The Last Word

My daughter Jemima asked me earlier in the year, "Dad, what's the longest you've gone without food?" I wracked my brain to remember. Apart from an overnight fast for a cholesterol test, and perhaps missing the odd meal over the years, I had to admit that probably the longest I had gone without food was a paltry 14 hours.

To friends and colleagues, I'm well-known for becoming rather tetchy when I haven't had anything to eat (it's not just me, the rest of my family is the same and there will be plenty of people reading this who recognise the symptoms too). It's best to ask me important questions just after lunch, rather than just before. I'm familiar with some mild symptoms of hunger.

Are you wondering what's going on? Four years into the Great Recession, also known in Australia as the GFC or Global Financial Crisis, it might be worth having a pause to survey the landscape, particularly with regards to the impact of the crisis on the building materials industry.

As is well known, the global crisis was triggered by the collapse of the US sub-prime mortgage market, but this was not the only 'house of cards' waiting to fall. The ill-conceived Euro project was thrown together by European elites, without asking the majority of the European voting public and without first aligning the economic and fiscal policies of its constituent members. This inevitably led to the triumph of human nature over long-term good sense and a 'grab-all-you-can-while-the-going-is-good' mentality from some of the peripheral states. The credit crunch in the US - (actually first triggered when French banks woke up to impossibility of selling or even of assigning a value to the mortgage-backed securities that they held) - led to banks on both sides of the Atlantic mistrusting each other to the extent that they refused to do business with each other and instead were only willing to deal directly with the central banks in their own countries. The immediate decrease in credit availability was one of the factors that led to widespread economic weakness, but the uncertainty sparked by the acute collapse of several institutions in 2008-2009 made investors flee from decisions: we heard reports of companies bankrolling new plant projects in Russia calling up the equipment suppliers and shouting at them to 'cancel all the orders.'

Have you noticed that recently there's been a little show happening up the road from us in London, called 'The Olympics'?

Anywhere we go in the world, we'll be able to chat about what we saw at the Olympics, whether it be

London, Beijing or an earlier games - and there are not many experiences that we have in common with the rest of the world's population. As one of the most-watched events in the world, the Olympics unite us in our humanity. They are, after all, the competition of mere humans, powered just by food and drink (shame on the drugs cheats - there should be lifetime bans for all of them), with the same amount of oxygen (barring the use of blood doping) to power their metabolism and muscles and with results dependent on genetics, talent, hard work, personality and good luck.

Do you remember all those family holidays of your youth that went perfectly well? No? What about the disasters - like when it rained for a week in France and you all got bitten by mosquitos, or when you rolled the Land-Rover on black-ice in Ireland and it was so cold that the pipes in the youth hostel froze and you all had to brush your teeth in beer? You remember those kind of holidays, don't you? Sometimes it's best when things don't go exactly according to plan.

Such it was when one of my speakers at the recent CemPower Conference dropped out at the last minute. I had to write and present a paper in his place, given less than 24 hours notice. However, I really enjoyed putting it together, the paper was well-received and it has led to a lot of useful discussion.

I'm often compared to a harbinger of doom, but I believe that's it better to be prepared by thinking through the possible eventualities of a situation. It has struck me over the last few years that the number of possible outcomes from any current situation is so vast that it is nearly impossible to forecast the future (even in a game of chess, the number of possible games is around 10120, the 'Shannon Number'). In the dark days before Lehman's collapse, nobody had a clue as to what might happen afterwards (it turns out that the world didn't end, after all, but it was one of the possibilities). Anyway, despite the wide variety of future outcomes, it's possibly worthwhile to contemplate the effects of the current instability (and weakness) of the Euro on the cement industry.

Just to be clear, I am not advocating a 'Grexit' - a Greek exit from the EuroZone - it is just that the markets now suggest that there is only a small chance that Greece will not leave the Euro. A run on Greece's banks and the declination of the ECB to guarantee them would lead to default, as might the rejection of further austerity by the electorate... or a number of other possible scenarios as well. Euro ejection would quickly follow any default.