The phrase "perfect storm" has often been used in connection with the chaos and turbulence in the global economy. To know how to cope with the effects of the perfect storm you have to look at how it impacts at individual level. Here is my summary of the perfect storm, obviously there is some overlap between elements.

But first, who is really responsible? The banks? Well remember Yossarian;

Yossarian rejected the advice with a sceptical shake of his head. 'When I look up, I see people cashing in. I don't see heaven or saints or angels. I see people cashing in on every decent impulse and every human tragedy ….'From now on I'm thinking only of me.'

'But Yossarian, suppose everyone felt that way.'

'Then I'd be a damned fool to feel any other way, wouldn't I?'

Joseph Heller (1962) Catch-22.

If any bank had behaved any other way than to follow the investment herd in recent years, the management would have run a high risk of being ousted by a mob of angry shareholders.

You and me? When was the last time you heard a bank or a politician saying we should all rein in our debt and balance our personal budgets?

What about politicians then? Well, politicians will only go so far as their officials let them. If their advisers - in the UK that would be Treasury civil servants - do not flash warning lights at any point they can say - reasonably - that they were only following professional official advice

Which brings me to PIDPILU


Property (prices and lack of buyers)
Investments (inc endowment policies)
Debt (esp. credit card)
Pensions (esp. if dependent on equity market)
Inflation (still high)
Loans (difficult to get)
Unemployment (actual and threat)

PIDPILU is a multi-pronged threat to personal and social wellbeing the like of which we have never seen before.

And of course some people will be more exposed to elements of the perfect storm than others.

Who is most vulnerable to the storm? Someone like a heavily indebted building worker who bought his house summer 2007 with a 100% mortgage and who has a defined contribution pension scheme.

Who is most protected from the storm? Probably someone with a solid salary facing low risk of unemployment with a gold-plated inflation-protected pension and with no danger of being held to account for their anonymised backroom role in advising on and designing the systems and regulatory structures which led to the perfect storm the building worker is facing.

That's it, that's what we all need.

That's the solution.

Forget bailouts, forget IMF crisis meetings, forget interest rate policy, forget everything from shorting to credit default swaps. .

Just make us all senior civil servants.

We could kick the process of with a job swap between Wimpey workers and Treasury officials.

Given the state of the construction market, it could not do much damage on that count, and given the quality of policy advice this could hardly fail to make a better fist of things.