The New York Stock Exchange. Richard B. Levine/PA Images. All rights reserved.It’s now ten years since the start of the great financial crisis, and, on the surface, waters stand still. In the US, exuberant stock markets have celebrated the advent of Donald Trump’s administration with a 12% rally since the US presidential election and the Federal Reserve feels sufficiently confident to move to normalise its monetary policy, announcing a series of interest rate rises, and is considering reducing its $4.5tn balance sheet.
In Europe, uncertainties are still running high, but the election of a former investment banker as the head-of-state in tumultuous France is icing on the cake for cheerful financiers, who have already embraced the enthusiastic mood of their US counterparts. As seen from the stock market, the wounds of the financial crisis have long been repaired and investors are betting on the next expansion.
But, deep down, all is not so rosey. Far from being resolved, the underlying contradictions that caused 2008 financial meltdown have, if anything, grown stronger in the past few years. Beyond the current deceiving calm, a tectonic socio-political shift is on its way, waiting for a minor incident to unleash a new wave of financial turbulences and draw a caesura of historical magnitude.
