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Credit Crisis. The Short Explanation.

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A clear concise informed explanation of how the credit-crisis happened. And a simple series of conclusions about what to do next. from 2thinknow.

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    Presentation Transcript

    1. Slide 1: There’s a long explanation Credit Crisis. for the loss of value. It’s serious. This is the short one.
    2. Slide 2: But… Weren’t we making money? Yes.
    3. Slide 3: We had… Economic Growth. GDP, total goods & services. Production. And, Consumption.
    4. Slide 4: A Bigger Pie.
    5. Slide 5: The Pie could grow by: Increases in productivity & Innovation. Or…
    6. Slide 6: Sin. Pride. Sloth. Lust. Greed. Gluttony. Wraith. Oops. Envy.
    7. Slide 7: Same old sins. Asset bubble. Debt binge. Wall Street. With no more suckers at the bottom of the pyramid…
    8. Slide 8: …And with no exit strategy. Oh, and like the Titanic, First Class survived.
    9. Slide 9: Or if we didn’t. As, we loaded Our Friends & Family did. up with debt. Our Employer, too. Our Banks, more! Our Government, most. There were great expectations, you see.
    10. Slide 10: First, Our Kids. If you didn’t borrow… Well, other parents could do more for their kids. Debt or… less for your kids. Not a palatable choice. So, ‘GULP’ … and, sign. So, Debt…
    11. Slide 11: Competition. If you didn’t borrow, or buy shares of people who did, or invest, your income probably shrunk further. Even your idiot cousin bought a really nice car. So, yes, Debt.
    12. Slide 12: And, Temptation. So, ah, Debt…
    13. Slide 13: Bankers said. Growth would never end. This time it was different. Not too hard, either.
    14. Slide 14: Now, Regret. It was ‘different’ before. In the 1920s. Then came the 1930s.
    15. Slide 15: We drank the Kool Aid…
    16. Slide 16: And now got less Pie. Middle-class wealth has shrunk despite ‘Growth’. And the minimum wage is not going anywhere. So, who got more Pie?
    17. Slide 17: Not workers. Jobs, offshore.
    18. Slide 18: Let’s ask thy neighbour. Dumped products. Unsafe conditions. Slavery. Pollution. He got crust.
    19. Slide 19: Money lenders in temples? You can tell who society considers important by the height of buildings. Mmm...
    20. Slide 20: Greenspan said it was ‘complex’. There was a book written If only… we about ethics once. had an The Bible. ethical guide. It underpins our laws.
    21. Slide 21: The Torah & Koran have something to say about ethics too.
    22. Slide 22: What’s Next? Well, we have to hand back all the ill-gotten gains of the last few years first. And stock & property markets are doing that. How much is given up will depend on future growth. Yes, it’s right to be angry. Otherwise nothing will change.
    23. Slide 23: But, don’t Envy. I shared an armrest. On a European flight. With head honcho of a major consultancy. He consulted to money lenders. As did I. I talked about my ideas about innovation. He snorted ‘winners & losers’. He meant “I am a bigger winner than you.”
    24. Slide 24: You may have lost money. But he lost something. Something very valuable. He was the most miserable single human I ever met. A wrecked wretch. Well, at least he’ll be warm.
    25. Slide 25: Economic policy is just a theory that hasn’t failed. Speaking of which, this is Yet. Or… not Milton Friedman. So, Milton. too badly. How do you feel now?
    26. Slide 26: But even Economists agree. True Economic Growth is derived from productivity & innovation. They don’t agree much. Producing innovation. That makes life better. Image from Lietuvos nacionalinis muziejus (National Museum of Lithuania)
    27. Slide 27: That’s Local Innovation. Jobs. Arts. Culture. Community. It’s the only thing that works. And the only thing that ever did.
    28. Slide 28: Local Innovation. Local Economy. Local Jobs. That’s the 2thinknow view.
    29. Slide 29: 2thinknow predicted in 2007 the current economic crisis including the US September shock event, US recession, and the peak of the ASX stock market in Nov 2007. At the time the voices of greed were still talking up the boom. We used our new proprietary technique of nascent trend analysis to do so. And, good judgment. 2thinknow is a global innovation agency specialising in sharing good original ideas, and profiting from innovation & global trends. To read more  about 2thinknow go to www.2thinknow.com
    30. Slide 30: Christopher Hire. The Author. Was a Consultant for. 3 banks. 2 investment banks. 1 ratings agency. 3 property developers. 341+ other organizations. He had worked on data in risk models, financial & analysis systems. Among other things. The author left data consulting. In April 2007. He did this at great cost. Because the system is short-sighted. And unethical. Business can be more than that. So he set-up 2thinknow. And he is author of the Global Innovation Review. He applied his skills to things he believed in. Business models & analysis. To improve places where we live, work & play. Innovation Cities. Trends. Creative Companies. He is now happier & poorer. And lives in Melbourne, Australia. He wears a suit some days but enjoys not working for tossers.

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