Today in the WSJ I read that the current financial crisis is the worst since the great depression? Really? Great Depression was pretty bad, and really didn't end from the time the Market crashed till WW2, it created long lines for welfare checks, double digit unemployment, and "hoovervilles" as well as an "alphabet soup" of new gov't agencies under Roosevelt.
Today unemployment is at around 6%, not too bad all things considered. I'm not seeing double digit interest rates and mile long lines at the gas station a la Carter years. The rise in foreclosure is limited to certain states (Florida and California), and is heavily impacted by foreclosures on secondary residences. Somehow I have a feeling that the market gurus are making this out to be much more than it really is, perhaps it is because sensational news is what sells, perhaps it is because this "crisis" is one of the biggest things to happen to the markets for a while. But not so long ago we experienced 9/11, fall of Worldcom, Enron, and the burst of the tech bubble and that had a lot of potential to really mess things up, granted it has caused difficulties but they have passed for the large part, and this too shall pass.
On a lighter note, some sort of genius combined my interest in politics, humor, and love of hockey. http://www.youtube.com/watch?v=URIypadX3n0
3 comments:
Wow, this is very good.
How about the fact that this is payback by Enron out of its grave, for all the dumb regulations that were inacted right after, and we are about to get even more legislative input.
P.S Write something about the current meltdown in Mother Russia
hmmm, Zhenya, the credit crisis is a result of lax regulation in mortgages, incorrect measure of risk on 'mortgage backed securites', and extremely easy credit over the last 7+ years. Some people think fair value accounting for bank assets further messed things up once the credit crises began... http://www.economist.com/finance/displaystory.cfm?story_id=12274096
Peter, the credit markets were close to freezing up at multiple times this week, and the Fed and/or Treasury had to inject hundreds of billions into the system, rescue aig, fannie and freddie, tighted rules on short selling, freeze short selling on a list of hundreds of financial stocks, insure money market funds against losses of 50billion, and then finally announce friday a program to create an entity that would buy hundreds of billions of toxic assets from financial institutions. Who knows what will happen this next week and the following few months.
Post a Comment