Sunday, 28 March 2010

Financial disasters

Apologies for the silence over the last few days. I have been updating The Disastrous History of London which will appear, with a new title, later in the year.

The main update covers the London bombings of July 7, 2005, which happened after the book was written. I have also added a fresh chapter on financial disasters, which includes the South Sea Bubble of 1720, the stock market crashes of the early 1970’s and of 1987 (“Black Monday”) and the banking crisis of the last couple of years.

The South Sea Bubble is great fun to write about – a story full of fascinating characters like the wonderfully named Sir John Blunt of the Sword Blade Company, who played a key role in ramping the share price through misinformation and bribery. Then, among those who made a mint were two mistresses of King George I – one enormously fat, the other spectacularly thin.

As with house prices in the banking crisis, so long as the South Sea Company share price kept climbing, the powers that be never noticed there was a problem. And, in spite of the havoc that its collapse wrought, the company carried on happily for another 130 years. Who would bet against the same thing happening with the banks today?

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