Safe as houses - part 1

In the beginning

Safe in their hands? Safe in their hands?

Introduction - At the start of what we now call the credit crunch I sensed that this was to be no ordinary event. As an avid reader of any business and economics news I developed a near morbid interest in this subject, so kept a diary. On a personal level, I once had a Northern Rock deposit account and own some bank shares.

In 2007, when some families in the UK were coping with the damage to their homes caused by the floods, another disaster was gathering pace. Unlike the floods, which at the time went straight to the top of the nation's concerns, the sub-prime crisis of the USA began at first as a mere trickle in the the depths of reporting. Not at all photogenic, this event took a long time to get the attention it deserved. Eventually we saw the Northern Rock (NR) investors form into queues to get their money back, the outcome from this event will, in time, be seen as a force equal to the UK floods, and reaching far beyond any flood plain or barrier. So how to describe the sub-prime crisis? An act of pure folly, or merely a market correction?

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