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October 19th 2008
World banks facing Titanic experience

Magnetic Times is, for the most, proudly parochial. We focus on news and issues of our Island and sometimes our region. But due to the current world economic crisis, we know that Islanders, their investments and futures, are likely in for or are already experiencing a big shock. That is why we have taken the unusual (and fortunate) opportunity to publish some advance, and scathing, copy by a top columnist from The Age and international journals, known as Planet Wall Street, for an appropriately seafaring slant on world economic events. Ed.

Two of the greatest ships ever built were the Titanic and the QEII.

The QEII was, after a long and honourable life, sunk by economic and historical forces. The Titanic, by an iceberg, on its maiden voyage. The QEII was built in strict compartments so if one section were holed the damage would be totally contained.

The same was thought of the Titanic where the models applied to its compartments combined with the thickness of the steel made the ship systemically unsinkable.

But the models did not incorporate the human element, greed. The ship's construction was financed by JP Morgan and pressures on delivery, use of inferior steel and rivets led to a subprime vessel. Risk had been distributed to compartments


World banks facing Titanic experience
 
4 comments
 
Marg Sewell
October 20th 2008
A great analogy to the deceased big ships and unfortunately very apt. I have been thinking for a long time now our world cannot continue on the hot air it has been travelling on for so long with nothing substantial to back it up and here it comes, the big tsunami.
 
Anne
October 21st 2008
If the world were to pay the same attention to the environmental crisis as to the economic crisis we may be all in better shape.
 
basil
October 21st 2008
I've heard our former prime minister talk about extreme greenies. What about our rational financial institutions playing deck chairs on the planet. Thats not extreme its exploitation.
 
fluffyduck
October 21st 2008
I just hope the economic crisis doesn't push the environmental crisis into the background, or even bury it. The more I talk to people and look at various media, the more I'm convinced that many people have little idea of how pressing the climate change problems really is.


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