Thursday, June 2, 2016
Some laws just write themselves...............
Behind the scenes, the stocks of credits and debits were building in an unsustainable way, like piles of bricks. It is always surprising how many bricks can be piled one on top of another without their collapsing. This truth is embodied in the first law of financial crises: an unsustainable position can continue for far longer that you would believe possible. That was true for the duration of the Great Stability. What happened in 2008 illustrated the second law of financial crises: when an unsustainable position ends it happens faster than you could imagine.
-Mervyn King, The End of Alchemy: Money, Banking, and the Future of the Global Economy