Since this is a blog devoted to the triple crunch, it is worth noting more evidence of just how inter-connected the various crunches are. There are increasing numbers of reports of how the insurance companies have been hit by this year’s hurricane season, Lloyd’s of London in particular.
This is worrying, not just because it may undermine the solvency of the insurers along with the banks – a clear example of the climate crunch affecting the credit crunch – but because of recent revelations about how short-sighted our financial services are.
It was easy to believe before recent events, that those the City employees who make predictions, and computer models based on different scenarios, were wise people who – despite everything – could see further than the rest of us. Unfortunately, they have largely been revealed as complete idiots, living in ivory towers that can see nothing except the accepted and erroneous assumptions of the financial world.
I happened to visit the City Business Library last week and found that they keep no periodicals beyond five years. I fear a similar blindness about the past and the future has led the financial services industry into the blind alley they are currently lost inside.