"We’ve arrived at this unfortunate juncture in our nation’s financial history because of reckless behavior in both New York and Washington D.C. Interest rates were too often kept too low, lending standards were whittled away until they were non existent, and borrowing too much for one’s own good (both corporate and personal) reached the point where it carried no negative stigma. Our nation’s elected officials consistently spent far more than was collected in tax revenue and our nation’s regulators were so poor they wouldn’t have been able to cut it as mall cops.
We learned nothing from the foreshadowing events brought about by the reckless behavior on display at Long Term Capital, Enron, and WorldCom. Bill Fleckenstein neatly summed up the last 15 years in one his best-ever Raps back in January of this year. Anticipating today’s events, Bill wrote, “…initially, in the late 1990’s, we attempted to speculate our way to prosperity via the stock bubble. And then, when that didn’t work, we attempted to borrow our way to prosperity during the real estate bubble. Of course, those two ended the way they did, in an epic disaster, and now we’re trying to print our way to prosperity…” Well said, Bill. Let us all hope the U.S. experiment with pushing the button on Quantitative Easing is more successful for us than it was for the Japanese. But given all the behavior that brought us to this point, we will need to be both lucky and good from this point forward." - Jack McHugh, on The Big Picture