If we learned anything over the last couple of months it is that we don't know the second and third derivative of how badly things will play out.

We knew that the housing market was in a bubble, but what we did not know was how its deflation would play out, i.e., a commercial market freeze. We did not know that that it would resonate in Germany or that it would cause a run on the bank in England. We did not know that Russia, a country that is supposed to be swimming in cash from oil revenues, will be tinkering with financial crisis again (at least we did not expect it with oil prices at $80).

What we know now is that our economies are a lot more interconnected than we ever imagined and also that the consequences of use of leverage will be found in places we never expected.





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