This is starting to feel a lot like 2008
Are you getting a nagging feeling of deja vu ? Bank downgrades here, weak banks shunned there, central banks accepting dodgy collateral over there and talk of recession all around. To me, this is starting to feel a lot like 2008.
I was on BNN this afternoon talking about the Fed running out of ammo, America banks getting downgraded, European banks needing $300 billion in capital, and Greece defaulting on its debt obligations plus a host of other issues – none of them good. TGIF.
Click on the picture below for the first video. You can go to the second one here.
P.S. – I wonder if Warren Buffett is feeling nervous about having so much of his wealth tied up in the two banks that just got downgraded, knowing that the downgrade was exactly because a bailout is not likely and people like him will have to feel some pain.
With Buffett shilling for the big O’s tax plan it wouldn’t shock me if TARP 2 is around the corner.
I’m convinced Buffett has made Obama an accessory to his Faustian bargain: rack up record investment returns for the league tables–by hook, crook, and crony capitalism if necessary–and in return, pay or express willingness to pay higher taxes. Not that it will have much impact on your batting average if I’m right….
Since all they did in 2008 is kick the can they were always going to catch up to it eventually..
It will leave all the same old problems for the next president assuming that it does not all implode before then. Bank reforms have been kicked into the long grass and practically abandoned. We are about to get the depression that we should have got in 2008 but this time it will be worse because the governments will be out of ammo and they will now be part of the problem. I am already hearing talk of supply side stimulus in the form of UK tax cuts which will not work, because without demand they will simply be saved. Yet it will devastate government finances at the same time.
You know, tax cuts are better than nothing even if they are saved because it reduces household sector indebtedness. The resulting effect on government finances, larger deficits, is endogenous and shouldn’t be the target. Reducing private sector debt and increasing employment participation should be.
Yes it is. Equities, gold, oil and other commodities dropping. Dollar up, US TREAS yields down. Looks like deleveraging from multiple asset classes and a flight to safety.