Dear friend,

Over lunch the other day I was quizzing a top-rank international property broker about the state of the market and he said it was soft, but not as soft as it had been at the bottom of other soft markets.

I was a bit surprised and asked why.

With that he sighed “There just doesn’t seem to be any naïve capacity around for us to exploit this time” and ruefully sipped a little more wine, lamenting the missed opportunity to help the old pros leverage their books (and boost his brokerage account) at the expense of the amateurs.

What a shocker! I almost spluttered a mouthful of coffee out of my nose in surprise.

Surely it couldn’t be? Where’s the fun in that?

A soft market with no chumps is like a wedding without alcohol – you’re flattered to be invited but as soon as you’ve stayed long enough for a departure not to cause offence, you make your excuses and leave.

Last time we Londoners had all sorts of newcomers who wanted to come and be our friends, and that was just fine and dandy.

Last time we all knew markets that were taking on risks that they simply did not understand. It seems inconceivable that now we are all going straight.

So maybe it's just that this time the chumps are elsewhere – maybe we’re just not looking hard enough?

But my lunch companion knew his market like the back of his hand and had no reason to lie.

So if there really are no chumps this time, then how about this here’s a seditious thought?

This time around we’re all the chumps, all using the same pricing, ERM, aggregation and Cat models and all buying the same protections.

I short all doing the same things in the same ‘disciplined’ way but in reality all cruising blindly and blissfully towards the next disaster?

In poker they always say that if you can’t spot the loser at the table, then you should get out quick because the loser is you.

Maybe this time we’re all collectively forgetting something?

Maybe this time we’re all the chumps and this game is made for losers.

Maybe the smart guys just aren't playing at all.

Mark Geoghegan.

PS. For the superstitious among you looking anxiously at today’s date of Friday 13th, I wrote this piece a couple of years ago.

PPS I did a couple more entries this week - have a rummage around for them on the site