Over the past three decades, the U.S. financial system has suffered a nasty financial shock every half dozen years or so, on average. And each incarnation has been different — from the 1987 stock-market crash to the savings-and-loan crisis to the demise of Long-Term Capital Management to the Great Global Financial Crisis, which arguably began six years ago this summer with the collapse of two Bear Stearns hedge funds.
If life were like the movies, it would be time for some world-weary-but-knowing character to drop the now-hackneyed line, “There’s a storm coming.” And whatever form that storm might take, would Wall Street be ready to weather it? Or more important for Main Street, would the U.S. economy be able to withstand another financial blowup without resorting to yet another taxpayer bailout?
Monday, July 1, 2013
Breaking Down a Pattern of Failure
James Pethokoukis notes the pattern of bank failures in the economy and argues that excessively concentrated financialization has harmed US economic growth:
Posted by Fred Bauer at 2:00 PM