Alessio Rastani: Prophet, vulture — or both?
Rod Dreher September 27th, 2011
If you do nothing else today, watch this three-minute clip of trader Alessio Rastani being interviewed on the BBC yesterday about the Eurozone crisis. It is one of the most astonishing things I’ve seen in ages. Quotes:
- “The Euro is gonna crash, and the markets are going to fall pretty hard.”
- “The big institutions, they don’t buy these rescue plans. They know the market is toast. They know the market is finished.”
- “See, I’m a trader. … If I see an opportunity to make money, I go with that. For most traders, we don’t care how they’re going to fix the economy, how they’re going to fix the whole situation. Our job is to make money from it. Personally, I’ve been dreaming of this moment for three years. … I go to bed every night and I dream of a moment like this, I dream of another recession.”
- “Listen, I would say this to everybody who’s watching this. This economic crisis is like a cancer. … What I would say to everybody right now is it’s not a time for wishful thinking, waiting for the government to sort everything out. The governments don’t rule the world. Goldman Sachs rules the world. Goldman Sachs doesn’t care about this rescue package, neither does [sic] the big funds.”
- “The first thing people should do is protect their assets, protect what they have. Because in less than 12 months, my prediction is that the savings of millions of people is going to vanish. And this is just the beginning. I would say: be prepared and act now. The biggest risk people can take is not acting.”
It’s a breathtaking performance. As Yves Smith describes the man, “Rastani is the bland, reasonable face of predatory capitalism.” The man is a pirate, is what he is — but in a way, we can be grateful that this amoral creature didn’t know better than to be honest with the viewers. I think he is telling us the unvarnished truth. I don’t know that he is right about the imminent collapse — I hope he is not — but I think he is unwisely disclosing a red-in-tooth-and-claw truth about how global markets work, and about the relative powerlessness of sovereign states against the barbarians that sail the seas of international capitalism.
You cannot watch this clip and say with a straight face that naked capitalism and conservatism go hand in hand. Alessio Rastani is as inhuman and revolutionary, in his way, as any Maoist Red Guard. But you know, should what he predicts come to pass, he had better have secure passage to a safe haven booked, because he’ll be the first one up against the wall when the mobs take over.
UPDATE: There’s some speculation that he might be a prankster, but so far, it looks like the guy is who he says he is.
“the relative powerlessness of sovereign states against the barbarians that sail the seas of international capitalism.”
Um, what? This statement is preposterous nonsense. You can’t possibly believe this. No one can. Governments getting into bed with the big financial institutions IS the problem. The US government’s Goldman Sachs bailout plan (and that’s what TARP was) and the creation of the Euro leading to their imminent economic calamity are NOT going to be solved by pretending we live in a bizarro world where “sovereign states” need MORE power. Just the opposite is true. Everything needs to move smaller. The government encourages big business over small business and has for decades now. All of that must stop.
But, alas, it won’t. It’s far too late.
I don’t think you understand where I’m coming from. We actually *agree*, I think, to a certain extent. One reason the governments are so powerless against these firms is that the firms have captured the governments. That, and the fact that these firms have no national loyalties to restrain them.
Maybe take a grain of salt with this guy’s doom n gloom:
on Tuesday night the BBC was left facing questions about just how qualified Mr Rastani is to speak about the markets.
In the interview Mr Rastani described himself as an independent trader. Elsewhere he claims he’s an “investment speaker”. Instead of operating from a plush office in Canary Wharf Mr Rastani works and lives with his partner Anita Eader in a £200,000 semi in Bexleyheath, south London. The house, complete with a mortgage from Royal Bank of Scotland, belongs to her not him.
He is a business owner, a 99pc shareholder in public speaking venture Santoro Projects. Its most recent accounts show cash in the bank of £985. After four years trading net assets are £10,048 – in the red.
http://www.telegraph.co.uk/finance/economics/8792829/BBC-financial-expert-Alessio-Rastani-Im-an-attention-seeker-not-a-trader.html
I don’t doubt that this guy probably stands to make a mint in the event of a global financial collapse – he’s probably short on everything. But I don’t see how that makes him an authority worth listening to, or why the BBC thought fit to give him a platform to make his “everybody panic” pitch.
Sure, we agree that contemporary crony capitalism is a bad thing. But as Chesterton and Belloc laid out clearly nearly a century ago, solutions in the socialist, big-government direction are easiest to see but don’t in fact actually solve anything (see, for example, absolutely everything done by the government during and after the 2008 crises). Too often it sounds like you argue in that direction, perhaps out of despair of seeing any alternative.
I don’t necessarily think he’s a prankster, but I do think that he’s probably a trader with a lot of short positions that he’s hoping to capitalize on. That’s my frustration with a lot of the financial media, and he’s coming closer to being honest about it so I can’t be uniquely frustrated with him. But I still view his comments with some healthy skepticism. He’s hardly a neutral observer.
That being said, I’m definitely in asset preservation mode. I’m not positioning myself to assume either a crash or a Fed-driven boom, since the downside for being wrong in a volatile market is too great. The only way for an average citizen to win this game is not to play.
Good point, Jaybird. You’d think — well, I would think — that the BBC would have vetted this guy better.
If you’ve got a well armed bad guy in town, it takes a bigger, better-armed guy to take him out. If we’re lucky, the bigger better-armed guy is also nicer, like in Shane (the old western). Big predatory capitalists, like big predatory drug cartels, require something with the legal and literal fire power of a government to nail them down. That leaves the question begging, quies custodiet ipses custodes?
Siarlys: Um, or rather than hoping that big boss man #2 will somehow be nicer than big boss man #1 (who btw, is big boss man #2′s cousin and best friend), maybe we can figure out how to get back to a town where one or two people can’t exert dominance over everyone else.
Nah. That’s just crazy talk. Let’s give the government all the power it wants. Heck, why not suspend elections while we’re at it? (http://dailycaller.com/2011/09/27/nc-governor-recommends-suspending-democracy-to-focus-on-jobs/) I mean, there ARE predatory capitalists about.
“the relative powerlessness of sovereign states against the barbarians that sail the seas of international capitalism.”
For some reason I thought of this classic Monty Python short that preceded the Meaning of Life…
http://www.youtube.com/watch?v=7YUiBBltOg4
Buffet is buying back his own stock. Verbum sat sapientibus
I’m going to defend this guy, simply for sake of fairness.
First, the guy is honest. That’s self-evident.
Second, he’s a trader, he’s not the guy who’s in charge of the policies whose results he trades in. He can make money in an up market or a down market, as long as he can anticipate the market. That’s his skillset.
Third, he’s realistic. He knows the current economic crisis in Europe is gigantic and very, very difficult to solve. He knows that the smart money would bet against it being solved in time to avoid a meltdown. He could be wrong, and he knows that, but by his calculations, the odds are he’s right.
Fourth, he’s actually eager to help people. He doesn’t know how governments and major financial institutions can solve this crisis, so he doesn’t bother trying to offer that kind of advice. He does know how to weather a storm, so he’s trying to help in that respect at least. He knows that major changes in the market offer huge opportunities to make money, if you can anticipate them in time, but not anticipate them too early. Timing is everything.
Fifth, don’t blame the messenger. He’s delivering a message he thinks can help people, just as a weatherman can help people by predicting the likelihood of a hurricane hitting your town. Warnings are good, if they are correct and properly heeded.
Sixth, he knows that the financial markets aren’t controlled by governments, but by the market itself, and the big players in the market especially. So he pays more attention to what the big players are doing than the governments. He sees that they are not taking the government measures seriously, and are anticipating a meltdown as a result. So he is not reassured by governments trying to reassure people. He thinks they are conning people into thinking all is well when it is not.
Seventh, he isn’t the bad guy here, despite his glee in seeing a great personal opportunity to make money. Kind of the way construction companies look at hurricanes. Great for business. The bad guys are the governments and the financial players who have created this mess in the first place. They are eager for you to blame guys like this, of course, so that you won’t pay attention to who is actually creating these booms and busts that screw people over and enrich a tiny few. He’s just trying to feed off the crumbs from their table. He has no power to take over the table.
Rod wrote; “One reason the governments are so powerless against these firms is that the firms have captured the governments. That, and the fact that these firms have no national loyalties to restrain them.” Exactly right.
We fought the Cold War to save Capitalism but we forgot to restore an older order. Banking without gentlemen is a casino.
Perhaps we can save something after the collapse. Or perhaps Judge Bork is right and we should gather our books and music, philosophy and religion, and withdraw out of the frae.
Faux pas belongs to the BBC for their non-vetting, IMHO.
“about the relative powerlessness of sovereign states”
erm, not so.
Sovereign is as sovereign does, particularly with their own financial media (legal tender laws, ie what constitutes permissible public revenue) . When municipal leaders entertain the concept of fiat currencies they must embrace all the consequences of same (exchange value is immaterial thus impermenant) and banking in such jurisdictions indeed becomes a casino. If the house is reputable perhaps they can earn your trust (ie the old-fashioned ‘gentlemen banker’). However when a majority issuer of fiat currency practices fractional reserves with the kitty, all bets are off. Such ‘houses’ open themselves up to all sorts of shenanigans from the punters — the share of kitty “reserved” is only as valuable as the fiduciary media deposited therein. In the US, the issuer of currency has nothing of value deposited, the Fed has a bunch of IOUs from the Treasury and since TARP a bunch of corporate tax IOUs to same bureaucracy (a debt is a “receivable” to the creditor).
The institution charged with issueing the dollar (the Fed) is NOT a sovereign institution but an association of private financial concerns, a magnum latrocinium (“a great band of robbers”) perhaps? You decide.
While a sovereign government legislated it into existence, the holders of the currency have never enjoyed allodial title to anything, not even a fractional reserve of gold… the principle at stake here isn’t sovereignty its seignorage.
What demesnes do you labor in? Multinational businesses can conveniently perform arbitrage across profit centers – shifting assets and liabilities in and out of the seignorage currency space most advantageous to corporate beneficiaries (stockholders, employees, customers). Sedentary citizens who do not enjoy such autonomy of place are necessarily left to the mercy of those who do (IOW are ‘serfs’ of the municiple authority whose currency taxes are levied in).
The body politic is held captive by the corpus monetalis (the minting body). Our taxes only go as far as the purchasing power of the medium (the demesnes) we use to collect them in. The ‘domain’ is not of our making — all wealth is a gift of the creative powers of nature — but neither do we control the terms of its valuation: the price premium aka interest we are willing to pay, ie our time preference of sacrifice of current goods for future goods, is not subject to our free market choices to economize or not as the case may be. Instead central planning is done by a state-appointed “economist” at the central bank, Mr Bernanke being the current office holder (greenbacks are the only legal tender permitted for non-bartered exchange in the USA, the value of our wealth is subject to his whims not yours!)
Banking BY gentlemen is an oxymoron. Oh, there have been gentlemen in banking. But they stayed small, or ceased being gentlemen, and often were bought out by men who were better bankers than they were gentlemen. Meehan, even Norman Rockwell didn’t believe that his paintings actually reflected “life as it is.” They were the tiny snippets of life that give hope that much else might pass out of existence.