By Isaac Cohen*

The tenth anniversary of the declaration of bankruptcy by the Lehman Brothers investment bank is on September 18. There is agreement that this bankruptcy marks the start of the Great Recession, the most profound setback of the US economy, since the Great Depression of 1929.

Among the most relevant comments on these events, there is one opinion piece in The New York Times (090918) titled “Prepping for the Next Crisis.” It is signed by three prominent financial regulators, who managed the emergency in those days, the head of the central bank Ben S. Bernanke, the head of the Federal Reserve Bank of New York Timothy F. Geithner and former Treasury Secretary Henry M. Paulson.

On the factors contributing to the emergency, they recognize an antiquated regulatory system provided “limited authority to respond” to the financial panic. However, it is expected that this deficiency has been corrected by the Dodd Frank Act of 2010, although there are doubts about the central bank’s capacity to act as lender of last resort.

On the future, many are asking if another Great Recession can happen again. The fact is the previous two recessions were preceded by stock market rallies, the so called “Dot-Com Boom,” which lasted until the year 2000 and the Housing Bubble, which burst in 2007. Therefore, there is concern about the present stock rally, which next March 9 may become the longest on record. This time, the boom is led by the so called Internet giants, Apple, Amazon, Alphabet (Google) and Microsoft.

*International analyst and consultant, former Director ECLAC Washington. Commentator on economic and financial issues for CNN en Español TV and radio, UNIVISION, TELEMUNDO and other media.

About Ramón Jiménez

Ramón Jiménez, Managing Editor de MetroLatinoUSA.Com (MLN). Graduado de la Escuela de Periodismo de la Universidad del Distrito de Columbia (UDC). Email: [email protected]

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