Yes, Ms. Yellen…There Will Be Another Financial Crisis
Janet Yellen, Federal Reserve Chair, recently stated;
“Will I say there will never, ever be another financial crisis? No, probably that would be going too far. But I do think we’re much safer and I hope that it will not be in our lifetimes and I don’t believe it will.”
That is a pretty bold statement to make considering that every one of her predecessors failed to predict the negative consequences of their actions.
Will there will be another “Financial Crisis” in our lifetimes?
Yes, it is virtually guaranteed.
The previous “crisis” wasn’t about just “an asset gone bad,” but rather the systemic shock caused by a “freeze” in the credit markets when Lehman Brothers filed for bankruptcy. Counterparties evaporated, banks froze lending and the credit market ceased to function.
Credit, not the stock market, is the “lifeblood” of the economy.
Of course, it is all good now because the Federal Reserve says so with Ms. Yellen placing a great amount of faith in the Federal Reserve’s own carefully constructing, and recently released results, of “bank stress tests.” Interestingly, EVERY bank passed with flying colors. In other words, the Millennial generation has now passed the baton of “Everybody Gets A Trophy” to the banking sector.
“Test results released by the Federal Reserve show that the 34 institutions under scrutiny have enough capital to make it through the two scenarios regulators posed — one akin to the financial crisis and another entailing a shallower downturn.
Under the scenarios, the banks tested ‘would experience substantial losses.’ However, in total, the institutions ‘could continue lending to businesses and households, thanks to the capital built up by the sector following the financial crisis.’
In the most severe scenario, bank losses are projected to be $493 billion. In the less severe, the losses were put at $322 billion.”
…click on the above link to read the rest of the article…
