Did David Bowie Cause 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.
Finally a scapegoat...*sighs in a dispairing way*
The US was securitising loans in the early 1980s. I wrote computer programmes that supported that work, back then.
Bowie may have securitised his royalties, but the concept was around well in advance of 1997.
The fault lay at the Banks doors for being so greedy, These Fat Cats pay themselves a huge salary with outrageous bonuses, Some City traders earn a 50.000000 bonus. The theiving bogus traders who have put companies out of business by gambaling all there money, Most of the city is corrupt with insie trading.
Its the Banks who lent more than they were getting in deposits and nearly went bankrupt if not saved with OUR TAX PAYERS MONEY from the government.
Bloody rediculous trying to use Bowie as a scapegoat.
We should ake Elton and the rest of them to help the county out witn money. Imagine all the morgages that could be paid of to help families if they all gave a couple of percent of there huge sums of money
what about the greedy, fat cat bankers?
what about the FSA?
what about the credit customers with the instant gratification syndrome?
what about the company shareholders putting pressure on directors to deliver huge returns by all means?
and the directors who devise various means of meeting targets for bonus?
blaming a musician is thougtless i believe
How can David Bowie, possibly be held responsible for their actions... it's nuts