“We were at the brink of something that would have made anything that’s
happened in financial history look pale. We were very, very close to a system that
was totally dysfunctional and would have not only gummed up the financial
markets but gummed up the economy in a way that would take us years and years
to repair.” – Warren Buffett
“There could be a lot more bank closures in the coming months which could create
significant investment opportunities. As many as thousand banks could go belly
up.” – Wilbur Ross
“It is quite likely that the current synchronized global economic boom and the
universal, all encompassing asset bubble will lead to a colossal bust.”
– Dr. Marc Faber
Introduction – Adding Perspective
This report attempts to provide the reader with data and perspective on the current financial crisis, often missing in the barrage of the media and commentary of experts. Crises are endemic to market cycles. Whenever a super cycle turns, the crisis is that much larger. The 1929 crash was the last big crisis in which the Dow Jones fell by 90% and it took the US six years to reach the same level of GDP. In more recent times, housing/credit bubbles have burst regularly across the world. The chart below shows the damage these have caused to markets.
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