Nevertheless they did teach me the value of ‘price conditioning’. We were instructed to provide examples to the punters using only reasonably large 5-figure sums of money.

“You want them to look like a rabbit in the headlights, ideally by the time Bryns finished with them they’ll be crying because they can’t afford it.”

When it came down to it the object of the game was to extract as much money as we could off the suckers. I wouldn’t have had a problem with it other that for the fact that these timeshare-cum-holiday clubs actually employ ‘clumpers’ to beat up their own employees and the managers try and get you on cocoaine.

Anyway, it looks to me like the bankers have managed to pull off some sort of reverse price conditioning scam. A year ago we were all shocked at writedowns of a couple of $billion. Our expectations have been slowly (and very effectivey) downgraded and all of a suddent we’re expected to believe $700 billion is pocket change. What next???

I can’t help thinking that there’s plenty of capital out there, that if we just but out the market, let it all deflate, let the shareholders lose out on writing off the bad debt and take the rough with the smooth, yes we’ll have a big recession, but banks are really just people, computers and capital and they’ll be back soon enough!

Ah James, you’re right about Paulson as always.

Don’t know if you remember me from CU’s drinks last Xmas, but hi anyway.

You’re right, it does sound like a scam. Speaking as a city outsider (and as a trading standards guy someone who knows a thing or two about scams) the whole thing does look like one gigantic scam. Now I appreciate a good scam, and as far as scams go, this is incredible, it’s pure genius.

Eighteen months ago, I didn’t know my LIBOR from my CDO, but, thanks to the wonders of the internet I find myself a bit better informed on these things. All I can say is what a fantastic scam.

Like all good scams the participants didn’t even know it was a scam either I bet. There’s a huge pyramid scheme doing the rounds at the moment over here in the South West. Everyone involved is convinced it is ‘legal’, that it ‘has been checked by solicitors’ some of them even believe ‘the committee have set up a kind of insurance fund so that if any box breaks down the fund will bail it out so that no one loses their money’. People actually believe this crap to the bitter end too.

When we first found out about it (as usual trading standards were the last people to do so) I thought I’d check with the two girls next door to see if they’d heard about it. Low and behold one of them was only thinking about going and joining.

“I think I’m definately going to Steve, it’s legal, there’s solicitors backing it up and everything”

“Pyramid schemes aren’t legal Kelly, you can get 2 years for promoting them.”

“No Steve, this one is legal, it’s been checked out and everything.”

“Look, Kelly, trust me on this, I do work for the department that prosecutes people for promoting pyramid schemes, and I’m telling you, it’s not legal.”

“No Steve, this one definately is.”

You can’t win. An old mate of mine is also in trading standards and half the people he plays football with are trying to sign him up to it.

“I wouldn’t care Steve, if they just said it’s illegal I wouldn’t care, but they just won’t listen to me.”

Going back to when this credit crunch started, I was sitting with a few colleagues in my old job. They were sat there talking about buying property and all the money that you could make doing so. I ventured that the party might be over, they weren’t impressed. I asked them ‘haven’t you seen the news?’ still they tried to educate me that house prices can only go in one direction. I ended up getting a bit arsy with them and saying ‘Look! Do are you honestly saying it’s a sustainable economic model that we all keep borrowing bigger and bigger amounts of money, keep selling our houses to each other and all get richer to infinity?’

Responses were something along the lines of:

“They might settle down for a few months then everything will be back to normal again.”

“Steve, my Dad says property always goes up.”

There’s a pattern emerging isn’t there. I’d imagine, going on the shock and panic that is eminently detectable in the voice of every trader I’ve seen interviewed recently, that a good proportion of investment bankers thought the whole thing would keep going indefinatley too.

Now I wouldn’t go as far as saying that the housing market is a pyramid scheme, pyramid scheme no, but ponzi scheme? Yes, it has all the classic hallmarks of an elaborate ponzi scheme, allbeit a very, very good one. Not that I’ve got anything against city bonus’s, but the money has been creamed off, the organisers have walked away and the whole thing is about to collapse in an almightly heap.

Somehow the pyramid scheme complaints have ended up on my desk. It’s early days at the moment, and no one actually wants to grass up their mates, so there’s not a great deal I can do about it. Give it until Christmas, however, and I’m expecting a flood of disgruntled people crying down the telephone that they’ve lost all their money.

This is when the friendships start to get tested, and I reckon there will be a few people ready to grass up the ‘mates’ that have defrauded them out of three grand and refuse to give it back.

It’ll all end in tears, but not for me. All of a sudden I feel quite smart being a renter.

Paulson is either completely incompetent or he is playing the incompetent patsy for much larger players.

At the end of the day you can’t get out of these holes without someone paying for it. Whether it be the bankers or the tax payers.