Friday, September 14, 2007
It really is different this time, no really, as in worse than other financial disasters
One man's debt is the whole world's burden
This is an economic landmark – it is the first time banks have changed a swath of their mortgage rates because of what has been going on in the markets rather than because of a change in the Bank of England’s base rate. Northern Rock is suffering in particular because it is most reliant on money borrowed from its fellow banks. Welcome to the 21st-century chaos economy – the butterfly’s wing-beats in one tiny, unknown part of the financial world that cause a hurricane in another. Like it or not, no one can choose to ignore economics any more.
Posted by darren @ 12:57 PM (574 views)
2 thoughts on “It really is different this time, no really, as in worse than other financial disasters”
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whiteknight says:
Its hardly a butterflies wing though.
The advent of fully global markets has allowed for some significant efficiences.
Bad lending and borrowing on an industrial scale across multiple countries is the reason.
Alan says:
The article says “It might have read like a cautionary moral tale about greed and excess if it weren’t for the fact that we’re all in this boat together”.
Unfortunately:
1. We “in this boat” had no way of influencing doubtful lending. We just suffer.
2. Billions of dollars are involved on a grand scale – not butterflies wings.
And that’s what hit our High Streets today….