Financial Times Guide to How the Stock Market Really Works, 5th Edition

13

An overview of the financial crisis

‘It’s the death of capitalism!’ exclaimed a radical academic happily at a dinner party I went to in early 2008, just when it had become plain that the financial crisis that had begun in the previous year was really very serious indeed. So far it looks as if she was completely wrong, but there is no doubt that the financial crisis, which is still ongoing at the time of writing, was a big one, and that guerrilla investors need to try to understand how it happened and what the implications are for investing in the future.

In this chapter we will look at:

• How the crisis began
• The banking crisis
• The crisis spreads to Europe
• Economic growth and the financial crisis
• Investment survival in the long term