Profiting from catastrophes

Over five years ago, I played the board game Monopoly with friends for the first time in many years. There was no cash in the box. Each of us in turn handed a machine to each other and we inserted our individual ‘credit cards’ into the machine to either credit or debit each other’s accounts, according to the fall of the dice.

It was, despite excellent company, among the most boring experiences I have ever endured. For children growing up today, playing this new incarnation of the original game will no doubt prove a stimulating experience. Just as I enjoyed using cash as a child, as I had seen adults do, the children of today will enjoy the mimicry they are engaging in over the board based around building a financial empire to the expense of other players. I am not judging them for it.
The reason I raise this game and my memories of it is that I have just watched my 12th hour of rolling international news coverage in a row of the horrific earthquake and ensuing tsunami in Japan.
What has just been reported on BBC News 24 has made me think of the little man with the large hat and broad moustache from the board game Monopoly.
BBC News 24 has just reported that the international money markets are likely, in the next few hours, to pull their money out of Japanese insurance companies. The fact that a natural disaster has occurred and the fact that people have had their lives devastated, means that the formerly lucrative investment has been rendered unwise. Insurance is only a good investment when people do not claim on a large scale.
Every car driver and homeowner in Ireland will testify that insurance companies will raise policy costs and premiums to cover themselves on a small scale. We are told that it is young, male drivers and fraudsters who drive up premiums because of the way they behave.
In response, the insurance company defends their profits by raising the premiums of everybody else. These minor adjustments and massive injustices mean the profits of the company are a good investment for the same nameless people who flock to, or flee from, banks when the profit sheets blossom or suffer.
Has it ever struck anybody that “acts of God” have not been covered by insurance policies? Surely that is why people take out such policies. The very fact that as humans living on an environmentally volatile planet, where we are subject to extremes of weather and tectonics, is what makes us want to protect what we have against loss in the first place. We insure because we fear to lose. We fear to lose because we are told that we must own, consume and possess in order to achieve.
My wife and I have taken out policies that will ensure the other will not be destitute if the other dies prematurely. We will continue to pay these until we reach old age or until such point as we are told that we have reached a stage when our deaths are inevitable anyway.
When this happens, we will turn and ignore the money we have given and those who have invested in the insurance fund over the years will count their money. They are probably the same age as us so they will probably have been living off their investments for the previous 40 years but no matter, profit was made and that is what counts.
The terrible tragedy that has befallen the people of Japan is causing these same people to pull their money out of the companies that people have been paying into to protect them, in cases just such as this. Within five hours of the inundation Reuters ran the following headline ‘Japan quake shakes UK gas market LNG supply fears’.
The story below detailed the fact that international markets had woken up to the fact that a large consumer of natural gas was beset by devastation and that they might pay more in the future for the diminishing commodity. Prices duly rose. Traders all over the world have made millions in the time it has taken me to type this column.
Those who have lost loved ones will remain as anonymous as those who have profited and the lives ruined will be old news by the time this is published and those who profited will not be news at all. The rolling news will be steamrolling another story to fill minutes without ever pausing to examine the issues that should constitute the body of bulletins.
I am watching the wreckage of people’s homes and lives being washed into the body of a canal and over the fields behind for at least the seventh time as I write and yet I am no closer to understanding the pain of the people who are experiencing it. I know I never will be unless, and I never wish this to be the case, I experience something similar.
Many people reading this will have experienced something similar to what those people have. The effects of their catastrophe will not have been as dramatic. Theirs is a slow-burning disaster. Despite this fact, they have been paid similar attention by the global media in recent years.
The Irish financial meltdown has been the subject of much coverage. It has not provided such cataclysmic images as those we have seen from Japan but the cameras have been there to capture every detail at the same time. What is common is the documenting of misery, albeit with a certain repeat value, when it comes to actual inundation. Behind both instances are those who have made money. They are not hidden. They operate in plain sight.
As I watch the horrifying image of homes on fire in the midst of a torrent, I ask myself the question – could you take all the homes that have been built under false pretences at the behest of the market in Ireland and do exactly the same thing to them with no loss of life?
Ireland will not be mentioned on the international news networks despite electing a replacement government because our cataclysm is not as media friendly as that unfolding in Japan.
What it lacks in ostentatious horror is compensates for in longevity. The same people will profit from both catastrophes.