Virtuous cycle

Bartlomiej Owczarek weblog

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“So the message from last week is that central banks have no game plan”

Comment in FT by Wolfgang Münchau:

It is a fully fledged solvency crisis that has arisen because two giant and interlinked bubbles burst simultaneously – one in property, one in credit – leaving banks and investors on the brink of bankruptcy, some hanging on by their fingertips. Yet there is nothing the central banks are offering at this stage to alleviate a solvency crisis.

Sounds rather dramatic – “some hanging on by their fingertips” – doesn’t it. Maybe we are currently going towards the edge macro-wise and we only start to realize.


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  1. September 29th, 2008 | 10:34 pm

    […] In December 2007 I quoted this passage I found in FT: (…) two giant and interlinked bubbles burst simultaneously – one in property, one in credit – leaving banks and investors on the brink of bankruptcy, some hanging on by their fingertips […]