Fin De Siecle?: Is the Economy at the End Of an Era?
Listener 19 December 1998.
Keywords: Macroeconomics & Money;
There will be frequent reference next year, to repeating the “fin de siecle”, a movement of decadence at the end of the nineteenth century. However the economic end of an era may be this year. If so, it will be identified with the Russian financial crisis of August 1998. This is not because of the size of the economy, but rather numerous financial institutions were heavily exposed to Russian debt. Some were highly “leveraged”, with a high debt to equity ratio, and are very vulnerable. One hedge fund had a liquidity crisis, others have taken a terrible financial pounding.