March 21, 2008
Nobody Could Have Predicted…
a total shutdown of global credit markets. (I’m actually somewhat sympathetic to this argument.)
Northern Rock Secret Memo Shows CEO Dismissed Subprime Threats
“Sandy Chen, an analyst in London, says Northern Rock depended too much on one asset, home loans, and one source of funding, securitization.
‘Their business model was far too extreme,’ says Chen, who had a ’sell’ rating on the bank from 2005. [ed. 2005 was “early” since the stock was up strongly in 2006 (before collapsing in 2007).]
In 2004, Matt Ridley, a nonexecutive director since 1994, became chairman of Northern Rock. Ridley, 50, a former U.S. editor of The Economist magazine, had no banking experience.”
An editor of The Economist in a position of responsibility in a real business? Say it ain’t so! How big a red flag was that? (I’ve long said that the only part of The Economist magazine worth reading is the Books & Arts section.)
March 21st, 2008 at 11:23 pm
I’m not too sure ‘nobody’ did…
Roubini is spot on here and quoted extensively.
March 22nd, 2008 at 8:16 am
bbc: If you have any time-stamped analysis from Roubini (or anyone else) predicting a total seize-up of global credit markets in the summer of ‘07, I’d love to see it.