We’ve had collapses in the past, but never so broad-gauged and systemic.
Marks foresees some drastic measures on the regulatory front:
A holiday from capital
requirements would allow regulated financial institutions to take writeoffs and clear their
balance sheets without having to worry about falling below minimums. They might even
try suspending mark-to-market accounting.
All the same, he’s convinced that we’ll get though this somehow.
one would do to gird for the demise of the financial system will turn out to be huge
mistakes if the outcome is anything else . . . and chances are high that it will be.
Which means that, sooner or later, things are going to stop getting worse and start getting better:
One of these days, the herd will give up on there
being a solution. And unless the financial world really does end, we’re likely to
encounter the investment opportunities of a lifetime.
Howard Marks has demonstrated that he’s good at calling those inflection points. But unless you’re Howard Marks, you might not want to try this at home.