I was attending a charity auction dinner when a Smart car was introduced as an item, with the starting price of NT$20,000 (US$600). That’s the spirit of charity, I thought—except that it would still belong to its original owner after the winning bid. So, was it a leasing plan? No: What the bidder would gain was the right to sit in the passenger seat and cruise Taiwan for a day with the owner-driver, a married guy in his 40s.
Half of the audience, dressed in proper attire for a five-star hotel banquet (except yours truly who dressed, looked, and was treated like a waiter), patiently sat out of respect and curiosity. An unexpected situation occurred: The bid went UP. A group of businessmen, occupying the nearest table to the stage, were bidding…against each other. One raised his hand. 25,000! The chairman yelled. After 30 seconds of calculated momentum, the next guy lifted his finger. 30,000!
I imagined two baldies cruising downtown Taipei in a yellow Smart for “fun,” wearing matching black suits. The whole show started to look like a scene from a surrealist art film, mimicking David Lynch or John Waters. I asked my friend who these guys were. She told me they were from Standard Chartered and were new in town. They were using this auction as an introduction to the higher echelon of Taiwan’s foreigner society (=gold mines). Presumably their “generosity” would be a corporate expense.
Who said the financial industry was in trouble?
Or was it ever in trouble, to begin with? I stumbled on a documentary called Inside Job, which revealed what was going on inside the U.S. financial industry during the first decade of the 21st century. Because everything financial is carbon-copied around the world under the name of globalization these days, we can take a hint about what is going on, or what will happen, to the rest of the world from the film.
(Spoilers ahead) The whole affair can be summarized roughly as follows. During the Reagan era, ex-bankers were invited by the government to become regulators because they were considered “experts” on complicated financial issues. Of course, the “regulators” started bending laws for, not against, their “old friends’” sake. The inmates had started running the asylum. Thus the housing credit scheme was born, which (1) disguised all risks under complicated mathematical terms, (2) targeted the uneducated poor, and (3) let people buy something they wanted but could not actually afford: housing properties. All “certified” under federal laws.
The rest is history. The financial industry knew that the meltdown was going to occur. Records show that internally they were betting AGAINST their own offerings. One more: Politicians, even the President, have short-term tenure, which limits their circle of influence. Bureaucrats, or financial regulators in this case, don’t. They stay. Not a single top financial executive has been prosecuted in the financial meltdown. History will repeat itself.
Here is the whole Inside Job, online. Go watch it, especially when you need some chills in the midst of summer heat.
Also, do not miss the (end credit of) The Other Guys., which brilliantly analyzes the recent financial situations and scams. I also bet you can enjoy 5 minutes of Will Ferrel movie if it is doesn’t have Will Ferrell in it.