dad norman macrae died of cancer june 2010- his obituaries- his last article dec 2008 on the sad consequences subprime would trap youth in - coming notes on remembrance parties across the globe- on his 10th parting we are also zoom-remembering- rsvp
next only to education/health/safety, change in banking immediately changes lives of families and generations whereas infrastructure and natural resources multiply national impacts over time- financial services have at least 3 segments - how its designed for people, for big organisations, for pensions ang government
since 1950, in developed countries - quarter of humans) changes in tech have caused changes in finance first- some peoples have leaped into banking consider those most linked to developed west, development of china region, rest of developing world- we will map what happened to innovation of tech to the west which has had access to 4 tech revolutions from 1950 rural, space-communications, engineering , computing brain power- china that had access to rural revolution in 1970s, engineering from 1980s, all tech from about 2005, and bangladesh which accesses rural change from 1970, has for most of its people not yet accessed engineering change, has joined in other tech between 1995-2005 thanks to being the epicentre of ngo sdg economy - epicentre fazle abed- of course in a world of 200 nations there are other hybrid models but decide which if any of these three is one your peoples need to understand first because big data collection has gone global - see society 5.0 and osaka track g20 2019
key system transformations -paper non-digital banking operations, digital operations, consumer digital atm and cards and end of community banking. mobilising change in commerce and banking, integrating all post 1950 tech revolution- finance needed to be a future affair that teachers and students questioned before youth began livelihoods- since 1760 alumni of adam smith and james watt glasgow u birth of industrial revolution have recommended mediating these questions openly - how much of wealth and natural resources do the top 10 and 500 people control- is your society one in which 3 halves of people - women youth and poor each have less than 10% voice in the future of their generation

putting our species at risk- wall streets bankers and washington lobbyists and careless media moguls did the worst job ever at end of 2000s- can ny's biggest fund managers return the planet to all families as we enter 2020s - search worldrecordjobs -biggest marketmakers bezos and ma - then join us at -or help us value goal of worlds biggest -search - google versus microsoft; health&safety investor bloomberg vs soros; largest funds fink versus mitsubishi ; education for all schwarzman versus hongkong-singapore partners -supercity adaptability ban ki-moon versus masa-son; big decision makers events schwab vs guterres; rural villages fazle abed partners

we also thank the baltimore branch of for sharing its investigative scholars of everything that's crazy about 21st financial services that thurgood marshall wouldn't have let rip

dec 2020 Washington thinktanks have become in most cases as dismal as the supreme leader trump making these exceptions absolutely brilliant 1 2
this economics policy series shows how banking in america has been serially designed to tip off the poor and the young - and even when the rich elders mess up they demand the poor and young bail them out- i now see why my father as early as 1980s described macroeconomics as totally fame political chicanery nothing to do with the origins system designs of the first 200 years of followers of adam smith moral sentiments- see also

Thursday, December 25, 2008

norman macrae's last article -subprime shockingly dismal economics strikes again

How to Avert A Great Depression Through the Hungry 2010s? 
Answer, By Making All Banking Very Much Cheaper
december 2008 norman macrae

If banks in rich democracies had been truly competitive institutions, at least one of them somewhere would have seized the main opportunity created by the computer. This main opportunity was to make all deposit-banking vastly cheaper than ever before. By this cheapening it should make such banking hugely more profitable. Then further competition would search for the cheapest ways to guide all the world’s saving into the most profitable (or otherwise most desirable) forms of capital investment, thus enriching all mankind.

Instead, during 2008 the total losses of banks in rich democracies – in North America, West Europe and Japan – soared into trillions of dollars. Fearful for their solvency, these banks virtually stopped lending. The issuance of corporate bonds, commercial paper, and many other financial products largely ceased. Hedge and insurance firms also crashed. Mankind is thus threatened in the 2010s with its longest great depression since the hungry 1930s.

Why? The strange answer seems to be that other happy consequences of modern technology promised to make this cheapening even faster. Call centres in Bangalore vastly undercut the middle class salaries of Midland bank clerk who until the 1950s expensively answered clients’ questions in their branches in the City of London. Cheap mobile phones kept village ladies in once miserable Bangladesh as fully in touch with market prices as is the chief research officer of the First National Bank of Somewhere in California. His weekly salary is still 1000 times greater than the previous annual earnings of that village lady. The cost-effective way of running the old Midland or First National then seemed to be to cut its total salary cost by something like 99%. This did not please Western welfare governments, or the decent chief executives of the old Midland or First National bank.

Awaiting the sensation of a short sharp shock
From a cheap and chippy chopper on a big black block
 – WS Gilbert in The Mikado - why it is uncomfortable to work in an industry which needs 99% redundancies.

Western welfare governments have long preferred to run their banks in high cost cartels, and even invented reasons why this seems to be moral.  Their deposit-banks have usually kept in cash only 10% of the total amount deposited with them. If 11% of depositors suddenly feared that their banks might go bust, this could accelerate a run that would send them bust indeed. Governments therefore thought that depositors would be less fearful if they were assured that the banks were officially and tightly regulated. Actually, this mainly meant that the banks had to hire ever more expensive lawyers so as to escape any crippling consequences from this regulation. The attached quote shows that Samuel Pepys understood this fact of life in his Diaries of July 21, 1662.

I see it is impossible for the King to have things done so cheaply as do other men
 – Samuel Pepys on discovering an important commercial fact of life in his Diary, 21 July, 1662

The decent bosses of the deposit banks felt that the best way of avoiding sacking nine tenths of their staffs was by competing with a very different sort of financing called merchant banking whose earnings and bonuses were far more generous than those given to their own staff. These merchant banks were of peculiarly differing pedigree. In London, it was assumed that they could best be run by families like Barings who had done the job for over 200 years. In the 1990s, Barings went totally bust because one of its hired traders bet much of its money on a hunch that a bad earthquake in Japan meant that the shares of Japanese banks and insurance companies would become more profitable. In Zurich, merchant banks felt it most moral to keep the accounts of their depositors totally secret, especially if these accounts were being used to defraud their own countries’ tax authorities. In 2008 those secretive banks were then defrauded. In Wall Street, Goldman Sachs and Lehman Bros bid up their annual bonuses to millions of dollars for each partner. In 2008 even Goldman Sachs made a loss and Lehman Bros went bust.

A former chairman of the Federal Reserve argues that “fearful investors clearly require a far larger capital cushion to lend unsecured to any financial intermediary now”. He therefore thinks that taxpayers money should be ladled into them to make those investors less fearful. This seems far more likely to make depositors intermittently more terrified and cause any depression into the 2010s to linger on and on.

In the 1930s, the chief economic adviser to the government of Siam was called Prince Damrong. I try always to remember it
– quote from former director of International Monetary Fund.

One of the few big banks to make a profit in 2008 was the Grameen Bank (which means Village Bank) in that once basket-case country called Bangladesh. The sole staff in a branch serving several villages was once a woman student. It is now more usually someone who has learnt to use the computer in the right way.

How to create cost-cutting banks? Learning from Dr Yunus and those who have exponentially sustained community rising microcredit seems to be the best way forward worldwide women and USA Congressmen can get.

As a child, Norman Macrae bumped into Peter Drucker. It was dinner time at the British Embassy in Stalin’s Moscow where Norman’s father was a consulate. Both Norman and Peter’s experiences of the 1930s determined their love of writing up for big management stories of why and how entrepreneurial systems are born micro. The teenage Norman studied economics from an Indian correspondence course whilst waiting to fly RAF planes out of Bangladesh in world war 2. He then went up to Cambridge as part of the last student generation to be lectured by Keynes. He married the daughter of the British Raj judge who was tutored for 25 years in change by Mahatama Gandhi –Kenneth Kemp went from being the Mumbai judge who imprisoned Gandhi in the 1920s to helping write up the legalese of India’s Independence in the 1940s.

Norman went on to Deputy Edit The Economist for 4 decades. He enjoyed reporting system change before it exponentially compounded - including in 1962 the exponential rise of Japan, and between 1976-1984 The Entrepreneurial Revolution trilogy. The latter provided a microeconomics map of how to transform - and sustainability invest - through the end of the Industrial era whilst cross-culturally uniting the generation destined to be worldwide. In 2009, Norman remains reasonably optimistic: Yes Human Beings Can End Poverty - if we choose to collaborate and celebrate this as our generation’s defining goal.