To understand the current economic crisis (pundits in the British media call it a developing catastrophe) I’m reading a book about the previous one: William D Cohan’s House of cards: how Wall Street’s gamblers broke capitalism (Allen Lane, 2009; UK edition title). The first hundred pages or so describe the Bear Stearns meltdown which precipitated the banking and credit crisis throughout the world.
And that’s the point: they show that in all the anguished discussions, pleas and threats in March 2008, none of the players, except perhaps the Fed, seem to have paused to think about what consequences to their actions there might be worldwide. It’s sobering to be reminded that all our credit problems in UK from that time onwards, including the threat of money running out, were triggered by comparatively minor events and statements inside a failing US institution.
No-one amongst these so-called Masters of the Universe cared about the rest of us, is the message; worse, no-one seems to realise how much, internationally, is riding on comparatively routine decisions made day by day in Wall Street. So we have to ask: the next stone waiting to precipitate an avalanche – where is it right now and what is it doing?