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The bail out tools available during the 2008 crisis is not available today. The 2008 can was kicked down the road with few safe guards to prevent what happened,
by wesleywt 4y ago
The bail out tools available during the 2008 crisis is not available today. The 2008 can was kicked down the road with few safe guards to prevent what happened, happening again. You are in for a rough time. I recommend EconTalk Podcast to find out what I am talking about.
- VirusNewbie 4y agooh man, another one who thinks this crash will be worse than last time. Just articulate why you think cascading failure will happen in the real estate market at this point. You predict that people who are underwater are going to be forced to sell because...why? And you don't think the people who are renting will want to buy houses?
- dcolkitt 4y agoLiterally all of the bailout tools from 2008, plus many more are available today. In fact the Fed is much more willing to quickly deploy QE because it has experience and has seen it work. This isn’t hypothetical, because it’s exactly what happened in March 2020, and why the Covid recession was a V-shaped recovery.
- throwawaylinux 4y agoYou think the Fed is more inclined to print money when inflation is running above 8% than when it was 2.something? What's the reasoning there?
- dcolkitt 4y agoInflation is a function of an overheated economy running with a tight labor and commodity market. If you're positing a 2008-like crisis followed by a deep recession, it's virtually certain that the economy will become deflationary, as people hoard cash. You don't have to take my word for it. From 2007 to 2008 inflation crashed from nearly 5% to 0.1%.
- throwawaylinux 4y agoYou said the tool is available _today_ though. It's not. Of course on some other day when inflation is not out of control it would be available, but not today.