In the fall of 2008, an earthquake along the opacity fault line in the global financial system triggered the acute phase of the Great Financial Crisis. Prior to the earthquake, investors Trusted Wall Street’s valuation stories without Verifying if they were true or not. The earthquake hit when investors came to doubt these stories and went to look for the data to verify them. Of course, where there was opacity, there was no data available. So naturally, investors “ran” from these securities (this included both structured finance deals and banks).
I agree with you, but then I thought it irresponsible of the Fed to say it was going to hike interest rates until something broke. Why? There is zero guarantee what breaks will be fixable by Fed policy.
It seems that the many prognostications that the Fed will hike rates until they break something are beginning to reach the point where they are breaking things. the UK pension system (tangentially), FTX, SVB. what's next? my take is momentum is gathering and perhaps by June we see the next domino fall. be careful all
I agree with you, but then I thought it irresponsible of the Fed to say it was going to hike interest rates until something broke. Why? There is zero guarantee what breaks will be fixable by Fed policy.
It seems that the many prognostications that the Fed will hike rates until they break something are beginning to reach the point where they are breaking things. the UK pension system (tangentially), FTX, SVB. what's next? my take is momentum is gathering and perhaps by June we see the next domino fall. be careful all