August 9, 2007 - the day the system broke

I started this blog in June 2010 because of a feeling that there was something very wrong in the financial world.  Most of my fears then seem to have been overblown, and I don't post very much anymore.  I would like to say definitely that everything is ok.  But they aren't, which is evidenced by the fact that the Fed has kept its rate at 0% for almost 7 years (it was lowered on Dec. 16, 2008).

It is interesting to note that August 9, 2007 was the day that things started to go wrong.

See http://www.theguardian.com/business/2011/dec/01/credit-crunch-pinpointed-august-2007

The former boss of Northern Rock, Adam Applegarth, pinpointed the start of the first credit crunch as 9 August 2007. It was the "day the world changed," he said. The European Central Bank and the US Federal Reserve injected $90bn (£45bn) into jittery financial markets that day, but it was still not enough to stop banks being frozen out of the markets they relied on for funding.

http://www.alhambrapartners.com/2014/08/11/the-anniversary-no-going-back/
Everything that has occurred in the years since can be traced to those days in August 2007 when money markets broke down for the first time. Even the current, though measured, move away from the US dollar in global trade is as much a downstream event of then as anything else. Careful examination reveals that it was the eurodollar system, linked to trade and financialism, that has wrought such persisting havoc and malaise.

http://www.alhambrapartners.com/2015/08/10/still-no-going-back-eighth-anniversary/ In very general terms, central banks could do no wrong prior, and then “suddenly” have been able to do nothing right since. The titanic shift in August 2007 cannot be overstated. The Fed (and all its central bank network) continued to do as it had done before, starting in September 2007 with its first very orthodox, quite textbook 50 bps cut in the federal funds rate. From then on, no matter what it did, the financial system remained unaffected and so with it the economy.

http://www.theguardian.com/business/2012/aug/07/credit-crunch-boom-bust-timeline
Larry Elliott, economics editor, said: "As far as the financial markets are concerned, August 9 2007 has all the resonance of August 4 1914. It marks the cut-off point between 'an Edwardian summer' of prosperity and tranquillity and the trench warfare of the credit crunch – the failed banks, the petrified markets, the property markets blown to pieces by a shortage of credit"

http://davidstockmanscontracorner.com/mind-the-eurodollar-markets-thats-where-the-exit-ramps-are-closing/
The rift in the global eurodollar exchange system that opened in 2007 is not closing, rather it remains in a state of paradigm shift that can only strain further a liquidity system that has actually lost robustness from even its weakened state just prior to near-collapse.