The ongoing banking crisis (from 2008 to present) presents a very big challenge to both investors and policy makers. The global economic system is broken. The break is a sign of a fault in the system. The system can't be tinkered with; it must be allowed to collapse, so that something different, and better, can be constructed.
Obviously, the perception of collapse is deeply troubling for capitalist ideologues. All is not lost however, since we are not speaking of the end of capitalism; merely its evolution. Capitalist hegemony is not really in doubt, although perhaps it should be.
Warren Buffet is the answer, at least in America - where he is singlehandedly and simultaneously, saving the banks and giving money away. This week, he purchased a slug of Bank of America. He's already bailed out Goldman Sachs.
The American (global) banking system is fatally broken. The US is bankrupt (US growth is stalled, unemployment is higher and the dollar is weak) and the chief executives of various big US banks are hiring criminal defence lawyers...
What else do you need to know?
The collapse of the world's greatest economy would be a catastrophe for everyone, not least the global plutocrats. So, Warren Buffet is buying bank stocks. The alternative is allowing banks to go bust (bad for voters) or nationalising them (bad for politicians). No wonder Capitol Hill is stuck.
The question is, how much of Berkshire Hathaway's cash can he spend propping up the system?
Hats off to Warren though. He's saving the American banking system.
The Fed can't really authorise another round of QE. The Tea Party wing of the Republican party will oppose anything that looks like additional help for the bankers.
I am a libertarian who believes in treating everyone fairly and with consideration.
I'm pretty sanguine about Buffet's investments - it's interesting that he's giving his own money away and spending his company's -
Perhaps his is the next stage in the development of capitalism. At least it is likely to be better than anything that the politicians can devise...