It's (Really) the Economy, Stupid

Monday, April 14, 2008 | 06:38 PM

Jesse Eisinger notes that the politicos still don't get the enormity of the Financial crisis yet: 

"There will be blood. In March, the markets got a reprieve, as hope rose that the crisis had passed. Unlikely. Over the next year, we will continue to see home-price depreciation. And much worse. We will have more failures similar to that of Bear Stearns. Since the banking system is pulling back, it will be much less willing to lend to consumers and, more significantly, to companies, which won't have the money to invest in new plants and research and development. That means layoffs are just beginning. Personal bankruptcy is rising, and corporate bankruptcies are starting to go up. State and local governments will enter financial crises. The future holds massive pension shortfalls and retirement agonies. The problem is that the Fed has fired most of the bullets from its six-shooter, yet the enemy advances. The next president may well be dealing with markets in a continued free fall and a Fed that's out of ammo and suffering serious damage to its reputation.

The landscape has been utterly transformed, yet the political establishment has barely grasped the enormity of the crisis. Washington isn't solely to blame—all the supposed financial wizards on Wall Street missed it too. Treasury Secretary Hank Paulson has announced a regulatory overhaul, but it hardly addresses any of the sources of the problem. President Bush has given a handful of typically tone-deaf speeches about the economy. But the proposals from this administration have been characteristically slow, myopic, and nowhere near ambitious enough to address the problem."

Go read the full piece . . .


It's (Really) the Economy, Stupid
Jesse Eisinger
Portfolio Apr 14 2008

Monday, April 14, 2008 | 06:38 PM | Permalink | Comments (25) | TrackBack (0) add to | digg digg this! | technorati add to technorati | email email this post



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I really don't know why anyone would want to be the next president.

If I was elected I would send out a legion of spokespeople to bluntly dump on the US population all the terrible statistics the previous administration had been so "deviously hiding."

Posted by: Red Pill | Apr 14, 2008 6:56:11 PM

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