Here’s the thing, as Robert Peston compulsively remarks online, on air and in print: how come many acclaimed experts – Gordon Brown, Alan Greenspan, Hank Paulson, Fred the Shred and Merv the Swerve – got it so calamitously wrong? How come they were all credit-crunched in 2008 and 2009? Even Peston wasn’t infallible. He could see desolation arriving but not to a precise schedule, not so that he could raise his voice in BBC editorial meetings and demand a special timber-shivering spot on Today. This mess caught everyone flat-footed – and by far the best half of his book is explaining how and why.
Peston, to be fair, did know that something was drastically wrong. He got his famous Northern Rock scoop because he’d spotted that the Rock – overleveraged, overborrowed, overconfident that the good times would roll on for ever – was patently vulnerable once confidence wobbled. He was waiting for the Bank of England to lurch to the rescue: his exclusive was rooted in analysis. But he’s utterly right – here’s another thing! – to turn some of his fire on journalists themselves, on the dogs that didn’t bark.
Begin with newspaper editors who “rarely knew much about business and the economy and couldn’t have cared less” about the continuing yarn of who was up or down on the stock market that day. Ask where, apart from the very specialist press, you could find any coverage of bond markets, derivatives, foreign exchange markets and, crucially, debt markets. “For years all this borrowing and lending was thought of as the equivalent of a sewage system or an electricity grid – necessary but dull.” Yet suddenly the sewage started to swill down Threadneedle Street as the grid went up in flames.
Read the full article at the Guardian HERE:
