Bankers are also losing confidence in governments.18 months ago it was the banks that failed to inspire confidence
The failure of Washington Mutual – the largest bank failure in US history by a very large measure – demonstrates that the US financial system, and probably the global system, is now balanced on a knife edge
and it was the banks own lack of confidence that necessitated government support
global central banks have become the liquidity providers of first resort because private banks and sovereign funds are not letting their cash out of their sight.It was the banks and capital markets that failed, not governments. As Roger Montgomery points out, much of this is hindsight
The people pointing out worries about China today are those that said the banks would rise to $100 before the GFC hit. One of the easiest things to observe in the markets is that predictions of a change in direction are far more frequent than they are accurate. And anyone can explain what has happened, but few seem to be able to look far enough ahead to be positioned well.
