Wishing that the Bank for International Settlements (BIS) had issued its annual report 2009 a day earlier - when Vienna drowned in torrential rain - I nevertheless attempt to provide readers with an executive summary that the central bank of central banks has omitted in its version.

This leads me to the first conclusion that world finance must have become really complicated when not even several dozen BIS economists with months of preparation time can sum up 250 pages of data and events. Please recline your chair and hang around as this annual report from what should be the highest-ranking group in the know unwittingly delivers ironies rat-tat-tat like an AK-47 in the loose hands of a kid soldier in one of these African countries we only know about because their soil holds rare elements needed to make your iPhone.

Starting with a stark notice that even the BIS profit declined from SDR 544.7 million to SDR 446.1 million (FRN660 million) YOY we are told that in a world once dominated by the Markowitz' model of portfolio diversification not even the BIS with a portfolio supposedly filled with assets (or just papers?) from all over the world was able to outperform markets.

If you read some sarcasm into this, you are right. After all there are enough bloggers who had warned about the current global crisis as many as 5 years early.

Sarcasm is the mildest form I can call my lines following below. Or was it just plain ignorance of warning voices that lead the authors of this annual report to start off with a question?

How could this happen? No one thought that the financial system could collapse.

Maybe they had better looked at the irresponsible monetary policy of the Federal Reserve in this millennium that did not create a society of house owners but a universe of debtors who have sunk below the water line called negative equity.

And how about reading other stuff than the Bubble Street Journal (WSJ) or other lamestream media? Simple "Go ogle" searches on various topics and reading their very own statistics could have alerted them to such fundamental changes like the USA morphing from the biggest creditor (until Nixon closed the gold window) to the biggest debtor in 3 decades that managed to stuff its unbacked FRNs down the throat of more or less all other nations under the disguise that these unbacked greenbacks were a "reserve currency."

As I am already so enraged I refer you to pages 2 to 10 of Alice in Wonderland, sorry, I meant the BIS annual report.
I have only one explanation for their explanations: One does not bite the hand that feeds one. I bow my head in honour of former World Bank chief economist Joseph Stiglitz who overcame this rule in order to set the record straight with his books. The same applies to former economic hitman John Perkins who tells in 2 books how he was contracted to draw unrealistic growth scenarios for developing countries, to be used by US banks and companies as a reason to indebt such nations while reimporting the loans by handing out contracts to US firms, greasing the local elite's hands on the way.

You don't really have to read these 9 pages if you have been following this blog on a post-by-post basis since April 2005.

You can also skip page 11, containing such wisdom like:

Commentators cautioned about the deterioration of credit standards, especially in the issuance of mortgages. And they warned about the risks that come with rapid financial innovation.

Do they allude to the blogosphere or did I just drink too much vin du pays this sunny afternoon?
Page 12 shines a light on the true problem for the first time:

Monetary policymakers’ only available instrument was the short-term interest rate, and there was a broad consensus that this tool would be ineffective against the alleged threat.

How many SDRs does one get paid for such enlightenment - after the world's investors were pared of half their savings in 2008, according to Blackstone?

As the BIS writers begin mind games whether more regulation - currently a hot issue in the EU especially stressed by German chancellor Angela Merkel - could have helped avoid the mess we currently live in, I humbly remind everybody that in a truly free market it is every investors own occupation to do his due diligence on prospected investments. There has never been a free lunch.

Before you get tired; the BIS is good at drawing tables of events that truly simplify recollecting what lead to the biggest financial/economic crisis in mankind's written history.

TABLE: Most important events leading to the current crisis. Source: BIS Annual Report. (Click all graphs for a larger image)

If you did not replicate Robinson Crusoe's life on an isolated island you can also skip pages 16 and 17.