A sudden eruption, and the surprise of realising that the world he understands is not the one he actually inhabits. – Paolo Bacigalupi, The Windup Girl
This time really is different.
Stock markets are crashing after a runaway boom. Again. And the financial sector is peddling complex derivative products. Again. (Check out the US satirical rag The Onion’s brilliant take on this: “Financial Sector Thinks It’s About Ready To Ruin World Again”)
But whereas previous periods of Wall Street mayhem have been preceded by a Main Street boom, this one hasn’t. We’ve re-entered a period of financial market volatility with unemployment still within cooee of its peak during the 1990s recession (see figure 1– which doesn’t factor in the changes in the definition of unemployment since 1990, and the fall in the participation rate during this downturn).
Read more: http://www.businessspectator.com.au/article/2013/6/24/economy/gasping-krugman%E2%80%99s-ocean-theory#ixzz2X7BUcGTL