Weighing in at 545 pages, the Financial Crisis Inquiry Commission has finally come out with a report that “didn’t produce new culprits or scandals” according to the Wall Street Journal report. It looks like the Commission has succeeded in its primary task…to bury any useful institutional lessons in a pile of paper.

The first paragraph of the article however, should give one pause:

Twelve of the 13 largest U.S. financial institutions “were at risk of failure” at the depth of the 2008 financial crisis, while at least 50 hedge funds tried to capitalize on it, according to a report released Thursday by a U.S. panel investigating how the financial system unraveled.

…are doomed to repeat it.

Whether you prefer the George Santayana or the Winston Churchill version of the famous dictum about the risk of ignoring the lessons of history, the lack of serious introspection on the Global Financial Crisis means the seeds of the next bubble are being sown right now. The must obvious suspect today would be sovereign debt but one shouldn’t concentrate all one’s attentions on the US and EU. S&P’s downgrade of long term Japanese debt (AA to AA-) may be the first signal of the next bubble getting ready to pop. With extremely low interest rates (ie. high bond prices) and a debt to GDP well into the triple digits, it would not take much of an interest rate rise to cause serious fiscal problems in aging Japan.

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