[PEN-L:4724] Re: Sumitomo

[dhenwood@xxxxxxxxx (Doug Henwood)]

At 8:45 AM 6/18/96, JDevine@xxxxxxxxxxxxxxx wrote:

>also, _if and only if_ the "real economy" is suffering from
>structural instability (as, say, in the late 1920s), financial
>disasters of this sort can trigger real collapse.

Well, yes, but we have big government and indulgent central banks to
contain a financial panic to the financial sector, at least so far. (One
prominent exception: as Penny Ciancanelli - are you still here, Penny? -
once put it, with the debt crisis, the First World banks got a Minsky
bailout and the Third World people got a Fisher deflation.) With the
exception of households, all U.S. sectors are in much better financial
shape than they were 5 or 7 years ago; both financial and nonfinancial
corporations have really cleaned up their balance sheets in the first half
of the 1990s.

Doug

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