Did big personalities worsen the financial crash? (2015)

“..in order to take a share in charisma, one must turn one’s back on the world. This process couldn’t have been more evident in the 2008 financial crisis.

Elesa Zehndorfer, author of ‘Charismatic Leadership: The Role of Charisma in the Financial Markets’

BBC News – Magazine, 24 August 2015

“In June 2007, Bloomberg Markets magazine dedicated an issue (“Toxic Debt”) to a 36-page special edition on the dangers of subprime mortgages – home loans made to people with a riskier credit history – and the mortgage-backed securities associated with them.

“But on 17 July that year, Federal Reserve Chairman Ben Bernanke delivered a speech designed to draw confidence back to the markets.

“Bernanke’s rhetoric was flawed yet effective, while Bloomberg’s warning remained unheeded.

“(It) contradicted the powerful groundswell of over-optimism and euphoria so characteristic of charismatic authority – a tidal wave of euphoria so powerful that it demanded the destruction of any logical dissent that got in its way.

“(At) the annual Lehman Brothers company meeting on 15 April 2008, chief executive Dick Fuld stated: “The worst of the impact of the financial markets is behind us.”

“Such a bold statement encouraged further investment in subprime, which naturally exacerbated the aggressive nature of the ensuing crash.”

Access the article here: Did big personalities worsen the financial crash?