David Bowie started the current global financial crisis when he offered fans the chance to buy bonds in his music in the mid-90s, an economics expert has claimed.
The 'Bowie Bonds' entitled the buyer to a share of the royalties from the singer's back-catalogue. In return, Bowie collected future profits up-front.
Evan Davies, who fronts the BBC's Dragons Den, said Bowie's initiative, also known as securitisation, was adopted by banks for use on customer mortgages.
Writing in today's Mirror newspaper, Davies said: “The banks were catching on to the idea. They 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.”
'Bad Risk'
In the financial system, securitisation, which effectively rebuilt the mortgage process, began to unravel when investors were sold "bad risk" loans by the banks.
“Securitisation was a kind of magic bullet for banks. It looked a fantastic way of making them more profitable with less risk. But they fired this magic bullet at themselves,” Davies wrote.
The process was used most destructively in the UK by Northern Bank, which was nationalised by the government last year.
Davies said the bank became too dependent on securitisation "and then the investors decided they didn’t like securities because they didn’t know what was in them and the loans were often bad.
“No one wanted to buy securities even if the securities were pretty good – which Northern Rock’s were. It was fashionable when David Bowie did it once. Ten years later it wasn’t.”
What do you think about Evan Davies synopsis of the credit crunch? Post your thoughts by filling out the comment form below.
The legendary David Bowie:


Slipknot's Corey Taylor To Record Debut Solo Album... Next
Happy 63rd Birthday David Bowie! - The Legend in Photos
Weird Animals Named After Rock Stars! - Photos
Evolution Songs: Celebrating Charles Darwin's 200th Birthday
Dodgy Look-alikes Of Music Stars
Songs To Make Your Guy Fawkes Night Go Bang!
Chapel Club, Lyrebirds and Munich Live In Brighton - Photos
Vampire Weekend Take 'Contra' To Manchester - Photos
Enter Shikari Meet & Greet Fans After Ceiling Collapses In Blackpool
~ by goodgrr 1/13/2009 Report
~ by MTT 1/15/2009 Report
~ by Rob 1/25/2009 Report
~ by Jack 2/20/2009 Report
Register now and have your comments approved automatically!