If nothing else the last few years should have taught governments, corporations and individuals a number of lessons. Below I've compiled a list of some of them, from the useful to the absurd, along with some general observations. Feel free to add your own in the comments box at the bottom of the article.
- Money doesn't grow on trees, but it can appear out of thin air (aka Quantitative Easing)
- Life is like a game of Monopoly - 1) The banker always wins because the temptation to cheat is too great. 2) Money can always buy a 'get out of jail free' card anyway
- Changing the CEO of a bank is like saying the Hydra has grown a new head.
- Property prices go down as well as up
- Economists must drive their cars backwards. Because they are great at describing where we've just been but appear to have no idea as to where we're heading
- If you don't understand it, don't invest in it. Plus if it sounds to good to be true, it probably is
- Any idiot could buy things on credit which they couldn't otherwise afford. And they did
- Banks never sell you something because they are looking out for you. You are a walking cash machine. If they push the right buttons you'll chuck money at them. They know your PIN
- There are no 'free lunches' in life. If you think there are then you just haven't had the bill yet. That's right, you're the one most likely to be paying.
- All bubbles eventually burst. Plus all bubbles are replaced with more bubbles fuelled by easy credit
- Credit Rating agencies are of questionable use. Lehman's was AAA rated just before it collapsed
- You will never meet someone who predicted the market falls - unless you have been invited to their private desert island
- All debts eventually have to be repaid - except if you are a sovereign state.
- You can't polish a turd - but you can roll it in glitter (e,g, sub prime mortgage backed securities)
- Politicians globally talk a lot of hot air which are good for inflating things (markets and their egos mainly) and not much else.
- No one has a clue what will happen with inflation. But there are a lot of people who like to tell you they do (Mervyn King being one)
- There is no new era or paradigm. Bust and boom are here to stay
- The world is still turning
- Man has always liked shiny things. Man still likes shiny things, it's called gold. He's still not found much use for it other than make other shiny things. Man is irrational
- Your home is not a pension. Those nearing retirement who thought it was a pension have just had a rude awakening
- Consumers, corporations and governments have been borrowing from Tomorrow to spend on Today. The trouble is Tomorrow is at the door and he wants paying back
