There were many culprits in this story, but the damage stemmed from an obsession to keep government small and markets big. Thus, mergers that created banks that were too big to fail went ahead and their daffy mathematical models went unchallenged. We need to reform our financial system from top to bottom, but neither shadow chancellor George Osborne nor shadow business secretary Ken Clarke began to address this question. Their twin attack was on the state – Osborne’s because it was borrowing too much, Clarke’s because it was regulating too much. Will Hutton, The Observer online article 11th October 2009
This is the story of the biggest financial catastrophe in living memory. An unprecedented boom has morphed into bust. It’s the story of how a desperate government fought to prevent a banking meltdown. Will Hutton, Dispatches: Crash: How Long Will It Last? Channel 4 2009
It turned banks into branches of a gigantic global betting shop. ibid.
The bankers sold trillions of dollars of complex new financial products. But their values depended on real things like US house prices. ibid.
Summer 2007 saw the first financial earth tremors. ibid.
Northern Rock had been a dramatic example of how banks ran out of cash when the money markets froze on them. It was not heeded. ibid.
By 2008 RBS had lent more than Britain’s annual gross domestic product, but its balance sheet was a high risk mess of subprime mortgages and bad loans. ibid.
Brown’s faith in the city had betrayed him. ibid.
Brown had combined decisiveness with weakness. He’d shied away from taking a stake in all of the banks, and for the £37 billion he’d handed over, he demanded no direct control or restructuring. Even bonuses were not directly capped. ibid.
Britain’s lead was now being followed in Washington. ibid.
It came at an awesome price. Worse, the banks were now the walking dead. ibid.
Around a quarter of all bank loans are so dodgy they have had to be insured: an astonishing indictment of the banks’ lending practices. ibid.
£1.3 trillion in guarantees, loans and investments to the banks. ibid.
What bankers do with our money is of vital public interest. ibid.
Finance picks up the profits, the taxpayer picks up the risks. ibid.
British finance is a double menace: it threatens us with another financial Armageddon at the same time as it shamefully neglects British business. As our own research has shown, British banks direct money into property and derivative trading but not into British business and entrepreneurship. Will Hutton, Dispatches: How the Banks Won, Channel 4 2010
The Biggest Game in Town is of major importance to every American. This program is a comprehensive disclosure of governmental financial operations that have been deliberately concealed and kept from the American people by the governmental financial agencies as well as by the syndicated media. The scope is huge, the personal financial impact of vital concern to us all. Walter Burien, The Biggest Game in Town
There are three words that a politician or news media will never use ... What is the total Income? Gross receipts. Number two: What are the total Investments? Number three: What is the net Worth? Walter Burien, interview Alex Jones, Comprehensive Annual Finance Reports Exposed
Today in Britain the government spends more than all private individuals and companies put together. Martin Durkin, Britain’s Trillion Pound Horror Story, Channel 4 2010
Today in Britain the public sector is bigger than the private sector. ibid.
In the next five years annual government spending will climb from £697 billion to £757 billion. ibid.
We now have a national debt of £4.8 trillion. ibid.
Counted out in £50 notes our national debt would form a stack no less than 6,561 miles. Or to put it another way, if we sold off all the houses and flats in the whole of the UK, we would still be the best part of a trillion pounds short of paying our debt. ibid.
British governments have been steadily debasing the currency or printing money for decades through the deliberate expansion of credit. ibid.
It’s very much in the interests of politicians to spend money. ibid.
The idea that public spending will stimulate growth is the biggest myth of the twentieth century and is the cause of Britain’s economic decline. ibid.
What do they all do? ibid.
The idea that we need state monopolies in order to look after the poor is obviously untrue. ibid.
Welcome to the world of money. Bread. Cash. Dosh. Dough. Loot. Lucre. Moolah. Readies. The Wherewithal. Call it what you like – money can make us or break us. Niall Ferguson, The Ascent of Money e1: Dreams of Avarice, Channel 4 2008
How on earth could a little local difficulty with subprime mortgages in the United States unleash an economic tsunami big enough to obliterate some of Wall Street’s most illustrious names, to force nationalisations of banks on both sides of the Atlantic and to bring the entire world economy to the very brink of recession if not downright depression? ibid.
The Ascent of Money has been an indispensable part of the Ascent of Man. ibid.
The US stock of money is now $8,7 trillion. ibid.
This hedge-fund paid George Soros a cool $2.4 billion. ibid.
Money is only worth what other people will give in exchange for it. ibid.
Money is about trust. ibid.
Our entire civilisation is based on the lending and borrowing of money. ibid.
The Hindu or Arabic numerals made all kinds of calculation easier. ibid.
For the first time money lending had evolved into banking. ibid.
The big mystery is why the world’s most successful capitalist economy is based on a foundation of more or less painless economic failure. ibid.
From 1996 to 2006 there were between one and two million bankruptcy cases a year in the United States. ibid.
In today’s world real power lies in the hands of an elite group of anonymous men in open-plan offices. The men who control the world’s bond market … Bonds are the magical link between the world of high finance and the world of political power. Niall Ferguson, The Ascent of Money e2: Human Bondage
After the rise of banks the birth of the bond market was the next big revolution in the history of finance. It created a whole new way for governments to borrow money. ibid.
There are bonds out there worth around $85 trillion. ibid.
Between around 1810 and 1836 the five sons of Meyer Amschel Rothschild rose from the obscurity of the Frankfurt ghetto to attain a position of unequalled power in international finance. ibid.
The South’s idea was to use cotton as collateral to back its bonds. ibid.
By June 1989 inflation in Argentina had reached a monthly rate of 100%. ibid.
The next step in the story of the Ascent of Money was the rise of the joint-stock limited-liability company. But the ability of the company to transform our lives would depend on another innovation – the stock market. Niall Ferguson, The Ascent of Money e3: Blowing Bubbles
Stock markets really can be like soap bubbles – we never quite know when they’re going to burst. ibid.
Ponzi scheme – after the legendary Italian-American con-man Charles Ponzi: to pay out the generous returns it’s promised to the first lot of suckers, a Ponzi scheme needed to take in more money from the next lot of suckers. ibid.
The Mississippi bubble of 1719 was the first stock market bubble in history. ibid.
Enron: It pioneered many of the dubious business practices that continue to plague us today. ibid.
The most basic financial impulse of all is to save for a rainy day. Niall Ferguson, The Ascent of Money e4: Risky Business
We’re stuck with random uncertainty. ibid.
It leaves you wondering why we bother spending so much on insurance policies every year. ibid.
A new idea began to emerge in Japan – that the state should take care of risk. ibid.
In theory derivatives offer a new way to hedge against an uncertain future. ibid.
It’s the English-speaking world’s favourite game – property. And today the stakes in the game are higher than ever. Niall Ferguson, The Ascent of Money e5: Safe as Houses
Property ownership was once the preserve of an aristocratic elite. ibid.