Every Monday (well, most of them) we feature a favourite Alex cartoon selected by our readers. This week’s choice is from November 2007.

Alex has always been a bit of a bullshitter. Back when he started in the late 1980s the products traded in the financial world were relatively simple. They were things like shares and bonds, which didn’t have any actual physical existence, but whose price was fairly easy to determine. All you had to do was to ensure that you sold them to someone else for more than you’d paid for them. OK, there were trickier things like options too, but as long as you remembered the difference between a put and a call you’d be fine.

The first alarms had sounded in 1995 when Barings Bank went bust. Trader Nick Leeson had hidden the losses he’d incurred with complex derivative positions, which none of the bank’s senior management understood. But while he was still making lots of money for them why would they bother to worry about minor technicalities like that?

Twelve years on financial products had become even more nebulous and complicated. The canary in the coal mine was Subprime Loans. The clue is in the name. These loans were clearly not prime, but it wasn’t stated just how subprime they were. Had they been more clearly labelled as loans that were never going to be paid back, then they might have been seen as more problematic. Though to be fair that would only have put them on the same footing as Gilts or Treasury Bonds or debt issued by pretty much any developed nation.

Subprime Loans were packaged up into investment vehicles called CDOs (Collaterised Debt Obligations). CDOs were a bit like CDs (which was the standard format people listened to music on in those days before streaming). Record companies would release a compilation CD of the Greatest Hits of a particular year. The album would contain a few Number One hits to draw the buyer in. But the company also owned the rights to various songs that had flopped, so they’d try to recoup some of the advances they’d paid to the failed bands and pad out the CD by dumping a few of those duds on it too. You had to figure out whether there were enough good tunes on the CD to bother buying it. It was a similar thing with the quality of the loans on CDOs, but banks just tended to buy them all anyway in the hope that the person they planned to sell them on to would be too cloth-eared to tell the difference between the good tunes and the bad.

This cartoon ran in November 2007, during the phoney war phase before the Global Financial Crisis kicked off for real in 2008. A couple of internal hedge funds at Bear Sterns had collapsed in July, but Alex and his fellow bankers were still hoping that if they didn’t worry too hard about the problem then it might just go away. This was a period known as the the Credit Crunch. Banks were secretly scared that their competitors were in as much trouble as they were, so everyone stopped lending money to each other, thus making the problem worse. It led to the first casualty of the GFC - Northern Rock, which went under in September, because it couldn’t borrow any money to fund its essentially Ponzi business model. The rest is history and will no doubt be featured in a future readers’ choice cartoon.

Alex and Penny are shown looking up at the stars, which is a shorthand for suggesting that they are contemplating profound matters. Ironically many of the complex financial instruments that caused the crisis were invented by astrophysics graduates poached to work as quants in investment banks. The strip had been running for 20 years when this cartoon appeared so any reader who believed that Alex was genuinely talking about spiritual values in the first three frames can’t have been paying attention.

If you’ve got any suggestions for a favourite cartoon for future inclusion please email us. And do tell us if there’s a particular reason why it appealed to you.