|By: Nick Howard | Date: August 2010 | Contact the Author
|Northern Rock’s former chief Adam Applegarth is not
a household name in North America, but he is
widely recognized across the United Kingdom and
most of Europe as a principal architect of the recent
global economic meltdown. Almost one year before
Wall Street’s late-2008 financial collapse, Applegarth
told a British news program that “It started on the 9th
of August (2007) when the world changed.”
At the young age of 39, Applegarth was named as
Chief Executive of Northern Rock, which he proceeded
to meld into a bank of mortgage specialists, particulary
by working through the open market. By mid-2007, Applegarth’s
strategy had turned Northern Rock into the
fifth-largest mortgage provider in Britain. Then on August
9, 2007, it became public knowledge that Applegarth
and Northern Rock needed to be rescued with £25 billion
in emergency funding from the Bank of England.
As a result, Applegarth created the first run on a bank
– when a large number of customers withdraw their deposits
because they believe a bank is about to become
insolvent – that England has seen in over 100 years. Beyond
the TV reports showing hundreds of people queuing
up outside of Northern Rock branches, like most
North Americans, I paid very little attention to Britain’s
2007 bank run.
| As a precursor to the sub-prime crisis, Northern Rock’s
financial fallout in 2007 created Britain’s first run on the
bank in over 100 years.
|August 9 held no more importance to me than any
other typical summer day in 2007. On September 16,
however, everything changed in terms of my business
and, indeed, the entire world of printing. But this was
September 2008 almost a full year after Northern Rock’s
bank run, when Lehman Bros. announced its pending
collapse. Within days, most major U.S. financial institutions
announced they too were on the brink because
of their exposure to packaged subprime loans and
credit default swamps.
Within days of the 2008 financial collapse in New York,
a global crisis began developing around the world, with a
number of bank failures across Europe and massive reductions
in the value of equities and commodities worldwide.
America, while certainly not innocent, became a
whipping boy for the Western World’s substandard banking.
I can understand why so many fingers were pointing
at the U.S., particularly under our own North American
news bias, but I also feel it is a huge business mistake to
underestimate the power of the U.S. economy, after so
much of the world continues to throw mud.
|| The collapse of Lehman Brothers, particulary
its Rockefeller Centre head office, became a
symbol of the 2008 economic crash.
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Western Europe in particular has taken to battering the
United States as the cause of economic ruin, without the
near-future ability to righten their economy. America is
a nation of entrepreneurs who look at what can be and
not what is. Excess and overindulgence are now seen as
key character traits of America, where people super-size
everything to make an example of their wealth. But corporate
malfeasance and ludicrous salary bonuses are
commonplace everywhere around the globe. Blame
America? I don’t think this is fair or accurate.
The world banking crisis is not just an American banking
crisis. There are plenty of financial enterprises in the
rest of the world that were just as eager to play with all
the cheap cash and credit. Europeans specifically should
consider that this is a worldwide banking crisis and not
just one Made in America. Sure it can be said that the
United States played a major role in allowing cheap, lowinterest
money to be so readily available. But this is largely
a byproduct of what is so good about America.
Yes – Americans think big. They refuse to accept what
most people in Europe refer to as just the way it is.
Americans will always find a way to make things better,
bigger and cheaper.
The past two years has certainly been chaotic and
perilous for many companies, particularly for printers,
but we have really just been dealing with a correction in
the global economy. We have seen these U.S. corrections
come fast and furious in the past, most recently with
the Dotcom crash around 2001/2002. The 2008 Wall
Street crisis, however, was an amplified U.S. economic
correction because of how tightly the
world’s economies are intertwined. Experts
have been talking about globalization
for years, and certainly some of you
have seen its effects in your printing businesses,
but still in 2008 the world was not
prepared for a simultaneous global financial
You should not, however, expect Americans
to start dreaming on a smaller scale.
Their spirit of individualism will reign
once again, in new and always innovative
ways of conducting business. Europe and
Japanese business are often by-products
of American innovation. In the case of
printing machinery, these countries react
and produce what America wants, because
Americans will accept what other
countries often struggle to conceptualize.
In most major industries, no matter
where its manufacturers are located on
the globe, it is America taking the lead. In
the printing industry, for example, presses
were built for years without continuous
dampening. It was Harold Dahlgren, an
American, who developed a continuous
dampener that added huge operational
advantages to the printing press.
Even while the powerful German manufacturers
preached about the advantages
of cloth-covered dampeners, here was a
guy, Dahlgren, who re-invented printing
as we know it. Now every company that
makes machinery has adapted a form of
Dahlgren’s unique and clever design.
From CTP to post-press, there are signs
of America’s fingerprints everywhere.
Several key labour-saving tools on presses
trace their roots back to American printing.
Even Heidelberg, the world’s largest
press maker, particularly when viewed in
terms of sheetfed press installations, paid
close attention to America for some of its
strongest technological enhancements.
Remember the Heidelberg CD was originally
launched as a carton press, but
quickly became a paper press in America.
Goss, Cottrell, Harris, Sheridan are just
a few examples of America’s ingenuity.
There are extraordinary features on the
Harris Lithotronic that are still current
today. That’s almost 40 years ago!