Central bankers face the music

It must be difficult being a central banker today.

Having taken much of the blame for the economic mess we're in, bankers are in a bind.

No longer able to busk in the halo-like glory that surrounded them for the last two decades, these heroes of our now bygone Gilded Age face a reckoning that exposes them to ridicule.

First it was Alan Greenspan, the demigod of the Federal Reserve, whose words have long been studied with the reverence once accorded by medieval monks to Aristotle.

When late October he admitted that there was a "flaw" in his assumption of 40 years that banks were best able to protect the interests of their shareholders and that they needed no oversight, it was a strange moment for people even with the smallest sense of reality.

You don't say, they would have been excused to think.

Sir John Gieve, the outgoing deputy governor of the Bank of England, went even further in humbling himself yesterday when he said that current mathematical models were ill-suited to understand our economies and that "putting the banks into the models would be a good place to start."

Ah. It would be, would it.

Sir John also said that, contrary to what he had thought before, a position of "cautious scepticism" regarding the markets should be in order, apparently unaware that this is not the first time their fear and greed led to a crisis.

It is difficult to know what to make of all this, other than to treat it as a fable of human fallacy, of the ability of even the smartest among us to lose themselves in self-delusion, to think common sense no longer applies.

The hysteria of the boom is, of course, over. But there will be others. They will sweep up in them new idols, only to humble them in the end. Best, perhaps, is to watch in wry amusement. And to remember to run for the door when the party really gets going.

Eastern European banks left out in the cold

Apart from stimulus packages and bank bail-outs, the talk is mostly of globalisation going into reverse. Free trade is out (even air traffic is badly down), protectionism is in. Depressingly, this seems to effect even the European Union's supposedly single market.

In this piece that I wrote with a colleague for this week's Magyar Narancs about the banking crisis spreading into Eastern Europe, we show that home-market preference forced on Western European banks by their national governments in return for the money is leaving their Eastern European subsidiaries out in the cold. Things are further complicated by the division of the EU into eurozone and non-eurozone states - the European Central Bank has a very limited role in helping the latter. Ultimately, though, it's the same old problem: these countries, especially Hungary, have borrowed well above their means to finance their investment and consumption growth. Now that easy credit has dried up, they're in trouble.

It's not all bad news: most people seem to recognise that there is problem - which is a start. Whether there will be a solution (the bailouts need to take the subsidiaries into account) is another question.

On balance and emotional distance

This week I interviewed Sherine Tadros, a British TV journalist who, as correspondent of Al Jazeera English, was the only Western journalist in Gaza during the January war. Some of the points she made:

_ Journalistic balance is a useless concept in covering a war that itself is not balanced in any meaningful way. Giving equal airtime to the parties or trying to artificially balance the story is bad journalism when most of the destruction and death happens on one side. That is, when most of the story happens on one side. What a journalist must do is try and be fair. That is, provide the context plus give both sides the opportunity to present their views. This means that a story is fair even if most or almost all of your reporting is going to be about Gaza as long as you get Mark Regev or some other Israeli official on air to comment on the story. Putting a TV team in Sderot to report every day on the Palestinian rockets that caused miniscule damage compared to the death raining down on Gaza is bad journalism because it misses the real story, which is Gaza.

_ Reporting a story like the war in Gaza in an emotional way is OK. How else are you going to tell the story of a boy who spent days in the company of his dead mother and brother? The story itself is emotional and if you present it with a stone-cold face, you are missing the point.

_ The best way of not missing this point is to live the story yourself. Sherine certainly did, having lived through the entire war, narrowly escaping death at least on one occasion. You have to really feel the victims and their experience in order to tell their story well.

Read the whole interview in next week's Magyar Narancs (in Hungarian).

Russia no longer resurgent

I find the demise of Russia hugely amusing. Their poor embattled central bank has already spent about a third of their entire foreign reserves to prop up the ruble (under political directives from the Kremlin) only to see it fall by 33 percent since the end of summer. There is no end in sight. 

But remember? It must have been only half a year ago when that bizarre and pathetic little man, Vladimir "Time Man of the Year" Putin, so alike all the other petty little thieves and autocrats who have ruled that unfortunate country, bestrode the globe with his lazy judo-belt self-confidence. Shame, really, that the price of oil has gone through the cellar since and now no money is left to prop up that huge ego any more. 

What's even more entertaining is that they didn't even have the foresight to spend some of the oil windfall on upgrading their energy infrastructure and developing new fields - so Gazprom now actually has to go and buy some of its gas from Central Asia. I mean if you have decided that you are going to forget about all that new economy nonsense and invest in the talents of your people, and instead make money by selling stuff that you found in the ground, then you could at least make sure that that one thing works. Even the Gulf Arabs know this. 

But not Russia. They really must have thought the oil boom is going to last forever. Or perhaps there were a few who knew better. But since the KGB is running the place now, they must have thought it best not to make too much noise. Is any of this a surprise? Of course not, unless you still believe in that old lie about the good tsar.

The problem 3.

There is a large number of people here in Europe who are justifying Israel's destruction of Gaza with a frightening moral certitude. Their case centres around the assumption, held unquestionable, that no country in the world would tolerate being constantly rocketed by a terrorist organisation that is constitutionally dedicated to its destruction. While this may well be true, the confident, almost lazy little nod with which some Western commentators, who have never in their life seen what a city looks like after a bombing raid, consign hundreds of people to their violent deaths is more than a bit unsettling. 

I can accept that the Israelis have no opportunity for such moral wishy-washiness. This sort of hand-wringing is a luxury. They have to do something to defend themselves. Theirs is a tough neighbourhood, as they like to frequently remind people. But ours is not. Civilisation may be the luxury of being out of the jungle. But let the civilised man at least sound a note of doubt in such matters. At the very least, the warrior pose makes us look silly.

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Is it just "the bravery of being out of range", as Roger Waters called it? Not even. I suppose the argument really is that until you have been faced with the corpse of a headless child half hanging out of the rubble of some house that has been hit by a shell, you are unqualified to make the moral call whether it is OK to launch a war even when it looks like a perfect case of self-defense. Therefore you shouldn't. And pray that the person who is making that decision has already peeked into that hell and can therefore hope to weigh the issues involved. 

We blame Israel

I spoke to a university student in Gaza City who sometimes works with foreign journalists. His name is Nasser Barakat and I reached him on the phone last Friday. We spoke about the conditions in Gaza after the war. One of the most interesting things he said, although this will probably not surprise anybody, was that not only were people not blaming Hamas for the war, the Islamists' support and popularity has actually grown since the Israeli agression, as he called it. (Obviously, I cannot say whether these opinions are representative but they are still interesting.)

"Hamas was not very popular before the war because many blamed them for the Israeli siege [the blockade Israel imposed after the 2007 Hamas takeover] which made life very difficult for people here. Everybody was fed up. But the war was an Israeli agression and people blame Israel for it. Hamas was only rocketing Israel to show them we are still here and we are not going to give up our rights," he said.

So did Hamas become more popular as a result of the war? "Yes. Most people think that they weren't hiding like Fatah but resisted the Israeli agression, tried to protect us. Fatah couldn't even negotiate with Israel to try and get some aid in," he said.

I also asked him what people thought about the rocketing of Israel by Hamas and whether there was much taste for more fighting. He said people were thinking all sort of things about the rockets. "They don't really like them when Hamas is shooting from somebody's garden," he said grimly, adding that "these rockets are our only weapons and if Israel will not stop the siege, then we might still need them. What are they compared to Israel's weapons?"

How about people' expectations? "Right now everybody just wants peace and calm ... We used to say things could only get better but they always got worse ... The war is now over but Hamas and Israel are still here. The siege has not ended. They should sit down and talk ... The Israelis will have to lift the siege and Hamas will have to stop rocketing. Otherwise civilians, Palestinians and Israelis, will continue to suffer," he said.

"Csak legyen nyugalom" - interjú egy gázai egyetemistával

Origo.hu, 2009. február 1.

Minden teljesen szét van rombolva, a házakba betörő izraeli katonák még a bútorokat is felforgatták. Az otthontalanok nagy része sátrakban lakik és a segélyszervezetektől szerzi be az ennivalót. A háború ellenére a Hamász népszerűsége nőtt, és sokak szerint a rakétákra is szükség lehet még, ha Izrael nem oldja föl a blokádot. De a gázaiak többsége most csak békét akar. Nasszer Barakat utolsó éves gázai egyetemistával, több külföldi újság és hírügynökség munkatársával beszélgettünk telefonon.

Mi a helyzet jelenleg Gázában?

Péntek lévén elég csöndes minden, bár korábban voltak utcai demonstrációk, amelyeket a Hamász szervezett a török miniszterelnök támogatására [Recep Erdogan csütörtökön kiviharzott egy Simon Peresz izraeli elnökkel rendezett nyilvános vitáról, mert úgy érezte, a moderátor nem volt vele tisztességes - a szerk.].

Folytatás itt.