Finanical Crices

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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 vending cards and turn them into sugar, caramel and fat (Kellaway, 2008, 18) The storming of the vending machines in Lehman Brothers’ Canary Wharf offices on Monday 15 September 2008 was an unlikely harbinger of an

extraordinary period in the history of the global financial system. As Lucy Kellaway points out, although the event displayed qualities of ‘[p]anic, desperation, pettiness and [of] everyman [sic] for himself’’, it also displayed an underlying logic. These people were behaving just as bankers should behave. Unwinding the catering contracts and taking delivery of confectionery showed a desire to balance books, an attention to detail, an abhorrence of waste and a desire to claim assets that rightfully belonged to them rather than let others claim them (ibid). In the intervening period between this event and the writing of this paper, we witnessed the same logic played out time and time again through the familiar

Ó The Author 2009. Published by Oxford University Press on behalf of the Cambridge Political Economy Society. All rights reserved. For permissions, please email: journals.permissions@oxfordjournals.org

French, Leyshon and Thrift performances associated with a financial crisis: institutional failure, rescue mergers and acquisitions, financial market instability, flight to commodity markets, emergency state intervention and a reappraisal of the nature of financial risk. So far, so familiar, and some older heads in financial markets were initially quick to chalk all this down as just another, although more intense, episode in the perennial history of financial crises that have routinely rocked the financial system over the last 30 years or so; from the less developed world debt crisis of the early 1980s, through the global stock market crash of 1987, to the housing-related financial crisis of the early 1990s, as well as the Asian, Russian and Argentine financial crises of the late 1990s, and the bursting of the tech bubble in 2000. Commentators writing...
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