A Complex System View on the Financial and Economic Crisis

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A 15y History of the 2008 crisis • The ITC “new economy” bubble (1995-2000) • Slaving of the Fed monetary policy to the stock market descent (2000-2003) • Real-estate bubbles (2003-2006) • MBS, CDOs bubble (2004-2007) and stock market bubble (2004-2007) • Commodities and Oil bubbles (2006-2008) Consequences (deep loss of trust, systemic instability) • Solution? 10
Internet stocks The Internet stock index and non- Internet stock index which are equally weighted. Comparison of index levels of the Internet index and the non-Internet Stock index, and the Nasdaq composite index for the period 1/2/1998-12/31/2002. The two indexes are scaled to be 100 on 1/2/1998. non-Internet stocks
Page 1 and 2: A Complex
Page 3: Canada Currency: Canadian dollars 3
Page 6 and 7: Standard claim: The current financi
Page 8 and 9: The illusionary “PERPETUAL MONEY
Page 12 and 13: •1995-2000: growing divergence be
Page 14 and 15: Foreign capital inflow 14
Page 16 and 17: A 15y History of the 2008 crisis
Page 18 and 19: Causal slaving of the US Treasury B
Page 20 and 21: Causal Slaving of the U.S. Treasury
Page 22 and 23: Real-estate bubbles 22
Page 24 and 25: Real-estate in the UK 24
Page 26 and 27: (2005) And this with the median hou
Page 28 and 29: B-F Over the past decade and a half
Page 33 and 34: Key Players and Frictions in Subpri
Page 35 and 36: Estimated assets and market positio
Page 39 and 40: 2006-2008 Oil bubble Speculation vs
Page 41 and 42: 41 Source: R. Woodard (FCO, ETH Zur
Page 43 and 44: Recession-Plagued Nation Demands Ne
Page 45 and 46: Separation of financial and credit
Page 47 and 48: Stress drop (coupling strength) 10
Page 49 and 50: • Fundamental error: “perpetual
Page 51: Main Messages • Do excesses exist

A Complex System View on the Financial and Economic Crisis

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