You always wonder “What if?” As in, what if the government had stayed out of things and let the corrupt financial houses fail. How about a bunch of greedy bankers going to Club Fed. Sure that would have increased the loss and pain but the dead wood would be gone when the system was rebuilt.
I've been in cash for years now waiting for this market to implode. It keeps defying reality but I think we are finally going to see a real bear market like in the 70’s. Just my 2¢.
“ I feel that the repel of The Glass-Steagall Act by Bill Clinton in 1999 together with the products Wall Street was pushing to make huge money in a very opaque manner opened the gates to allow the huge real-estate bubble that ended with the crash of 2008.”
The repeal of Glass-Steagall had little to do with it.
GREATLY simplified, it went something like this:
Government: Hey banks, we want you to make loans you wouldn’t normally make. If you don’t, forget about approval for expansions. Expect more regulations. Expect public humiliation for being racist scumbags.
Banks: Damn, we might as well go out of business then because having that bad debt on our books is the kiss of death.
Government: Don’t worry, Fannie & Freddie are government owned now. They’ll buy that crap from you. You won’t be holding it for more than a few days.
Banks: Hot damn, that’s a deal.
(Time passes)
Banks: Hey government, would it be OK for us to securitize those Fannie & Freddie securities like we do with stocks? We can’t do it without your OK due to Securities laws, rules and regulations.
Government: As long as you keep cranking out those sub-prime loans knock yourselves out.