It’s like the old line attributed to Mark Twain: “History doesn’t repeat itself, but it often rhymes.” Ask a CFO what parallels they see between the uncertainty of 2025 and the staggering economic collapse of 2007–08, and you’ll get some variant of that famous Twainism. In the worst way, we’re so back. 60% of CFOs expected a recession by the end of 2025, according to a Q1 CNBC CFO Council survey, while Goldman Sachs recently upped the likelihood of a recession in the next 12 months to 35%. And yet, everything’s different. To truly understand the potential dangers of our current moment, you have to look back. For starters: 2008 didn’t start like this. It started with a bang. Here’s CFO Brew’s oral history of the 2008 crash, as told by finance and accounting professionals. Click here to see the rest of CFO Brew’s Quarter Century Project. Interviews have been edited and condensed for length and clarity. Hard and fast Ari Shwayder, lecturer of business economics and public policy at the University of Michigan, who worked at McKinsey before and after the 2008 crash: When things crashed, it was one of those classic [scenarios] when all of a sudden it happened all at once. It felt like everything was fine; there was very little uncertainty. And then, all of a sudden, the banking system blew apart over the course of a couple of months. Shari Freedman, CFO for literacy nonprofit Room to Read: In 2008, it was immediate. Once [Lehman Brothers] collapsed, the whole market collapsed. Kelly Bargabos, CFO and COO of San Diego Theatres: I was in the diamond jewelry industry when 2007–2008 hit. We were a wholesaler, and we sold to [high end] retail jewelry stores. We were hit really hard and really fast, [as] one of the first sectors to really be impacted by the real estate bubble that burst and the beginning of the economic downturn. The reason we were hit so hard and so fast is because we were a luxury diamond jewelry brand, and the people who bought our products in the retail stores were the hedge fund managers. They were the Wall Street traders, all those people who lost their jobs, lost their income, lost their retirements. That was our customer base, those people with high disposable income. Keep reading (if you dare).—NP |