This is the ‘Greatest Depression’:
Prepare for collape.
There have been small bursts of growth and confidence, but the road to recovery still looks long
– Five years ago, the credit crunch began; today it’s worse. How long will it last? (The Observer, Aug 5, 2012):
Unhappy anniversary. Five years ago this week the world woke up to the fact that a credit crunch was definitely happening. On 9 August 2007, central bankers became so alarmed by banks’ reluctance to lend to each other that they took emergency action. The European Central Bank and the US Federal Reserve injected a combined $90bn into financial markets.
For the ECB, it was its first intervention since the 9/11 terrorist attacks six years earlier. The central bank called it a piece of “fine tuning”, but investors knew it was far more serious. The FTSE lost 121 points that day, and in the US the Dow Jones average fell by 387. A squall that had appeared at two French investment funds exposed to US sub-prime loans was about to develop into a hurricane. Adam Applegarth, boss of Northern Rock, where queues would form the next month, later called 9 August “the day the world changed”.
Even so, at the time few would have predicted that half a decade later the world, or at least the western part, would still be struggling with the consequences.