2021: The year the debt chickens might come home to roost Desmond Lachman, Opinion Contributor © Getty Images 2021: The year the debt chickens might come home to roost
On Wall Street it is said that the market consensus view on the economic outlook generally proves to be wrong. Judging by the overwhelming market consensus that we will see a continued V-shape recovery from the pandemic-induced economic crisis, it would seem that 2021 will again provide support for the Wall Street adage.
That s because markets will have underestimated the serious risks to both the U.S. and world economic outlook from a dark COVID-19 winter and from the massive debt buildup during the pandemic.
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Global markets are partying like it is 2008 (but a crash Is coming) | American Enterprise Institute
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Global Markets Are Partying Like It Is 2008 (But a Crash Is Coming)
After the 2008 U.S. housing and credit market crisis, Chuck Prince, the former Citibank CEO, explained his bank’s speculative activity during the bubble by noting that when the music is playing you have to dance. Today, with the world’s major central banks continuing to supply the markets with ample liquidity, there can be little doubt that the music is blaring and the markets are dancing.
In late 2008, at a meeting with academics at the London School of Economics, Queen Elizabeth II asked why no one seemed to have anticipated the world’s worst financial crisis in the postwar period. The so-called Great Economic Recession, which had begun in late 2008 and would run until mid-2009, was set off by the sudden collapse of sky-high prices for housing and other assets something that is obvious in retrospect but that, nevertheless, no one seemed to see coming.