Boom and Crash: The Politics of Individual Subject Creation in the Most Recent British House Price Bubble

Abstract

At the time of writing — January 2009 — British banks remained deeply embroiled in the ongoing fallout from the intensification of the credit crunch which occurred in the fall of 2008. On the day in late September 2008 when the U.S. House of Representatives voted down the first attempt to introduce a U.S. $700 billion bailout for American banks, the FTSE 100 index of leading shares fell by more than 5% to 4818, more than 30% down from its peak value. Banking shares led the market slide, posting more than double-digit losses on the day. Just two weeks previously, a spate of short selling against the country’s largest mortgage provider, HBOS, prompted the Brown government to suspend its own antimonopoly legislation to allow HBOS to merge with Lloyds TSB, albeit in a move which bore all the hallmarks of a takeover. A moratorium on short selling stocks duly ensued. Yet this was not enough to prevent a similar run on the stock of the Bradford and Bingley bank, the country’s most important provider of buy-to-let mortgages. Bradford and Bingley’s deposits business was sold off to Santander in a government-engineered acquisition, with its mortgage debt being nationalized. This followed the earlier nationalization of Northern Rock, Britain’s fifth-largest mortgage provider and previously its most adept exponent of leveraged mortgage deals.