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The world's biggest banks start to reveal the extent of their losses from a lending binge that has helped buoy the global economy through an extraordinary Decade of Debt.
A credit crunch on this scale can only end in economic dislocation.
Damian Reece Daily Telegraph 11/12/2007

That's certainly the view of Dick Berner and David Greenlaw, US economists at Morgan Stanley, who have been converted to the idea that America will suffer a recession next year.

When asset prices are ballooning leverage is a wonderful thing, super-powering returns, as witnessed in the UK housing market.

But when prices start to fall that leverage acts in a savage downward spiral, wiping out gains on investments that prove as flimsy as the thesis they were based upon.

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During times of market turmoil it helps to simplify and get basic – explain things to a public and even yourself in terms of what can be easily understood. Goodness knows it’s not a piece of cake for anyone over 40 these days to understand the maze of financial structures that now appear to be unwinding.
They were created by youthful financial engineers trained to exploit cheap money and leverage who showed no fear and who have, until the last few weeks, never known the sting of the market’s lash.
Bill Gross, September 2007 Even more excellent than usua