Classical music is the art music produced in, or rooted in, the traditions of Western liturgical and secular music, encompassing a broad period from roughly the 11th century to present times. The central norms of this tradition became codified between 1550 and 1900, which is known as the common practice period.

European music is largely distinguished from many other non-European and popular musical forms by its system of staff notation, in use since about the 16th century. Western staff notation is used by composers to prescribe to the performer the pitch, speed, meter, individual rhythms and exact execution of a piece of music. This leaves less room for practices such as improvisation and ''ad libitum'' ornamentation, that are frequently heard in non-European art music (as in Indian classical music and Japanese traditional music) and popular music.

The term "classical music" did not appear until the early 19th century, in an attempt to "canonize" the period from Johann Sebastian Bach to Beethoven as a golden age. The earliest reference to "classical music" recorded by the ''Oxford English Dictionary'' is from about 1836.

Characteristics

Given the extremely broad variety of forms, styles, genres, and historical periods generally perceived as being described by the term "classical music," it is difficult to list characteristics that can be attributed to all works of that type. Vague descriptions are plentiful, such as describing classical music as anything that "lasts a long time," a statement made rather moot when one considers contemporary composers who are described as classical; or music that has certain instruments like violins, which are also found in other genres. However, there are characteristics that classical music contains that few or no other genres of music contain.

Literature

The most outstanding and particular characteristic of classical music is that the repertoire tends to be written down. Composers and performers alike are typically highly literate in understanding notation and the written quality of the music has, in addition to preserving the works, led to a high level of complexity within them.

Instrumentation

The instruments used in most classical music were largely invented before the mid-19th century (often much earlier), and codified in the 18th and 19th centuries. They consist of the instruments found in an orchestra, together with a few other solo instruments (such as the piano, harpsichord, and organ). The symphony orchestra is the most widely known medium for classical music. The orchestra includes members of the string, woodwind, brass, and percussion families.

Electric instruments such as the electric guitar appear occasionally in the classical music of the 20th and 21st centuries. Both classical and popular musicians have experimented in recent decades with electronic instruments such as the synthesizer, electric and digital techniques such as the use of sampled or computer-generated sounds, and the sounds of instruments from other cultures such as the gamelan.

None of the bass instruments existed until the Renaissance. In Medieval music, instruments are divided in two categories: loud instruments for use outdoors or in church, and quieter instruments for indoor use. The Baroque orchestra consisted of flutes, oboes, horns and violins, occasionally with trumpets and timpani. Many instruments which are associated today with popular music used to have important roles in early classical music, such as bagpipes, vihuelas, hurdy-gurdies and some woodwind instruments. On the other hand, instruments such as the acoustic guitar, which used to be associated mainly with popular music, have gained prominence in classical music through the 19th and 20th centuries.

While equal temperament became gradually accepted as the dominant musical temperament during the 19th century, different historical temperaments are often used for music from earlier periods. For instance, music of the English Renaissance is often performed in mean tone temperament. Keyboards almost all share a common layout (often called the piano keyboard).

Form

Whereas the majority of popular styles lend themselves to the song form, classical music can also take on the form of the concerto, symphony, sonata, opera, dance music, suite, étude, symphonic poem, and others.

Classical composers often aspire to imbue their music with a very complex relationship between its affective (emotional) content and the intellectual means by which it is achieved. Many of the most esteemed works of classical music make use of musical development, the process by which a musical idea or motif is repeated in different contexts or in altered form. The sonata form and fugue employ rigorous forms of musical development.

Technical execution

Along with a desire for composers to attain high technical achievement in writing their music, performers of classical music are faced with similar goals of technical mastery, as demonstrated by the proportionately high amount of schooling and private study most successful classical musicians have had when compared to "popular" genre musicians, and the large number of secondary schools, including conservatories, dedicated to the study of classical music. The only other genre in the Western world with comparable secondary education opportunities is jazz.

Complexity

Performance of classical music repertoire demands a significant level of technical mastery on the part of the musician; proficiency in sight-reading and ensemble playing, thorough understanding of tonal and harmonic principles, knowledge of performance practice, and a familiarity with the style/musical idiom inherent to a given period, composer or musical work are among the most essential of skills for the classically trained musician.

Works of classical repertoire often exhibit artistic complexity through the use of thematic development, phrasing, harmonization, modulation (change of key), texture, and, of course, musical form itself. Larger-scale compositional forms (such as that of the symphony, concerto, opera or oratorio, for example) usually represent a hierarchy of smaller units consisting of phrases, periods, sections, and movements. Musical analysis of a composition aims at achieving greater understanding of it, leading to more meaningful hearing and a greater appreciation of the composer's style.

Society

Often perceived as opulent or signifying some aspect of upper-level society, classical music has generally never been as popular with working-class society. However, the traditional perception that only upper-class society has access to and appreciation for classical music, or even that classical music represents the upper-class society, may not be true, given that many working classical musicians fall somewhere in the middle-class income range in the United States, and that classical concertgoers and CD buyers are not necessarily upper class. Even in the Classical era, Mozart's opere buffe such as ''Così fan tutte'' were popular with the general public.

Classical music regularly features in pop culture, forming background music for movies, television programs and advertisements. As a result most people in the Western World regularly and often unknowingly listen to classical music; thus, it can be argued that the relatively low levels of recorded music sales may not be a good indicator of its actual popularity. In more recent times the association of certain classical pieces with major events has led to brief upsurges in interest in particular classical genres. A good example of this was the choice of ''Nessun dorma'' from Giacomo Puccini's opera ''Turandot'' as the theme tune for the 1990 FIFA World Cup, which led to a noticeable increase in popular interest in opera and in particular in tenor arias, which led to the huge sellout concerts by The Three Tenors. Such events are often cited as helping to drive increases in the audiences at many classical concerts that have been observed in recent times.

History

The major time divisions of classical music are the early music period, which includes Medieval (500–1400) and Renaissance (1400–1600), the Common practice period, which includes the Baroque (1600–1750), Classical (1750–1830) and Romantic (1815–1910) periods, and the modern and contemporary period, which includes 20th century (1900–2000) and contemporary (1975–current).

The dates are generalizations, since the periods overlapped and the categories are somewhat arbitrary. For example, the use of counterpoint and fugue, which is considered characteristic of the Baroque era, was continued by Haydn, who is classified as typical of the Classical period. Beethoven, who is often described as a founder of the Romantic period, and Brahms, who is classified as Romantic, also used counterpoint and fugue, but other characteristics of their music define their period.

The prefix ''neo'' is used to describe a 20th century or contemporary composition written in the style of an earlier period, such as Classical or Romantic. Stravinsky's ''Pulcinella'', for example, is a neoclassical composition because it is stylistically similar to works of the Classical period.

Roots

The roots of Western classical music lie in early Christian liturgical music, and its influences date back to the Ancient Greeks. Development of individual tones and scales was done by ancient Greeks such as Aristoxenus and Pythagoras. Pythagoras created a tuning system and helped to codify musical notation. Ancient Greek instruments such as the aulos (a reed instrument) and the lyre (a stringed instrument similar to a small harp) eventually led to the modern-day instruments of a classical orchestra. The antecedent to the early period was the era of ancient music from before the fall of the Roman Empire (476 AD). Very little music survives from this time, most of it from Ancient Greece.

Early Period

The Medieval period includes music from after the fall of Rome to about 1400. Monophonic chant, also called plainsong or Gregorian Chant, was the dominant form until about 1100. Polyphonic (multi-voiced) music developed from monophonic chant throughout the late Middle Ages and into the Renaissance, including the more complex voicings of motets. The Renaissance period was from 1400 to 1600. It was characterized by greater use of instrumentation, multiple interweaving melodic lines, and the use of the first bass instruments. Social dancing became more widespread, so musical forms appropriate to accompanying dance began to standardize.

It is in this time that the notation of music on a staff and other elements of musical notation began to take shape. This invention made possible the separation of the composition of a piece of music from its ''transmission''; without written music, transmission was oral, and subject to change every time it was transmitted. With a musical score, a work of music could be performed without the composer's presence. The invention of the movable-type printing press in the 15th century had far-reaching consequences on the preservation and transmission of music.

Typical stringed instruments of the Early Period include the harp, lute, vielle, and psaltery, while wind instruments included the flute family (including recorder), shawm (an early member of the oboe family), trumpet, and the bagpipe. Simple pipe organs existed, but were largely confined to churches, although there were portable varieties. Later in the period, early versions of keyboard instruments like the clavichord and harpsichord began to appear. Stringed instruments such as the viol had emerged by the 16th century, as had a wider variety of brass and reed instruments. Printing enabled the standardization of descriptions and specifications of instruments, as well as instruction in their use.

Common Practice Period

The Common Practice Period is when many of the ideas that make up western classical music took shape, standardized, or were codified. It began with the Baroque era, running from roughly 1600 to the middle of the 18th century. The Classical era followed, ending roughly around 1820. The Romantic era ran through the 19th century, ending about 1910.

Baroque music

Baroque music is characterized by the use of complex tonal counterpoint and the use of a basso continuo, a continuous bass line. Music became more complex in comparison with the songs of earlier periods. The beginnings of the sonata form took shape in the canzona, as did a more formalized notion of theme and variations. The tonalities of major and minor as means for managing dissonance and chromaticism in music took full shape.

During the Baroque era, keyboard music played on the harpsichord and pipe organ became increasingly popular, and the violin family of stringed instruments took the form generally seen today. Opera as a staged musical drama began to differentiate itself from earlier musical and dramatic forms, and vocal forms like the cantata and oratorio became more common. Vocalists began adding embellishments to melodies. Instrumental ensembles began to distinguish and standardize by size, giving rise to the early orchestra for larger ensembles, with chamber music being written for smaller groups of instruments where parts are played by individual (instead of massed) instruments. The concerto as a vehicle for solo performance accompanied by an orchestra became widespread, although the relationship between soloist and orchestra was relatively simple. The theories surrounding equal temperament began to be put in wider practice, especially as it enabled a wider range of chromatic possibilities in hard-to-tune keyboard instruments. Although Bach did not use equal temperament, as a modern piano is generally tuned, changes in the temperaments from the meantone system, common at the time, to various temperaments that made modulation between all keys musically acceptable, made possible Bach's Well-Tempered Clavier.

Classical period music

The Classical period, from about 1750 to 1820, established many of the norms of composition, presentation, and style, and was also when the piano became the predominant keyboard instrument. The ''basic'' forces required for an orchestra became somewhat standardized (although they would grow as the potential of a wider array of instruments was developed in the following centuries). Chamber music grew to include ensembles with as many as 8–10 performers for serenades. Opera continued to develop, with regional styles in Italy, France, and German-speaking lands. The ''opera buffa'', a form of comic opera, rose in popularity. The symphony came into its own as a musical form, and the concerto was developed as a vehicle for displays of virtuoso playing skill. Orchestras no longer required a harpsichord (which had been part of the traditional ''continuo'' in the Baroque style), and were often led by the lead violinist (now called the concertmaster).

Wind instruments became more refined in the Classical period. While double reeded instruments like the oboe and bassoon became somewhat standardized in the Baroque, the clarinet family of single reeds was not widely used until Mozart expanded its role in orchestral, chamber, and concerto settings.

Romantic era music

The music of the Romantic era, from roughly the second decade of the 19th century to the early 20th century, was characterized by increased attention to an extended melodic line, as well as expressive and emotional elements, paralleling romanticism in other art forms. Musical forms began to break from the Classical era forms (even as those were being codified), with free-form pieces like nocturnes, fantasias, and preludes being written where accepted ideas about the exposition and development of themes were ignored or minimized. The music became more chromatic, dissonant, and tonally colorful, with tensions (with respect to accepted norms of the older forms) about key signatures increasing. The art song (or ''Lied'') came to maturity in this era, as did the epic scales of grand opera, ultimately transcended by Richard Wagner's Ring cycle.

In the 19th century, musical institutions emerged from the control of wealthy patrons, as composers and musicians could construct lives independent of the nobility. Increasing interest in music by the growing middle classes throughout western Europe spurred the creation of organizations for the teaching, performance, and preservation of music. The piano, which achieved its modern construction in this era (in part due to industrial advances in metallurgy) became widely popular with the middle class, whose demands for the instrument spurred a large number of piano builders. Many symphony orchestras date their founding to this era. Some musicians and composers were the stars of the day; some, like Franz Liszt and Niccolò Paganini, fulfilled both roles.

The family of instruments used, especially in orchestras, grew. A wider array of percussion instruments began to appear. Brass instruments took on larger roles, as the introduction of rotary valves made it possible for them to play a wider range of notes. The size of the orchestra (typically around 40 in the Classical era) grew to be over 100. Gustav Mahler's 1906 ''Symphony No. 8'', for example, has been performed with over 150 instrumentalists and choirs of over 400.

European cultural ideas and institutions began to follow colonial expansion into other parts of the world. There was also a rise, especially toward the end of the era, of nationalism in music (echoing, in some cases, political sentiments of the time), as composers such as Edvard Grieg, Nikolai Rimsky-Korsakov, and Antonín Dvořák echoed traditional music of their homelands in their compositions.

20th century, modern, and contemporary music

Modernism (1905–1985) marked a period when many composers rejected certain values of the common practice period, such as traditional tonality, melody, instrumentation, and structure. Composers, academics, and musicians developed extensions of music theory and technique. 20th century classical music, encompassing a wide variety of post-Romantic styles composed through the year 1999, includes late Romantic, Modern and Postmodern styles of composition. The term "contemporary music" is sometimes used to describe music composed in the late 20th century through to the present day.

Significance of written notation

Modernist view of the significance of the score

The modernist views hold that Classical music is considered primarily a ''written'' musical tradition, preserved in music notation, as opposed to being transmitted orally, by rote, or by recordings of particular performances. While there are differences between particular performances of a classical work, a piece of classical music is generally held to transcend any interpretation of it. The use of musical notation is an effective method for transmitting classical music, since the written music contains the technical instructions for performing the work. The written score, however, does not usually contain explicit instructions as to how to interpret the piece in terms of production or performance, apart from directions for dynamics, tempo and expression (to a certain extent). This is left to the discretion of the performers, who are guided by their personal experience and musical education, their knowledge of the work's idiom, their personal artistic tastes, and the accumulated body of historic performance practices.

Criticism of the modernist view

Some critics express the opinion that it is only from the mid 19th century, and especially in the 20th century, that the score began to hold such a high significance. Previously, improvisation, rhythmic flexibility, improvisatory deviation from the score and oral tradition of playing was integral to style of music. Yet in the 20th century, this oral tradition and passing on of stylistic features within classical music disappeared. Instead, musicians use the score to play music, yet even given the score, there is considerable controversy about how to perform the works. Some of this controversy relates to the fact that this score-centric approach has led to performing styles that emphasize metrically strict block-rhythms (just as the music is notated in the score).

Some quotes that highlight this criticism of modernist overvaluing of the score:

''[...]one of the most stubborn modern misconceptions concerning baroque music is that a metronomic regularity was intended'' (Baroque Interpretation in Grove 5th edition by Robert Donington)

''Too many teachers, conditioned to 20th Century ideas, teach Bach and other Baroque music exactly the wrong way. This leads to what musicologist Sol Babitz calls "sewing machine Bach."'' ''[...] tendency to look alike, sound alike and think alike. The conservatories are at fault and they have been at fault for many years now. Any sensitive musician going around the World has noted the same thing. The conservatories, from Moscow and Leningrad to Juilliard, Curtis and Indiana, are producing a standardized product. [...] clarity, undeviating rhythm, easy technique, "musicianship". I put the word musicianship in quotes, because as often as not, it is a false kind of musicianship – a musicianship that sees the tree and not the forest, that takes care of the detail but ignores the big picture; a musicianship that is tied to the printed note rather than to emotional meaning of a piece.The fact remains that there is a dreadful uniformity today and also an appalling lack of knowledge about the culture and performance traditions of the past.'' (Music Schools Turning out Robots? by Harold C. Schonberg)

Improvisation

Improvisation once played an important role in classical music. A remnant of this improvisatory tradition in classical music can be heard in the cadenza, a passage found mostly in concertos and solo works, designed to allow skilled performers to exhibit their virtuoso skills on the instrument. Traditionally this was improvised by the performer; however, it is often written for (or occasionally by) the performer beforehand. Improvisation is also an important aspect in authentic performances of operas of Baroque era and of bel canto (especially operas of Vincenzo Bellini), and is best exemplified by the ''da capo aria'', a form by which famous singers typically perform variations of the thematic matter of the aria in the recapitulation section ('B section' / the 'da capo' part). An example is Beverly Sills' complex, albeit pre-written, variation of ''Da tempeste il legno infranto'' from Händel's ''Giulio Cesare''.

Its written transmission, along with the veneration bestowed on certain classical works, has led to the expectation that performers will play a work in a way that realizes in detail the original intentions of the composer. During the 19th century the details that composers put in their scores generally increased. Yet the opposite trend – admiration of performers for new "interpretations" of the composer's work – can be seen, and it is not unknown for a composer to praise a performer for achieving a better realization of the original intent than the composer was able to imagine. Thus, classical performers often achieve very high reputations for their musicianship, even if they do not compose themselves. Generally however, it is the composers who are remembered more than the performers.

Another consequence of the primacy of the composer's written score is that this has led to the state, where today improvisation plays a relatively minor role in classical music, in sharp contrast to musicians who lived during the baroque, classical and romantic era. Improvisation in classical music performance was common during both the Baroque era and in the nineteenth, yet lessened strongly during the 2nd half of the 19th and in the 20th centuries. Recently the performance of such music by modern classical musicians has been enriched by a revival of the old improvisational practices. During the classical period, Mozart and Beethoven often improvised the cadenzas to their piano concertos (and thereby encouraged others to do so), but they also provided written cadenzas for use by other soloists. In opera, the practice of singing strictly by the score i.e. ''come scritto'', is famously propagated by Maria Callas, who called this practice 'straitjacketing' and implied that it allows the intention of the composer to be understood better, especially during studying the music for the first time.

Relationship to other music traditions

Popular music

Classical music has often incorporated elements or material from popular music of the composer's time. Examples include occasional music such as Brahms' use of student drinking songs in his ''Academic Festival Overture'', genres exemplified by Kurt Weill's ''The Threepenny Opera'', and the influence of jazz on early- and mid-20th century composers including Maurice Ravel, exemplified by the movement entitled "Blues" in his sonata for violin and piano. Certain postmodern, minimalist and postminimalist classical composers acknowledge a debt to popular music.

There are numerous examples of influence in the opposite direction, including popular songs based on classical music, the use to which ''Pachelbel's Canon'' has been put since the 1970s, and the musical crossover phenomenon, where classical musicians have achieved success in the popular music arena.

Folk music

Composers of classical music have often made use of folk music (music created by musicians who are commonly not classically trained, often from a purely oral tradition). Some composers, like Dvořák and Smetana, have used folk themes to impart a nationalist flavor to their work, while others (like Bartók) have used specific themes lifted whole from their folk-music origins.

Commercialism

Certain staples of classical music are often used commercially (either in advertising or in movie soundtracks). In television commercials, several passages have become clichéd, particularly the opening of Richard Strauss' ''Also sprach Zarathustra'' (made famous in the film ''2001: A Space Odyssey'') and the opening section "O Fortuna" of Carl Orff's ''Carmina Burana''; other examples include the ''Dies Irae'' from the Verdi Requiem, Edvard Grieg's ''In the Hall of the Mountain King'' from ''Peer Gynt'', the opening bars of Beethoven's Symphony No. 5, Wagner's ''Ride of the Valkyries'' from ''Die Walküre'', Rimsky-Korsakov's "Flight of the Bumblebee", and excerpts of Aaron Copland's ''Rodeo''.

Similarly, movies and television often revert to standard, clichéd snatches of classical music to convey refinement or opulence: some of the most-often heard pieces in this category include Mozart's ''Eine kleine Nachtmusik'', Vivaldi's ''Four Seasons'', Mussorgsky's ''Night on Bald Mountain'', and Rossini's ''William Tell Overture''.

Education

Throughout history, parents have often made sure that their children receive classical music training from a young age. Some parents pursue music lessons for their children for social reasons or in an effort to instill a sense of self-discipline. Some believe that knowledge of important works of classical music is part of a good general education.

During the 1990s, several research papers and popular books wrote on what came to be called the "Mozart effect": an observed temporary, small elevation of scores on certain tests as a result of listening to Mozart's works. The approach has been popularized in a book by Don Campbell, and is based on an experiment published in ''Nature'' suggesting that listening to Mozart temporarily boosted students' IQ by 8 to 9 points. This popularized version of the theory was expressed succinctly by a ''New York Times'' music columnist: "researchers... have determined that listening to Mozart actually makes you smarter." Promoters marketed CDs claimed to induce the effect. Florida passed a law requiring toddlers in state-run schools to listen to classical music every day, and in 1998 the governor of Georgia budgeted $105,000 per year to provide every child born in Georgia with a tape or CD of classical music. One of the co-authors of the original studies of the Mozart effect commented "I don't think it can hurt. I'm all for exposing children to wonderful cultural experiences. But I do think the money could be better spent on music education programs."

See also

Notes

References

Kennedy, Michael (2006), ''The Oxford Dictionary of Music'', 985 pages, ISBN 0-19-861459-4

Further reading

Copland, Aaron;(1957) – ''What to listen for in music''. McGraw Hill.-10: 7018981026 (paperback).

Grout, Donald Jay; Palisca, Claude V. (1996) – ''A History of Western Music'', Fifth Edition. W.W. Norton & Company. ISBN 0-393-96904-5 (hardcover).

Hanning, Barbara Russano; Grout, Donald Jay (1998 rev. 2009) – ''Concise History of Western Music''. W.W. Norton & Company. ISBN 0-393-92803-9 (hardcover).

Johnson, Julian (2002). ''Who Needs Classical Music?: Cultural Choice and Musical Value''. Oxford University Press. ISBN 0-19-514681-6.

Kamien, Roger (2008) – ''Music: An Appreciation'' Sixth Brief Edition ISBN 978-0-07-340134-8

Lihoreau, Tim; Fry, Stephen (2004) – ''Stephen Fry's Incomplete and Utter History of Classical Music''. Boxtree. ISBN 978-0-7522-2534-0

Scholes, Percy Alfred; Arnold, Denis (photographer) (1988) – ''The New Oxford Companion to Music''. Oxford University Press. ISBN 0-19-311316-3 (paperback).

Taruskin, Richard (2005, rev. Paperback version 2009) – ''Oxford History of Western Music''. Oxford University Press (USA). ISBN 978-0-19-516979-9 (Hardback), ISBN 978-0-19-538630-1 (Paperback)

External links

Historical classical recordings from the British Library Sound Archive

Category:European music

af:Europese klassieke musiek ar:موسيقى كلاسيكية an:Mosica clasica az:Klassik musiqi bn:ধ্রুপদী সঙ্গীত zh-min-nan:Se-iûⁿ kó͘-tián im-ga̍k be:Класічная музыка be-x-old:Клясычная музыка bo:གནའ་གཞུང་རོལ་དབྱངས། bs:Klasična muzika br:Sonerezh klasel bg:Класическа музика ca:Música clàssica cs:Vážná hudba cy:Cerddoriaeth glasurol da:Klassisk musik de:Klassische Musik et:Klassikaline muusika el:Κλασική μουσική es:Música clásica eo:Klasika muziko eu:Musika klasikoa fa:موسیقی کلاسیک hif:Classical music fr:Musique classique fy:Klassike muzyk fur:Musiche classiche gl:Música clásica gan:古典音樂 ko:서양 고전 음악 hy:Դասական երաժշտություն hi:शास्त्रीय संगीत hr:Klasična glazba id:Musik klasik ia:Musica classic is:Klassísk tónlist it:Musica classica he:מוזיקה קלאסית kn:ಶಾಸ್ತ್ರೀಯ ಸಂಗೀತ sw:Muziki wa Klasiki la:Musica classica lv:Klasiskā mūzika lt:Klasikinė muzika li:Klassieke muziek hu:Klasszikus zene mk:Класична музика ml:പാശ്ചാത്യസംഗീതം mr:शास्त्रीय संगीत ms:Muzik klasikal nl:Klassieke muziek ja:クラシック音楽 no:Klassisk musikk nn:Klassisk musikk oc:Musica classica pnb:کلاسیکی موسیقی pl:Muzyka poważna pt:Música clássica ro:Muzică cultă qu:Klasiku musika rue:Класічна музика ru:Классическая музыка simple:Classical music sk:Klasická hudba sl:Klasična glasba sr:Класична музика sh:Klasična muzika fi:Taidemusiikki sv:Klassisk musik tl:Musikang klasiko ta:மேல்நாட்டுச் செந்நெறி இசை te:యూరోపియన్ శాస్త్రీయ సంగీతం th:ดนตรีคลาสสิก tr:Klasik müzik uk:Класична музика vi:Nhạc cổ điển fiu-vro:Klassikalinõ muusiga wa:Muzike classike war:Klasikal nga musika yi:קלאסישע מוזיק zh-yue:古典樂 bat-smg:Klasėkėnė mozėka zh:古典音乐

The late-2000s financial crisis (often called the Credit Crunch or the Global Financial Crisis) is considered by many economists to be the worst financial crisis since the Great Depression of the 1930s. It resulted in the collapse of large financial institutions, the bailout of banks by national governments, and downturns in stock markets around the world. In many areas, the housing market had also suffered, resulting in numerous evictions, foreclosures and prolonged vacancies. It contributed to the failure of key businesses, declines in consumer wealth estimated in the trillions of U.S. dollars, and a significant decline in economic activity, leading to a severe global economic recession in 2008.

The financial crisis was triggered by a liquidity shortfall in the United States banking system in 2008. The collapse of the U.S. housing bubble, which peaked in 2007, caused the values of securities tied to U.S. real estate pricing to plummet, damaging financial institutions globally. Questions regarding bank solvency, declines in credit availability and damaged investor confidence had an impact on global stock markets, where securities suffered large losses during 2008 and early 2009. Economies worldwide slowed during this period, as credit tightened and international trade declined. Governments and central banks responded with unprecedented fiscal stimulus, monetary policy expansion and institutional bailouts. Although there have been aftershocks, the financial crisis itself ended sometime between late-2008 and mid-2009.

While many causes for the financial crisis have been suggested, with varying weight assigned by experts, the United States Senate issuing the Levin–Coburn Report found “that the crisis was not a natural disaster, but the result of high risk, complex financial products; undisclosed conflicts of interest; and the failure of regulators, the credit rating agencies, and the market itself to rein in the excesses of Wall Street.” Critics argued that credit rating agencies and investors failed to accurately price the risk involved with mortgage-related financial products, and that governments did not adjust their regulatory practices to address 21st-century financial markets. The 1999 repeal of the Glass–Steagall Act of 1933 effectively removed the separation that previously existed between Wall Street investment banks and depository banks. In response to the financial crisis, both market-based and regulatory solutions have been implemented or are under consideration.

Background

The immediate cause or trigger of the crisis was the bursting of the United States housing bubble which peaked in approximately 2005–2006. Already-rising default rates on "subprime" and adjustable rate mortgages (ARM) began to increase quickly thereafter. As banks began to give out more loans to potential home owners, housing prices began to rise. In the optimistic terms, banks would encourage home owners to take on considerably high loans in the belief they would be able to pay them back more quickly overlooking the interest rates. Once the interest rates began to rise in mid 2007, housing prices dropped significantly. In many states, like California, refinancing became increasingly difficult. As a result, the number of foreclosed homes also began to rise.

Steadily decreasing interest rates backed by the U.S Federal Reserve from 1982 onward and large inflows of foreign funds created easy credit conditions for a number of years prior to the crisis, fueling a housing construction boom and encouraging debt-financed consumption. The combination of easy credit and money inflow contributed to the United States housing bubble. Loans of various types (e.g., mortgage, credit card, and auto) were easy to obtain and consumers assumed an unprecedented debt load. As part of the housing and credit booms, the number of financial agreements called mortgage-backed securities (MBS) and collateralized debt obligations (CDO), which derived their value from mortgage payments and housing prices, greatly increased. Such financial innovation enabled institutions and investors around the world to invest in the U.S. housing market. As housing prices declined, major global financial institutions that had borrowed and invested heavily in subprime MBS reported significant losses. Falling prices also resulted in homes worth less than the mortgage loan, providing a financial incentive to enter foreclosure. The ongoing foreclosure epidemic that began in late 2006 in the U.S. continues to drain wealth from consumers and erodes the financial strength of banking institutions. Defaults and losses on other loan types also increased significantly as the crisis expanded from the housing market to other parts of the economy. Total losses are estimated in the trillions of U.S. dollars globally.

While the housing and credit bubbles built, a series of factors caused the financial system to both expand and become increasingly fragile, a process called financialization. U.S. Government policy from the 1970s onward has emphasized deregulation to encourage business, which resulted in less oversight of activities and less disclosure of information about new activities undertaken by banks and other evolving financial institutions. Thus, policymakers did not immediately recognize the increasingly important role played by financial institutions such as investment banks and hedge funds, also known as the shadow banking system. Some experts believe these institutions had become as important as commercial (depository) banks in providing credit to the U.S. economy, but they were not subject to the same regulations. These institutions, as well as certain regulated banks, had also assumed significant debt burdens while providing the loans described above and did not have a financial cushion sufficient to absorb large loan defaults or MBS losses. These losses impacted the ability of financial institutions to lend, slowing economic activity. Concerns regarding the stability of key financial institutions drove central banks to provide funds to encourage lending and restore faith in the commercial paper markets, which are integral to funding business operations. Governments also bailed out key financial institutions and implemented economic stimulus programs, assuming significant additional financial commitments.

The U.S. Financial Crisis Inquiry Commission reported its findings in January 2011. It concluded that "the crisis was avoidable and was caused by: Widespread failures in financial regulation, including the Federal Reserve’s failure to stem the tide of toxic mortgages; Dramatic breakdowns in corporate governance including too many financial firms acting recklessly and taking on too much risk; An explosive mix of excessive borrowing and risk by households and Wall Street that put the financial system on a collision course with crisis; Key policy makers ill prepared for the crisis, lacking a full understanding of the financial system they oversaw; and systemic breaches in accountability and ethics at all levels."

Growth of the housing bubble

Between 1997 and 2006, the price of the typical American house increased by 124%. During the two decades ending in 2001, the national median home price ranged from 2.9 to 3.1 times median household income. This ratio rose to 4.0 in 2004, and 4.6 in 2006. This housing bubble resulted in quite a few homeowners refinancing their homes at lower interest rates, or financing consumer spending by taking out second mortgages secured by the price appreciation.

In a Peabody Award winning program, NPR correspondents argued that a "Giant Pool of Money" (represented by $70 trillion in worldwide fixed income investments) sought higher yields than those offered by U.S. Treasury bonds early in the decade. This pool of money had roughly doubled in size from 2000 to 2007, yet the supply of relatively safe, income generating investments had not grown as fast. Investment banks on Wall Street answered this demand with the MBS and CDO, which were assigned safe ratings by the credit rating agencies. In effect, Wall Street connected this pool of money to the mortgage market in the U.S., with enormous fees accruing to those throughout the mortgage supply chain, from the mortgage broker selling the loans, to small banks that funded the brokers, to the giant investment banks behind them. By approximately 2003, the supply of mortgages originated at traditional lending standards had been exhausted. However, continued strong demand for MBS and CDO began to drive down lending standards, as long as mortgages could still be sold along the supply chain. Eventually, this speculative bubble proved unsustainable.

The CDO in particular enabled financial institutions to obtain investor funds to finance subprime and other lending, extending or increasing the housing bubble and generating large fees. A CDO essentially places cash payments from multiple mortgages or other debt obligations into a single pool, from which the cash is allocated to specific securities in a priority sequence. Those securities obtaining cash first received investment-grade ratings from rating agencies. Lower priority securities received cash thereafter, with lower credit ratings but theoretically a higher rate of return on the amount invested.

By September 2008, average U.S. housing prices had declined by over 20% from their mid-2006 peak. As prices declined, borrowers with adjustable-rate mortgages could not refinance to avoid the higher payments associated with rising interest rates and began to default. During 2007, lenders began foreclosure proceedings on nearly 1.3 million properties, a 79% increase over 2006. This increased to 2.3 million in 2008, an 81% increase vs. 2007. By August 2008, 9.2% of all U.S. mortgages outstanding were either delinquent or in foreclosure. By September 2009, this had risen to 14.4%.

Easy credit conditions

Lower interest rates encourage borrowing. From 2000 to 2003, the Federal Reserve lowered the federal funds rate target from 6.5% to 1.0%. This was done to soften the effects of the collapse of the dot-com bubble and of the September 2001 terrorist attacks, and to combat the perceived risk of deflation.

Additional downward pressure on interest rates was created by the USA's high and rising current account deficit, which peaked along with the housing bubble in 2006. Federal Reserve Chairman Ben Bernanke explained how trade deficits required the U.S. to borrow money from abroad, which bid up bond prices and lowered interest rates.

Bernanke explained that between 1996 and 2004, the USA current account deficit increased by $650 billion, from 1.5% to 5.8% of GDP. Financing these deficits required the USA to borrow large sums from abroad, much of it from countries running trade surpluses, mainly the emerging economies in Asia and oil-exporting nations. The balance of payments identity requires that a country (such as the USA) running a current account deficit also have a capital account (investment) surplus of the same amount. Hence large and growing amounts of foreign funds (capital) flowed into the USA to finance its imports.

This created demand for various types of financial assets, raising the prices of those assets while lowering interest rates. Foreign investors had these funds to lend, either because they had very high personal savings rates (as high as 40% in China), or because of high oil prices. Bernanke referred to this as a "saving glut."

A "flood" of funds (capital or liquidity) reached the USA financial markets. Foreign governments supplied funds by purchasing USA Treasury bonds and thus avoided much of the direct impact of the crisis. USA households, on the other hand, used funds borrowed from foreigners to finance consumption or to bid up the prices of housing and financial assets. Financial institutions invested foreign funds in mortgage-backed securities.

The Fed then raised the Fed funds rate significantly between July 2004 and July 2006. This contributed to an increase in 1-year and 5-year adjustable-rate mortgage (ARM) rates, making ARM interest rate resets more expensive for homeowners. This may have also contributed to the deflating of the housing bubble, as asset prices generally move inversely to interest rates and it became riskier to speculate in housing. USA housing and financial assets dramatically declined in value after the housing bubble burst.

Weak and fraudulent underwriting practice

Testimony given to the Financial Crisis Inquiry Commission by Richard M. Bowen, III on events during his tenure as Citi's Business Chief Underwriter for Correspondent Lending in the Consumer Lending Group (where he was responsible for over 220 professional underwriters) suggests that by the final years of the US housing bubble (2006–2007), the collapse of mortgage underwriting standards was endemic. His testimony stated that by 2006, 60% of mortgages purchased by Citi from some 1,600 mortgage companies were "defective" (were not underwritten to policy, or did not contain all policy-required documents). This, despite the fact that each of these 1,600 originators were contractually responsible (certified via representations and warrantees) that their mortgage originations met Citi's standards. Moreover, during 2007, "defective mortgages (from mortgage originators contractually bound to perform underwriting to Citi's standards) increased... to over 80% of production".

In separate testimony to Financial Crisis Inquiry Commission, officers of Clayton Holdings—the largest residential loan due diligence and securitization surveillance company in the United States and Europe—testified that Clayton's review of over 900,000 mortgages issued from January 2006 to June 2007 revealed that scarcely 54% of the loans met their originators’ underwriting standards. The analysis (conducted on behalf of 23 investment and commercial banks, including 7 "Too Big To Fail" banks) additionally showed that 28% of the sampled loans did not meet the minimal standards of any issuer. Clayton's analysis further showed that 39% of these loans (i.e. those not meeting ''any'' issuer's minimal underwriting standards) were subsequently securitized and sold to investors.

Sub-prime lending

The term subprime refers to the credit quality of particular borrowers, who have weakened credit histories and a greater risk of loan default than prime borrowers. The value of U.S. subprime mortgages was estimated at $1.3 trillion as of March 2007, with over 7.5 million first-lien subprime mortgages outstanding.

As well as easy credit conditions, there is evidence that both government and competitive pressures contributed to an increase in the amount of subprime lending during the years preceding the crisis. Major U.S. investment banks and government sponsored enterprises like Fannie Mae played an important role in the expansion of higher-risk lending.

Subprime mortgages remained below 10% of all mortgage originations until 2004, when they spiked to nearly 20% and remained there through the 2005-2006 peak of the United States housing bubble. A proximate event to this increase was the April 2004 decision by the U.S. Securities and Exchange Commission (SEC) to relax the net capital rule, which permitted the largest five investment banks to dramatically increase their financial leverage and aggressively expand their issuance of mortgage-backed securities. This applied additional competitive pressure to Fannie Mae and Freddie Mac, which further expanded their riskier lending. Subprime mortgage payment delinquency rates remained in the 10-15% range from 1998 to 2006, then began to increase rapidly, rising to 25% by early 2008.

Some, like American Enterprise Institute fellow Peter J. Wallison, believe the roots of the crisis can be traced directly to sub-prime lending by Fannie Mae and Freddie Mac, which are government sponsored entities. On September 30, 1999, ''The New York Times'' reported that the Clinton Administration pushed for more lending to low and moderate income borrowers, while the mortgage industry sought guarantees for sub-prime loans:

In the early and mid-2000s, the Bush administration called numerous times for investigation into the safety and soundness of the GSEs and their swelling portfolio of subprime mortgages. On September 10, 2003 the House Financial Services Committee held a hearing at the urging of the administration to assess safety and soundness issues and to review a recent report by the Office of Federal Housing Enterprise Oversight (OFHEO) that had uncovered accounting discrepancies within the two entities. The hearings never resulted in new legislation or formal investigation of Fannie Mae and Freddie Mac, as many of the committee members refused to accept the report and instead rebuked OFHEO for their attempt at regulation. Some believe this was an early warning to the systemic risk that the growing market in subprime mortgages posed to the U.S. financial system that went unheeded.

A 2000 United States Department of the Treasury study of lending trends for 305 cities from 1993 to 1998 showed that $467 billion of mortgage lending was made by Community Reinvestment Act (CRA)-covered lenders into low and mid level income (LMI) borrowers and neighborhoods, representing 10% of all US mortgage lending during the period. The majority of these were prime loans. Sub-prime loans made by CRA-covered institutions constituted a 3% market share of LMI loans in 1998. Nevertheless, only 25% of all sub-prime lending occurred at CRA-covered institutions, and a full 50% of sub-prime loans originated at institutions exempt from CRA.

An analysis by the Federal Reserve Bank of Dallas in 2009 concluded unequivocally that the CRA was not responsible for the mortgage loan crisis, pointing out that CRA rules have been in place since 1995 whereas the poor lending emerged only a decade later. Furthermore, most sub-prime loans were not made to the LMI borrowers targeted by the CRA, especially in the years 2005-2006 leading up to the crisis. Nor did it find any evidence that lending under the CRA rules increased delinquency rates or that the CRA indirectly influenced independent mortgage lenders to ramp up sub-prime lending.

Others have pointed out that there were not enough of these loans made to cause a crisis of this magnitude. In an article in Portfolio Magazine, Michael Lewis spoke with one trader who noted that "There weren’t enough Americans with [bad] credit taking out [bad loans] to satisfy investors’ appetite for the end product." Essentially, investment banks and hedge funds used financial innovation to enable large wagers to be made, far beyond the actual value of the underlying mortgage loans, using derivatives called credit default swaps, CDO and synthetic CDO. As long as derivative buyers could be matched with sellers, the theoretical amount that could be wagered was infinite. "They were creating [synthetic loans] out of whole cloth. One hundred times over! That’s why the losses are so much greater than the loans."

Economist Paul Krugman argued in January 2010 that the simultaneous growth of the residential and commercial real estate pricing bubbles undermines the case made by those who argue that Fannie Mae, Freddie Mac, CRA or predatory lending were primary causes of the crisis. In other words, bubbles in both markets developed even though only the residential market was affected by these potential causes.

As of March 2011 the FDIC has had to pay out $9 billion to cover losses on bad loans at 165 failed financial institutions.

Predatory lending

Predatory lending refers to the practice of unscrupulous lenders, enticing borrowers to enter into "unsafe" or "unsound" secured loans for inappropriate purposes. A classic bait-and-switch method was used by Countrywide Financial, advertising low interest rates for home refinancing. Such loans were written into extensively detailed contracts, and swapped for more expensive loan products on the day of closing. Whereas the advertisement might state that 1% or 1.5% interest would be charged, the consumer would be put into an adjustable rate mortgage (ARM) in which the interest charged would be greater than the amount of interest paid. This created negative amortization, which the credit consumer might not notice until long after the loan transaction had been consummated.

Countrywide, sued by California Attorney General Jerry Brown for "unfair business practices" and "false advertising" was making high cost mortgages "to homeowners with weak credit, adjustable rate mortgages (ARMs) that allowed homeowners to make interest-only payments". When housing prices decreased, homeowners in ARMs then had little incentive to pay their monthly payments, since their home equity had disappeared. This caused Countrywide's financial condition to deteriorate, ultimately resulting in a decision by the Office of Thrift Supervision to seize the lender.

Former employees from Ameriquest, which was United States' leading wholesale lender, described a system in which they were pushed to falsify mortgage documents and then sell the mortgages to Wall Street banks eager to make fast profits. There is growing evidence that such mortgage frauds may be a cause of the crisis.

Deregulation

Critics such as economist Paul Krugman and U.S. Treasury Secretary Timothy Geithner have argued that the regulatory framework did not keep pace with financial innovation, such as the increasing importance of the shadow banking system, derivatives and off-balance sheet financing. In other cases, laws were changed or enforcement weakened in parts of the financial system. Key examples include: Jimmy Carter's ''Depository Institutions Deregulation and Monetary Control Act of 1980'' (DIDMCA) phased out a number of restrictions on banks' financial practices, broadened their lending powers, and raised the deposit insurance limit from $40,000 to $100,000 (raising the problem of moral hazard). Banks rushed into real estate lending, speculative lending, and other ventures just as the economy soured. In October 1982, U.S. President Ronald Reagan signed into Law the Garn–St. Germain Depository Institutions Act, which provided for adjustable-rate mortgage loans, began the process of banking deregulation, and contributed to the savings and loan crisis of the late 1980s/early 1990s. In November 1999, U.S. President Bill Clinton signed into Law the Gramm-Leach-Bliley Act, which repealed part of the Glass–Steagall Act of 1933. This repeal has been criticized for reducing the separation between commercial banks (which traditionally had fiscally conservative policies) and investment banks (which had a more risk-taking culture). In 2004, the U.S. Securities and Exchange Commission relaxed the net capital rule, which enabled investment banks to substantially increase the level of debt they were taking on, fueling the growth in mortgage-backed securities supporting subprime mortgages. The SEC has conceded that self-regulation of investment banks contributed to the crisis. Financial institutions in the shadow banking system are not subject to the same regulation as depository banks, allowing them to assume additional debt obligations relative to their financial cushion or capital base. This was the case despite the Long-Term Capital Management debacle in 1998, where a highly-leveraged shadow institution failed with systemic implications. Regulators and accounting standard-setters allowed depository banks such as Citigroup to move significant amounts of assets and liabilities off-balance sheet into complex legal entities called structured investment vehicles, masking the weakness of the capital base of the firm or degree of leverage or risk taken. One news agency estimated that the top four U.S. banks will have to return between $500 billion and $1 trillion to their balance sheets during 2009. This increased uncertainty during the crisis regarding the financial position of the major banks. Off-balance sheet entities were also used by Enron as part of the scandal that brought down that company in 2001. As early as 1997, Federal Reserve Chairman Alan Greenspan fought to keep the derivatives market unregulated. With the advice of the President's Working Group on Financial Markets, the U.S. Congress and President allowed the self-regulation of the over-the-counter derivatives market when they enacted the Commodity Futures Modernization Act of 2000. Derivatives such as credit default swaps (CDS) can be used to hedge or speculate against particular credit risks. The volume of CDS outstanding increased 100-fold from 1998 to 2008, with estimates of the debt covered by CDS contracts, as of November 2008, ranging from US$33 to $47 trillion. Total over-the-counter (OTC) derivative notional value rose to $683 trillion by June 2008. Warren Buffett famously referred to derivatives as "financial weapons of mass destruction" in early 2003.

Increased debt burden or over-leveraging

U.S. households and financial institutions became increasingly indebted or overleveraged during the years preceding the crisis. This increased their vulnerability to the collapse of the housing bubble and worsened the ensuing economic downturn. Key statistics include:

Free cash used by consumers from home equity extraction doubled from $627 billion in 2001 to $1,428 billion in 2005 as the housing bubble built, a total of nearly $5 trillion dollars over the period, contributing to economic growth worldwide. U.S. home mortgage debt relative to GDP increased from an average of 46% during the 1990s to 73% during 2008, reaching $10.5 trillion.

USA household debt as a percentage of annual disposable personal income was 127% at the end of 2007, versus 77% in 1990.

In 1981, U.S. private debt was 123% of GDP; by the third quarter of 2008, it was 290%.

From 2004-07, the top five U.S. investment banks each significantly increased their financial leverage (see diagram), which increased their vulnerability to a financial shock. These five institutions reported over $4.1 trillion in debt for fiscal year 2007, about 30% of USA nominal GDP for 2007. Lehman Brothers was liquidated, Bear Stearns and Merrill Lynch were sold at fire-sale prices, and Goldman Sachs and Morgan Stanley became commercial banks, subjecting themselves to more stringent regulation. With the exception of Lehman, these companies required or received government support.

Fannie Mae and Freddie Mac, two U.S. Government sponsored enterprises, owned or guaranteed nearly $5 trillion in mortgage obligations at the time they were placed into conservatorship by the U.S. government in September 2008.

These seven entities were highly leveraged and had $9 trillion in debt or guarantee obligations; yet they were not subject to the same regulation as depository banks.

Financial innovation and complexity

The term financial innovation refers to the ongoing development of financial products designed to achieve particular client objectives, such as offsetting a particular risk exposure (such as the default of a borrower) or to assist with obtaining financing. Examples pertinent to this crisis included: the adjustable-rate mortgage; the bundling of subprime mortgages into mortgage-backed securities (MBS) or collateralized debt obligations (CDO) for sale to investors, a type of securitization; and a form of credit insurance called credit default swaps (CDS). The usage of these products expanded dramatically in the years leading up to the crisis. These products vary in complexity and the ease with which they can be valued on the books of financial institutions.

CDO issuance grew from an estimated $20 billion in Q1 2004 to its peak of over $180 billion by Q1 2007, then declined back under $20 billion by Q1 2008. Further, the credit quality of CDO's declined from 2000–2007, as the level of subprime and other non-prime mortgage debt increased from 5% to 36% of CDO assets. As described in the section on subprime lending, the CDS and portfolio of CDS called synthetic CDO enabled a theoretically infinite amount to be wagered on the finite value of housing loans outstanding, provided that buyers and sellers of the derivatives could be found. For example, buying a CDS to insure a CDO ended up giving the seller the same risk as if they owned the CDO, when those CDO's became worthless.

This boom in innovative financial products went hand in hand with more complexity. It multiplied the number of actors connected to a single mortgage (including mortgage brokers, specialized originators, the securitizers and their due diligence firms, managing agents and trading desks, and finally investors, insurances and providers of repo funding). With increasing distance from the underlying asset these actors relied more and more on indirect information (including FICO scores on creditworthiness, appraisals and due diligence checks by third party organizations, and most importantly the computer models of rating agencies and risk management desks). Instead of spreading risk this provided the ground for fraudulent acts, misjudgments and finally market collapse.

Martin Wolf further wrote in June 2009 that certain financial innovations enabled firms to circumvent regulations, such as off-balance sheet financing that affects the leverage or capital cushion reported by major banks, stating: "...an enormous part of what banks did in the early part of this decade – the off-balance-sheet vehicles, the derivatives and the 'shadow banking system' itself – was to find a way round regulation."

Incorrect pricing of risk

The pricing of risk refers to the incremental compensation required by investors for taking on additional risk, which may be measured by interest rates or fees. For a variety of reasons, market participants did not accurately measure the risk inherent with financial innovation such as MBS and CDOs or understand its impact on the overall stability of the financial system. For example, the pricing model for CDOs clearly did not reflect the level of risk they introduced into the system. Banks estimated that $450bn of CDO were sold between "late 2005 to the middle of 2007"; among the $102bn of those that had been liquidated, JPMorgan estimated that the average recovery rate for "high quality" CDOs was approximately 32 cents on the dollar, while the recovery rate for mezzanine CDO was approximately five cents for every dollar.

Another example relates to AIG, which insured obligations of various financial institutions through the usage of credit default swaps. The basic CDS transaction involved AIG receiving a premium in exchange for a promise to pay money to party A in the event party B defaulted. However, AIG did not have the financial strength to support its many CDS commitments as the crisis progressed and was taken over by the government in September 2008. U.S. taxpayers provided over $180 billion in government support to AIG during 2008 and early 2009, through which the money flowed to various counterparties to CDS transactions, including many large global financial institutions.

The limitations of a widely-used financial model also were not properly understood. This formula assumed that the price of CDS was correlated with and could predict the correct price of mortgage backed securities. Because it was highly tractable, it rapidly came to be used by a huge percentage of CDO and CDS investors, issuers, and rating agencies. According to one wired.com article:

As financial assets became more and more complex, and harder and harder to value, investors were reassured by the fact that both the international bond rating agencies and bank regulators, who came to rely on them, accepted as valid some complex mathematical models which theoretically showed the risks were much smaller than they actually proved to be. George Soros commented that "The super-boom got out of hand when the new products became so complicated that the authorities could no longer calculate the risks and started relying on the risk management methods of the banks themselves. Similarly, the rating agencies relied on the information provided by the originators of synthetic products. It was a shocking abdication of responsibility."

Moreover, a conflict of interest between professional investment managers and their institutional clients, combined with a global glut in investment capital, led to bad investments by asset managers in over-priced credit assets. Professional investment managers generally are compensated based on the volume of client assets under management. There is, therefore, an incentive for asset managers to expand their assets under management in order to maximize their compensation. As the glut in global investment capital caused the yields on credit assets to decline, asset managers were faced with the choice of either investing in assets where returns did not reflect true credit risk or returning funds to clients. Many asset managers chose to continue to invest client funds in over-priced (under-yielding) investments, to the detriment of their clients, in order to maintain their assets under management. This choice was supported by a "plausible deniability" of the risks associated with subprime-based credit assets because the loss experience with early "vintages" of subprime loans was so low.

Despite the dominance of the above formula, there are documented attempts of the financial industry, occurring before the crisis, to address the formula limitations, specifically the lack of dependence dynamics and the poor representation of extreme events. The volume "Credit Correlation: Life After Copulas", published in 2007 by World Scientific, summarizes a 2006 conference held by Merrill Lynch in London where several practitioners attempted to propose models rectifying some of the copula limitations. See also the article by Donnelly and Embrechts and the book by Brigo, Pallavicini and Torresetti, that reports relevant warnings and research on CDOs appeared in 2006.

Boom and collapse of the shadow banking system

In a June 2008 speech, President and CEO of the New York Federal Reserve Bank Timothy Geithnerwho in 2009 became Secretary of the United States Treasuryplaced significant blame for the freezing of credit markets on a "run" on the entities in the "parallel" banking system, also called the shadow banking system. These entities became critical to the credit markets underpinning the financial system, but were not subject to the same regulatory controls. Further, these entities were vulnerable because of maturity mismatch, meaning that they borrowed short-term in liquid markets to purchase long-term, illiquid and risky assets. This meant that disruptions in credit markets would make them subject to rapid deleveraging, selling their long-term assets at depressed prices. He described the significance of these entities:

Paul Krugman, laureate of the Nobel Prize in Economics, described the run on the shadow banking system as the "core of what happened" to cause the crisis. He referred to this lack of controls as "malign neglect" and argued that regulation should have been imposed on all banking-like activity.

The securitization markets supported by the shadow banking system started to close down in the spring of 2007 and nearly shut-down in the fall of 2008. More than a third of the private credit markets thus became unavailable as a source of funds. According to the Brookings Institution, the traditional banking system does not have the capital to close this gap as of June 2009: "It would take a number of years of strong profits to generate sufficient capital to support that additional lending volume." The authors also indicate that some forms of securitization are "likely to vanish forever, having been an artifact of excessively loose credit conditions."

Economist Mark Zandi testified to the Financial Crisis Inquiry Commission in January 2010: "The securitization markets also remain impaired, as investors anticipate more loan losses. Investors are also uncertain about coming legal and accounting rule changes and regulatory reforms. Private bond issuance of residential and commercial mortgage-backed securities, asset-backed securities, and CDOs peaked in 2006 at close to $2 trillion...In 2009, private issuance was less than $150 billion, and almost all of it was asset-backed issuance supported by the Federal Reserve's TALF program to aid credit card, auto and small-business lenders. Issuance of residential and commercial mortgage-backed securities and CDOs remains dormant."

Commodities boom

Rapid increases in a number of commodity prices followed the collapse in the housing bubble. The price of oil nearly tripled from $50 to $147 from early 2007 to 2008, before plunging as the financial crisis began to take hold in late 2008. Experts debate the causes, with some attributing it to speculative flow of money from housing and other investments into commodities, some to monetary policy, and some to the increasing feeling of raw materials scarcity in a fast growing world, leading to long positions taken on those markets, such as Chinese increasing presence in Africa. An increase in oil prices tends to divert a larger share of consumer spending into gasoline, which creates downward pressure on economic growth in oil importing countries, as wealth flows to oil-producing states. A pattern of spiking instability in the price of oil over the decade leading up to the price high of 2008 has been recently identified. The destabilizing effects of this price variance has been proposed as a contributory factor in the financial crisis.

In testimony before the Senate Committee on Commerce, Science, and Transportation on June 3, 2008, former director of the CFTC Division of Trading & Markets (responsible for enforcement) Michael Greenberger specifically named the Atlanta-based IntercontinentalExchange, founded by Goldman Sachs, Morgan Stanley and BP as playing a key role in speculative run-up of oil futures prices traded off the regulated futures exchanges in London and New York. However, the IntercontinentalExchange (ICE) had been regulated by both European and US authorities since its purchase of the International Petroleum Exchange in 2001. Mr Greenberger was later corrected on this matter.

Copper prices increased at the same time as the oil prices. Copper traded at about $2,500 per tonne from 1990 until 1999, when it fell to about $1,600. The price slump lasted until 2004 which saw a price surge that had copper reaching $7,040 per tonne in 2008.

Nickel prices boomed in the late 1990s, then the price of nickel imploded from around $51,000 /£36,700 per metric ton in May 2007 to about $11,550/£8,300 per metric ton in January 2009. Prices were only just starting to recover as of January 2010, but most of Australia's nickel mines had gone bankrupt by then. As the price for high grade nickel sulphate ore recovered in 2010, so did the Australian nickel mining industry.

Coincidentally with these price fluctuations, long-only commodity index funds became popular – by one estimate investment increased from $90 billion in 2006 to $200 billion at the end of 2007, while commodity prices increased 71% – which raised concern as to whether these index funds caused the commodity bubble. The empirical research has been mixed.

Systemic crisis

Another analysis, different from the mainstream explanation, is that the financial crisis is merely a symptom of another, deeper crisis, which is a systemic crisis of capitalism itself. According to Samir Amin, an Egyptian Marxist economist, the constant decrease in GDP growth rates in Western countries since the early 1970s created a growing surplus of capital which did not have sufficient profitable investment outlets in the real economy. The alternative was to place this surplus into the financial market, which became more profitable than capital investment, especially with subsequent deregulation. According to Samir Amin, this phenomenon has led to recurrent financial bubbles (such as the internet bubble).

Ravi Batra's theory is that growing inequality of financial capitalism produces speculative bubbles that burst and result in depression and major political changes. He has also suggested that a "demand gap" related to differing wage and productivity growth explains deficit and debt dynamics important to stock market developments.

John Bellamy Foster, a political economy analyst and editor of the Monthly Review, believes that the decrease in GDP growth rates since the early 1970s is due to increasing market saturation.

John C. Bogle wrote during 2005 that a series of unresolved challenges face capitalism that have contributed to past financial crises and have not been sufficiently addressed: Echoing the central thesis of James Burnham's 1941 seminal book, The Managerial Revolution, Bolge cites particular issues, including:

that "Manager's capitalism" has replaced "owner's capitalism," meaning management runs the firm for its benefit rather than for the shareholders, a variation on the principal-agent problem;

the burgeoning executive compensation;

the management of earnings, mainly a focus on share price rather than the creation of genuine value; and

the failure of gatekeepers, including auditors, boards of directors, Wall Street analysts, and career politicians.

An analysis conducted by Mark Roeder, a former executive at the Swiss-based UBS Bank, suggested that large scale momentum, or The Big Mo "played a pivotal role" in the 2008-09 global financial crisis. Roeder suggested that "recent technological advances, such as computer-driven trading programs, together with the increasingly interconnected nature of markets, has magnified the momentum effect. This has made the financial sector inherently unstable."

Robert Reich has attributed the current economic downturn to the stagnation of wages in the United States, particularly those of the hourly workers who comprise 80% of the workforce. His claim is that this stagnation forced the population to borrow in order to meet the cost of living.

Role of economic forecasting

The financial crisis was not widely predicted by mainstream economists, who instead spoke of the Great Moderation. A number of heterodox economists predicted the crisis, with varying arguments. Dirk Bezemer in his research credits (with supporting argument and estimates of timing) 12 economists with predicting the crisis: Dean Baker (US), Wynne Godley (UK), Fred Harrison (UK), Michael Hudson (US), Eric Janszen (US), Steve Keen (Australia), Jakob Brøchner Madsen & Jens Kjaer Sørensen (Denmark), Kurt Richebächer (US), Nouriel Roubini (US), Peter Schiff (US), and Robert Shiller (US). Examples of other experts who gave indications of a financial crisis have also been given.

A cover story in ''BusinessWeek'' magazine claims that economists mostly failed to predict the worst international economic crisis since the Great Depression of 1930s. The Wharton School of the University of Pennsylvania's online business journal examines why economists failed to predict a major global financial crisis. Popular articles published in the mass media have led the general public to believe that the majority of economists have failed in their obligation to predict the financial crisis. For example, an article in the New York Times informs that economist Nouriel Roubini warned of such crisis as early as September 2006, and the article goes on to state that the profession of economics is bad at predicting recessions. According to ''The Guardian'', Roubini was ridiculed for predicting a collapse of the housing market and worldwide recession, while ''The New York Times'' labelled him "Dr. Doom".

Within mainstream financial economics, most believe that financial crises are simply unpredictable, following Eugene Fama's efficient-market hypothesis and the related random-walk hypothesis, which state respectively that markets contain all information about possible future movements, and that the movement of financial prices are random and unpredictable.

Lebanese-American trader and financial risk engineer Nassim Nicholas Taleb, author of the 2007 book ''The Black Swan'', spent years warning against the breakdown of the banking system in particular and the economy in general owing to their use of bad risk models and reliance on forecasting, and their reliance on bad models, and framed the problem as part of "robustness and fragility". He also took action against the establishment view by making a big financial bet on banking stocks and making a fortune from the crisis ("They didn't listen, so I took their money"). According to David Brooks from the New York Times, "Taleb not only has an explanation for what’s happening, he saw it coming."

Impact on financial markets

US stock market

The US stock market peaked in October 2007, when the Dow Jones Industrial Average index exceeded 14,000 points. It then entered a pronounced decline, which accelerated markedly in October 2008. By March 2009, the Dow Jones average reached a trough of around 6,600. It has since recovered much of the decline, exceeding 12,000 for most of the first half of 2011. Likely, the aggressive Federal Reserve policy of quantitative easing spurred the recovery in the stock market.

Market strategist Phil Dow "said he believes distinctions exist between the current market malaise" and the Great Depression. The Dow's fall of over 50% in 17 months is similar to a 54.7% fall in the Great Depression, followed by a total drop of 89% over the next 16 months. "It's very troubling if you have a mirror image," said Dow. Floyd Norris, chief financial correspondent of The New York Times, wrote in a blog entry in March 2009 that the decline has not been a mirror image of the Great Depression, explaining that although the decline amounts were nearly the same at the time, the rates of decline had started much faster in 2007, and that the past year had only ranked eighth among the worst recorded years of percentage drops in the Dow. The past two years ranked third however.

Financial institutions

The International Monetary Fund estimated that large U.S. and European banks lost more than $1 trillion on toxic assets and from bad loans from January 2007 to September 2009. These losses are expected to top $2.8 trillion from 2007-10. U.S. banks losses were forecast to hit $1 trillion and European bank losses will reach $1.6 trillion. The International Monetary Fund (IMF) estimated that U.S. banks were about 60% through their losses, but British and eurozone banks only 40%.

One of the first victims was Northern Rock, a medium-sized British bank. The highly leveraged nature of its business led the bank to request security from the Bank of England. This in turn led to investor panic and a bank run in mid-September 2007. Calls by Liberal Democrat Treasury Spokesman Vince Cable to nationalise the institution were initially ignored; in February 2008, however, the British government (having failed to find a private sector buyer) relented, and the bank was taken into public hands. Northern Rock's problems proved to be an early indication of the troubles that would soon befall other banks and financial institutions.

Initially the companies affected were those directly involved in home construction and mortgage lending such as Northern Rock and Countrywide Financial, as they could no longer obtain financing through the credit markets. Over 100 mortgage lenders went bankrupt during 2007 and 2008. Concerns that investment bank Bear Stearns would collapse in March 2008 resulted in its fire-sale to JP Morgan Chase. The financial institution crisis hit its peak in September and October 2008. Several major institutions either failed, were acquired under duress, or were subject to government takeover. These included Lehman Brothers, Merrill Lynch, Fannie Mae, Freddie Mac, Washington Mutual, Wachovia, and AIG.

Credit markets and the shadow banking system

During September 2008, the crisis hit its most critical stage. There was the equivalent of a bank run on the money market mutual funds, which frequently invest in commercial paper issued by corporations to fund their operations and payrolls. Withdrawal from money markets were $144.5 billion during one week, versus $7.1 billion the week prior. This interrupted the ability of corporations to rollover (replace) their short-term debt. The U.S. government responded by extending insurance for money market accounts analogous to bank deposit insurance via a temporary guarantee and with Federal Reserve programs to purchase commercial paper. The TED spread, an indicator of perceived credit risk in the general economy, spiked up in July 2007, remained volatile for a year, then spiked even higher in September 2008, reaching a record 4.65% on October 10, 2008.

In a dramatic meeting on September 18, 2008, Treasury Secretary Henry Paulson and Fed Chairman Ben Bernanke met with key legislators to propose a $700 billion emergency bailout. Bernanke reportedly told them: "If we don't do this, we may not have an economy on Monday." The Emergency Economic Stabilization Act, which implemented the Troubled Asset Relief Program (TARP), was signed into law on October 3, 2008.

Economist Paul Krugman and U.S. Treasury Secretary Timothy Geithner explain the credit crisis via the implosion of the shadow banking system, which had grown to nearly equal the importance of the traditional commercial banking sector as described above. Without the ability to obtain investor funds in exchange for most types of mortgage-backed securities or asset-backed commercial paper, investment banks and other entities in the shadow banking system could not provide funds to mortgage firms and other corporations.

This meant that nearly one-third of the U.S. lending mechanism was frozen and continued to be frozen into June 2009. According to the Brookings Institution, the traditional banking system does not have the capital to close this gap as of June 2009: "It would take a number of years of strong profits to generate sufficient capital to support that additional lending volume." The authors also indicate that some forms of securitization are "likely to vanish forever, having been an artifact of excessively loose credit conditions." While traditional banks have raised their lending standards, it was the collapse of the shadow banking system that is the primary cause of the reduction in funds available for borrowing.

Wealth effects

There is a direct relationship between declines in wealth, and declines in consumption and business investment, which along with government spending represent the economic engine. Between June 2007 and November 2008, Americans lost an estimated average of more than a quarter of their collective net worth. By early November 2008, a broad U.S. stock index the S&P 500, was down 45% from its 2007 high. Housing prices had dropped 20% from their 2006 peak, with futures markets signaling a 30-35% potential drop. Total home equity in the United States, which was valued at $13 trillion at its peak in 2006, had dropped to $8.8 trillion by mid-2008 and was still falling in late 2008. Total retirement assets, Americans' second-largest household asset, dropped by 22%, from $10.3 trillion in 2006 to $8 trillion in mid-2008. During the same period, savings and investment assets (apart from retirement savings) lost $1.2 trillion and pension assets lost $1.3 trillion. Taken together, these losses total a staggering $8.3 trillion. Since peaking in the second quarter of 2007, household wealth is down $14 trillion.

Further, U.S. homeowners had extracted significant equity in their homes in the years leading up to the crisis, which they could no longer do once housing prices collapsed. Free cash used by consumers from home equity extraction doubled from $627 billion in 2001 to $1,428 billion in 2005 as the housing bubble built, a total of nearly $5 trillion over the period. U.S. home mortgage debt relative to GDP increased from an average of 46% during the 1990s to 73% during 2008, reaching $10.5 trillion.

To offset this decline in consumption and lending capacity, the U.S. government and U.S. Federal Reserve have committed $13.9 trillion, of which $6.8 trillion has been invested or spent, as of June 2009. In effect, the Fed has gone from being the "lender of last resort" to the "lender of only resort" for a significant portion of the economy. In some cases the Fed can now be considered the "buyer of last resort." Economist Dean Baker explained the reduction in the availability of credit this way: }}

At the heart of the portfolios of many of these institutions were investments whose assets had been derived from bundled home mortgages. Exposure to these mortgage-backed securities, or to the credit derivatives used to insure them against failure, caused the collapse or takeover of several key firms such as Lehman Brothers, AIG, Merrill Lynch, and HBOS.

European contagion

The crisis rapidly developed and spread into a global economic shock, resulting in a number of European bank failures, declines in various stock indexes, and large reductions in the market value of equities and commodities.

Both MBS and CDO were purchased by corporate and institutional investors globally. Derivatives such as credit default swaps also increased the linkage between large financial institutions. Moreover, the de-leveraging of financial institutions, as assets were sold to pay back obligations that could not be refinanced in frozen credit markets, further accelerated the solvency crisis and caused a decrease in international trade.

World political leaders, national ministers of finance and central bank directors coordinated their efforts to reduce fears, but the crisis continued. At the end of October 2008 a currency crisis developed, with investors transferring vast capital resources into stronger currencies such as the yen, the dollar and the Swiss franc, leading many emergent economies to seek aid from the International Monetary Fund.

Effects on the global economy

Global effects

A number of commentators have suggested that if the liquidity crisis continues, there could be an extended recession or worse. The continuing development of the crisis has prompted in some quarters fears of a global economic collapse although there are now many cautiously optimistic forecasters in addition to some prominent sources who remain negative. The financial crisis is likely to yield the biggest banking shakeout since the savings-and-loan meltdown. Investment bank UBS stated on October 6 that 2008 would see a clear global recession, with recovery unlikely for at least two years. Three days later UBS economists announced that the "beginning of the end" of the crisis had begun, with the world starting to make the necessary actions to fix the crisis: capital injection by governments; injection made systemically; interest rate cuts to help borrowers. The United Kingdom had started systemic injection, and the world's central banks were now cutting interest rates. UBS emphasized the United States needed to implement systemic injection. UBS further emphasized that this fixes only the financial crisis, but that in economic terms "the worst is still to come". UBS quantified their expected recession durations on October 16: the Eurozone's would last two quarters, the United States' would last three quarters, and the United Kingdom's would last four quarters. The economic crisis in Iceland involved all three of the country's major banks. Relative to the size of its economy, Iceland’s banking collapse is the largest suffered by any country in economic history.

At the end of October UBS revised its outlook downwards: the forthcoming recession would be the worst since the early 1980s recession with negative 2009 growth for the U.S., Eurozone, UK; very limited recovery in 2010; but not as bad as the Great Depression.

The Brookings Institution reported in June 2009 that U.S. consumption accounted for more than a third of the growth in global consumption between 2000 and 2007. "The US economy has been spending too much and borrowing too much for years and the rest of the world depended on the U.S. consumer as a source of global demand." With a recession in the U.S. and the increased savings rate of U.S. consumers, declines in growth elsewhere have been dramatic. For the first quarter of 2009, the annualized rate of decline in GDP was 14.4% in Germany, 15.2% in Japan, 7.4% in the UK, 18% in Latvia, 9.8% in the Euro area and 21.5% for Mexico.

Some developing countries that had seen strong economic growth saw significant slowdowns. For example, growth forecasts in Cambodia show a fall from more than 10% in 2007 to close to zero in 2009, and Kenya may achieve only 3-4% growth in 2009, down from 7% in 2007. According to the research by the Overseas Development Institute, reductions in growth can be attributed to falls in trade, commodity prices, investment and remittances sent from migrant workers (which reached a record $251 billion in 2007, but have fallen in many countries since). This has stark implications and has led to a dramatic rise in the number of households living below the poverty line, be it 300,000 in Bangladesh or 230,000 in Ghana.

The World Bank reported in February 2009 that the Arab World was far less severely affected by the credit crunch. With generally good balance of payments positions coming into the crisis or with alternative sources of financing for their large current account deficits, such as remittances, Foreign Direct Investment (FDI) or foreign aid, Arab countries were able to avoid going to the market in the latter part of 2008. This group is in the best position to absorb the economic shocks. They entered the crisis in exceptionally strong positions. This gives them a significant cushion against the global downturn. The greatest impact of the global economic crisis will come in the form of lower oil prices, which remains the single most important determinant of economic performance. Steadily declining oil prices would force them to draw down reserves and cut down on investments. Significantly lower oil prices could cause a reversal of economic performance as has been the case in past oil shocks. Initial impact will be seen on public finances and employment for foreign workers.

U.S. economic effects

Real gross domestic product

The output of goods and services produced by labor and property located in the United States—decreased at an annual rate of approximately 6% in the fourth quarter of 2008 and first quarter of 2009, versus activity in the year-ago periods. The U.S. unemployment rate increased to 10.1% by October 2009, the highest rate since 1983 and roughly twice the pre-crisis rate. The average hours per work week declined to 33, the lowest level since the government began collecting the data in 1964.

Distribution of wealth

The very rich lost relatively less in the crisis than the remainder of the population, widening the wealth gap between the economic class at the very top of the demographic pyramid and everyone else beneath them. Thus the top 1% who owned 34.6% of the nation's wealth in 2007 increased their proportional share to 37.1% by 2009.

Typical American families did not fare as well, nor did those "wealthy-but-not wealthiest" families just beneath the pyramid's top. On the other hand, half of the poorest families did not have wealth declines at all during the crisis. The Federal Reserve surveyed 4,000 households between 2007 and 2009, and found that the total wealth of 63 percent of all Americans declined in that period. 77 percent of the richest families had a decrease in total wealth, while only 50 percent of those on the bottom of the pyramid suffered a decrease.

Official economic projections

On November 3, 2008, the European Commission at Brussels predicted for 2009 an extremely weak growth of GDP, by 0.1%, for the countries of the Eurozone (France, Germany, Italy, Belgium etc.) and even negative number for the UK (-1.0%), Ireland and Spain. On November 6, the IMF at Washington, D.C., launched numbers predicting a worldwide recession by -0.3% for 2009, averaged over the developed economies. On the same day, the Bank of England and the European Central Bank, respectively, reduced their interest rates from 4.5% down to 3%, and from 3.75% down to 3.25%. As a consequence, starting from November 2008, several countries launched large "help packages" for their economies.

The U.S. Federal Reserve Open Market Committee release in June 2009 stated: Economic projections from the Federal Reserve and Reserve Bank Presidents include a return to typical growth levels (GDP) of 2-3% in 2010; an unemployment plateau in 2009 and 2010 around 10% with moderation in 2011; and inflation that remains at typical levels around 1-2%.}}

Government responses

Emergency and short-term responses

The U.S. Federal Reserve and central banks around the world have taken steps to expand money supplies to avoid the risk of a deflationary spiral, in which lower wages and higher unemployment lead to a self-reinforcing decline in global consumption. In addition, governments have enacted large fiscal stimulus packages, by borrowing and spending to offset the reduction in private sector demand caused by the crisis. The U.S. executed two stimulus packages, totaling nearly $1 trillion during 2008 and 2009.

This credit freeze brought the global financial system to the brink of collapse. The response of the U.S. Federal Reserve, the European Central Bank, and other central banks was immediate and dramatic. During the last quarter of 2008, these central banks purchased US$2.5 trillion of government debt and troubled private assets from banks. This was the largest liquidity injection into the credit market, and the largest monetary policy action, in world history. The governments of European nations and the USA also raised the capital of their national banking systems by $1.5 trillion, by purchasing newly issued preferred stock in their major banks. In October 2010, Nobel laureate Joseph Stiglitz explained how the U.S. Federal Reserve was implementing another monetary policy —creating currency— as a method to combat the liquidity trap. By creating $600,000,000,000 and inserting this directly into banks the Federal Reserve intended to spur banks to finance more domestic loans and refinance mortgages. However, banks instead were spending the money in more profitable areas by investing internationally in emerging markets. Banks were also investing in foreign currencies which Stiglitz and others point out may lead to currency wars while China redirects its currency holdings away from the United States.

Governments have also bailed out a variety of firms as discussed above, incurring large financial obligations. To date, various U.S. government agencies have committed or spent trillions of dollars in loans, asset purchases, guarantees, and direct spending. For a summary of U.S. government financial commitments and investments related to the crisis, see CNN - Bailout Scorecard. Significant controversy has accompanied the bailout, leading to the development of a variety of "decision making frameworks", to help balance competing policy interests during times of financial crisis.

Regulatory proposals and long-term responses

United States President Barack Obama and key advisers introduced a series of regulatory proposals in June 2009. The proposals address consumer protection, executive pay, bank financial cushions or capital requirements, expanded regulation of the shadow banking system and derivatives, and enhanced authority for the Federal Reserve to safely wind-down systemically important institutions, among others. In January 2010, Obama proposed additional regulations limiting the ability of banks to engage in proprietary trading. The proposals were dubbed "The Volcker Rule", in recognition of Paul Volcker, who has publicly argued for the proposed changes.

The U.S. Senate passed a regulatory reform bill in May 2010, following the House which passed a bill in December 2009. These bills must now be reconciled. The ''New York Times'' provided a comparative summary of the features of the two bills, which address to varying extent the principles enumerated by the Obama administration. For instance, the Volcker Rule against proprietary trading is not part of the legislation, though in the Senate bill regulators have the discretion but not the obligation to prohibit these trades.

A variety of other regulatory changes have been proposed by economists, politicians, journalists, and business leaders to minimize the impact of the current crisis and prevent recurrence. None of the proposed solutions have yet been implemented. These include:

Ben Bernanke: Establish resolution procedures for closing troubled financial institutions in the shadow banking system, such as investment banks and hedge funds.

Nassim Nicholas Taleb: "Black Swan Robustness" i.e. Robustness against High Impact Rare Events ("Fat Tails").

Joseph Stiglitz: Restrict the leverage that financial institutions can assume. Require executive compensation to be more related to long-term performance. Re-instate the separation of commercial (depository) and investment banking established by the Glass–Steagall Act in 1933 and repealed in 1999 by the Gramm-Leach-Bliley Act. Simon Johnson: Break-up institutions that are "too big to fail" to limit systemic risk. Paul Krugman: Regulate institutions that "act like banks" similarly to banks. Alan Greenspan: Banks should have a stronger capital cushion, with graduated regulatory capital requirements (i.e., capital ratios that increase with bank size), to "discourage them from becoming too big and to offset their competitive advantage." Warren Buffett: Require minimum down payments for home mortgages of at least 10% and income verification. Eric Dinallo: Ensure any financial institution has the necessary capital to support its financial commitments. Regulate credit derivatives and ensure they are traded on well-capitalized exchanges to limit counterparty risk. Raghuram Rajan: Require financial institutions to maintain sufficient "contingent capital" (i.e., pay insurance premiums to the government during boom periods, in exchange for payments during a downturn.). HM Treasury: Contingent capital or capital insurance held by the private sector could supplement common equity in times of crisis. There are a variety of proposals (e.g. Raviv 2004, Flannery 2009) under which banks would issue fixed income debt that would convert into capital according to a predetermined mechanism, either bank-specific (related to levels of regulatory capital) or a more general measure of crisis. Alternatively, under capital insurance, an insurer would receive a premium for agreeing to provide an amount of capital to the bank in case of systemic crisis. Following Raviv (2004) proposal, on November 3 Lloyds Banking Group (LBG), Britain’s biggest retail bank, said it would convert existing debt into about £7.5 billion ($12.3 billion) of "contingent core Tier-1 capital" (dubbed CoCos). This is a kind of debt that will automatically convert into shares if the bank’s cushion of equity capital falls below 5%. A. Michael Spence and Gordon Brown: Establish an early-warning system to help detect systemic risk. Niall Ferguson and Jeffrey Sachs: Impose haircuts on bondholders and counterparties prior to using taxpayer money in bailouts. In other words, bondholders with a claim of $100 would have their claim reduced to $80, creating $20 in equity. This is also called a debt for equity swap. This is frequently done in bankruptcies, where the current shareholders are wiped out and the bondholders become the new stockholders, agreeing to reduce the company's debt burden in the process. This is being done with General Motors, for example. Nouriel Roubini: Nationalize insolvent banks. Reduce mortgage balances to assist homeowners, giving the lender a share in any future home appreciation. Adair Turner: In August 2009 in a roundtable interview in ''Prospect'' Adair Turner supported the idea of new global taxes on financial transactions, warning that a "swollen" financial sector paying excessive salaries has grown too big for society. Lord Turner’s suggestion that a "Tobin tax" – named after the economist James Tobin – should be considered for financial transactions reverberated around the world. Let Wall Street Pay for the Restoration of Main Street Bill - in the US only (not international) - Proposed legislation introduced December 3, 2009 - Contained in the US House of Representatives bill entitled ''"H.R. 4191: Let Wall Street Pay for the Restoration of Main Street Act of 2009"'' It is a proposed piece of legislation that was introduced into the United States House of Representatives to assess a minuscule tax on US Financial market ("Wall Street") securities transactions. If passed, the money it generates will be used to rebuild "Main Street." On the day it was introduced, it had the support of 22 representatives. Volcker Rule - (in US) - Endorsed by President Barack Obama on January 21, 2010. At its heart, it is a proposal by US economist Paul Volcker to restrict banks from making speculative investments that do not benefit their customers. It was proposed in January 2010. On April 16, 2010, the IMF proposed two types of global taxes on banks: The "Financial Activities Tax" comes in two varieties. The simple version is a straight tax on a bank's gross profits—before deducting compensation. A "financial stability contribution", would initially be at a flat rate, this would eventually be refined so that riskier businesses paid more. The second, more complex tax aims directly at excess bank profit and pay. (See also Bank tax) Maximum wage is an idea which has been enacted in early 2009 in the United States, where they capped executive pay at $500,000 per year for companies ''receiving extraordinary financial assistance from the US Taxpayers''.

Don Tapscott writes about the need for transparency in the banking industry using a different kind of financial innovation in his book Macrowikinomics, drawing on the power of the crowd to value financial securities.

United States Congress response

On December 11, 2009 - House cleared bill H.R.4173 - Wall Street Reform and Consumer Protection Act of 2009 On April 15, 2010 - Senate introduced bill S.3217 - Restoring American Financial Stability Act of 2010 On July 21, 2010. - the Dodd-Frank Wall Street Reform and Consumer Protection Act was enacted.

Stabilization

The recession that began in December 2007 ended in June 2009, according to the U.S. National Bureau of Economic Research (NBER) and the financial crisis appears to have ended about the same time. In April 2009 TIME Magazine declared "More Quickly Than It Began, The Banking Crisis Is Over." The United States Financial Crisis Inquiry Commission dates the crisis to 2008. President Barack Obama declared on January 27, 2010, "the markets are now stabilized, and we've recovered most of the money we spent on the banks."

The New York Times identifies March, 2009 as the "nadir of the crisis" and notes that "Most stock markets around the world are at least 75 percent higher than they were then. Financial stocks, which led the markets down, have also led them up." Nevertheless, the lack of fundamental changes in banking and financial markets, worries many market participants, including the International Monetary Fund.

Media coverage

The financial crises have generated many articles and books outside of the scholarly and financial press, including articles and books by author William Greider, economist Michael Hudson, author and former bond salesman Michael Lewis, Kevin Phillips, and investment broker Peter Schiff.

In May 2010 premiered ''Overdose: A Film about the Next Financial Crisis'', a documentary about how the financial crisis came about and how the solutions that have been applied by many governments are setting the stage for the next crisis. The film is based on the book ''Financial Fiasco'' by Johan Norberg and features Alan Greenspan, with funding from the libertarian think tank The Cato Institute. Greenspan is responsible for de-regulating the derivatives market while chairman of the Federal Reserve.

In October 2010, a documentary film about the crisis, ''Inside Job'' directed by Charles Ferguson, was released by Sony Pictures Classics.

See also

1929 stock market crash

2009 G-20 London summit protests

2008 Greek riots

2009 Icelandic financial crisis protests

2008–2011 Irish financial crisis

2009 May Day protests

2009 Moldova civil unrest

2009 Riga riot

2008–2011 bank failures in the United States

Causes of the financial crisis of 2007-2010

Crisis (Marxian)

Dot-com bubble

Financial Crisis Responsibility Fee

Europeans for Financial Reform

Keynesian resurgence of 2008

List of acquired or bankrupt banks in the late 2000s financial crisis

List of acquired or bankrupt United States banks in the late 2000s financial crisis

List of economic crises

List of entities involved in 2007–2008 financial crises

List of largest U.S. bank failures

Low-Income Countries Under Stress (LICUS) (World Bank program)

Mark-to-market accounting

Private equity in the 2000s

Subprime crisis impact timeline

Foreclosure crisis

Late-2000s recession

References

The initial articles and some subsequent material were adapted from the Wikinfo article Financial crisis of 2007-2008 released under the GNU Free Documentation License Version 1.2

External links and further reading

US Financial Crisis Inquiry Commission

US Senate - Anatomy of a financial collapse- an Investigations Subcommittee report on the mortgage market, 5.5MB

Times of Crisis – Reuters: Multimedia interactive charting the year of global change

PBS Frontline – Inside the Meltdown

Credit Crisis—The Essentials topic page from The New York Times

How nations around the world are responding to the global financial crisis from PBS

In depth: Global financial crisis from the Financial Times

Timeline: Global credit crunch Published in BBC News on October 6, 2008.

Financial Crisis-IMF

Financial Crisis-World Bank Group

Global Financial Crisis-Asian Development Bank

"What Caused the Crisis": A collection of papers at the Federal Reserve Bank of St. Louis,

Category:2000s economic history Category:2010s economic history Category:2007 in economics Category:2008 in economics Category:2009 in economics Category:2010 in economics Category:Economic bubbles Category:Economy of the United States Category:Financial crises * Category:Stock market crashes

ar:الأزمة المالية العالمية 2008 bg:Световна финансова криза от 2008 година cs:Světová finanční krize 2008 da:Finanskrisen 2007-2008 de:Finanzkrise ab 2007 el:Διεθνής χρηματοπιστωτική κρίση 2007-2008 es:Crisis financiera de 2008 fa:بحران مالی ‎۲۰۰۷-۲۰۰۸ fr:Crise financière de 2007-2008 ko:2007~2010년 금융 위기 hr:Svjetska financijska kriza od 2007. godine id:Krisis finansial 2007–2010 it:Crisi economica del 2008-2010 lv:2008./2009. gada globālā finanšu krīze lb:Finanzkris 2007/2008 mk:Финансиска криза 2007-2010 година arz:الازمه الماليه 2007-2010 nl:Kredietcrisis ja:世界金融危機 (2007年-) no:Finanskrisen 2007–2008 pl:Kryzys finansowy od 2007 pt:Crise econômica de 2008-2009 ksh:Zsammebroch van dr Finanzmaat em Joohr 2007 un 2008 ro:Criza economică mondială din 2007–2009 ru:Финансовый кризис 2007–2008 годов fi:Finanssikriisi (2007–2009) sv:Finanskrisen 2008–2009 vi:Khủng hoảng tài chính 2007-2010 zh:2007年－2010年環球金融危機

Name	Niall Ferguson
Birth date	April 18, 1964
Birth place	Glasgow, Scotland
Nationality	British
Fields	Financial and economic history
Workplaces	Harvard University Harvard Business SchoolLondon School of Economics
Alma mater	Magdalen College, Oxford
Known for	Counterfactual historyEconomic historyHistory of empire and imperialism
Influences	A J P Taylor, Kenneth Clark, Adam Smith, Karl Marx, John Maynard Keynes
Religion	Atheist
Signature
Footnotes	}}

Niall Campbell Douglas Ferguson (born April 18, 1964) is a British historian who specialises in financial and economic history, particularly hyperinflation and the bond markets, as well as the history of colonialism.

Ferguson, who was born in Glasgow, is the Laurence A. Tisch Professor of History at Harvard University as well as William Ziegler Professor of Business Administration at Harvard Business School, and also currently the Philippe Roman Chair in History and International Affairs at the London School of Economics. He was educated at the private Glasgow Academy in Scotland, and at Magdalen College, Oxford. During the 2008 U.S. presidential election, Ferguson advised Senator John McCain's campaign.

In the UK, Ferguson is probably best known as the author of ''Empire: How Britain Made the Modern World''. In 2008, Ferguson published ''The Ascent of Money: A Financial History of the World'', which he also presented as a Channel 4 television series. Both at Harvard College and at LSE, Ferguson teaches a course entitled "Western Ascendancy: The Mainsprings of Global Power from 1600 to the Present."

Early life

Ferguson was born the son of a doctor father and a physics teacher mother in Glasgow on April 18th 1964, and lived for a time near Ibrox Park. He attended The Glasgow Academy.

Ferguson cites his father as instilling in him a strong sense of self-discipline and of the moral value of work, whilst his mother encouraged his creative side. His journalist maternal grandfather encouraged him to write. Unable to decide on studying an English or a History degree at university, Ferguson cites his reading of War and Peace as persuading him towards History. Of late 1970s Glasgow, Ferguson describes "the main industries" of the city as "sectarianism and strike action".

University of Oxford

Ferguson received a Demyship (half-scholarship) at Magdalen College, Oxford, graduating with a first-class honours degree in History in 1985. He became a Thatcherite by 1982, identifying the position with "the Sex Pistols' position in 1977: it was a rebellion against the stuffy corporatism of the 70s." Whilst at university "He was very much a Scot on the make...Niall was a witty, belligerent bloke who seemed to have come from an entirely different planet." according to Simon Winder. Ferguson has stated that "I was surrounded by insufferable Etonians with fake Cockney accents who imagined themselves to be working-class heroes in solidarity with the striking miners. It wasn't long before it became clear that the really funny and interesting people on campus were Thatcherites."

Rachel Johnson has said of Ferguson at the time: :''He was attractive. He was clever. And I still remember him making me sob with laughter by describing how a man feels if he succeeds in bringing a woman to orgasm (like Jesse Owens at the Olympic stadium in Berlin, he said, raising his arms aloft).''

Johnson commisioned Ferguson to write an essay for a collection: :''Ferguson's piece was one of the first to come in. I can't remember much about it, but it wasn't quite the ticket. I remember sending him a photocopied letter that I was sending to all the contributors, with suggestions, pertaining to his essay, at the bottom. I found his reply in my pigeonhole, a few days later. "Dear Rachel Johnson," it read. "F--- off. Yours, Niall Ferguson." I assumed that he wanted nothing to do with the book again, so I re-commissioned the piece.''

Regarding slights and criticism, Ferguson has stated: "Nobody should ever imagine that they can do that kind of thing to me with impunity. Life is long, and revenge is a dish that tastes best cold. I'm very unforgiving."

Ferguson thus went on to attack Johnson's collection of essays (minus his own contribution) in a newspaper review.

At Oxford, Ferguson improved his German by reading Nietzsche whilst drinking Guinness in the pub with Norman Stone.

Career

Academic career

1983-1986 B.A History Magdalen College, Oxford.

1987–88 Hanseatic Scholar, Hamburg and Berlin

1989–90 Research Fellow, Christ’s College, University of Cambridge

1990–92 Official Fellow and Lecturer, Peterhouse, University of Cambridge

1992–2000 Fellow and Tutor in Modern History, Jesus College, University of Oxford

2000–02 Professor of Political and Financial History, University of Oxford

2002–04 John Herzog Professor in Financial History at Stern School of Business, New York University

2004, continuing. Laurence A. Tisch Professor of History, Harvard University and William Ziegler Professor of Business Administration at the Harvard Business School.

2010, continuing. Philippe Roman Chair in History and International Affairs at the London School of Economics, located within LSE IDEAS, beginning in 2010.

Ferguson is a Senior Research Fellow of Jesus College, Oxford University and a Senior Fellow of the Hoover Institution, Stanford University. He is a resident faculty member of the Minda de Gunzburg Center for European Studies, and an advisory fellow of the Barsanti Military History Center at the University of North Texas.

In May 2010 he announced that Education Secretary Michael Gove in the U.K's newly elected Conservative/Lib Dem government had invited him to advise on the development of a new history syllabus—"history as a connected narrative"— for schools in England and Wales. In June 2011 it was announced that he would join the professoriate of New College of the Humanities, a private college in London.

Business career

In 2007, Ferguson was appointed as an Investment Management Consultant by GLG Partners, focusing on geopolitical risk as well as current structural issues in economic behaviour relating to investment decisions. GLG is a UK-based hedge fund management firm headed by Noam Gottesman.

Career as commentator

In October 2007, Niall Ferguson left ''The Sunday Telegraph'' to join the ''Financial Times'', where he is now a contributing editor. He also writes for ''Newsweek''.

Ferguson has often described the European Union as a disaster waiting to happen, and has criticised President Vladimir Putin of Russia for authoritarianism. In Ferguson's view, certain of Putin's policies, if they continue, may stand to lead Russia to catastrophes equivalent to those that befell Germany during the Nazi era.

Subject matter

World War I

In 1998 Ferguson published the critically acclaimed ''The Pity of War: Explaining World War One'', which with the help of research assistants he was able to write in just five months. This is an analytic account of what Ferguson considered to be the ten great myths of the Great War. The book generated much controversy, particularly Ferguson's suggestion that it might have proved more beneficial for Europe if Britain had stayed out of the First World War in 1914, thereby allowing Germany to win. Ferguson has argued that the British decision to intervene was what stopped a German victory in 1914–15. Furthermore, Ferguson expressed disagreement with the ''Sonderweg'' interpretation of German history championed by some German historians such as Fritz Fischer, Hans-Ulrich Wehler, Hans Mommsen and Wolfgang Mommsen, who argued that the German Empire deliberately started an aggressive war in 1914 and that the Second Reich was little more than a dress rehearsal for the Third Reich. Likewise, Ferguson has often attacked the work of the German historian Michael Stürmer, who argued that it was Germany's geographical situation in Central Europe that determined the course of German history.

On the contrary, Ferguson maintained that Germany waged a preventive war in 1914, a war largely forced on the Germans by reckless and irresponsible British diplomacy. In particular, Ferguson accused the British Foreign Secretary Sir Edward Grey of maintaining an ambiguous attitude to the question of whether Britain would enter the war or not, and thus confusing Berlin over just what was the British attitude towards the question of intervention in the war. Ferguson accused London of unnecessarily allowing a regional war in Europe to escalate into a world war. Moreover, Ferguson denied that the origins of National Socialism could be traced back to Imperial Germany; instead Ferguson asserted the origins of Nazism could only be traced back to the First World War and its aftermath.

The “myths” of World War I that Ferguson attacked, with his counter-arguments in parentheticals, are: That Germany was a highly militarist country before 1914 (Ferguson claims Germany was Europe’s most anti-militarist country) That naval challenges mounted by Germany drove Britain into informal alliances with France and Russia before 1914 (Ferguson claims the British were driven into alliances with France and Russia as a form of appeasement due to the strength of those nations, and an Anglo-German alliance failed to materialize due to German weakness) That British foreign policy was driven by legitimate fears of Germany (Ferguson claims Germany posed no threat to Britain before 1914, and that all British fears of Germany were due to irrational anti-German prejudices) That the pre-1914 arms race was consuming ever larger portions of national budgets at an unsustainable rate (Ferguson claims that the only limitations on more military spending before 1914 were political, not economic) That World War I was, as Fritz Fischer claimed, a war of aggression on part of Germany that necessitated British involvement to stop Germany from conquering Europe (Ferguson claims that if Germany had been victorious, something like the European Union would have been created in 1914, and that it would have been for the best if Britain had chosen to opt out of war in 1914) That most people were happy with the outbreak of war in 1914 (Ferguson claims that most Europeans were saddened by the coming of war) That propaganda was successful in making men wish to fight (Ferguson argues the opposite) That the Allies made the best use of their economic resources (Ferguson argues that the Allies “squandered” their economic resources) That the British and the French had the better armies (Ferguson claims the German Army was superior) That the Allies were more efficient at killing Germans (Ferguson argues that the Germans were more efficient at killing the Allies) That most soldiers hated fighting in the war (Ferguson argues most soldiers fought more or less willingly) That the British treated German prisoners of war well (Ferguson argues the British routinely killed German POWS) That Germany was faced with reparations after 1921 that could not be paid except at ruinous economic cost (Ferguson argues that Germany could easily have paid reparations had there been the political will)

Another controversial aspect of the ''Pity of War'' was Ferguson's use of counterfactual history. Ferguson presented a counter-factual version of Europe under Imperial German domination that was peaceful, prosperous, democratic and without ideologies like Communism and fascism. In Ferguson's view, had Germany won World War I, then the lives of millions would have been saved, something like the European Union would have been founded in 1914, and Britain would have remained an empire and the world's dominant financial power. ''The House of Rothschild: Volume 2: The World's Banker: 1849–1999'' The books won the Wadsworth Prize for Business History and were also short-listed for the Jewish Quarterly-Wingate Literary Award and the American National Jewish Book Award.

Counterfactual history

Ferguson is an academic champion of counterfactual history, and edited a collection of essays exploring the subject titled ''Virtual History: Alternatives and Counterfactuals'' (1997). Ferguson likes to imagine alternative outcomes as a way of stressing the contingent aspects of history. For Ferguson, great forces don't make history; individuals do and nothing is predetermined. Thus, for Ferguson there are no paths in history that will determine how things will work out. The world is neither progressing nor regressing; only the actions of individuals will determine whether we live in a better or worse world. His championing of the method has been controversial within the field.

In a recent review of Ferguson's book Civilisation, Noel Malcolm who is Senior Research Fellow in History at All Souls College, Oxford University stated that: "Students may find this an intriguing introduction to a wide range of human history; but they will get an odd idea of how historical argument is to be conducted, if they learn it from this book."

Henry Kissinger

In 2003, former United States Secretary of State Henry Kissinger provided Ferguson with access to his White House diaries, letters, and archives for what Ferguson calls a "warts-and-all biography" of Kissinger.

Colonialism

Ferguson is critical of what he calls the "self-flagellation" that he says characterizes modern European thought.

"The moral simplification urge is an extraordinarily powerful one, especially in this country, where imperial guilt can lead to self-flagellation," he told a reporter. "And it leads to very simplistic judgments. The rulers of western Africa prior to the European empires were not running some kind of scout camp. They were engaged in the slave trade. They showed zero sign of developing the country's economic resources. Did Senegal ultimately benefit from French rule? Yes, it's clear. And the counterfactual idea that somehow the indigenous rulers would have been more successful in economic development doesn't have any credibility at all."

Richard Drayton, Professor of Colonial History at the University of London, has stated that it is correct to associate "Ferguson with an attempt to "rehabilitate empire" in the service of contemporary great power interests."

Islam and Eurabia

Matthew Carr wrote in ''Race & Class'' that "Niall Ferguson, the conservative English historian and enthusiastic advocate of a new American empire, has also embraced the Eurabian idea in a widely reproduced article entitled ‘Eurabia?’, in which he laments the ‘de-Christianization of Europe’ and its culture of secularism that leaves the continent ‘weak in the face of fanaticism’." Carr adds that "Ferguson sees the recent establishment of a department of Islamic studies in his Oxford college as another symptom of the ‘the creeping Islamicization of a decadent Christendom’" and that in a 2004 lecture at the American Enterprise Institute entitled ‘The end of Europe?’, "Ferguson struck a similarly Spenglerian note, conjuring the term ‘impire’ to depict a process in which a ‘political entity, instead of expanding outwards towards its periphery, exporting power, implodes – when the energies come from outside into that entity’. In Ferguson’s opinion, this process was already under way in a decadent ‘post-Christian’ Europe that was drifting inexorably towards the dark denouement of a vanquished civilisation and the fatal embrace of Islam."

Iraq war

Ferguson supported the Iraq war and isn't necessarily opposed to future incursions in the world.

"It's all very well for us to sit here in the west with our high incomes and cushy lives, and say it's immoral to violate the sovereignty of another state. But if the effect of that is to bring people in that country economic and political freedom, to raise their standard of living, to increase their life expectancy, then don't rule it out."

Economic policy

In its August 15, 2005 edition, ''The New Republic'' published "The New New Deal", an essay by Ferguson and Laurence J. Kotlikoff, a Professor of Economics at Boston University. The two scholars called for the following changes to the American government's fiscal and income security policies:

Replacing the personal income tax, corporate income tax, Federal Insurance Contributions Act tax (FICA), estate tax, and gift tax with a 33% Federal Retail Sales Tax (FRST), plus a monthly rebate, amounting to the FRST a household with similar demographics would pay if its income were at the poverty line. See also: FairTax;

Replacing the Old Age benefits paid under Social Security with a Personal Security System, consisting of private retirement accounts for all citizens, plus a government benefit payable to those whose savings were insufficient to afford a minimum retirement income;

Replacing Medicare and Medicaid with a Medical Security System that would provide health insurance vouchers to all citizens, the value of which would be determined by one's health;

Cutting federal discretionary spending by 20%.

A recent ''New Republic'' piece with Harvard's Samuel J. Abrams explored attitudes towards immigration in Europe and the United States.

Criticisms

As scholar

Fellow academics have questioned Ferguson's commitment to scholarship. Benjamin Wallace-Wells, an editor of ''The Washington Monthly'', comments that

"''The House of Rothschild'' remains Ferguson's only major work to have received prizes and wide acclaim from other historians. Research restrains sweeping, absolute claims: Rothschild is the last book Ferguson wrote for which he did original archival work, and his detailed knowledge of his subject meant that his arguments for it couldn't be too grand."

John Lewis Gaddis, a renowned Cold War era historian, characterized Ferguson as having unrivaled "range, productivity and visibility" at the same time as criticising his work as being "unpersuasive". Gaddis goes on to state that "several of Ferguson's claims, moreover, are contradictory".

Marxist historian Eric Hobsbawm has praised Ferguson as an excellent historian. However, he has also criticised Ferguson, saying, on the BBC Radio programme "Start the Week", that he was a "nostalgist for empire". Ferguson responded to the above criticisms in a Washington Post "Live Discussions" online forum in 2006.

Exchange with Krugman

In May 2009, Ferguson became involved in a high-profile exchange of views with economist Paul Krugman (then the most recent Economics Nobel Prize winner) arising out of a panel discussion hosted by Pen/New York Review on April 30, 2009, regarding the U.S. economy. Ferguson contended that the Obama administration's policies are simultaneously Keynesian and monetarist, in an incoherent mix, and specifically that the government's issuance of a multitude of new bonds will cause an increase in interest rates. Krugman then extended the criticism to China and the European Union, as both pursued policies more in accord with Ferguson's stance than Krugman's.

Krugman has argued that Ferguson's view is "resurrecting 75-year old fallacies" and full of "basic errors". He has also stated that Ferguson is a "poseur" who "...hasn't bothered to understand the basics, relying on snide comments and surface cleverness to convey the impression of wisdom. It's all style, no comprehension of substance." J. Bradford DeLong of Berkeley agreed with Krugman, concluding "Niall Ferguson does indeed know a lot less than economists knew in the 1920s".

Ferguson criticized Krugman in his December 7, 2009 Newsweek cover story, "An Empire at Risk", claiming that Krugman's partisanship caused him to change his position between 2003 and 2004. Ferguson wrote:

Now, who said the following? 'My prediction is that politicians will eventually be tempted to resolve the [fiscal] crisis the way irresponsible governments usually do: by printing money, both to pay current bills and to inflate away debt. And as that temptation becomes obvious, interest rates will soar.' Seems pretty reasonable to me. The surprising thing is that this was none other than Paul Krugman, the high priest of Keynesianism, writing back in March 2003. A year and a half later he was comparing the U.S. deficit with Argentina's (at a time when it was 4.5 percent of GDP). Has the economic situation really changed so drastically that now the same Krugman believes it was 'deficits that saved us,' and wants to see an even larger deficit next year? Perhaps. But it might just be that the party in power has changed.

Personal life

He married journalist Susan Douglas, whom he met in 1987 when she was his editor at the ''Daily Mail''. They have three children. They separated in 2010 and began divorce proceedings in 2011.

His younger sister is a professor at the University of Pennsylvania.

Ferguson was the inspiration for Alan Bennett's play ''The History Boys'', particularly the character of Irwin, a history teacher who urges his pupils to find a counterintuitive angle, and goes on to become a television historian.

Ferguson rises at 6am every day.

Ferguson's self confessed workaholism has placed strains on his personal relations in the past. Ferguson has commented that: :''from 2002, the combination of making TV programmes and teaching at Harvard took me away from my children too much. You don't get those years back. You have to ask yourself: "Was it a smart decision to do those things?" I think the success I have enjoyed since then has been bought at a significant price. In hindsight, there would have been a bunch of things that I would have said no to.''

Relationship with Ayaan Hirsi Ali

In February 2010 the ''Daily Mail'' reported that, following a series of affairs, Ferguson had left his wife for former Dutch MP and feminist critic of Islam Ayaan Hirsi Ali. A similar story in ''The Independent'' was followed by the publication of a correction, noting that Ferguson's marriage had broken down before he met Ali. As of June 2011, Ali is reportedly five months pregnant with Ferguson's child. Ferguson dedicated his book ''Civilization'' to "Ayaan". In an interview with ''The Guardian'', Ferguson spoke about his love for Ali, who, he writes in the preface, "understands better than anyone I know what Western civilisation really means – and what it still has to offer the world".

Ali, he continued,

"grew up in the Muslim world, was born in Somalia, spent time in Saudi Arabia, was a fundamentalist as a teenager. Her journey from the world of her childhood and family to where she is today is an odyssey that's extremely hard for you or I to imagine. To see and hear how she understands western philosophy, how she understands the great thinkers of the Enlightenment, of the 19th-century liberal era, is a great privilege, because she sees it with a clarity and freshness of perspective that's really hard for us to match. So much of liberalism in its classical sense is taken for granted in the west today and even disrespected. We take freedom for granted, and because of this we don't understand how incredibly vulnerable it is."

See also

Anglosphere

Chimerica

Bibliography

''The Cash Nexus''

In his 2001 book, ''The Cash Nexus'', which he wrote following a year as Houblon-Norman Fellow at the Bank of England, Ferguson argues that the popular saying, "money makes the world go 'round", is wrong; instead he presented a case for human actions in history motivated by far more than just economic concerns.

''Colossus'' and ''Empire''

In his books ''Colossus'' and ''Empire'', Ferguson presents a nuanced and partially apologetic view of the British Empire and in conclusion proposes that the modern policies of the United Kingdom and the United States, in taking a more active role in resolving conflict arising from the failure of states, are analogous to the 'Anglicization' policies adopted by the British Empire throughout the 19th century. In ''Colossus'', Ferguson explores the United States' hegemony in foreign affairs and its future role in the world.

''War of the World''

The ''War of the World'', published in 2006, had been ten years in the making and is a comprehensive analysis of the savagery of the 20th century. Ferguson shows how a combination of economic volatility, decaying empires, psychopathic dictators, and racially/ethnically motivated (and institutionalized) violence resulted in the wars and the genocides of what he calls "History's Age of Hatred". The New York Times Book Review named ''War of the World'' one of the 100 Notable Books of the Year in 2006, while the ''International Herald Tribune'' called it "one of the most intriguing attempts by an historian to explain man's inhumanity to man". Ferguson addresses the paradox that, though the 20th century was "so bloody", it was also "a time of unparalleled [economic] progress". As with his earlier work ''Empire'', ''War of the World'' was accompanied by a Channel 4 television series presented by Ferguson.

''The Ascent of Money''

Published in 2008, ''The Ascent of Money'' examines the long history of money, credit, and banking. In it he predicts a financial crisis as a result of the world economy and in particular the United States using too much credit. Specifically he cites the China–America dynamic which he refers to as Chimerica where an Asian "savings glut" helped create the subprime mortgage crisis with an influx of easy money.

''Civilization''

Published in 2011, ''Civilization: The West and the Rest'' examines what Ferguson calls the most "interesting question" of our day: "Why, beginning around 1500, did a few small polities on the western end of the Eurasian landmass come to dominate the rest of the world?" He attributes this divergence to the West's development of six "killer apps" largely missing elsewhere in the world - "competition, science, democracy, medicine, consumerism and the work ethic". A related documentary ''Civilization: Is the West History?'' was broadcast as a six part series on Channel 4 in March and April of 2011.

Publications

(also a Channel 4 series)

As Contributor

“Europa nervosa”, in Nader Mousavizadeh (ed.), The Black Book of Bosnia (New Republic/Basic Books, 1996), pp. 127–32

“The German inter-war economy: Political choice versus economic determinism” in Mary Fulbrook (ed.), German History since 1800(Arnold, 1997), pp. 258–278

“The balance of payments question: Versailles and after” in Manfred F. Boemeke, Gerald D. Feldman and Elisabeth Glaser (eds.), The Treaty of Versailles: A Reassessment after 75 Years (Cambridge University Press, 1998), pp. 401–440

“‘The Caucasian Royal Family’: The Rothschilds in national contexts” in R. Liedtke (ed.), ‘Two Nations’: The Historical Experience of British and German Jews in Comparison (J.C.B. Mohr, 1999)

“Academics and the Press”, in Stephen Glover (ed.), Secrets of the Press: Journalists on Journalism (Penguin, 1999), pp. 206–220

“Metternich and the Rothschilds: A reappraisal” in Andrea Hamel and Edward Timms (eds.), Progress and Emancipation in the Age of Metternich: Jews and Modernisation in Austria and Germany, 1815–1848 (Edwin Mellen Press, 1999), pp. 295–325

“The European economy, 1815–1914” in T.C.W. Blanning (ed.), The Short Oxford History of Europe: The Nineteenth Century (Oxford University Press, 2000), pp. 78–125

“How (not) to pay for the war: Traditional finance and total war” in Roger Chickering and Stig Förster (eds.), Great War, Total War: Combat and Mobilization on the Western Front (Cambridge University Press, 2000), pp. 409–34

“Introduction” in Frederic Manning , Middle Parts of Fortune (Penguin, 2000), pp. vii-xviii

“Clashing civilizations or mad mullahs: The United States between informal and formal empire” in Strobe Talbott (ed.), The Age of Terror (Basic Books, 2001), pp. 113–41

“Public debt as a post-war problem: The German experience after 1918 in comparative perspective” in Mark Roseman (ed.), Three Post-War Eras in Comparison: Western Europe 1918-1945-1989 (Palgrave-Macmillan, 2002), pp. 99–119

“Das Haus Sachsen-Coburg und die europäische Politik des 19. Jahrhunderts”, in Rainer von Hessen (ed.), Victoria Kaiserin Friedrich (1840–1901): Mission und Schicksal einer englischen Prinzessin in Deutschland (Campus Verlag, 2002), pp. 27–39

“Max Warburg and German politics: The limits of financial power in Wilhelmine Germany”, in Geoff Eley and James Retallack (eds.), Wilhelminism and Its Legacies: German Modernities, Imperialism and the Meaning of Reform, 1890-1930 (Berghahn Books, 2003), pp. 185–201

“Introduction”, The Death of the Past by J. H. Plumb (Palgrave Macmillan, 2003), pp. xxi-xlii

“Globalization in historical perspective: The political dimension”, in Michael D. Bordo, Alan M. Taylor and Jeffrey G. Williamson (eds.), Globalisation in Historical Perspective (National Bureau of Economic Research Conference Report) (University of Chicago Press, 2003)

“Introduction to Tzvetan Todorov” in Nicholas Owen (ed.), Human Rights, Human Wrongs: Oxford Amnesty Lectures (Amnesty International, 2003)

“The City of London and British imperialism: New light on an old question”, in Youssef Cassis and Eric Bussière (eds.), London and Paris as International Financial Centres in the Twentieth Century (Oxford University Press, 2004), pp. 57–77

“A bolt from the blue? The City of London and the outbreak of the First World War”, in Wm. Roger Louis (ed.), Yet More Adventures with Britainnia: Personalities, Politics and Culture in Britain (I.B. Tauris, 2005), pp. 133–145

“The first ‘Eurobonds’: The Rothschilds and the financing of the Holy Alliance, 1818–1822”, in William N. Goetzmann and K. Geert Rouwenhorst (eds.), The Origins of Value: The Financial Innovations that Created Modern Capital Markets (Oxford University Press, 2005), pp. 311–323

“Prisoner taking and prisoner killing in the age of total war”, in George Kassemiris (ed.), The Barbarization of Warfare (New York University Press, 2006), pp. 126–158

“The Second World War as an economic disaster”, in Michael Oliver (ed.), Economic Disasters of the Twentieth Century (Edward Elgar, 2007), pp. 83–132

“The Problem of Conjecture: American Strategy after the Bush Doctrine”, in Melvyn Leffler and Jeff Legro (eds.), To Lead the World: American Strategy After the Bush Doctrine (Oxford University Press, 2008)

Television documentaries

Empire (2003)

American Colossus (2004)

The War of the World (2006)

The Ascent of Money (2008)

Civilization: Is The West History? (2011)

References

Notes

General references

External links

niallferguson.org, Ferguson's official website

RSA Vision webcast - Niall Ferguson on "The Ascent of Money"

Audio: Niall Ferguson in conversation on the BBC World Service discussion programme ''The Forum''

Hans Koning's Review of 'The Pity of War' (from The Nation)

A Banker to the Rescue, Martin Rubin, The Wall Street Journal, 26 June 2010

"Yesterday's Banker" Liaquat Ahamed, ''The New York Times'', 30 July 2010

Historian vs. Futurist on Human Progress discussion with Stewart Brand and Peter Schwartz (futurist) at The Long Now Foundation, May 2008

On the Edge of Chaos discussion of his work at Centre for Independent Studies, July 2010

'The Sun Sets in the West', review of ''Civilization'' in the ''Oxonian Review''

An Interview with Niall Ferguson, ''Oxonian Review'', 9 April 2011

Category:1964 births Category:Living people Category:Alumni of Christ's College, Cambridge Category:Alumni of Magdalen College, Oxford Category:British foreign policy writers Category:Fellows of Jesus College, Oxford Category:Fellows of Peterhouse, Cambridge Category:Harvard Business School faculty Category:Harvard University faculty Category:New York University faculty Category:People from Glasgow Category:Scottish historians Category:World War I historians

de:Niall Ferguson es:Niall Ferguson fr:Niall Ferguson ko:니얼 퍼거슨 hr:Niall Ferguson it:Niall Ferguson he:ניל פרגוסון ja:ニーアル・ファーガソン no:Niall Ferguson pl:Niall Ferguson fi:Niall Ferguson

name	William Hopper
birth name	DeWolf Hopper, Jr.
birth date	January 26, 1915
birth place	New York City, New York, U.S.
death date	March 06, 1970
death place	Palm Springs, California, U.S.
occupation	Actor
yearsactive	1916; 1936–1966; 1970
spouse	Jane Gilbert (1940-1959) (divorced) 1 childJeanette J. Hopper (?-?) (his death) }}

William Hopper, born DeWolf Hopper, Jr. (January 26, 1915 – March 6, 1970) was an American actor. He is best-remembered for playing Paul Drake on television's ''Perry Mason''.

Early life

Hopper was born in New York City, the only child of singer comic actor DeWolf Hopper (1858–1935), a stage star, and actress and gossip columnist Hedda Hopper (1885–1966). He was named DeWolf Hopper, Jr.

His debut motion picture appearance was as a baby in his father's 1916 silent movie ''Sunshine Dad''. His mother divorced his father in 1924, and she moved with her son to Hollywood.

Military service

He enlisted in the Navy in 1942, served as a frogman, and won a Bronze Star for bravery and heroic action during operations in the Pacific.

He was discharged when the war ended in 1945, and worked as a car salesman in Hollywood for eight years.

Acting career

1930s–1940s

Hopper began his acting career as a teenager, working in summer stock in Ogunquit, Maine. He went from there to Broadway, where he appeared in two plays in 1934, ''Order Please'' and ''Romeo and Juliet''.

Early in his film career, Hopper appeared uncredited in numerous movies or under the name DeWolf Hopper. In 1936, he played the small role as a photographer in the Columbia Pictures film ''The King Steps Out'' starring Grace Moore and Franchot Tone. In 1937 he portrayed the leading man in two films, ''Public Wedding'' with Jane Wyman and ''Over the Goal''. He also enjoyed significant roles alongside Ann Sheridan in ''The Footloose Heiress'' (1937) and ''Mystery House'' (1938).

After that he had roles that included playing a sergeant in the Western ''Stagecoach'' (1939) starring Claire Trevor and John Wayne; a New York reporter in ''Knute Rockne, All American'' (1940) starring Pat O'Brien, Gale Page, Ronald Reagan, and Donald Crisp; a reporter in the post-Hollywood Production Code version of ''The Maltese Falcon'' (1941) starring Humphrey Bogart and Mary Astor; and a reporter in ''Yankee Doodle Dandy'' (1942) starring James Cagney and Walter Huston. Reagan and Hopper appeared in nine films together between 1937 and 1942.

1950s–1970s

In the mid 1950s, Hopper resumed his movie career with the part of Roy in ''The High and the Mighty'' (1954) starring John Wayne, Claire Trevor, Laraine Day, and Robert Stack. In 1956, Hopper starred in Wayne's production of ''Good-bye, My Lady''.

Other appearances included his iconic role as the father of Natalie Wood in the James Dean classic ''Rebel Without a Cause'' (1955), as Robert Mitchum's ill fated brother Arthur in the William Wellman adventure ''Track of the Cat'' (1954), and as the often absent father Col. Kenneth Penmark in ''The Bad Seed'' (1956) also starring Nancy Kelly and Patty McCormack. Hopper, along with Joan Taylor and a very young Bart Braverman, starred in the classic Ray Harryhausen science fiction film ''20 Million Miles to Earth'' (1957).

Also in 1957, he played a supporting role in the pilot episode of the television series ''The Restless Gun'', which was broadcast as an episode of ''Schlitz Playhouse of Stars''. His television guest appearances included the ''The Joseph Cotten Show'', ''Gunsmoke'', ''Studio 57'', ''The Millionaire'', and ''Schlitz Playhouse of Stars''.

He made two movie appearances during his years on ''Perry Mason'', but retired after the television show was canceled in 1966. He made one final movie appearance as a judge, Frederic D. Cannon, in Gore Vidal's ''Myra Breckinridge'' (1970) starring Raquel Welch, John Huston, Farrah Fawcett, Rex Reed, and Mae West.

Perry Mason

Hopper is best known for his regular role as the private investigator Paul Drake on CBS' classic courtroom television series ''Perry Mason'' (1957–1966) with Raymond Burr in the title role and Barbara Hale as secretary Della Street.

In 1959, Hopper was nominated for an Emmy Award for Best Supporting Actor in a Dramatic Series for his performance as Paul Drake.

Personal life

In the mid to late 1930s Hopper occasionally visited nightclubs with film actress Isabel Jewell. He married actress Jane Gilbert (née Kies, sister of the better-known Margaret Lindsay) in 1940, with whom he had one daughter, Joan (born 1942).

The couple divorced in 1959, and shortly thereafter he married Jeanette J. Hopper. He became stepfather to her son, Gordon P. Williams.

Death

Hopper was hospitalized on February 14, 1970, after a stroke at his home in Yucca Valley, and was transferred to a hospital in Palm Springs when pneumonia developed. He died of a heart attack on March 6 at the age of fifty-five.

He was buried in Rose Hills Memorial Park in Whittier, California.

Actor Dennis Hopper is his cousin.

Stage

Order Please (1934) Playhouse Theatre, as Victor Neilson

Romeo and Juliet (1934–1935) Martin Beck Theatre

Film

References

External links

William Hopper at Aveleyman

William Hopper as Paul Drake

Category:1915 births Category:1970 deaths Category:American film actors Category:American stage actors Category:American television actors Category:American military personnel of World War II Category:People from New York City Category:Deaths from pneumonia

de:William Hopper es:William Hopper fr:William Hopper it:William Hopper pt:William Hopper

Name	Gerald Celente
Birth date	November 29, 1946
Birth place	The Bronx, New York City, New York, U.S.
Occupation	Trend forecaster
Nationality	American
Ethnicity	White
Parents	}}

Gerald Celente (born November 29, 1946) is an American trend forecaster, publisher of the ''Trends Journal'', business consultant and author who makes predictions about the global financial markets and other events of historical importance. Celente has described himself as a "political atheist" and "citizen of the world". He has appeared as a guest on television news shows such as ''The Oprah Winfrey Show'', ''The Today Show'', ''Good Morning America'', ''CBS Morning News'', ''The Glenn Beck Show'', ''NBC Nightly News'', ''The Alex Jones Show'', ''The Jeff Rense Show'' and ''Russia Today''.''

Background

Celente was born in The Bronx, New York City, New York. He had early political experience running a mayoral campaign in Yonkers, New York and served as executive assistant to the secretary of the New York State Senate, which Celente called the worst job he ever had. From 1973 to 1979 Celente traveled between Chicago and Washington D.C. as a government affairs specialist. In 1980 Celente founded The Trends Research Institute (at first called the Socio-Economic Research Institute of America), now located in Kingston, New York, publisher of the ''Trends Journal'' which forecasts and analyzes business, socioeconomic, political, and other trends.

Forecasting

His forecasts since 1993 have included predictions about terrorism, economic collapses and war. More recent forecasts involve fascism in the United States, food riots and tax revolts. Celente has long predicted global anti-Americanism, a failing economy and immigration woes in the U.S. In December 2007 Celente wrote, "Failing banks, busted brokerages, toppled corporate giants, bankrupt cities, states in default, foreign creditors cashing out of US securities ... whatever the spark, the stage is set for panic in the streets" and "Just as the Twin Towers collapsed from the top down, so too will the U.S. economy ... when the giant firms fall, they’ll crush the man on the street." He has also predicted tax revolts. In November 2008 Celente appeared on Fox Business Network and predicted economic depression, tax rebellions and food riots in the United States by 2012. Celente also predicted an "economic 9/11" and a "panic of 2008."

In 2009 Celente predicted turmoil which he described as "Obamageddon" and he was a popular guest on conservative cable-TV shows such as ''Fox News Sunday'' and Glenn Beck's television program. In April 2009 Celente wrote, "Wall Street controls our financial lives; the media manipulates our minds. These systems cannot be changed from within. There is no alternative. Without a revolution, these institutions will bankrupt the country, keep fighting failed wars, start new ones, and hold us in perpetual intellectual subjugation." He appeared on the ''Glenn Beck'' show and criticized the U.S. stimulus plan of 2009, calling government controlled capitalism "fascism" and saying shopping malls in the U.S. would become "ghost malls." Celente has said, "smaller communities, the smaller groups, the smaller states, the more self-sustaining communities, will 'weather the crisis in style' as big cities and hypertrophic suburbias descend into misery and conflict," and forecasts "a downsizing of America."

Revolution in the USA

On Russia Today, he predicted that the USA would face a revolution.

Neosurvivalism

Celente's website has stated that:

Predictions

2009

"The Crash of '09 was as dramatic as the crash of '29. The New Depression had begun." (Trends Journal, Summer 2008, pg. 12)

2010

Some areas of the U.S. are experiencing resurgences in real estate values due to highly localized factors, and some investors profit from this. However, the rises will almost all stop and reverse with time, and the overall national trend in real estate values is downward. (T.J. Summer 08, pg. 8)

Ghost malls have become a common sight across America. Especially hard-hit are big chain stores (Sears, Home Depot, etc.). (T.J. Summer 08, pg. 8)

2012

The economic policies of the U.S. government over the past few years have failed to fix America's fundamental problems and have merely papered over them and in fact made them worse. By 2012, the "American Empire" is collapsing. In the U.S., basic staple goods like quality food and water are too expensive for most people to afford,(T.J. Summer 08, pg. 1) and "food riots" happen across the country (T.J. Summer 09, pg.1). Major American cities look like disaster zones, and mass homelessness exists across the country. Crime is rampant, with much of it being directed at the rich. (T.J. Summer 08, pg. 1) Kidnappings and ransomings of rich people are on the rise. Average people fed up with big government, high taxes and out-of-control spending join tax revolts. (T.J. Summer 09, pg. 1) The world is also experiencing major environmental problems and "the blackest of plagues." The global financial system has also "melted down" and the situation is very bad outside the U.S.(T.J. Summer 08, pg. 1) The advanced industrial economies collapse first, and their sagging consumer spending drags down the export-based economies of emerging economies next.(T.J. Summer 09, pg. 2) The economy is as bad as it was during the Great Depression in many ways. In spite of all this, the U.S. government, power elites, and mainstream media continue to insist that the fundamentals of the world economy are sound, and that official policies can lead to a recovery. A growing number of average people, however, doubt this. (T.J. Summer 08, pg. 1)

While the Mayan and Hopi prophecies of global destruction do not come to pass, 2012 is indeed a watershed year that sees the death of an ailing and unsustainable global economic system and lifestyle and its replacement with something better. (T.J. Summer 08, pg. 2)

By 2012, Obama is viewed by most as a stale president who sold himself as a fresh, visionary candidate in 2008 and instead proved to be a servant of the big corporations and the military-industrial complex like his predecessors.(T.J. Summer 09, pg. 5) His economic policies only delayed disaster and in fact have made the situation worse: Expansionary monetary policy and the various government bailouts and stimulus programs create a "Bailout Bubble" that invariably bursts in a cataclysm for the U.S. and world economy.(T.J. Summer 09, pg. 11) Obama blames other factors for this and might have even tried to start a war by 2012 to distract attention from the domestic misery.(T.J. Summer 09, pg. 12) Obama's foreign policy has also failed to accomplish anything significant on the world stage, and Pakistan is a mess and the Afghan war continues to drag on without hope of conclusion.(T.J. Summer 09, pg. 12)

In the 2012 U.S. elections, online news sites, bloggers and independent journalists wield as much influence on voters as mainstream media outlets (TV, cable, magazines, newspapers) for the first time. This breaks the corporate and moneyed stranglehold on American politics and allows a third party to attain nation-level recognition. (T.J. Summer 08, pg. 5)

Broad future trends

Americans will adapt to lower standards of living and will travel less, both on a daily basis and for vacations. Higher fuel costs, advances in telecommuting and an aging American population will push many more people to work from home or close to home. Walking-distance communities will be constructed and will become popular. (T.J. Summer 08, pg. 7)

Geographically isolated resort destinations like Las Vegas will wither due to higher fuel costs, lower American incomes and increased overseas competition while vacation spots closer to population centers will revive. (T.J. Summer 08, pg. 9)

Government-run lotteries, on the other hand, will thrive. (T.J. Summer 08, pg. 9)

In America and to a lesser extent overseas, consumer spending habits will be motivated out of fear and escapism. Businesses that capitalize upon this will succeed. (T.J. Summer 09, pg. 24)

Publications

''Trend Tracking: The System to Profit from Today's Trends'' (1991), ISBN 978-0446392877

''Trends 2000: How to Prepare for and Profit from the Changes of the 21st Century'' (1997), ISBN 978-0446519014 (This book was a national best seller)

''What Zizi Gave Honeyboy: A True Story about Love, Wisdom, and the Soul of America'' (2002), ISBN 978-0066212661

References

External links

trendsresearch.com

geraldcelente.com

Category:1946 births Category:Living people Category:American economics writers Category:Futurologists Category:People from the Bronx Category:People from New York City

de:Gerald Celente fr:Gerald Celente pl:Gerald Celente sv:Gerald Celente