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Total Cost of the Credit Crunch

You’ve got to feel sorry for the banks and credit card companies. They sustained us through the good times, barely taking enough profit to carpet their meagre offices and keep their executives and shareholders above the corporate poverty-line. Always willing to help those less fortunate than themselves, they tried to provide mortgages for poor Americans who couldn’t afford to pay them back. And that very act of largesse has turned around and (as Noel Coward might have said) ‘bitten them in the ass’. Shame on you, ungrateful subprime mortgagees.

Of course, the reality is very different. Banks and credit card companies have always been making millions, much of it coming from the poorest and those least able to afford their services. If you have a million in the bank and pay off your credit card every month, you’ll never have to fork out a penny. If you can’t afford to pay your mortgage, you’ll be walloped with charges until they come out of your ear-holes.

The reason European banks and investment companies invested in the US Subprime Market (don’tcha just love the jargon?) in the first place was because they suspected that the people who took out these ‘risky’ mortgages were probably too poor to be able to pay up on time. But that didn’t matter: the institutions had the security of being able to repossess the properties and keep whatever payments had already been made. (Another word for properties is ‘homes’ but that’s not something you’ll find in too many financial reports.)
What these lovely fellows hadn’t taken into account was that the value of the properties would plummet after 9-11, the Iraq War and subsequent exploits of George W Bush. And so they lost lots and lots of money.

A lot of homes were repossessed (nearly two and a half million at the last count), the banks lost zillions and, fearing a ‘run’ on their assets, used creative accounting to cover up just how much of their money had actually departed down the Suwannee. Because every bank knew they’d fudged their own figures, they refused to believe how much other institutions said they’d lost. Mistrust set in and the banking system began to wobble.

What had previously been a series of simple every-day transactions in which High Street banks advanced one another billions in short-term credit, ground to a halt. Northern Rock all but went to the wall and a couple of others almost followed. Recently the Bradford and Bingley Building Society, a British mortgaging institution, issued a profits warning. It’s not getting better, it’s getting worse. No one short of the Duke of Wellington can currently get a loan in the UK and card companies are lowering credit limits and calling in cards like there’s no tomorrow – which is exactly what they’re fearing.

My own bank, the ethically-motivated Co-operative Bank have just reduced the credit limit on my Gold card by £1,500, getting an advisor to call me to ‘explain and discuss my new credit limit’. This is all being done for my own benefit, apparently, though how the attendant rise in interest rates fits into this scheme of things passes me by. ‘Are you OK with this?’ he asked at one point. ‘No,’ I said. ‘Oh well, let’s move on…’

The American Subprime crash didn’t cause the current Credit Crunch, it was merely a catalyst. Many other factors came into play, including the slowdown in the UK housing market, and the fact that banks had few genuine assets to sustain the big losses. In the ‘good old days’, banks and building societies took in money from investors and lent it, at a higher interest rate, to those buying property. But times have changed and they got greedy, lending money they didn’t actually have, occasionally in a silly fashion, such as Together, Northern Rock’s infamous 125% mortgage.

Repossessions are becoming big news in Europe, too. Over 27,000 in the UK in 2007, a nine-year high. According to an article on the BBC website posted in February: ‘Among the biggest mainstream lenders, Britannia, Bradford & Bingley and Northern Rock were found to be using the courts the most, relative to their market share.’

The worrying thing is that no matter how badly the banks do, they will always pass on their losses to their customers. The recent legal action against them for unjust charges – which the banks are supposed to have lost, though you wouldn’t think so – has put them on the back-foot, looking for new and more interesting ways to take money off us.

The total cost of the Credit Crunch? As ever, it looks like the rich will survive and the poor will lose their homes and possibly their jobs as well. A pity Britain is ruled by a government too afraid of losing affluent middle class votes to help those who really need it.

The only vaguely optimistic note is that Gordon Brown and his post-Blair Thatcherite government has two years to improve their miserable record before they get kicked out and David Cameron’s Thatcherite Conservative government takes over. We can but hope…

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Featured Lead Story Life London Music

Life As An Out-Of-The Loop Music Promoter (Part 1)

I’ve been a music promoter for most of my working life. It’s basically the same as being a theatrical impressario except, instead of plays, I organise rock ‘n’ roll shows. The wife likes to think of it as being something like a professional gambler, but that’s just her.

A music promoter hires a venue, finds an act people will (hopefully) pay to come and see, and sells tickets. Ideally, ticket money will exceed costs and so a profit is made. That’s the theory at least. In reality you are gambling that enough people will buy enough tickets to pay for everything. If it’s too hot, people won’t come; if it’s too cold, they won’t come either. A big sporting event on the television can ruin you. So too can another, bigger event somewhere else.

There’s a lot of money to be made in music. Problem is, 5% of the participants get to keep 90% of the loot, while the rest of us scrabble around for what’s left. I can’t deny that there have been rare occasions when I’ve made relatively big money. One such occasion was a Boomtown Rats concert in 1977. Afterwards, I couldn’t see the bed in my hotel room because it was literally covered in bank-notes – not to mention the young woman who’d come back with me from the show. But at the time I was living in a one-room office, sleeping on the floor, and I’d lost hundreds of pounds practically every gig I’d put on that year. The only secret of promoting that matters is to win more than you lose.

Generally speaking, to make serious money you’ve got to be in ‘the loop’ and I’m not. Being ‘in the loop’ means being part of the music mainstream.

I’ve always been something of an outsider and I only got to do the Rats in the first place because very few promoters back then would sully their hands with ‘punk’. I’d followed a hunch by booking this unknown Irish band for £250, largely because I rated their début single, ‘Looking After Number One’, and it paid off. It could easily have been another flop but, luckily for me, by the time the gig came around, the single was number 2 in the NME charts.

Usually putting money on bands you personally like is the kiss of death. At least it is in my case. My personal taste doesn’t often coincide with that of the general public. Big Brother, Susan Boyle, tabloid newspapers, obscure 1950s R&B, even more obscure British folk musicians and Socialism are just some of the subjects the general public and I disagree on. The big promoters, like major record company executives, never ever put money on what they personally enjoy, they “invest” their cash on what they are told other people will enjoy. Invariably it’s the lowest common denominator that comes into play. Was it Barnum (perhaps paraphrasing H L Menckne) who said: ‘No one ever lost a fortune underestimating public taste’?

Popular music is one of Britain’s leading businesses and for the last 50 years or so, the biggest players have been major corporations. Led by accountants masquerading as cool dudes, these outfits are not only in ‘the loop’ they pretty much are the loop. The players all know each other, they’ve all worked in one another’s offices at some time or other and they all go to each other’s parties. Maybe they’ve even got the same accountancy qualifications.

I first realised the situation had become critical in the early-1990s when I was a music journalist taken out to dinner to meet the big cheeses of a major British record company. Every single one of them was a lawyer or an accountant and their collective knowledge of music was woeful. A couple of the collected musos had great sport goading them with such misinformation as: Jerry Lewis had turned to rock & roll after dissolving his partnership with Dean Martin and added the “Lee” as a tribute to US General Robert E Lee; Prince Andrew is the name of a 70-year-old ska legend; and the news that Chuck Berry devoted his spare time to playing and mastering the Dixieland jazz trumpet after attending a funeral in New Orleans. These people knew how to maximise profits, they know all about downsizing and negative equity but, when it came to music, they didn’t know their Associates from their Donnie Elberts. Literally.

In my time I’ve been in on the ground floor of quite a few movements in popular music. Rock & Roll was before my time, as was the British Beat Boom of the early 1960s, but I was excited, moved and inspired by Peace, Love and Hippydom, which I was getting tired of when the Punk and New Wave movement started up in 1976. I was into punk months before the Sex Pistols signed to EMI and I desperately wanted to be part of it. And I was, in my small way. The same went for several other, smaller movements, such as pub rock, Indie Rock and the Irish/ Country-punk explosion of the early 1980s that blew the Pogues out to an unsuspecting world.

The small independent promoter has to make his or her money by selling crumbs from what the people in the loop don’t want – most likely what they don’t yet know exists. Because I have always promoted in small venues, I tend to be part of the grass-roots and I get to see new acts coming up. If I’m lucky, I’ll get a couple of shows out of them before they get snapped up by those ‘in the loop’. You’ve got to get in there quick, before the company-guys see what’s happening and kick sand in your face. But every year, it’s getting harder and harder to grab even a small slice of the pie.

The trend these days is to move acts to bigger – and more profitable venues– way too soon, before they’ve had chance to learn their craft and iron out their bumps. The Rolling Stones are the Rolling Stones today because, when they started, they were allowed to hone their craft in hundreds of small gigs before stepping up to play dancehalls, theatres, town halls, then to arenas and finally, when they were ready, into huge stadiums. The same went for all of the true greats: Chuck Berry, Jerry Lee Lewis, The Beatles, Bob Dylan, Johnny Cash, etc, etc… That’s why witnessing an 81-year-old, arthritic, part-deaf Chuck Berry play a gig in London’s 300-capacity 100 Club, as I did recently, was an exciting, uplifting experience that totally beats going to see the latest manufactured stars play in a stadium or in a field in Somerset.

As they used to say: ‘That’s rock and roll, man.’

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Featured Writing

Write A Novel The Easy Way

Never mind the old cliché that says ‘there’s a novel inside everyone’. It might well be true, but the tricky part is getting it out and on to paper. You might be surprised to hear that there’s never been a better time to write a novel.

After 23 years trying, I think I’ve finally discovered the secrets of writing a novel the easy way. Or, to put it another way, “the easier way.”

The Author Struggling to Get Out

I’ve served time as publisher, reviewer and writer. I’ve met a few authors in my time, ranging from Stephen King, Ian Rankin and Ken Follett to Ken Bruen, Terry Pratchett and Minette Walters. Although you can never lump everyone into the same box, generally speaking, people who write novels, are ‘different’. There’s something about them that sets authors apart from the rest of society.

For a start, they have to be single-minded. Working out a story, inventing characters and putting it all down on paper (all right, probably a computer screen, but don’t pick hairs) is a daunting process. Novels range in length from 50,000 to 150,000 words. That’s a lot of writing. And plenty of opportunities along the way to think ‘the hell with this!’ and run off to watch reruns of The High Chaparral. Or The Walking Dead.

Maybe Breaking Bad… (got the idea now?)…

Motivated to Write a Novel?

Veteran American mystery writer Joe Gores quotes the advice given to him when he asked a Notre Dame professor how to become a writer. “It’s very easy to be a writer,” the prof said. “Go to a big city and get a little room with a table and a chair in it. Put your typewriter on the table and your backside on the chair. Start writing. When you stand up ten years later, you’ll be a writer.”

Today we can substitute ‘computer’ for ‘typewriter’. (Have you ever tried to get ribbons for those things?). Which adds the added hassle that we have to conquer the urge to edit whilst we write. But essentially nothing has changed.

Do you have a strong belief in your own talent?

To be productive, writers need to have a strong belief in their own talent and confidence that what they are writing is ‘good enough’. As a former publisher who had to wade through piles of submissions, I can vouch that this sense of confidence can be misguided. Having said that, several terrible writers I rejected (no names) went on to have tremendous success with other publishers. So the question to ask yourself is ‘good enough for what?’. And frankly, that depends on what your goals are.

If you’re attempting literary fiction and you suffer from lack of self-confidence, then you’re probably a masochist who should think about switching to self-flagellation. It’ll be immensely less painful in the long run.

If, on the other hand, you’re trying to write a thriller, a romance, historical mystery or similar genre novel, keep at it. As another old saying goes, practice makes perfect. Writing is a craft that can be learned and the way to learn is to work at it. Don’t worry about making mistakes, just get writing. There’s nothing you write that can’t be edited and improved on later.

Severe Lack of Confidence

I can confess that I suffer from a severe lack of confidence in my writing. At the moment I am reading The Tin Roof Blowdown by James Lee Burke, a brilliantly multi-textured work of fiction by any standard and I can’t help comparing Burke’s flowing prose to my own miserable efforts. Which is silly.

A guy I know who teaches writing at university suggests that would-be novelists keep a copy of Dan Brown’s Da Vinci Code to hand. It sold millions and zillions of copies, but let’s be honest, Dan Brown is no William Shakespeare, nor I suspect, does he aspire to be.

So that’s how you write a novel. You just sit down and write. There is no easy way unless you are the type of self-obsessed, doggedly persistent person that will make a natural author. For the rest of us, I can recommend some very helpful eBooks:

UK: https://amzn.to/2Vtqr5e

USA: https://amzn.to/354IHF9

In addition, I should say that I wrote them. They’re the best.

Honest.

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Featured Life

The Lies Start Here *(if you believe the facts)…

Although I’ve never kept a diary, as a facts-lover, the idea of a blog is strangely appealing. Thanks to the European Nuclear industry’s Tim Berners-Lee and Robert Cailliau, it is now possible for just about any living person to read what you have to say about the world.

George Walker Bush.

Fidel Castro.

Gordon Brown.

Paris Hilton.

All you have to do is write it and the world will be your audience.

There are somewhere around 20 billion blogs currently active in our solar system. All of them spewing out over a million words an hour. Read by 26,759 people every single minute. It’s staggering.

Facts: It Figures

Well, it would be if I hadn’t just made up all those facts and figures. That’s one of the many great things about the web, you can make up anything you like and people will believe it. Partly because it might be true. No one really knows.

I’ve done more than my fair share of creating facts over the years. In fact, some of my facts are becoming very well known.

A few years ago I subsidised my interesting but less than successful independent publishing company by journalism. This mostly involved writing reviews.

I was a primary contributor to many London guide books, knocking off 250 words each on pubs, restaurants, cafés, bars, shops, markets, whatever. This was my daily life on a regular and quite monotonous basis. I once visited and reviewed 186 pubs and bars in a single week. The pay per review was low and frankly, there wasn’t much to say about most of the places they sent me to. So I made it up.

Guide books contain all the facts in the world

Nothing significant, and not all the time. Just occasionally I’d add an interesting ‘fact’ here, a snippet of ‘well-researched information’ there.

“A house on this site was the regular meeting place for Lord Horatio Nelson and his mistress, Lady Emma Hamilton, the seemingly respectable wife of William Hamilton, British Ambassador to Naples.”

“Beatles manager Brian Epstein was a regular here until his untimely suicide in August 1967.”

“Back in the 17th Century, Welsh drovers rested their cattle here, en route to slaughter at Smithfield Market.”

Techniques for Invention

It’s important to include a sprinkling of genuine facts, if such a thing really does exist. The name of Emma Hamilton’s husband. The date of Brian Epstein’s death. And the ultimate destination of the Welsh cattle

This served a twin purpose. It added credibility to the lie and it ate up the word-count very nicely. When you’re being chased for 150 words per review and you’ve described the furnishings to death, the beers they sell, who drinks there, these little extras are a godsend.

As Edith Piaf suggests, I have no regrets. The lies were never huge and they did brighten up some pretty dull reviews. In the final analysis, the reader won, the businesses themselves received increased cred, and the publishers got a more readable and more salable product.

Everybody wins!

Who Knows What’s Really Real?

The only vaguely disconcerting side effect was that much of what I made up has since been adopted as real truth. That’s how journalism, especially guide books, works. You check out the competition to make sure you’re not being left behind and you snaffle the most interesting tidbits.

In my position as creator, I feel a little cheated that I was paid peanuts for such groundbreaking and much-copied fiction. On the other hand, I realise that throughout history, the true originator has always been penalised. It’s just something I will have to learn to live with, even if it’s not always as easy as I make it look.

The moral of my story might well be that we have to question everything we are told. And yes, that goes for you. I don’t care if you’re President Bush, Fidel Castro, Gordon Brown, Paris Hilton or the supermarket check-out assistant. Ask the questions.

Of course, all I’ve just written could be another huge lie. Maybe we’ll never know where truth diverges from fiction.

If a tree falls down in the jungle and no one is there to see it, did it really happen or was it just another line in some lying idiot’s blog?