Why Wall Street Has Forgotten The Lessons of 2008----Thanks, Fed!

While I agree with Kashkari that Wall Street is forgetting the lessons of the 2008 financial crisis (and is participating in the development of another dangerous economic bubble), he seems to be absolving the Federal Reserve of its massive responsibility for inflating the mid-2000s U.S. housing and credit bubble as well as the current “Everything Bubble” that I am warning about. Make no mistake: by holding interest rates at artificially low levels and pumping large amounts of liquidity into the financial system, the Fed plays the primary role of creating bubbles – not Wall Street. The Fed is the dog and Wall Street is merely its tail – not the other way around. Of course, Wall Street is guilty for participating in bubbles originally created by the Fed – it takes two to tango.

 

 

 

http://davidstockmanscontracorner.com/?p=182657&preview_id=182657&preview_nonce=751e2cafe4&preview=true

David Stockman's Contra Corner is the only place where mainstream delusions and cant about the Warfare State, the Bailout State, Bubble Finance and Beltway Banditry are ripped, refuted and rebuked. Subscribe now to receive David Stockman’s latest posts by email each day as well as his model portfolio, Lee Adler’s Daily Data Dive and David’s personally curated insights and analysis from leading contrarian thinkers.