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The Bubble, the Stampede, and the Aftermath

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Posted in 2007-08 Financial Crisis Tagged with: , , ,

It is time, finally, to return to the crisis of 2008, to the conference at Jackson Hole, August 21-23, where we began.  We know now that the policy makers who stayed home, in Washington, New York, London. Frankfurt and Basel, had been seeking for a year to defuse the situation behind the scenes. We know, too, that policy-makers had little idea how dangerous the situation would become, and conference-goers still less. After all, the crisis hadn’t happened yet. Three weeks later Lehman Brothers filed for bankruptcy. An all-out financial panic ensued, and for the next three weeks global markets tottered