The collapse of the sub-prime mortgage market has had one positive effect: It has exposed the flimsy scaffolding propping up the financial system.
Back in 2006, most U.S. stocks were still hitting new all-time highs and credit markets were soaring on the heels of ultra-low borrowing costs. But at the time, one important leading indicator was still flashing red.
‘The U.S had 0.6% growth in the last quarter and 1% population growth. In my book, that’s a recession. Now Japan is running at about three-and-a-half percent at the moment and they’ve got no population growth so that is a real three-and-a-half percent. So overall, the Japanese are really pretty solid.’— Martin Hutchinson, editor of The Money Map Report