I tend to look at events like the GFC like getting your leg snapped in half by a combine harvester when you were showing off to your friends. Bad decisions led to bad outcomes. The low rates and the QE are the opioids, and you might need them as you heal and get back on your feet. You have to stop at some point, probably earlier than you’d like. If you keep on them too long you get addicted.
We’re addicted now. But using them after our leg turned into a pretzel wasn’t the wrong idea at the time. We just couldn’t stop.
The alternative of biting down on a leather strap while the doc amputates wasn’t better even knowing what we know now. That would have been the situation if we let the GFC play out. Total and utter agony.
The Sackler family drives a hard bargain! Enough with my dead analogy…
The temptation is still strong, even now. I’m not sure Warsh has the credibility to pull off remaking the Fed. It’s going to be a tough first few meetings after a long confirmation. He might get lower rates, but sustained balance sheet reductions will be an up hill battle.
Impossible to predict how he will do on the job. He might need to make all kind of promises to get confirmed, but at least from his outlook, he’s a breath of fresh air.
I tend to look at events like the GFC like getting your leg snapped in half by a combine harvester when you were showing off to your friends. Bad decisions led to bad outcomes. The low rates and the QE are the opioids, and you might need them as you heal and get back on your feet. You have to stop at some point, probably earlier than you’d like. If you keep on them too long you get addicted.
We’re addicted now. But using them after our leg turned into a pretzel wasn’t the wrong idea at the time. We just couldn’t stop.
The alternative of biting down on a leather strap while the doc amputates wasn’t better even knowing what we know now. That would have been the situation if we let the GFC play out. Total and utter agony.
100% the temporary emergency solution, became the permanent status quo.
The incentives to keep it going was too strong, now breaking out of it, is going to be difficult. Or we will continue to deal with the consequences.
The Sackler family drives a hard bargain! Enough with my dead analogy…
The temptation is still strong, even now. I’m not sure Warsh has the credibility to pull off remaking the Fed. It’s going to be a tough first few meetings after a long confirmation. He might get lower rates, but sustained balance sheet reductions will be an up hill battle.
Impossible to predict how he will do on the job. He might need to make all kind of promises to get confirmed, but at least from his outlook, he’s a breath of fresh air.
This is magnificent in its clarity, cogency, and concision. You have one more faithful (and grateful) subscriber now.
Thank you so much @chenrui I appreciate you taking the time to read, subscribe and share your compliments!
Really glad you liked it!