To let the banks fail and with it the entire System and to suffer the consequences.
To bail it out and try to minimize the carnage by propping up the System.
Both political parties agreed.
It became adopted without much resistance and then we were off to the races.
The Rich Asset Owners (on Wall Street and elsewhere) along with Big Business convinced both the Red and Blue to prop up the System at all costs.
Big Businesses got Bigger as they consolidated and Captured even more power.
Profit Margins hit peaks, as the powerful businesses squeezed as much as they could out of the Economy and the System.
They pushed the markets to such extremes that European and Japanese Real Money has nowhere to hide but in U.S. tech stocks.
So what happened is they propped up the Captured System by *underpricing* Political Risk.
Well: it is a direct response to the Captured Political Parties who bailed out the System for the Powerful and Rich - Populism.
Even though the Central Banks have been powerful enough to prop up markets and the Rich have gotten Richer and the Big Businesses have hit Peak Margins, the People have been building their response.
The Risk of Populsism has Arisen.
Populism is the natural Political Risk that was underpriced by their Greed.
It is driving the trade war, which is ultimately inflation and margin compression.
It is driving the pending fight between Italy and Germany which could cause a Systemic Collapse.
But today it seems obvious:
Of course the powerful would crush the people and the Captured Red and Blue political parties would play along.
It is far too late.
Idiots like @paulkrugman is just one of so many who are so deluded they can’t even see what they helped to create.
But this is Global.
And it all goes back to that decision in 2008.
They don’t understand that it is already happening.
The repricing of Political Risk is highly unintuitive.
We have already seen the warning shots in Italy. We see where this is going.
Populism has only just begun to unfold.
In 2008, it peaked and people didn’t want to take the pain so it was delayed.
But the Risk didn’t go away:
It was transferred to Government Balance Sheets and then massively underpriced.
Political Risk has arisen.
Systemic Risk will emerge.
And there is nothing that can be done to stop it.