A British mountaineer, stranded for six days near the summit of Everest, has been rescued in an operation that, I suspect, will cost a small fortune. Not that anyone is adding up the bill just now. The UK Mountaineering Foundation, predictably, is calling for better altitude safety regulations.
This is the City of London equivalent of blaming the weather for a bad trading day. The market, if we stretch the metaphor, was volatile. The climber, whose name is being withheld for privacy, was caught in a storm at 8,000 metres.
Six days. That is a long time to hold a position. The rescue team, including two Sherpas, managed to bring him down to a lower camp.
He is now recovering, which is more than can be said for his bank account. Evacuation by helicopter from such altitudes is not cheap. But let us focus on the real issue.
The Foundation’s call for better safety is a classic example of regulatory overreach. Every year, climbers queue for the summit like punters at a bargain sale. The mountain does not care about your fitness or your oxygen tanks.
It is a harsh, efficient market. Those who fail to prepare, prepare to fail. The fundamental law of finance applies here.
Risk and reward. The thrill of Everest attracts a certain type of investor. The one who overlooks the small print.
The one who forgets that leverage works both ways. Now, the government will be tempted to step in. More rules.
More oversight. Perhaps a licensing system for altitude. But that only drives the activity into unregulated spaces.
Capital flight, if you will. The best safety measure is a functioning price mechanism. Let the cost of rescue be borne by those who take the risk.
It would focus the mind wonderfully. Consider the gilts market. When yields rise, the cost of borrowing goes up.
Suddenly, governments think twice about spending. Similarly, if climbers knew their rescue would cost them 50,000 pounds, they might reconsider that summit push in marginal weather. The Foundation’s bleating about safety is just another way of saying, ‘There ought to be a law.
’ There already is a law. It is called gravity. And the market.
Both are unforgiving. I note the Bank of England is not involved. Yet.
But give it time. Central banks love to intervene in everything. The real story here is not the rescue.
It is the moral hazard. We are creating a system where the reckless are saved by the prudent. The British taxpayer will, in one way or another, foot part of this bill.
The Foundation will lobby for more funding. The government will oblige. And the climbers will keep queuing.
It is a bubble. And like all bubbles, it will burst. The only question is when.
For now, the climber is safe. The Foundation has its talking point. And I have my column.
The bottom line? Altitude safety is an oxymoron. The only safe mountain is the one you do not climb.
