“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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[...] 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 [...]