Why Osama may have won after all

Just not exactly the way he intended
The world's foremost *economic* terrorist?

The world’s foremost *economic* terrorist?

Now that the euphoria over Osama Bin Laden’s demise is over, it is perhaps a more appropriate intellectual exercise to assess his legacy rather than dwell over the ultimately pointless debates on the legality of the operation which finally nailed him. It seems, after all, that even in death Bin Laden appears destined to polarize opinions: be it by the ridiculous and downright false claims by conservatives that the intelligence gathering which led to his hideout justified torture (

As a result, from a peak of 6.5% in 2000, the US federal funds rate fell to 2% by late-2001. This was not enough and by mid-2003 the rate stood at just 1%. Of course, we all know what followed: low interest rates led to a flood of cheap credit. With stock markets still reeling from the dot-com crash (one decade later, Nasdaq has yet to recover from its 2000 high), investors poured their cash into the increasingly lucrative housing market which had already began exhibiting bubble-like characteristics years before 9/11. And with the availability of new and exotic credit derivatives such as MBSs and CDOs, banks were able to recycle their highly leveraged debt throughout the entirety of the financial system. It’s hard to believe that all this happened over the course of barely 4-5 years, such was the speed in which global finance became intoxicated with the bountiful profits of history’s most massive asset bubble. And all it took was Greenspan reversing his put to make it burst. The rest is history: the subprime crisis, the credit crunch, and the ultimate collapse of Lehman Brothers which has been the closest humanity has gotten to a complete global economic meltdown. Continue reading