Still running..

On the news today, the queues were still growing outside the doors of Northern Rock. Anyone with a bit of intelligence knows that the Bank of England will not let this bank fail. Yet, the images of people panicking invokes a more primitive response; conscious intelligence is out of the window and animal instinct takes over. I’m reminded of a couple of stories that illustrate this, one true, the other fictional.

The first involves a storm at sea. It was a big one, a hurricane I think, and all the ships in the storm’s path were told of its approach. All the fishing boats made a run for safe harbour, except one which ran into the teeth of the storm. The boat that sailed into the storm knew that it didn’t have enough time to get to a safe harbour before the storm overtook them, so the sensible thing to do was to try and ride it out, facing the waves. The other boats who sailed for safe harbour also knew that they wouldn’t make it before the storm overtook them but the instinct to run was too powerful and so they sailed away from the waves.

Now I am sure the captains of those boats created supports for their decision – maybe the forecast was wrong, maybe the storm will change course, maybe they will just make it etc. but consciously they must have known it was the wrong decision. And it was the wrong decision.

All the boats that sailed away from the storm were sunk, the only boat that survived was the one that sailed into the storm.

The other story involves an old black and white film I saw as a child. In it, a couple of hustlers wanted to increase the odds on a favourite horse. They were going to do this by going to the racetrack and spreading a rumour that another horse in the same race called ‘Doughboy’ which had no chance of winning, was actually a dark horse. They pretended to let slip the secret whilst talking to several gamblers. Within minutes the rumour had taken hold and frantic bets were being placed on the horse. Eventually, the entire betting crowd were screaming ‘Doughboy!’ and placing huge bets on the hapless creature.

Such was the hysteria of the crowd that the two hustlers who started the rumour, were taken up by it and deliriously placed bets on Doughboy instead of the horse that they knew had the best chance of winning.

Needless to say, Doughboy came in last and the horse they should have bet on came in first.

I found this scene hugely funny without really understanding why. I now know the best jokes are funny because they are true.

The point I am making here is that the media are perpetuating the panic by showing long queues outside the bank branches. If they didn’t show these scenes, I’m pretty sure the queues wouldn’t be so long (”Did you see me on the telly mum, I was bringing a bank to its knees?”).

I half expect the news presenter, midway through their presentation, to remember that they have an account at this bank too and that they had better join the queue before all the money dissapears.

The other misleading part of the report is when they state one billion pounds has been withdrawn so far. The fear is, other banks will become involved and they will have to pay out billions as well. What nobody is asking is, where is all this money going – under the mattress, into another bank?

Although Northern Rock is suffering, someone else is going to be flush with money.

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