David Bowie Caused The Credit Crunch
-
Artist:
-
Album:
-
Track:
According to economist Evan Davies, who fronts the BBC's Dragons Den, the credit crunch is all David Bowie's fault.
In the mid-90s, Bowie raised $50million selling 'Bowie Bonds', which entitled the buyer to a share of the royalties from the singer's back-catalogue. In return, Bowie collected future profits up-front.
Davies said that the intiative, known as securitisation, was picked up by banks to use with customer's mortgages. "[The banks] thought, 'We have billions out there in mortgages which are going to pay us back very slowly. Why don't we sell those and get the money now? So the banks started doing what Bowie had done - in a big way."
Bowie Bonds were downrated to junk status within a few years. Too bad the banks didn't notice that aspect as well.
Comments (11)
The man who sold the world, huh?
Colin, trust you to know the apposite song!
hilarious flux
incredible that he was a trendsetter in the economy and in music
one would think bankers would be smart enough not to follow the lead of a self destructive rock star, but alas, the thin white duke is a powerful pied piper
perhaps he should be attending The World Economic Forum with Bono
Nobody told the banks about the glam factor..gotta have the catalyst!
This always sounded to me like Bowie was getting the better end of the deal here, no matter how many good songs he had, it just never computed to me. I'll read the article and be back for more.
I smell a new Bowie Persona - "The Fat White Commodities Speculator" - how 21st century!
Maybe "Jump They Say" could be the theme song for the new depression.
CB - you figured it out! But look at the Madonna/Clear Channel deal - who in their right mind would sign Mdonna to a 10 year deal at a rumoured $35million an album? Would anyone with a logical mind punt that kind of money on someone who will be 60? And these were guys in the industry, not starstruck bankers.
When I first heard of the Bowie bonds I thought I smelled some self-promotion. Securitization of long term debt (mortgages and other credit instruments) is complicated because it is very hard to appraise risk of default. This is close to the epicenter of the present international earthquake, high unemployment, bank failures, etc. As to Bowie, I have liked his more recent work better than his back catalogue. If the Bowie bonds are junk, I might buy one to frame and hang on the wall with other losers. No matter how astute a businessman Bowie might be, I doubt he ended up with $50 million. I agree with Jonh--the Madonna 360 degree deal makes absolutely no sense, even if it involves deferred payment.
Jonh, that's a great picture you've posted. Talk about a basket of securities....
Brilliant, get your high powered trader rockster rocks off and the downside is you just write off a capital loss.
And oddly enough, Bowie's music for the last two decades has also been downrated to junk status...
lol ivylander! I remember when Bowie sold himself. I thought it was just a new personality. It's interesting to compare the two calamities. Did people have to take out mortgages on Bowie?