Remember after the dust settled from the Great Financial Crisis of 2008-09, and analysts were dissecting what happened and why? The consensus was that no, nothing had really been ‘fixed’ by all the quantitative easing and bailouts, but the problems had been just kicked down the road. Even worse, down the road the situation was going to be many times more dire, and the financial authorities would have far fewer and less effective tools to use.
There have been many recessions in my lifetime when it looked as though the financial house of cards was really going to collapse - but each time, astoundingly enough, there emerged creative mechanisms to forestall the reckoning. Have they really run out of financial mechanisms this time? If so, it’s Great Depression 2. If not, the mechanisms are likely to require a large group of major ‘losers’ - the taxpayers, the stockholders, the pension funds, etc. Who’s going to get walloped on the chin this time? I’ll bat there are some major players this weekend trying to throw each other under the bus...
Update: looks like the UBS deal has made it over the finish line.
https://archive.md/H7upl
Remember after the dust settled from the Great Financial Crisis of 2008-09, and analysts were dissecting what happened and why? The consensus was that no, nothing had really been ‘fixed’ by all the quantitative easing and bailouts, but the problems had been just kicked down the road. Even worse, down the road the situation was going to be many times more dire, and the financial authorities would have far fewer and less effective tools to use.
There have been many recessions in my lifetime when it looked as though the financial house of cards was really going to collapse - but each time, astoundingly enough, there emerged creative mechanisms to forestall the reckoning. Have they really run out of financial mechanisms this time? If so, it’s Great Depression 2. If not, the mechanisms are likely to require a large group of major ‘losers’ - the taxpayers, the stockholders, the pension funds, etc. Who’s going to get walloped on the chin this time? I’ll bat there are some major players this weekend trying to throw each other under the bus...