23 September 2008
Are you ready for the great crash of 2008?
It's nice to see proof of the old adage that things change but stay the same. On Friday of last week the American government put forward a multi-million dollar rescue package to try and save Wall Street and by Monday the wheels appeared to have fallen off it. Back on Friday the 25th October 1929 a consortium of heavyweight bankers tried to save the falling market by spending millions to buy shares at above their market values. At least that held the market for all of four days until the 29th when things went seriously pear shaped.
The other thing that stayed the same was the main cause of both crashes which was a surfeit of easy credit. Whether it was allowing people to buy shares with ninety percent credit or allowing them to finance a lifestyle with a credit card and cheap mortgages, the end result is the same. A bubble is created and sooner or later it will burst.
As for the mugs who got a class above themselves and are now going to lose their homes, those of us who never entered into the financial merry-go-round in the first place can now sit back and enjoy the show.
The house lights are going down and the main feature is about to begin!