Karl Marx, WeWork and the junk bond bubble
When the banks were bailed out at a cost of hundreds of billions of dollars during the 2008 crisis, it was supposed to be a one-off intervention by governments and central banks, designed to save the financial system and prevent a collapse in the world economy.
Barely a decade later and we have another “black swan”.
Now, in addition, the global economic shutdown threatens WeWork’s fundamental business model — and in a way that has startling echoes of the failure of Lehman Brothers, Northern Rock and other high-profile casualties of the last financial crisis.
The reason those institutions failed was because they had relied on high volumes of very short-term finance, when their own lending commitments were far longer-term.
FT 30 March 2020
Northern Rock
Barely a decade later and we have another “black swan”.
Now, in addition, the global economic shutdown threatens WeWork’s fundamental business model — and in a way that has startling echoes of the failure of Lehman Brothers, Northern Rock and other high-profile casualties of the last financial crisis.
The reason those institutions failed was because they had relied on high volumes of very short-term finance, when their own lending commitments were far longer-term.
FT 30 March 2020
Northern Rock
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