The Fed bailed out the system by making the banks front money to LTCM in form of new equity so it would not be forced to liquidate. In doing so, this took pressure off of prices of its assets and it was able to more leisurely liquidate over time, helping asset prices in the process and keeping BT and Lehman from going bk. taxpayers made no payments and the banks made money on the investment.
The effect will be obfuscated by endless attempts by central banks in partnership with the international private banking establishment to minimize any effects.
What was tht effect of the Long Term Capital blowup? who knows? What is the effect of higher oil prices? What is the effect of the housing bubble?
The banking system is controlled by people that are experts at obfuscating results. As a result, we, the public get led to believe that everything is hunky dory even though we may be standing on the edge of a cliff.
Can't argue with your first comment about central banks.
Interesting that you mention LTCM. I came across something a while ago that I've been trying to find again to forward on to someone. AG had been testifying and some Senator asked him why the Fed had interevened in LTCM, a "private business matter", which extended far beyond the scope of charged Fed duties. AG's response was that it was to prevent the collapse of the world's banking system. I don't recall what the reaction to that reason was, which is one of the reasons I'm looking for the source document and to see if I can find the original testimony and Q&A session in particular on that one.
Effect of higher oil prices? Higher prices from everything that uses oil directly as a component ingredient, and uses oil in the form of energy in the manufacturing process and delivery process - until demand for oil as a component, or as part of manufacturing or delivery decreases. With the caveat that world peak oil production may be at hand.
Housing bubble? Even AG admits it is going the end badly. But bubbles can go on much longer than people anticipate (i.e. internet bubble). According to a broker/realtor, housing price cycles should have peaked in 2000 (based on some kind of 9 year cycles), but never did. Equity still being tapped. How much longer? Who knows. May be partially dependent on Mr. A.G.
<<<<"The banking system is controlled by people that are experts at obfuscating results. As a result, we, the public get led to believe that everything is hunky dory even though we may be standing on the edge of a cliff.">>>> Most definitely agree.