Sunday, July 24, 2005

stories worth a thousand words #28



Written: December 8, 2004 (except lyrics)

I was always one to tune out when the Sky News business report came on. What really annoyed me was the way the newscasters referred to the Financial Times Share Index as “Footsie”. I’m sorry, but in my humble opinion even a mild sexual reference can’t jazz up an update on the business world!

One day, however, in the mid 90s, my attention was captured, so much so that I turned the channel back on again an hour later to make sure that I had not been mistaken in what I had heard. I may well be wrong in the actual figures I am about to relate, but there is no doubt that the company they were on about was Guinness, so I guess that was the first thing to make me prick up my ears!

The lead story in the bulletin was all about the world famous Dublin-based brewery’s announcement of its yearly profits, and for argument’s sake let’s say the figure was £500million sterling. To my amazement, the reporter proceeded to list possible reasons for the company’s failures in the preceding 12-month period; among them were the typical things like rising insurance costs, interest rates, change in “market behaviour”; the same old chestnuts.

But wait a minute; didn’t he say that the millions mentioned were profits and not losses? Yes he had, for the figure was still present on the TV screen, in the form of the usual quirky colourful diagram. The reason it was considered a disappointment, apparently, was that the previous year’s returns had been as much SIX hundred million, so officially their “profits were down”. Well boo BLOODY hoo!

I can hear economists’ patronizing tones screaming into my ear as I type. “Ah, you don’t seem to realize successful businesses must sustain growth to survive in today’s ever-changing marketplace!”

Maybe I only studied Economics as far as First Year university level, but I still think I learned enough to know about the whole growth thing. By the same token, however, I also know what is meant by “profit”, and when a group of people consider creating an amount of wealth greater than that of several actual countries a failure, it is surely the sign of a world gone absolutely barking mad.

I couldn’t let a book on my life to date go by without including my pigeon story, and I feel this is the appropriate chapter in which to do so. It happened one day when I was in my room in our house in the Dublin suburb of Blackrock. My grandmother would always make a point of saving all leftovers from dinner so she could throw them into the back garden for the various birds, cats and even occasional foxes that would pay a visit.

On this particular day the grass was covered in breadcrumbs from end to end. I was peering out my window, most likely pondering some crucial adolescent issue that was occupying my mind at the time. The space was empty until a lone pigeon flew down from a nearby tree, and began happily pecking away at the feast. He was soon joined at the opposite end of the grounds by a similar feathered creature.

My daydream was only broken when the first pigeon stopped feeding, lowered its head, and charged towards the second, forcing it up to the tree. When it tried to return back over the other side, it was chased off again. This went on for a good fifteen minutes until a cat appeared, causing both to flee for good. All this time, neither pigeon could have consumed more than a mouthful of crumbs.

I won’t insult your intelligence by explaining what represents what in relation to the way we handle money and resources. Of course I have to include myself in this judgement. As I type this on my laptop when I also have a Palm Pilot and various other pricey luxuries, I am more than aware that I am closer to the first pigeon than the second.

There is only one rule of thumb you need to remember to grasp the goings on in the greedy world of corporate finance. Wherever there is a demand, there will ALWAYS be a supply, not vice versa. This is why governments can’t legislate fast enough to keep up with multinationals’ mischief. I guess all I can hope for is that there is a huge demand for this book so I can make pots of loot for myself…

[I decided to cop out and make up the thousand words for this chapter with the lyrics to an “a-capella” song I wrote called “Money’s Got Me” which I already published on this blog while ago, click here to have a look.]

© JL Pagano 2004

NEXT, #29 : 1000 WORDS ON…MY MOTHER AND I (years of despair)

1 comment:

shandi said...

I have never seen economics explained so well. When you put it that way, we really are no different that animals.
Well done!