Four Decades and Counting
I am 40 today! This milestone has got me thinking and reminiscing about events which have occurred during my lifetime. Below are the 10 most significant economic/financial events that occurred during my lifetime and which had an impact on my thinking at the time. The collapse of Bretton Woods would be in here if I could remember back that far. In retrospect, I would probably have a different 10, but these 10 events all made an impression on me at the time.
1. Winter of Discontent (1978-79) – an economic meltdown that scarred a seven-year-old boy from Co. Tyrone.
2. Irish Punt breaks link with Sterling (1979) – all of a sudden my classmate from south of the border had to pay more for his 1/3 pint of milk!
3. Flotation of TSB (1985) – this resulted in my first share ownership.
4. October Stock Market Crash (1987) – this taught me that shares can go down as well as up!
5. German Reunification (1990) – the economic powerhouse of Europe became even more powerful.
6. Maastricht Treaty (1992) / Euro introduced (1999) – say no more!
7. East Asia Crisis (1997) – this was when I first realised that China was emerging as an economic giant.
8. Dotcom Bubble (1998-2000) – I kept saying to my MBA class at the time that the high prices of tech stocks weren’t justified.
9. Housing Bubble (2001-7) – greatest asset price bubble I’ve ever lived through. My house increased in value by 220% between 2002 and 2007! Unlike the dotcom crash, the bursting of this bubble had serious consequences because it was financed by bank debt.
10. Financial Crisis (2008) – my PhD in 1998 essentially argued that bank stability depended upon managers and shareholders who were properly incentivised either via extended shareholder liability or regulation. At the time no one listened, but 2008 changed that.