ML-Implode News - Doug Noland - Despite Apologists, Distortions As Bad As Ever

With Washington fiscal and monetary stimulus having reflated the asset markets, what limited appetite that existed for so-called "financial reform" has virtually disappeared.Â It would be laughable if it weren't so maddening.Â The GSEs still completely dominate mortgage finance, which implies ongoing market distortions.Â They are basically as big -- and as thinly capitalized -- as ever.Â The nation's goliath banks have grown only more dominant.Â
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From a systemic standpoint, the notion of "de-leveraging" has been a myth. And for five years now unprecedented global imbalances have worsened. Chinese and EM Credit Bubbles and attendant Bubble economies have inflated to historic proportions. Indeed, there is a fine line between "frightening financial meltdown" and unleashing history's greatest inflation of global securities prices. The only justification for the "100-year flood" thesis is wishful thinking.

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Doug Noland - Despite Apologists, Distortions As Bad As Ever