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Surprised Again: The Covid Crisis and the New Market Bubble

From the publisher:

About every 10 years, we are surprised by a financial crisis. In 2020, we were Surprised Again! by the financial panic of the spring triggered by the Covid-19 pandemic. Not one of the 30 official systemic risk studies developed in 2019 had even hinted at this financial crisis as a possibility, or at the frightening economic contraction that resulted from the political responses to control the virus. In response came the unprecedented government fiscal and monetary expansions and bailouts. Later 2020 brought a second big surprise: the appearance of an amazing boom in asset prices, including stocks, houses and cryptocurrencies.

Alex Pollock and Howard Adler lived through this historic instability while serving as senior officials of the U.S. Department of the Treasury. Their book lays out the many elements of the panic and its aftermath, from the massive elastic currency operations that rode to the rescue by financing the bust with unprecedented government debt to the consequent asset price boom, which included a renewed bubble in house prices financed by government guarantees. It considers key leveraged sectors such as commercial real estate, student loans, pension funds, banks and the government itself. It reflects on how to understand these events both in retrospect and prospect.