Redstate

Posted at 8:38am on May 1, 2008 The Credit Crisis and the Economic Outlook

Low Growth in Q1. What Lies Ahead?

By blackhedd

If you follow my posts here at RedState, you know that I was among the first to compare the current economic situation to the Great Depression (in its genesis and dynamics, not necessarily in its severity), and also to predict a long, stubborn economic funk. Now that many, if not most, mainstream commentators on the economy basically agree with me, it's time to turn contrarian again and take another look into the crystal ball.

Given that all kinds of Armageddon scenarios have now been baked into financial-asset and commodity prices, it's not a bad time to ask whether something less bad than the worst-case will actually occur.

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Posted in Bond market | credit crunch | depression | Economy | housing-market equilibrium | overnight repo | recession | stock marke — Comments (19)/ Email this page » / Read More »

Posted at 8:36am on Apr. 9, 2008 Waiting for the Patient to Start Breathing Again

Liquidity Crisis and Credit Crisis

By blackhedd

As I told you yesterday, there are gathering signs that the liquidity crisis which has roiled money markets since early this year, and became a series of convulsions after the Bear Stearns collapse, is abating.

If conditions continue to stabilize and improve, then we can say that aggressive Federal Reserve intervention indeed solved a systemic liquidity problem that affected the financial system more seriously than similar problems in the past.

But if the defibrillator worked and the patient’s heart is beating again, we’re still waiting for him to start breathing. Dealing with the liquidity crisis doesn’t mean we’ve done anything to fix the credit crunch.

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Posted in credit crunch | Economy | federal reserve | liquidity crisis | risk management — Comments (25)/ Email this page » / Read More »