Huge numbers are all around us – but do they add up?

Oct 29 2008 by Bill Gleeson, Liverpool Daily Post

IN THESE days of banking and market turmoil, we are getting quite used to seeing and hearing reports quoting some truly astronomical figures.

Yesterday morning, for example, one of the BBC's correspondents spoke in almost matter of fact terms about a report that had just been publish- ed by the Bank of England.

Its title caught my attention immediately because the number crunchers at the Old Lady of Threadneedle Street contrived to put the words "Financial" and "Stability" in the title of their report.

That may seem a little optimistic just now, but sure enough the Bank of England's bi-annual Financial Stability Report is up and running.

And it makes some startling assertions about the depth and extent of the current financial crisis.

First of all, there has been what these academics call an adjustment.

In this case, the Bank now estimates that the world's financial firms have now lost £1.8 trillion ($2.8 trillion) as a result of the continuing credit crisis. Broken down, it adds that total spending by central banks and governments to shore up banks now totals £5 trillion.

The Bank also warned that 1.2m homeowners in the UK now face going into negative equity if house prices continue recent sharp falls.

All this, remember, in a report talking about stability.

Some other big numbers caught my eye yesterday – though nowhere near as big as the trillions being talked about elsewhere.

These other numbers referred to the campaign pots being set aside by the US presidential candidates to bankroll their race to the White House.

And they have been amazingly successful.

Barack Obama has raised more money than John McCain, partly because of the excitement generated by the Democratic nomination battle.

Mr McCain has decided to take public financing, which means that, from September 1, he has a maximum of $84m (£51m) to spend. Barack Obama is the first candidate not to take public financing since the system was introduced in the mid-1970s. In September, the Obama campaign raised $153m (£93m), a new record for a single month, and can continue fundraising.

Mr Obama has a distinct advantage in heavily urbanised states such as New York, Illinois and California, while John McCain is receiving significant support from the key battleground state of Florida.

One area where the Obama campaign has broken the mould of US election finance is in making big efforts to attract small donors. As a result, Mr Obama had raised four times as much as Mr McCain from donors contributing less than $200.

That could represent a level of public participation in an electoral process which we in England can only aspire to.

MATT JOHNSON is chairman of Mando Group