Interesting, mundane truth telling:
Financial innovation left transparency in the dust. Wall Street devoted much of its intellectual and political capital to concealing the risks it was creating. This concealment was deliberate; products needed to be priced inefficiently to produce profits.
What the U.S. really needs is an economic Marshall Plan to rebuild itself, with all of the sacrifice and public service that would entail.
...the forces of denial, as potent as they are, are starting to weaken. Accordingly, investors should structure their portfolios for further equity declines.
- Interest rates have dropped to zero.
- Bank stocks have plunged by 90 percent or more.
- The Federal Reserve's balance sheet has exploded.
- Credit spreads have widened to historic levels.
- The economy is seeing massive asset deflation.
- Debt is being destroyed in record amounts.
- Unemployment is increasing each month.
- The financial industry is shrinking radically.
- Manufacturing activity has slowed sharply.
This is not a situation that is consistent with recent American experience. ....a depression...an economic condition in which traditional monetary and fiscal policy is rendered ineffective.
The economy will have to absorb trillions of dollars of bad debts and transition its resources away from speculative activities and toward new productive endeavors. The economy has to be completely retooled.... - Michael E. Lewitt