Posted on 09/07/2018 6:16:58 AM PDT by ChicagoConservative27
Ten years ago this week, I was in Madrid on a Monday afternoon, watching as some of the 26,000 employees of Lehman Brothers spilled onto a Manhattan sidewalk, their mighty investment bank suddenly non-existent. As I could plainly see, this was no mere American crisis: the streets around me were already filling with Spanish and Central American workers forced to walk away from construction projects where work had halted, permanently, their U.S. and European bank financing having suddenly vanished.
Over the next couple of days, the world economy ground to a halt, some of the mightiest financial institutions of the United States and Europe went bankrupt, markets crashed like never before and economic output and employment fell into a decline that wouldn’t recover for half a decade; its after-effects are still shaping our lives today.
The terrifying aftermath of 2008 should have taught us some lasting lessons. Yet, as Columbia University economic historian Adam Tooze writes in his monumental history of 2008 and its after-effects, Crashed: How a Decade of Financial Crises Changed the World, most of those lessons are being ignored.
(Excerpt) Read more at theglobeandmail.com ...
later
One could say after the 1929 crash....that the lessons learned...dissolved within a decade as well.
From 1920 to 1929...there were literally dozens of signals given on a major catastrophic event occurring eventually. No one...from Congress to the Fed...seemed willing to act or change the pace of things. It’s the reality of the stock market.
“Free markets are a product of big government. What prevented an all-out worldwide depression, and triggered the return to full employment and growth the world is experiencing today, was the Barack Obama administration’s difficult decision to launch the largest government-spending act in history”
So was the author in Madrid, or Manhattan? Was he watching Lehman Brothers employees on TV while in Madrid? If so, why was he watching TV outdoors? Do people still stand on the sidewalk watching TVs playing in store window displays? Isn’t this written in a rather confusing way?
And what are the mistakes we’re repeating. I read the article but I don’t see them.
The lesson will have been learned if we don’t allow the Dims to take the house like in 2007, which started the whole collapse. I blame the witch Pelosi.
There is no downside for the too big to fail mafia.... we will bail them out again......they will recover and begin another decade of huge profits......some more consolidations and we will eventually have Goldman Sachs as the national bank....
He was in two places at once. :)
It seems most of us are living much better under Trump than Obama. We sure do not want to vote for someone who will raise our taxes. The midterm vote is extremely important.
Good point, but infinite credit and money printing doesn’t help either.
Welfare programs, gov’t debt, gov’t waste, and the fools running the gov’t are mostly to blame.
How can you be two places at once, when you’re not anywhere at aaaaalll?
By being everywhere, and nowhere...
You are correct
There are not a lot of mortgage related derivatives being split up and sold these days. The sister of my DIL who is an environmental studies major is not now delivering water samples and being a part time waitress and getting a mortgage on a “fixer upper” she can’t fix nor keep the electricity on.
Trump and his policies have unleashed the American economy and prosperity. Yet leverage and the commingling of commercial and investment banking leaves the economy at risk of bust as great as the boom. Then again I am just an old curmudgeon.
There’s a company advertising on YouTube and FaceBook called FundThatFlip.com, with purportedly four different types of unconventional financing.
Deja vu all over again, was my first thought.
I don’t think the 2008 crash was a mistake at all. I think it was planed years before.
It was well known from the beginning that Fannie Mae and Freddie Mac were failures waiting to happen.
GW Bush tried to get Congress to pass a bill to audit them and put requirements on them to toughen loan requirements.
Plenty of financial writers were writing articles warning of eminent failure of the Federal loan underwriters and rampant fraud in loan writing.
But people in congress like Barney Fag were protecting Freddie and Fannie.
When the failure finally happened those at the top and the biggest frauds were protected and walked away with millions of taxpayer dollars.
And of course Freddie and Fannie still exist essentially unchanged so that others may again exploit the taxpayer to become wealthy.
The lesson of any big negative event is that governments usually respond the wrong way. They layer on additional regulation that doesn’t really work and don’t get rid of or rationalize the old regulations. So you build up layer after layer after layer until the whole thing collapses.
There are a number of recognitions as to why our economy is in trouble.
The Deindustrialization Of America, the exploding U.S. trade deficit, the shrinking middle class, the growing size of the U.S. government, the constantly growing U.S. national debt, the ongoing devaluation of the U.S. dollar, the lies and destruction of the U.S. health care industry, the growing retirement crisis.
Combined, these have created a hurdle we are trying to get over that just gets bigger by the moment. And it moves to another lane in that moment. It’s a lot of reasons. And it took a long time to get them. It will take a long time to fix them. (If we can)
rwood
I read it. It ignores the core problem of the community reinvestment act. That was where the problem started. It also ignored the Democrat infiltration of the mortgage lending process and Fannie Mae and Freddie Mac. As a result it is a useless collection of electrons.
A relative of mine bought a house in Seattle just before the crash. Rather than walk away, she just stayed there but stopped making payments just a couple of months after moving in. She spent years there negotiating with the bank regarding staying, leaving, etc. Except she was in the industry and she knew that the deed and note probably got separated and the bank did not have standing to foreclose.
So I met her earlier this summer and found out she is STILL living in that house and has made no payments, yet they have yet to foreclose. This collapse was historic in so many ways.
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