World is turning
The most “interesting times” in financial markets for many years. At the heart is the decline in US housing but passing through are many factors: regulation, consumption, use of financial derivatives, currencies, China… All analysed with much more acumen by many others, than by me.
Worth knowing about because I believe the US (particularly) but “anglo-saxon markets” in general have reached a philosophic crossroads.
It is socio-economic. It is the biggest cross roads since WWII and it is likely to be decided only by few (is it ever different that the few lead the many?)
The crux of the matter is those who believe in minimum government intervention, light regulation and the self-correcting nature of markets vs those who argue that the markets have proved that greed has demonstrated markets can not be as lightly regulated as before.
Why does this matter?
This time the problem will be solved and the US will bounce back (note long term optimism of eg Warren Buffett). But the next time the problem will be bigger. The world more globalised and the risk of a large depression which affects the common man will be high. See Michael Lewitt of HCM, Martin Wolf of FT, Prof Roubini of NYU.
Indirectly, for the creative arts this could be a boon time. On one hand there will be less money for creative arts – economic setbacks tend to cause this. On the other hand, clever creative people who went in to financial engineering for the money etc. will not be so attracted and may end up becoming more “productive” members of society [note I do think finance is “productive” but is arguably overweighted with clever creative people who could go into other industries] such as teachers, nurses and potential swell the creative classes too… more artists, writers, thinkers…
The world you live in is going to go through another big change this generation. Watch.