Being in the financial industry for the last 26 years, I have seen quite a few crisis before. Had experienced the EMU/GBP, Asia, Russia, Dot.com and GFC/Sub-prime financial meltdowns. The 2008 GFC taught us the dangers of excessive over-leverage and too big to fail, but have we learnt the lesson? Nope. The central banks have taken over the role of the bad banks instead. They have crazily ballooned their balance sheet and push for negative rates to drive growth. But we hardly have any in the last 8 years.
Global banks, starved for revenues, are now doing a periodic chopping of headcount to bring expenses down as profits decline. In 2008, an economist predicted that the world would see 10 years of slow growth and we laughed at his ridiculous prediction. Since then, the debt balloon has grown multiple times larger than the last crisis. I thought I have seen it all in my career, but then this comes along. A strange new financial world indeed…
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