Who would have thought that a month would have altered the financial landscape so much!
Global financial meltdown - sounds like something that Ernst Blofeld would plan in a suitably named Bond movie - and it happened so rapidly.
One could even have imagined that there was some malevolent mind sabotaging the markets.
The actuality is more banal , over -extended, the capital foundations of the banks were eroded by actual and prospective losses on loans that had been made into frighteningly pumped-up housing and real estate markets.
Some commentators are saying we are living through epochal events - but funnily enough it didn’t feel like it. Perhaps the media storm that accompanied the credit crunch/ crisis/ crash / collapse -take your pick - has exaggerated its importance.
But when the governor of the Bank of England likens the situation at the banks to that which existed at the start of World War I, one can begin to imagine the potential magnitude of this invisible crisis. when everything shakes out it may well be that we have passed through a paradigm shift, into a new financial reality.
Or is it just that another bubble has been burst? From the tulip bulb mania in the 1630s, bubble after speculative bubble has been erased from the popular memory: the South Sea bubble in the early 1700s; the Mississippi bubble, which caused a stockmarket crash in 18th-century France; the Florida real-estate bubble in the 1920s; the stockmarket crash of 1929; the stockmarket crash of 1987; the Nikkei bubble, which began in 1991; and the Nasdaq bubble of 2000.
And now the great property bubble of 2007-8.
These episodes share a theme: a perceived fundamental change in the economy arouses euphoria and heightened expectations of return, leading to excess, fraud and collapse.
The speed at which these bubbles comes around has accelerated., possibly due to technology, or is it due to man’s hubris and credulity?
Let's hope there is a quantum of solace to be had from the market meltdown - perhaps an end to the Gordon Gekko creed, that greed is good.
