But its different this time...
Wednesday 28 October 2009
We are all very resilient as a nation but when we focus on the events as they happen, short sightedness means the problem can be taken out of proportion...perhaps even seen as something so big as if it has never happened before. In other words, its different this time.
In fact the credit crisis we are all experiencing may be different, but historically lots of events have been different but we have got though them. Hindsight is a wonderful healer.
To have sense of perspective, I found a list of the crisis over time from Lombard Odier below.
There will be new crisis to come...the unknown unknowns....and whist they will feel equally enormous at the time, reflection on the past might give some perspective.
Crises through time:
1637 – The tulip crisis affects the futures market.
1720 – In France and the UK, stocks of companies exploit resources from the New World crash.
1797 – Monetary crisis. Short of reserves, the Bank of England suspends cash payments, leading to the first bank panic.
1810 – Crisis in England. The credit system collapses.
1819 – First major financial crisis in the US.
1825 – Stock market crisis in London resulting from intense speculation in Latin-American investments.
1836 – The stock market crash in the UK caused by real estate speculation in the US spreads to the rest of Europe and then the US.
1847 – The collapse of railroad company stock prices in the UK and France provokes a credit crisis and a bank panic.
1857 – The credit crisis in the US sends equity prices tumbling; economic recession in all countries connected by monetary, financial, and economic links.
1866 – Financial crisis in the UK due to speculation on rail-roads, a stock market crash (“Black Friday”), and then a bank panic leading to a liquidity shortage and banking crisis.
1873 – The crash on the Vienna stock exchange begins the era of the “great stagnation” in the world economy between 1873 – 1896.
1882 – Bankruptcy of the bank Union Générale leads to a market crash and banking crisis in France.
1890 – Barings, the oldest bank in the UK, verges on collapse due to its exposure to Argentine sovereign debt.
1893 – Financial crash in the US as investors try to convert their government bonds into gold.
1907 – Bank panic in the US following a sharp stock market collapse; spreads to France, Italy and other countries.
1921 – Fall in commodities prices.
1923 – Monetary crisis in Germany due to hyperinflation.
1929 – Market crash on Wall Street causes a banking crisis that throws the US into the Great Depression and unleashes the largest world economic crisis in the 20th century.
1931 – Financial crises in Austria, Germany, Japan and the UK.
1933 – The US abandons the gold standard, setting off a panic in the national banking system.
1966 – US credit crisis. The crisis leads to tumbling prices, a shortage of liquidity, rising bond yields and a drastic economic slowdown.
1971 – The US unilaterally decides to suspend conversion of dollars into gold.
1973 – Adoption of a system of floating exchange rates ushers in a new era for financial markets.
1973 – OPEC quadruples the price of oil. World financial crisis.
1979 – Fed funds rate hikes aimed at putting an end to systemic inflation destabilise markets.
1980 – Speculation on the silver market by the Hunt brothers, Texas oilmen, ends in their bankruptcy and a lasting demonetisation of precious metals.
1982 – World banking crisis and a general credit squeeze make it difficult for developing countries to honour their debt obligations.
1985 – A computer crash at the Bank of New York endangers the settlement / delivery system for US Treasury Bonds.
1987 – Collapse of the bond market, followed by that of the equity market.
1989 – Japanese bubble.
1989 – Junk bond crisis following the defaults of numerous issuers.
1992 – Crisis in the European Monetary System triggered by the French referendum on the Maastricht Treaty.
1994 – Sharp bond market correction.
1994 – Mexican economic crisis resulting from the incompatibility of the peso’s peg to the dollar and the high levels of inflation in Mexico.
1997 – The pegs of many Asian currencies to the dollar and waves of real estate and stock market speculation lead to an Asian economic crisis involving an exchange rate and banking crisis.
1997 – Brazilian exchange rate crisis.
1998 – Spectacular financial crisis in Russia, which defaults on its public debt.
2000 – Dot-com bubble. Equity prices collapse as a result of overinvestment in tech stocks.
2000 – Panic in the Turkish debt market following a plan aiming to lower inflation by pegging the lira to the dollar.
2001 – Junk bond crisis.
2001 – The September 11th attacks lead to systemic risk by impacting numerous vital communication hubs crucial for payment and clearing systems on the financial markets.
2001 – Argentine economic crisis. The country defaults on its payment obligations.
2002 – Brazilian bond market crisis.
2007 – US real estate crisis leads to the collapse of major international banks and plummeting equity markets.
2008 – General financial crisis and a drastic market crash which almost entirely paralyses the interbank market.
...and the future
2010 and beyond - more crisis but if since 1637 we have experienced increasing lifestyle, wealth and health...perhaps we should welcome more crises as the long term outcomes have been good!
posted by Murray Round Wealth Management @ 08:01,
The Authors
Nicholas Round
Nic is the Managing Director of Murray Round Wealth Management Limited, who seeks to ensure the advice provided is truly independent. Based in Shropshire with clients local, national and worldwide, Nic has strived to find the best possible service for his clients needs, by researching and studying the market, trends and philosophies. Nic strongly believes Asset Class Management will bring his clients Financial Freedom, Independence and Happiness.
Kirsty
Kirsty is our communication guru. Managing information requires considerable due diligence and her passion for organisation gives the clarity we all seek. From Shropshire, with a Psychology Degree and much travelling, she is now back in Shrewsbury...and London often, keeping us all at Murray Round focused.
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