From today's New York Times,
Hoping to avoid a systemic meltdown in financial markets, the Federal Reserve on Sunday approved a $30 billion credit line to engineer the takeover of Bear Stearns and announced an open-ended lending program for the biggest investment firms on Wall Street.
So if I read this right, our financial system almost collapsed over the weekend. This should be screaming front page news.
It is in a few media outlets: The Wall Street Journal, The New York Times, and BBC are all covering it.
And not in others - it's total media silence. CNN is all concerned about Obama's ethnicity. The Honolulu Advertiser is covering a 17 year old student who got busted for soliciting a Chinatown hooker. USA Today is still talking about the crane collapse in New York.
I feel like I'm in some alternate universe, where the country was days from falling apart & no one noticed. It's five minutes to midnight, the warheads are armed, and not a soul in my office (and these boys here love their doomsday scenarios) even noticed.
I called the Professor to get his views. Maybe, I thought, I'm just being an alarmist and reading too much into this.
His comparison? He says it's as if General Motors collapsed - in a day. Bearns was one of the Big Four. If they failed there would have been a ripple effect, and yeah: it could have all fallen down. The entire system. And it came as a shock on Friday, because no one saw it coming. And now they wonder, who else is at risk?
We'll never know how close we came, because the feds bailed them out on Sunday.
I'm tempted to blame the war, but the Professor says that's a minor contributor. The pressure has been coming from the mortgage crisis, the falling dollar, and the high price of oil. These have all been compounded by the Bush administration's glacial response to all of these.
In March he would have given 10% odds for total system failure.
After this weekend, he gives it 20%.
And by total system failure, he means: the economy collapses, wages fall by 50%, and we rebuild it by scratch.
It is in a few media outlets: The Wall Street Journal, The New York Times, and BBC are all covering it.
And not in others - it's total media silence. CNN is all concerned about Obama's ethnicity. The Honolulu Advertiser is covering a 17 year old student who got busted for soliciting a Chinatown hooker. USA Today is still talking about the crane collapse in New York.
I feel like I'm in some alternate universe, where the country was days from falling apart & no one noticed. It's five minutes to midnight, the warheads are armed, and not a soul in my office (and these boys here love their doomsday scenarios) even noticed.
I called the Professor to get his views. Maybe, I thought, I'm just being an alarmist and reading too much into this.
His comparison? He says it's as if General Motors collapsed - in a day. Bearns was one of the Big Four. If they failed there would have been a ripple effect, and yeah: it could have all fallen down. The entire system. And it came as a shock on Friday, because no one saw it coming. And now they wonder, who else is at risk?
We'll never know how close we came, because the feds bailed them out on Sunday.
I'm tempted to blame the war, but the Professor says that's a minor contributor. The pressure has been coming from the mortgage crisis, the falling dollar, and the high price of oil. These have all been compounded by the Bush administration's glacial response to all of these.
In March he would have given 10% odds for total system failure.
After this weekend, he gives it 20%.
And by total system failure, he means: the economy collapses, wages fall by 50%, and we rebuild it by scratch.
2 comments:
Is the professor SLC?
Yessir!
And I got a free macro-econ lesson out of it, too.
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