David Bowie has been accused of causing the current recession by being one of the first to adopt a means of borrowing known as ‘securitisation’.
Okay, stick with me here. Back in 1997 Bowie realised that he was missing out on a whole load of money that was rightfully his – all the money he hadn’t made yet. So, he came up with the idea of “Bowie Bonds”, which saw the singer sell off the projected royalties from his first 25 albums for $55 million to the Prudential Insurance Company. So far, so good. Bowie has a big stack of cash, which he used to buy the publishing rights to his entire catalogue, and The Pru has a steady income from now until the end of time (or until sales of recorded music start to tail off, but that’ll probably never happen, right?).
So successful was the idea, that artists including James Brown and The Isley Brothers followed suit. As did banks. Although the banks weren’t selling on future revenues from songs they recorded, they were selling on future revenues from mortgages, which is all well and good until large amounts of people start defaulting on those loans, leaving the new owners of the loans suddenly out of pocket in a big way. As we have now seen, this leads to what is now known as a credit crunch, where people realise all of that pretend money they bought isn’t actually worth anything.
So, if you’re feeling the squeeze at the moment, you know who to blame. Bloody David Bowie. If it weren’t for him, banks would be the ethical institutions we always knew them to be. They’re just easily led astray, is all. Although, I should probably point out, it was a banker who originally suggested the bonds idea to Bowie.
This article originally appeared in CMU Daily on 14 Jan 2009.