In today’s Guardian John Harris has poured water on Evan Davis’ claim that David Bowie caused the credit crunch. Arguably Davis’ article was a humorous attempt to look at the credit crunch in a novel way. In no ways did he actually believe that Bowie lit the touch paper that eventually resulted in the implosion of the global financial system.
First of all Bowie Bonds were released over a decade ago well before the recent financial troubles began. Secondly the concept of securitisation where investors receive a share of the repayments of a debt or in Bowie’s case royalties had been in use since the 70’s. In the 70’s banks sold on debts from credit cards and car loans to investors who would receive a share of the repayments over a certain period of time. Bowie Bonds were certainly an innovation but only of an existing concept. Investors paid Bowie up front for a share of his royalties over a ten year period. Thirdly and this is the most important, Bowie did not envison this scheme himself. Hell, he’s inventive, creative and is wildly inspirational but I doubt that his creative talents could be applied to the financial sector. Instead it was Bowie’s wily financier David Pullman who was behind the scheme.
In the ten years that followed the issue of the Bowie Bonds, traders used the concept of securitisation but applied it to mortgages. The trouble was there were selling on mortgages from people who had no ability to pay them back, what the market calls ‘junk status’. That’s what caused the credit crunch, billions of pounds of bad debt injected into the financial markets which fundamentally corrupted the global economy.
The Bowie Bond was influential but only in the music industry where other arts used securitisation to secure large one of payments in return for giving their investors access to their royalties, most notably James Brown and Iron Maiden. So next time you hear ‘Bring your Daughter to the Slaughter’ on an Iceland ad, there’s some investor in Wall Street who’s got paid a dollar.
My basic point: leave Bowie alone. Plus I get to stick one more Bowie video in, just for kicks. Little China Girl one of my favourites.
