Same people who caused it in 2008.
who were they?
Bubbles collapse. 2008 was the result of a massive mortgage bubble that some of us here at FR had recognized and were warning about for maybe as long as two years.
The 2008 crisis wasn’t manipulated.
The US economy had already been weakened by decades of off-shoring after we lowered the tariffs in the 1960’s.
To shore up the economy, they relaxed credit standards allowing 100% mortgages. That and the low interest rates caused a refinancing boom
Oil prices started to rise in 2007. That soaked up disposable income and marginal businesses began laying people off. Mortgages that were affordable when people had jobs, suddenly weren’t.
Banks reacted by tightening credit as the delinquencies rose.
In the meantime, money market funds that were limited to investing in assets that had a maturity of less than one year, had loaded up on short-term mortgage derivatives.
But when delinquencies occur you don’t get paid.
One money market fund broke the dollar. Meaning for the first time ever they returned less than the $1.00 invested.
That caused a panic in investment circles.
George W Bush, realizing he needed the FED to act and he needed funding from Congress to support the FED, went on Television and told us all that we were in a crisis.
And suddenly we were in a much worse crisis.
The 2008 crisis wasn’t manipulated.
The US economy had already been weakened by decades of off-shoring after we lowered the tariffs in the 1960’s.
To shore up the economy, they relaxed credit standards allowing 100% mortgages. That and the low interest rates caused a refinancing boom
Oil prices started to rise in 2007. That soaked up disposable income and marginal businesses began laying people off. Mortgages that were affordable when people had jobs, suddenly weren’t.
Banks reacted by tightening credit as the delinquencies rose.
In the meantime, money market funds that were limited to investing in assets that had a maturity of less than one year, had loaded up on short-term mortgage derivatives.
But when delinquencies occur you don’t get paid.
One money market fund broke the dollar. Meaning for the first time ever they returned less than the $1.00 invested.
That caused a panic in investment circles.
George W Bush, realizing he needed the FED to act and he needed funding from Congress to support the FED, went on Television and told us all that we were in a crisis.
And suddenly we were in a much worse crisis.