Ominous bursts of smoke have been rising from Gillian Tett recently.
On September 12, the lady who gave us Fool's Gold pointed out that six key aspects of the financial system in 2008 are far worse now.
The banks are bigger. Shadow banking is bigger. Investor faith hinges on central banking 'wisdom' and liquidity, while the top 5% of bankers are soaking up 40% of that support in bonuses. No one has been jailed for their role in the sub-prime fiasco. And the US government agencies now account for 90% of the mortgage market...
Today's smoke is rising over the Federal Reserve's decision to keep buying
smack bonds at the rate of $85bn a month. It appears to have concluded that the West simply can't handle the withdrawal symptoms. Meanwhile, the UK regulatory elite has finally started to ring the bell over the fact that only 10-15% of the money our banks create actually goes to productive firms, while the rest is stoking financial asset bubbles... And, oh look, the real estate agency, Foxtons, has soared on its return to the stock market.
Either Gillian Tett's on fire, or something else sure as Hell is.
Image from JetSetRnv8r.