Finanical Crices
Cambridge Journal of Regions, Economy and Society 2009, 2, 287–302 doi:10.1093/cjres/rsp013 Advance Access publication 21 June 2009
A very geographical crisis: the making and breaking of the 2007–2008 financial crisis
Shaun Frencha, Andrew Leyshona and Nigel Thriftb a School of Geography, University of Nottingham, University Park, Nottingham NG7 2RD, UK. shaun.french@nottingham.ac.uk, andrew.leyshon@nottingham.ac.uk b Vice Chancellor’s Office, University of Warwick, Coventry CV4 7AL, UK. nigel.thrift@warwick.ac.uk
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The paper argues that the origins of the financial crisis of 2007–2008 can ultimately be located in four spaces: in international financial centres, in particular, in the longstanding competition that has existed between London and New York; in the insularity of the everyday geographies of money that have emerged in such centres in the wake of the apparent hegemony of financialization; in the geographical recycling of surpluses and deficits and, more particularly, the structural dependency that has grown up between China and the USA, and, finally; in the growing power of the financial media, centred in international financial centres and an increasingly significant agent in performing money and the economy in general, and in engendering mimetic forms of rationality. Keywords: financial crises, securitization, sub-prime, financial centres, media, China JEL Classifications: O16, P10, R11
Introduction
[I]n the course of a crisis, capitalism is forced to abandon the fictions of finance and to return to the world of hard cash, to the eternal verities of the monetary basis (Harvey 1982, 292). One of the least reported yet most remarkable market movements of the past week was the run on Mars and Snickers bars in the Lehman Brothers vending machines. For me, this was the image that most sticks in the mind: bankers jostling with each other to liquidate their positions on prepaid
A very geographical crisis: the making and breaking of the 2007–2008 financial crisis
Shaun Frencha, Andrew Leyshona and Nigel Thriftb a School of Geography, University of Nottingham, University Park, Nottingham NG7 2RD, UK. shaun.french@nottingham.ac.uk, andrew.leyshon@nottingham.ac.uk b Vice Chancellor’s Office, University of Warwick, Coventry CV4 7AL, UK. nigel.thrift@warwick.ac.uk
Downloaded from http://cjres.oxfordjournals.org/ by guest on December 18, 2012
The paper argues that the origins of the financial crisis of 2007–2008 can ultimately be located in four spaces: in international financial centres, in particular, in the longstanding competition that has existed between London and New York; in the insularity of the everyday geographies of money that have emerged in such centres in the wake of the apparent hegemony of financialization; in the geographical recycling of surpluses and deficits and, more particularly, the structural dependency that has grown up between China and the USA, and, finally; in the growing power of the financial media, centred in international financial centres and an increasingly significant agent in performing money and the economy in general, and in engendering mimetic forms of rationality. Keywords: financial crises, securitization, sub-prime, financial centres, media, China JEL Classifications: O16, P10, R11
Introduction
[I]n the course of a crisis, capitalism is forced to abandon the fictions of finance and to return to the world of hard cash, to the eternal verities of the monetary basis (Harvey 1982, 292). One of the least reported yet most remarkable market movements of the past week was the run on Mars and Snickers bars in the Lehman Brothers vending machines. For me, this was the image that most sticks in the mind: bankers jostling with each other to liquidate their positions on prepaid
References: Downloaded from http://cjres.oxfordjournals.org/ by guest on December 18, 2012 4 5 6 For example, Langley (2008c) argues that risk technologies ironically led to the manufacture rather than the reduction of uncertainty Downloaded from http://cjres.oxfordjournals.org/ by guest on December 18, 2012 301 Received on December 16, 2008; accepted on April 28, 2009 Downloaded from http://cjres.oxfordjournals.org/ by guest on December 18, 2012