Graeme Robertson It was the year the neo-liberal economic orthodoxy that ran the world for 30 years suffered a heart attack of epic proportions. Not since has the financial community witnessed 12 months like it. Lehman Brothers went bankrupt.
Graeme Robertson It was the year the neo-liberal economic orthodoxy that ran the world for 30 years suffered a heart attack of epic proportions. Not since has the financial community witnessed 12 months like it. Lehman Brothers went bankrupt. Western leaders, who for years boasted about the self-evident benefits of light-touch regulation, had to sink trillions of dollars to prevent the world bank system collapsing.
The ramifications of the Banking Collapse of will be felt for years if not decades to come. Here, Observer writers pick out the three pivotal weeks that shaped a year of unforgettable and remarkable events.
By the end of February, all was quiet save for global banks routinely updating queasy investors over the tens of billions of dollars they had lost by fuelling the madness we now know as the debt catastrophe.
At the start of the year, a global economic meltdown still seemed unimaginable to many. But, during the first two months of the year, a lingering belief remained that perhaps the vicious economic hurricane might blow itself out before it hit the real world.
That changed during the week beginning 9 March, seven days in which the real storm broke and swept away some of the biggest and most revered names in international finance.
It began on Sunday evening with an unbelievable personal fall from grace and ended with the most spectacular American banking collapse seen in decades. As the once proud defender of the people against the excesses of capitalism sank into the quicksand, financial storm clouds swiftly gathered overhead.
Headed by New York society figure Stephen Schwarzman, Blackstone perhaps more than any firm exemplified the gung-ho leverage mania. Blackstone spent hundreds of billions of dollars on consumer and leisure firms as well as the betting on the latest investment craze: Now its strategy was unravelling, placing the businesses it bought in serious jeopardy.
In Britain house-builder Bovis meekly warned that unless there was an urgent cut in interest rates, the property market would collapse.
It was a message the Bank of England failed to heed until much later. On Tuesday, there was blind panic on Wall Street. Few asked the question: It meant that when Alistair Darling, in his first Budget, said the UK was well placed to withstand the effects of US turbulence, no one quite believed him.
If there was hope that perhaps Thursday would bring a sense of calm, more news from America shattered that illusion.
The most revered name in private equity, and for many an extension of American foreign policy, the Carlyle Group, admitted that one of its funds could not repay its debt.
In other words, it toppled over under the weight of unsustainable debt.The Wall Street Crash of , also known as the Stock Market Crash of or the Great Crash, is the stock market crash that occurred in late October, It started on October 24 ("Black Thursday") and continued through October 29, ("Black Tuesday"), when share prices on the New York Stock Exchange collapsed..
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Audible Audiobook. $ $ 3 Available for immediate download. The Wall Street meltdown: What really happened The Week Staff In protesters hit New York's financial district to challenge Wall Street's $ trillion government bailout.
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