London Special - Part 1

LONDON SPECIAL

A few observations from London in the midst of a financial summit fumbling for the formula to fix the financial crisis…

Miracles and jeans…
As global and London’s markets tumbled on the first day of trading for the week with news Spain was bailing-out some of its banks, the US auto-makers would be denied further funds and the upcoming G20 summit was a failure before global leaders even met for their first cocktail party, I set-off for the Canary Wharf offices of Citi – in doing so, a small miracle and a strange occurrence presented themselves in front of my jet-lagged eyes. Having walked down to the local tube station in the crisp spring air (a welcome break from the rising heat of the Middle East at this time of year) a smooth-running train pulled up at the platform of a delay-free tube line and offered a selection of seats to rest on during the journey. Yes, you read correctly (especially those of you familiar with London’s public transport system) – a selection of seats. Now, this may not sound like too much of a miracle to some, but please bare in mind that we are talking about an underground system that sees 3million passengers carried daily and that used to see city-workers have to fight their way just to get ON to the (stinking) carriage and then fight for every inch of their personal space against a myriad of grumpy and super-egoed city execs wielding the ubiquitous FT as they flipped and turned pages with the skill of a master conjuror – really quite impressive from some but still annoying when the pages slap against your face.

As if this miraculous morning experience was not enough to open someone’s eyes to the sweeping change wrought open this city, a strange phenomenon then began to materialise – everyone on the tube and around the former centres of financial-excellence were dressed in jeans and t-shirts. Had I not received the memo there was some special wear-jeans-for-charity-day? In fact, the only suit in sight was the platform inspector’s as he sat idly by remembering the days when he would have enough people to shout at to “mind-the-doors”. He’s probably lamenting the loss of those poor unfortunates that used to dash-for-the-closing-doors-desperate-not-to-miss-that-particular-tube only to find their raincoats/umbrella/handbag/I-Pod Wire had become lodged behind them and an entire carriage’s forlorn and angry eyes set firmly on their reddening face. What is the reason behind the sudden distaste of formal-dress I hear you ask? As described later, the G20 Summit may be blamed.

Bubble-London-icious
London has long been an overpopulated city, and Londoners have long become accustomed to dealing with aggression on a minute-by-minute basis, whether walking, driving or simply asking a fellow resident for the time. The global crisis has certainly changed the atmosphere here though. First, almost 30% of the working population that used to travel to Canary Wharf and the City have disappeared – they haven’t vanished into thin air, they’ve been made redundant by the vicious bursting of a huge financial bubble – originally inflated by the hot-air of fast-talking London-based financial wizards - I recall a lot of them speaking in foreign tongues though, especially around the derivatives desks. The high-flyers have become the lowly-tube-riders. Taxis are easy to find (and friendly to foreign looking folk), restaurant bookings are definitely easier to secure and easier to pay for by virtue of the daily voucher offers, and shops are noticeably quieter in some areas. The tourist shopping areas and attractions are buzzing with activity though thanks to the strength of both the Euro and the US$ versus Sterling. In fact, Harrods and the museums around Knightsbridge seemed even busier than at Christmas time and the January sales.

For some time this capital city and certain swathes of its geography in particular (Mayfair, Chelsea, Knightsbridge) have represented a Monaco-like enclave nestled within and subsidised by the working-folk that make up the remaining 95% of the population. The 5% must be responsible for close to 60% of the expenditure across the city’s still vibrant night-life scene and do not seem ready to give up or change their spending habits just because there is a global recession taking place – mind you, drinks at the most popular and exclusive bars and clubs are a bargain compared to recent nights out in the UAE. Frustratingly, it’s still easier for Madonna to adopt her latest accessory from Malawi than finding a parking spot around the West-End on a Saturday night.

Road-Works-Like-a-Charm
Stimulus packages around the world are being announced in many shapes and form. Obama’s administration wants to protect home-owners to promote greater consumption, China wants to generate land-ownership to generate construction, even Zimbabwe has implemented an economic recovery programme to stem inflation of 1,000%/day. London has opted for the “let’s-dig-up-a-perfectly-good-road for any and every purpose”.

Any visitor to this great capital of the world will instantly be aware of an extremely over-proportionate number of red and white construction barriers and road-works signs – not to mention overweight men sitting lazily around wearing jeans that for some nondescript reason are three sizes too small and have a liking for showing off what is an extremely unattractive “butt-cleavage”. When times are good, these road-works can be infuriating, as traffic and pedestrians alike are inconvenienced and the sounds of the jackhammers drill their way into your consciousness. Now that times are bad, you cannot walk more than 20metres without being confronted by a team from British Gas one day, British Telecom another and EDF (Electricity firm) the following day digging up the SAME hole for the third time in a row. Some amusing scenes present themselves with two cement trucks and a team of seven all watching one fellow worker smoothing over newly-laid concrete – for the benefit of a 1sq metre plot!

It’s not always clear what’s funnier/sadder – the spending of government money on totally unnecessary projects serving no immediately clear purpose or the absolutely palpable act of desperation that Gordon Brown’s government has forced boroughs into implementing. Either way, its reminiscent of 2001 when the tech-bubble burst saw the whole of London dug-up and wired for broadband in an attempt to save a number of tech-firms – it certainly worked then (with many ancillary benefits through increased internet capability/speeds) but this downturn may need a bigger jackhammer.

G20 or Geee where have all the hotel rooms gone?
The G20 conference has gotten off to a terrible start – talk of disagreement between the attending global leaders, and their splendid entourages, over leaked wording of a document ahead of the official opening ceremony has overshadowed media coverage. The other focus is on Obama’s first visit to Europe as President of the United States – unlike other family visits that consider 5 traveling companions as sufficient, Obama is bringing over 200 Secret Service Agents in addition to the “normal” 100 strong traveling circus. Nice and intimate.
Any cursory calculation of the accommodation requirements for such a conference (20 nations, average delegation per nation 50 = 1,000) presents a formidable logistical nightmare for those organizing, but a great windfall in hotel and leisure revenues for the UK government! A friend was looking to book a few hotel rooms around town to be told by almost every decent one that “they were fully G20ed out”. Judging by the luxury hotels that have been booked solid, these G20 leaders certainly don’t mind flying and residing first-class even if their castigated corporate titans aren’t allowed to anymore!

The revenues expected must provide some comfort to what is otherwise fast becoming an beacon for the venting of a great deal of pent-up anger and frustration by the disenfranchised UK public. A huge number of official and unofficial protests and “riots” have been called for, with certain internet flyers making the round calling for the “storming of the bank of England”. There is a more sinister side to the expected trouble tomorrow and Thursday in London unfortunately. Social strife has been rising for the last 18mths, and some areas have seen record increased in crime. Even walking down one street in a more secure area of the city you are confronted with several luxury cars in a row dripping with left-over milkshake splashed across their windscreens and messages artfully written-in such as “Financial Loser” (spelt correctly surprisingly) and “Must be a banker/^anker” - you can guess what the ^ represents as a rhyme. This is not an entirely new aspect to living in a cosmopolitan city where income disparity has always existed, but conversations with those living here provide evidence of a marked increased in these types of events and a pervasive emotional tirade against the once-loved financial industry. It is now the major culprit in this crisis.

The reason no one traveling to work seems to want to wear those lovely Zegna tailored-suits and bespoke shoes they used to all be so proud of? The G20 protesters have threatened violence against the financial communities of both “The City” and Canary Wharf resulting in formal requests for bank staff to dress-down appropriately and pay extra vigilance to possible acts of violence – yeah, like 1m people all-of-a-sudden wearing jeans and t-shirts is going to fool the gangs of evil-wishers – especially not when they spot the FTs cradled under one arm and the Starbucks latte grasped in hand as the “bankers” exit the (empty) tube stations.

I remember a statistic published during the height of London’s boom-time in 2005 – it was stated that for every new job being created in London’s rapidly growing financial sector, an additional 4 jobs were being created directly and indirectly across the city. With an estimated 15,000 (and more to come) financial positions culled –that’s a lot of suddenly out-of-work Londoners looking enviously and angrily on at those still driving to work in their milkshake-stained Porsches, wearing jeans and trying to avoid the road-work riddled obstacles.