Levin: To change, we must challenge assumptions, fear

  • Article by: ROSS LEVIN
  • Updated: March 10, 2014 - 5:54 PM

When our large puppy went to a neighborhood dog’s birthday party, I was worried. Our dog is 85 pounds and 18 months old. He is friendly and rambunctious. There were kids and dogs of all sizes running around and I was prepared for the worst. My assumption was that, off-leash, he would be romping everywhere and getting his big body into all sorts of trouble. But my assumption turned out to be wrong. I almost didn’t go to the party, which would have deprived both me and our dog of a terrific night.

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mauianJul. 28, 13 1:45 PM

Personally, I think your client is wise to be afraid. Lehman Brothers went under in 2008 because they had insufficient capital. They had assets of $691 billion, and equity of just $22 billion… about 3%. The US Federal Reserve is currently sitting on these figures: $54 billion in capital on $3.57 trillion in assets, roughly 1.53%. This is actually less than the 1.875% capital they had in December. So the trend is getting worse, not better. All it would take for the Fed to technically "go under" is an asset loss of more than 1.5 %. Much of the Fed's assets is housing. Confidence inspiring? Of course in practice, they can just print more money, but I doubt they would find purchasers of their treasury notes.

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