Thursday, 18 June 2009

Too Big To Fail Yet too Big to Bail: Can we get our ACT together?

The theme of this blog is a legal nascent trend. The last eighteen months have witnessed a financial Tsunami of plummeting asset prices, share prices, property prices, currency values, etc. According to many pundits, economists and academics, we are in the eye of the storm of the biggest recession since the 1930’s. Unemployment is a lagging factor and the worst is yet to come in that regard.

Everyone has been finger pointing at all and sundry; politicians, central bankers, banks regulators, media, feckless consumers and over leveraged companies. In addition, as banks have evloved into global entitites, legislation has also been blamed. One piece of legislation which has been getting the blame for the crisis is the unmemorable Gramm Leach Bliley Act (GBLA).

Wikipedia can be unreliable but use the references at the bottom of the page or google scholar to find out more.

It is also known as the vehicle for repealing the Glass Steagall Act. Glass Steagall was enacted following the last depression of the 1930’s and prevented conventional deposit banks from engaging in riskier casino style investment banking.

Have a look at the video of Senator Byron Dorgan’s prophecy back in 1999. It is chilling viewing.

This gave rise to mega banks which were paradoxically too big to fail, yet in the long run will be too big to bail.

The GBLA act ironically saved Goldman Sachs and Morgan Stanley from collapse as it facilitated their conversion to bank holding companies.

Many leading pundits in the media, the BoE and some politicians are now calling for a British Glass Steagall style act.

Rather than conclude with my opinion I will leave you to formulate your own.

Wednesday, 10 June 2009


Welcome to my blog on nascent trends. I have chosen this title because it can mean emerging directions/fashions/tendancies, etc. These trends may eventually reach a tipping point and become conventional wisdom.

The book by Malcolm Gladwell "The Tipping Point" identified 3 essential propagators of knowledge: mavens, connectors and salesmen (salespeople).

Mavens are avid collectors of knowledge and are described by Gladwell as "almost pathologically helpful" they are information brokers.

Connectors as the name suggests are people who are very well connected. It is much more than simply having 500+ friends on your Facebook profile. Connectors can be viewed as conduits for knowledge dissemination.

Salesmen are highly charasmatic people and are excellent at securing buy in. They are effectively closers - they seal the deal.

As an educator I am a firm believer that we should not fashion ourselves as the font of all knowledge but as life long learners. How are we going to improve our research and education if we don't strive to know more. As teachers and researchers we must guard against epistemic arrogance. To put it simply as my old gran would say "pride comes before a fall".

This blog is not related to my research but topics that are of interest to me.

One of my MBA students put it in words that say it all "The more I learn the less I know". If I can encourage some people to find out more and separate fact from opinion then this blog is worthwhile. Who knows you may see things in a different way which will question your deeply held beliefs and you may experience a paradigm shift.

Lets start with this simple optical illusion. Watch the twirling dancer and see which direction it is travelling. Is it clockwise, counter clockwise or both!!

From time to time I will post web links which will hopefully encourage you to find out more about the subject. I will endeavour to ensure that posts are neutral and they will look at political, economic, socio-cultural, technological, environment and legal.

If you find other sites that may be of interest I would welcome you sharing them with fellow surfers.