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Does Mike Norman contribute to this blog anymore ?What is his synopsis on the 2008 downturn ?What was "balanced" such that the market retracted ?Was there any government force that retracted liquidity out of the real economy and back into the Fed / Tsy ?Or was it all market side ... ?
Goog,The deficit was collapsing as early as 2007 (many surplus months) and by early 2008 it was too small and Bear Stearns collapsed in March 08 timeframe IIRC and at that point we were circling the toilet bowl in earnest...btw speaking of "retracting liquidity" as we speak the Treasury is also running a SURPLUS this month (Dec 2012) as it is running up against the "debt ceiling" again and cannot freely spend $NFA into the economy.As of yesterday's DTS it stands at 27B surplus so far... this is not good... rsp
Was there any government force that retracted liquidity out of the real economy and back into the Fed / Tsy ? A massive market failure lead to extraordinary govt action to head off a depression, but the govt action did not address the underlying issues that led to the failure, and they remain in place. In fact the TBTF's have consolidated and are bigger now.
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