TAILIEUCHUNG - A Failure of Capitalism: The Crisis of '08 and the Descent into Depression_4

Tham khảo tài liệu 'a failure of capitalism: the crisis of '08 and the descent into depression_4', tài chính - ngân hàng, ngân hàng - tín dụng phục vụ nhu cầu học tập, nghiên cứu và làm việc hiệu quả | The Underlying Causes stock values are rising the financial markets as well as the consuming public expect them to keep rising indefinitely. One even hears it said that financiers are stupid. I am skeptical that readily avoidable mistakes failures of rationality or the intellectual deficiencies of financial managers whose IQs exceed my own were major factors in the economic collapse. Had the mistakes that brought down the banking industry been readily avoidable they would have been avoided. There were plenty of warnings of a housing bubble beginning in 2003 warnings about excessive leverage in financial firms and even rather precise predictions of the debacle that has ensued as in When Bubbles Burst an eerily prescient paper by Thomas Helbling and Marco Terrones published in October 2003. Robert Shiller wrote a similar paper in April of the following year as did another economist Avinash Persaud the same month. The Economist magazine spotted the housing bubble in September 2002 and soon became obsessed with it and its possible broader implications for the financial system and the . economy as a whole in an article published on July 3 2004 we read Housing optimists dismiss these fears by pointing out that doomsters such as The 77 A Failure o f c a p I I A I. I s M Economist began wringing their hands about a property bubble a year ago and yet prices have continued to climb. But this has made the housing market not safer but more vulnerable. The first law of bubbles is that they inflate for a lot longer than anybody expects. The second law is that they eventually burst. A particularly good piece called Will It Be Different This Time ran in the Economist in October of 2004. The Financial Times soon picked up the thread. The fragility of the banking system and the inadequacy of banking regulation were related topics discussed frequently in the financial press. The banks must have known as much as economists and financial journalists did about their industry. They .

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