2009 Prospects – Trench Warfare

There was palpable relief as at the end of 2008 the “financial” crisis moved into the “real” economy. Commentators could move to the relatively familiar language of “recessions” and “depressions”. The arcane minutiae of securitised debt, derivatives and toxic three letter acronyms (ABS; CDO; MBS; SIV; CDS etc) could be left behind. Familiarity, no matter how terrible, is comforting.

“We interrupt regular programming to announce that the United States of America has defaulted”

On 30 October 1938, the American Radio Drama series Mercury Theatre aired “The War of the Worlds”, directed by Orson Welles. Adapted from H.G. Welles’ novel, the first half of the broadcast was scripted as a series of dramatic news bulletins of a Martian invasion. Listeners who had missed or ignored the opening credits assumed that the invasion was real. People fled their homes. Police were swamped by panicked phone calls. Today the financial equivalent of this broadcast would be the announcement: “we interrupt regular programming to announce that the United States of America has defaulted on its debt!”

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