What has been achieved by this recession? What problems/issues/imbalances have been resolved by the crisis/recession? What has changed in the system/institutions/market as a result of the financial crisis and recession?
My answer to those questions, is not much. Not much has changed. For all intents and purposes, the stimulus and emergency monetary measures have failed to allow the economy to clear (markets cleared, but are now showing strong signs of amnesia). The instability of the economy and the financial markets is greater now than prior to the onset of the financial crisis and recession.
As far as I can tell, the legacy of this crisis is heightened moral hazard, heightened financial risk and heightened economic risk - not to mention higher taxes, greater regulation. We have compounded our problems. We haven't resolved anything. As such we have simply deferred our day of reckoning...again.
For the time being, the market is flashing the all clear sign. This is going to be interesting. We'll all bowl back into the market, only to find out we were chasing ourselves. And should have known better.
No comments:
Post a Comment