As Loans Dry Up, So Will Economy
Jon Markman echoes our sentiments in his latest "As loans dry up, so will economy." and also takes a meaningful look at
the monster Reagan's deregulation created and what we call "the ascendancy of the house of finance".
Those who say that the worst banking news is already out are more wishful than watchful. Take a look at what happens when businesses can't borrow what they need.
All of these efforts to create what a Harvard endowment executive termed the "global liquidity factory" generated ungodly fees and
were predicated on the notion that the real assets underlying the loans and derivatives, U.S. real estate, would keep rising.
Now, of course, we know that as soon as home prices began to peak in 2006 and mortgage loans began to collapse,
the bond values began to collapse, and the gig was up.
Despite many bank executives' wishful comments to the media over the past few weeks that "the worst is behind" them,
the business that supported million-dollar salaries to 25-year-old bankers fresh out of graduate school is dead.
the monster Reagan's deregulation created and what we call "the ascendancy of the house of finance".
Those who say that the worst banking news is already out are more wishful than watchful. Take a look at what happens when businesses can't borrow what they need.
All of these efforts to create what a Harvard endowment executive termed the "global liquidity factory" generated ungodly fees and
were predicated on the notion that the real assets underlying the loans and derivatives, U.S. real estate, would keep rising.
Now, of course, we know that as soon as home prices began to peak in 2006 and mortgage loans began to collapse,
the bond values began to collapse, and the gig was up.
Despite many bank executives' wishful comments to the media over the past few weeks that "the worst is behind" them,
the business that supported million-dollar salaries to 25-year-old bankers fresh out of graduate school is dead.
Comments