In which I burn off the Christmas Belly of Ignorance using the Faddish Diet of Learning. It’ll never last.
This week, I’ve finished The Big Short. (Do I have a better understanding of the financial crisis? I’ll let you be the judge. At the very least, I’m more comfortable seeing the words subprime mortgage bond in writing.) Also, we’re back in Greek myth territory, this time with Stephen Fry’s Heroes — his sequel to Mythos. Expect more mythical figures and curious etymologies. Anyway, enough waffle:
- This is my layman’s — or should that be Lehman’s, heh! — understanding of the 2008 financial crisis. Let me know where I’ve gone wrong. The crisis was set off by (I get to say it!) subprime mortgage bonds. At their heart, these were mortgage loans to people who couldn’t afford them.
The obvious question: Why would banks make these loans? Answer: Because they were — through trickery and obfuscation — able to package the bonds up to make them seem decent. As a result, they could flog them for more. It’s a manufacturing marvel: Cheap materials come in; expensive product comes out.
Once interest rates rose, people — normal, everyday people — started defaulting on their loans. At this point, the fragility of the banking system became clear: it was built on debts rather than anything tangible. It was smoke-filled air and — let’s run with this metaphor — the Window of Reality was about to open. Banks stopped trusting each other, not knowing who among them had actual assets, and who was sat on a tower of debt. The lending stopped. The banks collapsed. Hey presto.
- A change of pace now. What’s that, you want a whisky fact? Try this: Whisky — with and without an e — has to age for at least 3 years and a day. Otherwise, it ain’t whisky.
- Music modes are, to my simple brain, the normal scales with one or two notes changed. This small difference has a drastic effect on the sound and mood. Many of their names, such as Lydian and Dorian, comes from Ancient Greece.
- The same 5 notes appear in every music system in the world. These are the black notes on the piano. As Howard Goodall says: These 5 notes are a human genetic inheritance, like the fingers on our hands. This is pentatonic.
- The word uncanny has nothing to do with resemblance. Instead, it means “strange or unnatural, to the point of being unsettling”. So an uncanny photo is an unsettling image, rather than a cheap imitation.
- The original meaning of Enthusiasm is “possession or inspiration by a god”.
- Pegasus — famous winged horse — was actually the offspring of Medusa, sired by Poseidon. In Fry’s telling, he escapes his mother’s body seconds after Perseus chops off her head.
- The word Galaxy comes from the Ancient Greek for “milky”.