University – October 2021
When Centrus was set up, we and clients were still dealing with the immediate aftermath of the global financial crisis. A seismic series of events which brought an abrupt end to 30 years or so of relatively benign economic and political conditions in the developed world.
In a book called “Ubiquity, Why Catastrophes Happen” Mark Buchanan asks us to imagine dropping one grain of sand after another onto a table. A pile develops until just one grain starts an avalanche. Most of the time it is a small one, but sometimes it builds up in a way which is hard to predict and one whole side of the pile slides down to the bottom. In a similar fashion, historians may look back at the GFC of 2008-2010 and see the crisis and associated policy responses as setting off a series of chain reactions which, from a 2021 perspective, are still playing out.
The immediate policy medicine of public sector bail outs, massive QE and record low interest rates, together with the subsequent knee-jerk austerity packages, conspired to create the various Eurozone crises as well as widening the wealth gap and stagnating wage growth. It was perhaps those “left behinds” who tipped things in favour of the election of Donald Trump and the vote to leave the EU – two of the events that shattered the era of political consensus… Download full market update