Well well... Happy Anniversary Fuckfaces! !
Today, August 9th, 2012 marks the 5th anniversary of the start of the Global Financial Crisis– "the day the world changed" in the words of former Northern Rock boss Adam Applegarth. To think I almost completely forgot all about it with it also being AAPL EX-Div Day today and the 24th Anniversary of the Edmonton Oilers selling of Wayne fucking Gretzky to the LA Kings. A momentous day it is indeed!
So raise and clink your diamond-encrusted chalices folks to this glorious day; thanks to global policy makers, and financial regulators, and general government asshattery for pouring trillions of dollars of liquidity into the 'murderhole' that is banking and finance, we can all celebrate in this momentous occasion for many more years to come as no end is in sight...
And what would a celebration be if one were not to look back, reminscing how it all came to be.. so in the words of the Guardian:
On 9 August 2007, the final wake-up call to the world's banking system occurred after many early warnings over the toxic nature of high-risk mortgage debt. "Sub-prime" was about to enter the vocabulary.
France's biggest bank, BNP Paribas, had been forced to suspend three of its funds with major exposure to bonds backed by US sub-prime mortgages – it was unable to value them because the market for these products, or "securities", had dried up completely.
Default levels among high-risk US borrowers had soared as the US Federal Reserve hiked interest rates to 5.25%.
This shattered confidence in the bonds, which were used by most banks as collateral for the commercial paper they used as a source of short-term funding.
There had been early signs of the crisis – notably the first-ever profit warning from HSBC in February and the collapse of two Bear Stearns hedge funds exposed to high-risk mortgage debts in July.
But BNP caused other banks, concerned at the possibility of more bad debts coming out of the woodwork, to cut back on everyday lending to each other by hiking their own interbank rates – and so began the credit crunch....
In the wake of 9 August 2007, heightened inter-bank lending rates, along with the closure of the mortgage securities market, placed the finances of Northern Rock under intolerable pressure.
The way the group financed itself, "a reckless business model excessively reliant on wholesale funding", according to MPs, had been caught short by the credit crunch. Panicking customers queued to grab back their savings and the UK's first bank run in 140 years was under way.
The Rock – the fast-growing banking success story of the previous decade – was on the road to nationalisation, a £27bn taxpayer bailout and huge political embarrassment for the government.
Here's another look at it with pictures here at the Telegraph. Cheers! And Fuck You.
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