've just heard on the news one of the most important bankers in the world describing derivatives as 'Financial weapons of mass destruction'. I've heard how some of the richest companies in the world have turned out to be almost completely worthless - they have absolutely no assets at all, other than the buildings that they own. Banks are buying each other in the same way that most people buy hotels in a game of Monopoly. They are actually talking about a crash as big as 1929. Economists never talk like that. They are always trying to put a postive spin on things to stop the market from panicing. It's quite refreshing really. This sudden need for reflection and self-awareness. They actually seem to be in touch with reality for once."
"Manton, the economy is in a perilous state. You cannot possibly be happy about this state of affairs."
"Treworthy, I haven't enjoyed myself so much for years. I am only sorry that the Government lost it's nerve at the last minute and starting bailing out some of these charlatans. I think they should be made to face up to the consequences of their actions."
"Rubbish. You wouldn't plunge the global economy into chaos just to satisfy some juvenile wish for moral justice, surely?"
"I haven't plunged anything into chaos. They have. And they ought to be made to pay for it. Personally. The speculators have just been stupidly short sighted, but that's the nature of the beast. That's what we have regulators for. But they have been content to look the other way, or go through the motions of checking up on them, because they are enjoying all this money appearing from nowhere. The government have not bothered to ensure that the regulators do their job properly, or put into place laws to prevent it happening, because the richer that the City appears to be, the more likely they are to be re-elected. They are all as bad as each other."
"But if the economy crumbles, it will be ordinary people who suffer."
"Well that didn't seem to weigh too heavily on their minds when they were constructing these idiotic financial packages. Or maybe it is just possible that they are not incredibly intelligent people who are worth every penny of the bonuses that they are paid. Maybe they are short-sighted morons who don't give a damn for the society that they live in, or the people that they share the planet with?"
"Manton, you cannot hope to understand the complexity of the money markets..."
"They aren't complex. Money markets are very simple. They are deliberately made to appear complex, by these idiots, so that they can make themselves appear intelligent by making money appear from nowhere, without doing any useful work. Except of course, money doesn't appear from nowhere. It's just financial misdirection. Like a magician drawing attention to his left hand so that he can make the coin appear in his right hand. But sooner or later you have to pay the piper. The place where you really did get the money from will want it back."
"It's not that simple."
"Isn't it? Well let me tell you about a lady of my aquaintance, who wished to know what this sub-prime mortage crisis was all about. I explained it to her, and after thinking about it for a while, she said:
"It's a bit like the rummage sale that we do at the church hall, every month."
I, in my best patronising way, said: "I think it's a bit more complicated that the Women's Institute rummage sale, my dear." And do you know what she did? She made me realise that it isn't. She said:
"No, I don't think so. You see, at a rummage sale, you tend to sell scraps and small items in bags, and you always put some rubbish in to fill the bag up - otherwise you wouldn't be able to get rid of it. Most of the time, people don't mind getting a bit of rubbish if there are some decent things in there as well.
What's happened is, people have been buying bags without looking inside them. Then they have worried that they might have bought a bag that isn't really worth what they paid - but instead of opening it and finding out, they have just sold it on again, and congratulated themselves for making a profit.
And even more stupidly, even if they do look inside the bags, the contents are so mixed up and have been made deliberately obscure, that no one can possibly work out what they are worth anyway. Which means that now, everyone is too scared to buy anything."
"And I realised that she understood the situation all too well."
"Well, it's easy to be wise after the fact, Manton."
"Treworthy, I may not be an economist, but if someone asked me whether or not it is a good idea to lend money to people who have no hope of paying it back, I think that even with my limited financial acumen, I would have said no. I mean, I'm no biologist, but the notion of feeding crushed up diseased sheep carcasses to cows strikes me as slightly unwise."
"You don't really think that the country would be better off without the money markets, do you?"
"I don't really mind the money markets, as a way for rich people to get even richer. It's a bit like horse racing, or playing poker. As long as they pay the price when they do something really stupid. But you wouldn't want to base your entire economy on them, would you. I mean that would be complete and utter madness."
As Manton was speaking, Henry appeared at the door and glided over to stand by his chair.
"Ah Henry, your timing is as impeccable as ever. A fresh glass of whisky, if you please."
"I'm afraid I can't, sir."
"I beg your pardon." Manton looked stunned - as indeed did we all.
"It's a slightly delicate matter sir..."
"Never mind all that. Explain yourself, immediately."
"As you wish, sir. I'm afraid it's time to pay the piper."
"Time to...what the hell are you talking about, man?"
"Your club subscription, sir. The secretary wondered if you could drop by his office for a quick word. At your convenience, sir."
"Ah....good Lord. Has it come round again...I'll...er... pop and see him now, Henry. Thank you." The rest of us laughed heartily. It wasn't very often that we saw Manton at a disadvantage. He got up, searching for his wallet. "Henry, my dear fellow, I'm sorry if I was a little brusque just then."
"I can't say that I noticed, sir. When the secretary is satisfied, I will be happy to serve you."
"Don't worry Manton, the next drink is on me." said Treworthy, enjoying the moment immensely.