You mean like all the children who lost private health insurance because their plans would have become too expensive and were therefore dropped before the new mandates took effect?
That's not at all what happened in 1929. Hoover ramped government spending and bailed out the banks. That's why we got a decade and half of depression instead of 2 years of panic and a quick rebound like in 1920.
Consumers around the world who had too much debt. People racked up all sorts of debt because they thought they could just put it on a credit card or take out a loan and forget about it - but eventually, the bill comes due and they couldn't pay it.
So who gave them the loans?
Banks knew the loans were no good and they kept making them and selling them anyway. In fact, they intentionally sought out loans that would fail because then they could sell the same loan to more than one investor and pocket the extra cash.
Then intentionally set up their pools so that the tranches that they expected to get wiped out wouldn't own enough of the pool to sue them.
Unfortunately for them they miscalculated and the losses extended even into the senior tranches and those investors are jumping into the lawsuits as well.
Yes Congress and the borrowers messed up but the banks were there enabling all of it and egging them on so that they could scam an ever-increasing number of investors and pocket the loot.
Maybe the CRA forced them to make questionable loans.
It did not force them defraud investors, shred the evidence and pocket the loot.
It did not force them to grant HELOCs to people they knew couldn't pay and that they knew for a fact would fail just for the purpose of ripping off pension funds and pocketing even more loot.
Gridlock prevents the situation from getting even worse than if special interests are able to get more special favors passed into law than already are.
You'd think it would be in Wal*Mart's, Sony's, Exxon's, Apple's, Microsoft's best interests to make sure as many people as possible can buy their crap.
Too bad those corporations aren't pulling the strings.
The Goldman Sachs, JP Morgans and Banks of America don't care about anything as long as they have Ben Bernanke's infinite electronic dollar well to draw from to their benefit.
They can borrow from the Federal Reserve for practically 0% and use that money to play the markets of the entire world.
I'm doubtful that the bankers set out to do a pump and dump
You don't accidentally sell mortgages more than once.
An industry that has been known for hundreds of years as experts in document retention doesn't accidentally lose the original loan paperwork.
Bank executives have testified to Congress under oath that as early as 2005 they knew at the boardroom level that 80% of their loans were bad and they keep making them and selling them to investors anyway.
We've got a huge set of financial problems that have resulted from a decade of bad decisions compounding and turning into a huge global mess, and then we pitch a fit when a couple hundred people can't turn it all around in a year and a half.
No, no, no. It wasn't bad decisions or mistakes - it was premeditated crime. We should be pitching a fit because no one, regardless of party, will apply indictments and handcuffs to the banksters.
Comparatively, a 1% increase in the cost of consumables is spitting in the ocean.
It's not that relevant if your are in the upper middle class or above but for the families that are barely scraping by increasing food and energy prices will absolutely crush them, just like it did last time.
Some inflation will help them by reducing their existing debt in comparison to their income because it will increase to match inflation.
How? What mechanism will make incomes go up? A larger percentage of the population is out of work than at any time in the last 20 years. Companies have no margin with which to raise wages and commodity inflation is going to make this worse, not better. Average income except for Wall Street hasn't risen for the last 10 years, so how is inflation helped you?
There's no denying that banks played a major role in the collapse, largely due to not properly ensuring that borrowers were capable of repaying the loans.
They didn't want the borrowers to repay the loans. The whole thing was a scam from day one.
The sold unpayable loans to generate more fees by forcing borrowers to refinance.
They sold the same mortgage more than once so that when it defaulted the investors would not realize that it had been pledged two, three or four times over and blame the default for their loss. (Think of the plot of The Producers)
The Republicans and Democrats both know this but neither one is willing to throw their benefactors in jail.
The following 1.5 years has been relatively stable.
The federal government is borrowing and spending 12% of GDP and all they can manage to do is barely keep things stable? Do you realize how insane this is?
Despite this massive amount of deficit spending the economic fundamentals are deteriorating.
The second great depression started a few years ago. Running up debt is covering it up for the moment but eventually the credit card will run out and they won't be able to hide it any more.
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Not all of the bankers are unapprehended felons.
Prosecute the ones that are, liquidate the corrupt institutions to pay for the losses and let the honest ones take up the slack.
You can't have a free market if some of the players are free to commit crimes and avoid punishment for it yet everybody else has to play by the rules.
You mean like all the children who lost private health insurance because their plans would have become too expensive and were therefore dropped before the new mandates took effect?
That's not at all what happened in 1929. Hoover ramped government spending and bailed out the banks. That's why we got a decade and half of depression instead of 2 years of panic and a quick rebound like in 1920.
They are not simple middlemen and they made out like bandits. Haven't you heard about how much they paid out in bonuses and continue to do so?
They intentionally sought out borrowers were were unable to pay because that was the only way to make the scam work.
Watch The Producers (the 1968 version). That's basically what these banks did. It's not a theory any more, they've been caught red-handed.
So who gave them the loans?
Banks knew the loans were no good and they kept making them and selling them anyway. In fact, they intentionally sought out loans that would fail because then they could sell the same loan to more than one investor and pocket the extra cash.
Then intentionally set up their pools so that the tranches that they expected to get wiped out wouldn't own enough of the pool to sue them.
Unfortunately for them they miscalculated and the losses extended even into the senior tranches and those investors are jumping into the lawsuits as well.
Yes Congress and the borrowers messed up but the banks were there enabling all of it and egging them on so that they could scam an ever-increasing number of investors and pocket the loot.
Bernanke just announced his intent to monetize the entire federal deficit next year, diluting the value of the currency by 20%.
So at least we have that to look forward to.
Maybe the CRA forced them to make questionable loans.
It did not force them defraud investors, shred the evidence and pocket the loot.
It did not force them to grant HELOCs to people they knew couldn't pay and that they knew for a fact would fail just for the purpose of ripping off pension funds and pocketing even more loot.
It's circulating in other economies and starting to hit commodities.
Gridlock prevents the situation from getting even worse than if special interests are able to get more special favors passed into law than already are.
Too bad those corporations aren't pulling the strings.
The Goldman Sachs, JP Morgans and Banks of America don't care about anything as long as they have Ben Bernanke's infinite electronic dollar well to draw from to their benefit.
They can borrow from the Federal Reserve for practically 0% and use that money to play the markets of the entire world.
They needed the derivatives to cover up for the original fraud. I agree that it's all part of the same story.
You don't accidentally sell mortgages more than once.
An industry that has been known for hundreds of years as experts in document retention doesn't accidentally lose the original loan paperwork.
Bank executives have testified to Congress under oath that as early as 2005 they knew at the boardroom level that 80% of their loans were bad and they keep making them and selling them to investors anyway.
That's not an accident, it's fraud.
No, no, no. It wasn't bad decisions or mistakes - it was premeditated crime . We should be pitching a fit because no one, regardless of party, will apply indictments and handcuffs to the banksters.
It's not that relevant if your are in the upper middle class or above but for the families that are barely scraping by increasing food and energy prices will absolutely crush them, just like it did last time.
Don't misunderstand me - the GOP will fix absolutely nothing, just like the Democrats fixed absolutely nothing.
Wrong, troll.
How? What mechanism will make incomes go up? A larger percentage of the population is out of work than at any time in the last 20 years. Companies have no margin with which to raise wages and commodity inflation is going to make this worse, not better. Average income except for Wall Street hasn't risen for the last 10 years, so how is inflation helped you?
Inflation due to rising incomes and margins is entirely different than inflation due to currency devaluation.
What happened to the economy when gasoline prices reached $4 per gallon?
Why do you think it's different this time?
There is no solution to be found in either major political party, unfortunately.
The answer is to restore the rule of law and prosecute the banksters.
They didn't want the borrowers to repay the loans. The whole thing was a scam from day one.
The sold unpayable loans to generate more fees by forcing borrowers to refinance.
They sold the same mortgage more than once so that when it defaulted the investors would not realize that it had been pledged two, three or four times over and blame the default for their loss. (Think of the plot of The Producers)
The Republicans and Democrats both know this but neither one is willing to throw their benefactors in jail.
The federal government is borrowing and spending 12% of GDP and all they can manage to do is barely keep things stable? Do you realize how insane this is?
Despite this massive amount of deficit spending the economic fundamentals are deteriorating.
What could possibly go wrong?
I'm not claiming that hyperinflation is coming. Hyperinflation requires wages to increase.
What we are getting is going to be much worse.
The second great depression started a few years ago. Running up debt is covering it up for the moment but eventually the credit card will run out and they won't be able to hide it any more.
Those laws were passed decades and centuries ago. New laws are not needed for that.