The biggest bill of sale sold to the public after the great financial crisis was that the legislation enacted forced the banks to maintain a higher level of integrity in their business dealings. But nothing could be further from the truth. The various pieces of legislation enacted after the 2008 de facto banking system collapse ultimately made it easier for the TBTF banks to move their fiat currency-based Ponzi scheme off-balance-sheet.
Over the last 10 years a massive Rube Goldberg credit market black hole has formed. Point of note: the Fed is injecting printed money into the banking system at a faster rate now than at any time after 2008.
While the coronavirus to be sure is the “black swan” that pricked the stock bubble, market forces eventually would have accomplished the same result. The Fed started bailing out the banking system in September, printing half a trillion dollars to save the banks well before anyone had ever heard of coronavirus or Covid-19. As it turns out, the Fed was also bailing out hedge funds. Powell knew back in September that a massive credit problem was starting to bubble up.
Chris Marcus of Arcadia Economics and I try to put some context on the current market crisis that was triggered by coronavirus but was an eventuality anyway:
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