This crisis is a “pure government debt crisis,” not one of the financial markets, and it is the regulators and the politicians' jobs to notice the bubbles that cause crises, said Karsten Schroeder, chairman of Amplitude Capital. He shared his insights.
“The thing I find quite irritating is that they (global governments) blame the financial industry for just rating their performance,” Schroeder told CNBC.
“The governments have been poorly managed for the last decade, if not even more, and all the market’s doing is reflecting that.”
Schroeder said the real cause of the crisis was the combination of excess liquidity available in the U.S. and the “political motivation” that "everyone" should own a house.
Schroeder also pointed out that investors are ultimately the ones who end up buying the government debt.
“And if you have no trust and no confidence in the future of the economy, in the way these countries are run, then you shouldn’t be surprised that you get beaten up in the market,” he said.
Scorecard — What He Said:
- Schroeder's Previous Appearance on CNBC (May 3, 2010)
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No immediate information was available for Schroeder or his firm.