by David Steven | Apr 18, 2010 | Cooperation and coherence, UK
When crisis strikes, it doesn’t take long for people to start finding ways to help themselves.
On 9/11, a self-organising flotilla began to evacuate people from Manhattan even before the Twin Towers fell. Katrina saw the same improvised response.
The Coast Guard did not act alone in its sizeable rescue effort. An emergent and ephemeral flotilla of civilian boat operators also converged on the heavily damaged areas, both on their own initiative and in response to a call for assistance by political leaders. The ability of Coast Guard operational commanders to act relatively autonomously in the field, a strong-hold of experienced personnel, versatile training, an organizational environment that combines uniformed and civilian operations, and the development of a shared vision of what was necessary by both Coast Guard and civilian boat operators facilitated the ability to improvise at a multi-organizational level.
Interestingly, one of New York City’s most dramatic (albeit rarely mentioned) improvised response activities on September 11th, 2001 was the waterborne evacuation of Lower Manhattan… The harbor community did not have plans to execute a mass evacuation of the City, but vessels converged—again, some on their own initiative and others in response to the Coast Guard’s call for all available boats—to improvise a successful evacuation of hundreds of thousands of people. In fact, ferries, tugs, dinner cruise boats, and other private vessels played an even more significant role in the operation than actual Coast Guard vessels. This same operation quickly became involved in transporting critical equipment, supplies, and personnel to Manhattan on return trips to collect more evacuees
Today saw an attempt by Dan Snow to organize a Dunkirk-style evacuation from France, for those unable to get a plane home after Eyjafjallajökull shut down European airspace (more on Europe’s slow motion crisis, here).
Dan has been tweeting as calaisrescue. Unfortunately, it seems the authorities have not taken too kindly to his efforts, bringing the rescue effort to a halt after just three boat loads got away:
It’s not yet clear exactly what happened (I am guessing a health and safety issue) – but any attempt to stamp on bottom-up resilience seems extremely short-sighted. After all, the 2003 European heat wave was such a disaster precisely because people didn’t help their neighbours.
The decision to stamp on the rescue could also make an interesting campaign theme for David Cameron, who has put the Big Society (and resilience, too) at the heart of his bid for office, providing a good example of where the state (presumably the French one, in this case) crowds out community-led initiative.
[BTW those interested in community resilience should read Charlie Edwards’s Resilient Nation – as well as these talks (1, 2) for RUSI.]
Update: BBC says ‘French officials’ took the decision… though there appear to be efforts ongoing to get the show back on the road.
by David Steven | Apr 17, 2010 | Europe and Central Asia, UK
As the Eyjafjallajökull eruption continues, my sense is that the crisis is beginning to become quite serious (check out radar of Europe’s empty skies). Lots of people have been stranded for a significant period of time now – many in difficult conditions. Some are being told not to expect a flight home for a week or more.
And that’s if the ash cloud clears quickly. At the moment, there are no signs of this happening (for recent info, see Erik Klemetti’s blog). The volcano is still erupting, albeit at a lesser intensity – but high pressure means that the cloud is not going anywhere. A renewed eruption is possible, while the bigger neighbouring volcano, Katla, is reported to be showing increased seismic activity.
That could be a very big deal:
The danger is that the small volcano is just the beginning and that it will trigger the far more powerful volcano of Katla, which nestles beneath Myrdalsjoekull.
“That has to be on the table at the moment,” Dave McGarvie, senior lecturer at the Volcano Dynamics Group of the Open University, said. “And it is a much nastier piece of work.”
Icelanders agree. “This could trigger Katla, which is a vicious volcano that could cause both local and global damage,” Pall Einarsson, from the University of Iceland, said.
There is an immediate need to get those stranded abroad home. The FCO finally has an emergency consular hotline up and running (+44 207 008 0000) for British citizens stranded abroad (not on the website as yet, though, as far as I can see), and hopefully other countries are implementing crisis plans as well.
There are also encouraging signs of people helping themselves, with bottom-up resilience being facilitated by social media (also this Dunkirk evacuation – loading now in Calais). On Twitter, the #getmehome tag is worth watching as, of course, are the main tags: #ashtag #ashcloud (also – a good list of Twitter resources here).
But I’d like to see some coordination by and between European governments. It is absolutely absurd that people are having to buy bicycles to be allowed to board a cross-Channel ferry. Soon, we are going to need a much more coordinated evacuation.
Beyond that, I am wondering how healthy European airlines are. Are any facing immediate cash flow problems as they face demands for refunds and are forced to shell out to put stranded travellers in hotels? How long can each one keep going if flights remain grounded? A bailout probably needs to be considered. A stress test of the industry’s stability would be a useful first step.
Finally, it’s worth exploring the longer-run consequences if this develops into a major Black Swan event. Is there anything that can be done to keep planes flying should there be a chain of eruptions over months or a year or more (maybe not, but it’s worth exploring)? And is there a risk of serious damage to Europe’s fragile economy, or can we be sure regular interruptions to aviation pose no systemic threat?
I can’t help thinking of the European heat wave of 2003. That was one of the continent’s “worst ever peacetime disasters, but we barely noticed it at the time and have forgotten it remarkably quickly.” The volcano is unlikely to cause 35,000 deaths, of course, though the risk to health could worsen depending on the changing composition of the ash.
But the heat wave should remind us how bad we are at responding to a slow motion crisis – and that resilience may be at its lowest ebb when we don’t take a threat seriously enough until it is too late.
In the UK, it doesn’t help that there’s an election on. But Lord Adonis, the Secretary of State for Transport, is not running for office. It would be good to see greater signs that he – or someone else – is being much more decisive about taking charge.
Update: Both KLM and Lufthansa are itching to get flying again (have a look though at these pics of damage to a Finnish airforce jet – also the experience of this Ural Airlines flight is not encouraging):
KLM, the Dutch subsidiary of Air France, said Sunday it wants to resume passenger flights in Europe as soon as possible after it flew a plane through the cloud of volcanic ash covering much of the continent without suffering any damage.
KLM carried out the test flight above Dutch airspace Saturday. It said initial inspections afterward showed no damage or irregularities from the ash in the air that has led to a ban on air travel over much of Europe since Friday.
The airline says it now plans to return seven airplanes without passengers to Amsterdam from Duesseldorf Sunday.
“We hope to receive permission as soon as possible after that to start up our operation and to transport our passengers to their destinations,” said Chief Executive Peter Hartman, who was aboard Saturday’s flight.
Germany’s Lufthansa flew 10 empty planes to Frankfurt from Munich at low altitude on Saturday under so-called visual flight rules, in which pilots don’t have to rely on their instruments.
Update II: Robert Patterson – and in the comments, @aem76us, wonder what longer-term disruption of air traffic might look like…
Update III: I think the media is getting desperate to find a new angle on this story – and that means having someone to blame. FCO, Department for Transport – if you’re not 100% on top of the situation, they’re coming for you…
Update IV: Sure enough, the Conservative Party has issued an eight-point action plan for beefing up the response to the crisis. John Redwood calls for a cross-Whitehall review of what can be done. And, finally, Brown will chair a Ministerial meeting. I’d say the government allowed itself to get at least 48 hours behind the curve.
Update V: Watching the latest Eurocontrol press conference and many journalists seem to be coming to the conclusion that governments should be blamed for exaggerating the threat from the ash cloud. Airlines are also pushing this line. Here’s a statement from Olivier Jankovec of Airports Council Europe:
With 313 airports paralysed at the moment, the impact is already worst than 9/11. More than 6.8 million passengers have been affected so far and European airports have lost close to €136 million. Many thousands of passengers are still stuck at airports because of this situation. While safety remains a non-negotiable priority, it is not incompatible with our legitimate request to reconsider the present restrictions.”
Absolutely clear, that governments are losing – or have lost – control of the narrative now…
by David Steven | Apr 16, 2010 | Economics and development, North America, UK
A great spot from Reuters’ Peter Thal Larsen. According to the SEC’s complaint against Goldman Sachs, Royal Bank of Scotland took the bulk of the losses when Goldman’s Abacus CDOs went toxic (Felix Salmon has a good summary of the case here):
In late 2007, ABN was acquired by a consortium of banks that included the Royal Bank of Scotland (“RBS”). On or about August 7, 2008, RBS unwound ABN’s super senior position in ABACUS 2007-AC1 by paying GS&Co $840,909,090. Most of this money was subsequently paid by GS&Co to Paulson.
RBS was bailed out by the taxpayer in October 2008 – making the British taxpayer the mug in Goldman’s alleged fraud.
Update: Here’s how Goldman vice-president, Fabrice Tourre, saw things:
More and more leverage in the system, The whole building is about to collapse anytime now…Only potential survivor, the fabulous Fab[rice Tourre]…standing in the middle of all these complex, highly leveraged, exotic trades he created without necessarily understanding all of the implications of those monstrosities!!!
By my rough reckoning, fabulous Fab cost every UK taxpayer 20 quid or so…
Update II: At the heart of the accusation against Goldman is that John Paulson’s hedge fund persuaded the great vampire squid to base its CDOs on lots of super-crappy mortgage bonds, allowing Paulson to bet against the US housing market. Much of RBS’s money ended up in Paulson’s pocket.
What is especially delicious about this is that Paulson then made another killing betting against RBS’s shares:
New York-based Paulson, who made more than $3bn by betting against the US housing market, now appears to be profiting from positions placed on the assumption that bank shares would tumble in the aftermath of the market chaos caused by the demise of the sub-prime mortgage industry.
His hedge fund, Paulson & Co, was one of the few to trade through the ban imposed on short-selling by the Financial Services Authority in September to protect the rescue takeover of HBOS by Lloyds TSB. On the basis of the disclosures that his company has made since then, the Guardian estimates Paulson is likely to have made a profit of £100m – and possibly more – after making around 240p on each of the RBS shares he sold.
Update III: Probably not the best timing for Republicans to signal they’re going to filibuster the US financial regulation bill.
Update IV: Who was the underwriter for RBS’s rights issue in Spring 2008 when its ill-advised acquisition of ABN Amro was beginning to drag the bank down? Goldman Sachs. (It was largely shut out of the October bailout, though. Not hard to work out why.)
Update V: From The Big Short:
Paulson was… in some ways, a Wall Street outsider. “I called Goldman Sachs to ask them about Paulson,” said one rich man whom Paulson had solicited for funds in mid-2006. “They told me he was a third-rate hedge fund guy who didn’t know what he was talking about.”
And of course, Goldman was betting on CDOs itself, not just passing them onto Paulson and other investors who believed a crash was coming:
Goldman was in the position of selling bonds to its customers [the suckers: ABN, AIG etc] created by its own traders, so they might bet against them…Today, Goldman Sachs is, to put it mildly, unhelpful when asked to explain what it did, and this lack of transparency extends to its own shareholders.
“If a team of forensic accountants went over Goldman’s books, they’d be shocked at just how good Goldman is at hiding things,” says one former AIG FP employee, who helped to unravel the mess, and who was intimate with his Goldman counterparts.”
Surely, there will be more charges from the SEC once it gets its teeth into the business Goldman did with AIG. I reckon this is only an amuse bouche to pave the way for a much bigger onslaught on the bank.
Update VI: Republicans double down and try to tie Goldman to the Democrat plan to regulate Wall Street:
“These are very serious charges against a key supporter of President Obama’s bill to create a permanent Wall Street bailout fund,” [House Minority Leader John] Boehner said Friday in the statement. “Despite President Obama’s rhetoric, his permanent bailout bill gives Goldman Sachs and other big Wall Street banks a permanent, taxpayer-funded safety net by designating them ‘too big to fail.’ Just whose side is President Obama on?”
Update VII: Finally, word from the FSA. And Gordon Brown wants a public enquiry:
I’m shocked at this moral bankruptcy, this is probably one of the worst cases I have seen.
It makes me absolutely determined we are going to have a new global constitution for the banking system,” he said.
I cannot allow this to continue, everything I find out convinces me we have to go in deeper and I believe I’m the man to deal with these problems of the banks. I want a special investigation done into what has happened at Goldman Sachs.
Germany is considering legal action too.
Update VIII: Convicted white collar criminal, Sam Antar (read his story), has some fascinating insights…
