In which I lose six trillion dollars

Where did the money go?

By Nury Vittachi

*

One of my kids was staring at the front page headline on the newspaper: “Six trillion dollars lost in global markets”, it said.

                “Who took it?” she asked. “That’s naughty.”

                I thought about this. This was a good question. Before I could attempt to answer it, she asked an even better one. “Whose money was it?”

                I answered the last question first. “Not your Dad’s,” I said. “I’m too smart to invest my money in risky stocks.”
*

                The following day, I asked my friend Todd, a man who recently changed job from banker to property fund dealer, to answer the first question. “The six trillion dollars lost from the stock markets in the global financial crisis—where did they actually go?”

                He was on his way to his car, but he stopped and thought for a moment. “Nowhere. They never existed. It was a nominal six trillion: just figures on paper.”

                As I watched him leave (in a sports car—bankers adhere strictly to stereotype), I realized his answer had left me more puzzled, not less. If the six trillion dollars that disappeared never existed, there’s no crisis. So why are the newspapers full of panic?
*
                I put the point to the wisest person I know, my mentor-bartender. “It’s true,” he said. “The money never existed. They call it a bubble because it is an insubstantial thing that disappears with a sudden pop, like a mirage, or the career of the guy who played Luke Skywalker.”

                He picked up a glass to wipe and explained: “But banks thought it existed, so they spent unimaginably large amounts of money buying the stuff in the form of home loans, stocks, hedge funds and other investments.”

                I knocked back my shot of mineral water on the rocks. “So that’s why banks are in trouble. Well, it serves them right,” I said. “For once, the rich get into a whole heap of trouble, while widows, orphans and regular people like me, escape.”

                He finished polishing his glass and slowly shook his head. “Sorry to bring you bad news,” he said. “But where do you think the banks got the money to buy all these bad investments?”

                I froze. He was smiling one of those creepy smiles that have no actual smiliness in them.

                He nodded. “Yes. They used the money that normal people put into their accounts – widows, orphans and general, struggling non-entities, like you. No offence intended. They used your savings and pension funds. And now they’re scared they may not have enough money to pay up when you want to take it out. Banks can go bankrupt, you know. And they can take ordinary people’s savings with them when they go.”

                Ah. Now I saw where the crisis was. I asked him to hit me with another shot of mineral water on the rocks and downed it in one.
*

The kids were still awake when I got home so I told them the bad news.

                “You know that six trillion dollars that was lost in the stock market? I have some really bad news for you. It was your Dad’s.”

                “Oh,” said one. “Never mind, Dad. I’ll share my pocket money with you.”

                I patted her head. “Thanks.” You know what? A pledge like that one is worth six trillion dollars in any currency, no doubt about it.

               

Comments

[fardel]

Child wisdom.
Would the world be better if we let children run it?
How did you find this picture?
It gives a lot of flavour to this editioral;
Can I send it to my President?

[Nury]

I love the picture too, Fardel. I sometimes borrow news pics (that one is from Reuters) for the sake of adding word balloons and funny captions, but this one is just funny in its own right. Well done, Reuters.
As for your question, I think the world would be much better if we let children run it -- just think of a city filled with ball-pools we can jump into!

[fardel]

One should not underestimate children's understanding on what should be done or what should be right, once given the proper guidance (that most so-called leaders are missing.)
In France we have now officially elected children's deputies. They make proposals to the National Assembly , which studies them before passing laws. Is is still in the initial stage, but one would be surprised (happily surprised) by the seriousness of their projects
Would a city filled by ball pools be better than a city fill with pool -bars?
It would be good to relieve the stress, would provide good exercise; and it would stop adults from being intoxicated, ot too serious.

[Mark Hamill]

Hey- I resemble that remark about Luke Skywalker!

[Vince A]

In order to keep the banks from crashing, the solution is for people to put all their money in the banks and just keep it there.

No, wait. Doing that would cause the economy to shrink and businesses to collapse.

Perhaps the solution is for people to withdraw all their money and spend it like crazy, to revive the economy.

No, wait. withdrawing their money will cause the banks to run and collapse.

I guess the solution is for people to keep their money in the banks, and shop like crazy on credit.

No, wait. That's how we got here in the first place.

Maybe Stephen Hawking is right for once. We should just run away from all creditors by migrating to other planets.

[BILLY]

I like this picture very much . The child is good.I think she has a lot of money.

[fardel]

There is another solution, stuff you mattress with money,sleep well, and spend like crazy.
Get a dog to protect your money, and good bye the banks,
Who needs them anyway?

[shrynne]

well for one thing, kids are extremely savvy of the current goings-on...

my boss's five year old made her own poem abt it:

Crunch Crunch
Credit Crunch
Crunch Crunch
i want my lunch!

I think it's brilliant, and frighteningly apt...

[Humayan Hye]

Your 'Six trillion dollars can't just vanish, you know' is an excellent exposition of what is happening in the global financial and stock exchange markets these days -- a Super. As for your query as to where the money may be, I would say: "It's in the belly of a dragon named 'capitalism'. Others call it 'free market economy'.
Humayan Hye,
Dhaka, Bangladesh

There once was a banker of Bangalore
Who now sells sweets to children in Mysore
"Come and taste my candy, children, it is terribly dandy"
Cried that impoverished bank clerk of Bangalore

There once was quite a lot of money
Which was shared amongst us like honey
But with the stroke of a pen
That money was Zen
The sound of one hand clapping...not funny

There once was a bank man who owned a Jag
You are
He said to his vehicle, a beautiful car.
He washed it he buffed he shone it he loved it
But when the egg hit the fan
He sold it for five hundred yuan
Saying to himself what a "jag" you are.
What a wanker I was to buy such a car.

There was an illusion hoo boy it was grand
Money could be had like on the beach sand
But the Yanks pulled the plug
Everyone said ugh
They cannot pay for their remortgaged land!

And thus it is written in all the good books
From Bhagavad Gita to Tolstoy,
That God is not mocked as ye sow shall ye reap
When with the gods, with the Fates, with the rulers of men and their sheep
You like a childish infant do so toy.

[Edward G. Nilges, Hong Kong]

Above limericks, Nuri, are the work of Edward G. "betcha didn't know I was a poet probably thought I was a wanker" Nilges

[Mr Jam]

Thanks, Edward, very amusing, clearly you have a new career ahead of you

[Fred Brick Ralph]

Yes it’s unbelievable and so very embarrassing. Pick-pocketed twice within about six months on the KL Monorail between Bukit Bintang and Maharajalela.

Yes I do keep my hand on my pocket in crowded trains and I do keep my wallet in a front pocket but sometimes I’m tired, distracted or just plain in a rush and that’s when it happens.

The danger time is when getting on or off the train or if you are stuck somewhere near the door. The pickpocket will try to ensure that he is on and you are off the train or vice versa by the time you realise what happened, so the act will usually take place during your entrance or exit.

Each time it happened to me I noticed one thing, someone suddenly pushing when there seem to be no call to do so. In the recent instance I even recall who (assuming there was only one person) must have been involved. He was short and stocky with sallow skin and I believe of mid eastern origin. He made to get of the train and then turned abruptly and rammed into me so I had to manoeuvre round him to the door. I was annoyed and thus distracted as I tried to get off the train before the doors closed. I missed my wallet instantly, but it was too late.

Well I was (justifiably) lectured last time and am being lectured again. Believe me, cancelling and replacing credit and bank cards and licenses is punishment in itself. Of course I had that morning been to the ATM and had also topped up my Touch and Go card. Not a huge amount of cash but enough to cancel out a typical day’s hard work in the classroom.

Any silver lining? Well, there was the sympathetic ticket office attendant who let me out of the station without ticket or money; the pleasant and efficient young policewoman who took my report in English and kept me in the Police station for less than 20 minutes; The efficient and sympathetic RHB bank staff who cancelled my ATM card and instructed me how to replace it; The very sympathetic lady at American Express who kept asking, “Are you all right?” to which I answered, “No, I’m not all right. I’m so stupid!!!”

Despite setbacks Malaysia is OK. It’s full of GOOD Malaysians who deserve this country to be the best it can for them. Thanks for sharing it with me. . . Lesson learnt.

Poor Expatriate

[Nury]

Dear Fred, what a lovely letter. You come across as a very sweet man, to suffer such problems and react as generously as you do. It just goes to show the truth of something I have always believed: the most marvelous thing on this planet is the human spirit.

I feel sorry for people from low crime states (Japan, Hong Kong) who go to places with high crimes rates. They are such easy pickings.

But I agree with you about Malaysia. It's actually a wonderful place. The people are warm, the prices are low, and the food is unbeatable probably anywhere on the planet!