Tooze, A. (2018). Crashed: How a Decade of Financial Crises Changed the World. New York: Viking.

1. US Mortgage Industry’s Fragility:

• Deregulation in the 1970s increased risk and profit in US lending markets.
• From 1996 to 2006, US house prices nearly doubled; household wealth grew by $6.5 trillion.
• Introduction of “subprime” mortgages enabled high-risk borrowers to acquire homes.
• The 2008 crisis ensued when the housing bubble burst, with Lehman Brothers heavily invested in subprime mortgages.

1. European Financial Crisis and US Connections:

• European banks heavily invested in American high-risk financial practices.
• A quarter of all US securitized mortgages were held by European banks.
• HSBC alone invested $70 billion in US mortgages before the crisis.

1. Eurozone’s Inadequate Crisis Response:

• Post-crisis, global trade among wealthy countries dropped from $17 trillion to just over $1.5 trillion.
• The U.S. Federal Reserve responded with $1.85 trillion in quantitative easing.
• The Eurozone’s response was less aggressive, leading to a prolonged economic struggle.

1. European Unity and Smaller Countries:

• Ireland’s banking sector debts were more than 700 times its GDP.
• The Irish government’s guarantee for the debts of its six largest banks led to a national financial crisis.
• Larger European nations were hesitant to provide debt relief to smaller economies.

1. Russia’s Influence in Eastern Europe:

• Post-recession, Eastern Europe’s economic vulnerability increased its susceptibility to external influences, especially from Russia.
• Eastern European economies were reliant on foreign investment, making them a geopolitical battleground.
• The automotive industry, significantly foreign-owned, exemplified the region’s economic dependencies.

1. London’s Reduced Global Financial Status:

• The 2008 crisis undermined London’s position as a global financial hub.
• The city’s financial sector had been historically supported by the Bretton Woods Agreement.

1. Brexit Motivated by Financial Sector Concerns:

• Brexit was partly driven by the desire to protect London’s status as a financial center.
• Concerns about EU policies diminishing London’s financial role influenced the decision.
• Euroscepticism and economic considerations played a significant role in the Brexit decision.

1. American Political Shift Post-Financial Crisis:

• The 2008 crisis led to public disillusionment with the financial sector.
• Wall Street paid out $18.4 billion in bonuses in 2008, fueling public resentment.
• This led to a political shift away from traditional establishments.

1. US Voter Frustration in the 2016 Election:

• The 2016 election reflected frustrations stemming from the financial crisis.
• The Obama administration’s focus on stabilizing banks over penalizing them led to a sense of betrayal.
• This sentiment significantly influenced the election outcome.