Friday, September 14, 2007
It really is different this time, no really, as in worse than other financial disasters
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.