Friday, December 17, 2010


I am not an economist but was keen to try and understand what words like credit crunch, sub-prime mortgage market and quantitative easing actually meant. I recommend holding hands with John Lanchester, a very good novelist and journalist who followed the story in the City and helps, in Whoops!, to explain a global financial crisis as no-one has done, for me, so far.

Did you realise that it was caused by four things going wrong at once?

1. In the context of free-market capitalism...
2. ... bad risk mortgages were sold on for inflated prices...
3. ... to people who miscalculated the risk...
4. ... and weren't properly regulated.

The sub-title Why everyone owes everyone and no one can pay sums it up nicely.

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