It’s bad out there. But can even the collapse in global markets justify the increasingly frenetic coverage of financial markets? Things have got so gloomy that, this morning, the Guardian has launched a new “Crisis Watch” column, in which resident in-house doom mongers
“Larry Elliott and Will Hutton will analyse the latest developments in the financial crisis every Tuesday to Friday for the coming weeks”
If, in the coming days, the paper feels obliged to put Hutton on twice-daily rotation, we can be assured the end is nigh. Elsewhere, television increasingly resembles wartime, with breathless front-line reports and whizzy, graphically intensive briefings from experts. The 119,000 confused residents of Reykjavik must be wondering how their city became the credit crunch equivalent of Praia De Luz, with the world’s media suddenly camped out, waiting for Iceland to sink under the weight of its debts. Would that Chris Morris were still plying his trade, the updating of the famed “Its War!” skit would be welcome. That said, in this morning’s FT, i found perhaps the simplest explanation of current events, from Tony Jackson:
“Compared to 1929, there are two main differences today. First, world policy makers grasped the scale of the threat more quickly and are prepared for much more drastic action. Against that, the financial system is more complex. And thanks to modern communications, the pace has accelerated enormously. So any policy action is uncertain in its effect and generally out of date by the time it arrives.”
Such complexity explains why even Henry Paulson wasn’t able to forsee that, a few weeks on, that letting Lehman Brothers go bust would turn out to be a bad idea. Some small comfort for the citizens of Iceland, perhaps, although perhaps not enough to stop them worrying about Will Hutton’s imminent arrival.