Tuesday, 1 June 2010

Global financial system is sick and needs an extended period of convalescence

My two cents worth on a lot of the macro calls being made by cheerleaders that the economic fundamentals are improving and that a major rally lies ahead is that they fail to distinguish adequately between the financial economy and the real economy (i.e. the trade in goods and services (not financial)).

The global financial system is sick and needs an extended period of convalescence or it will suffer from a major cardiac arrest. The plight of central banks is that they are running out of options to provide the right kind of intensive care and meanwhile the hapless private sector bankers are still running the asylum.
Strange isn’t it?

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