Supervision by regulators appears to have been inadequate. The financial system is under stress, and fresh problems could start popping up in a multitude of unexpected places. Odds are that further unpleasantness is in store. Whatever your horizon and risk appetite, it’s particularly important to keep cash in a handy and safe place, like an F.D.I.C.-insured bank account, or a money-market fund that holds high-quality government securities. So if you are a long-term investor, you may be best off sticking to your plans - as long you are confident that you can ride out the difficulties that may be ahead. And from what I can see so far, the Fed, the Treasury, the Federal Deposit Insurance Corporation and other regulators are doing a solid job of keeping the financial system working during this turbulence. Zandi is cautiously optimistic about the strength and stability of the economy, and the Fed’s battle against inflation. “I think it’s going to be OK, yet I also think we’re just one or two or three small bank failures away from people losing faith in the system, losing faith that their money is safe, and if that happens, who knows?” “This is a very uncomfortable moment,” Mark Zandi, chief economist at Moody’s Analytics, said in a conversation on Tuesday. Maximum employment? Superb.īut as the movie suggests, if you put too many seemingly benign elements together and add vastly more complexity, before you know it you’ve concocted a self-contradictory, nihilistic mixture that can spin your quiet world utterly out of control.
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