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Abroad, the contraction was even more severe: assets under management in Spain and Germany dropped from €2.7 billion to €1.7 billion.
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"It is quite conceivable — many would say probable — that the severe asset price collapses that have occurred in both equity and real estate will prompt a lasting increase in the desired saving rate, at least on the part of many consumers," Ed McKelvey, an economist at Goldman Sachs, wrote in a note last week.
But the worst cases involve severe asset deflation and destruction of financial system capital.
Furthermore, Denis and Rodgers (2007) find that firms are more likely to emerge as going concerns if they realize significant, severe asset and liability cuts during retrenchment.
The Merval index has risen 56percentthis yearas Argentinesneseekek hard assets to protect wealth from a severe financial crisis and a sharply devalued currency.
Everything central bankers traditionally rely on to combat economic problems are much more likely to fuel dangerous asset bubbles under conditions of severe inequality.
To withstand this immense market pressure, the government would have to impose severe restrictions on asset markets – not just on international transactions, but on purely domestic transactions as well.
Reinhart and Rogoff (2009) stress that recessions following a financial crisis have particularly severe effects on asset prices, output and unemployment.
The Ford Foundation announced that because of the severe decline in its assets, it was closing its offices in Russia and Vietnam.
Most of those who got into financial trouble because of "troubled assets" suffered severe consequences, and many innocent people are still suffering the collateral damage.
In one year, Mr. Treffinger nearly closed the budget gap, by selling county assets, making severe personnel cuts and engaging in what some called sleight-of-hand debt juggling.
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