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David Bowie causes Credit crunch-apparently

  • 13-01-2009 3:17pm
    #1
    Closed Accounts Posts: 1,148 ✭✭✭


    http://new.uk.music.yahoo.com/blogs/guestlist/14935/did-david-bowie-cause-the-credit-crunch

    Did David Bowie Cause the Credit Crunch?
    Posted Tue 13 Jan 2009 12:17PM GMT by Mitch Carter in The Guestlist
    He's one of Britain's most influential artists but now David Bowie stands accused of starting one of the nation's latest trends: The credit crunch.


    As implausible as it seems, the Daily Mirror has today accused the pop legend of inspiring ‘securitisation', one of the key factors behind today's economic fallout.

    Back in 1997 Bowie came up with the idea of selling his projected royalties income in the form of ‘Bowie Bonds'.

    In other words, Bowie realised he would have a steady stream of money coming in from the sale of his music but rather than wait for it to accrue, he sold the rights to the future earnings so he could withdraw a large cash sum there and then. This became known as ‘securitisation'.

    Towards the end of the 1990s, the banks began to adopt a similar model but on a much much larger scale.

    But instead of selling royalties in the case of Bowie, they began to sell on mortgages that they had loaned to their customers.

    The premise was that the buyer of the loans would have a guaranteed income from the interest on the repayments and the banks would take an upfront cash sum in return.

    Banks were lending out huge bundles of loans in the guise of contracts, giving the buyer the rights to the future repayments on those loans.

    The problems began when loans were given to people who were then unable to pay them back. This caused many of these contracts to be rendered worthless and a lot of this bad debt had to be written off, causing the financial system to lose billions of pounds.

    Did Bowie cause the credit crunch? No. But inadvertently he set the paradigm.


Comments

  • Closed Accounts Posts: 11,848 ✭✭✭✭Doctor J


    First Tin Machine and now the credit crunch? He's got a lot to answer for :pac:


  • Registered Users, Registered Users 2 Posts: 10,602 ✭✭✭✭ShawnRaven


    Doctor J wrote: »
    First Tin Machine and now the credit crunch? He's got a lot to answer for :pac:

    I liked Tin Machine II actually! :(


  • Registered Users, Registered Users 2 Posts: 1,064 ✭✭✭poundhound


    Well he is God!


  • Registered Users, Registered Users 2 Posts: 10,673 ✭✭✭✭senordingdong


    I bet he'll try and blame Ziggy.


  • Closed Accounts Posts: 31,967 ✭✭✭✭Sarky


    Nobody would believe him. All HE did was play guitar.


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