Prior to the NASDAQ crash in early 2000, American commentators were fond of describing their economy as being in a “Goldilocks” phase–with all economic indicators being “just right”.
That phrase dropped out of circulation after April 2000, but a level of complacency still ruled when that stock market crash appeared to have little impact on the real economy.
Complacency dramatically left the building today, with the release of the Bank of International Settlement’s (BIS) 77th Annual Report. The BIS turns the Goldilocks story around, and sees it not from Goldilocks’ perspective, but from that of the Bears. Just as the Bears’ domestic idyll was disturbed by Goldilocks the Home Invader, the apparently neat global financial system has been put at risk by out of control speculative lending.
