The Great 2008 Collapse

[georgephillip]

Addendum: I want to add Vegas and Atlantic City. Heck, Trumps mug shot is at the bottom of this page...

Is anybody ready to watch The Donald starring as The Donald in "The Donald?"

Lost in all his re-born birther rhetoric of late are some of Trump's earlier positions which favored a Canadian-style single-payer health care system and a Huey Long-like 14% tax on the wealthiest Americans specifically targeting debt reduction.

"So what gives here? Did Trump just turn on a dime, scrap all of his former positions, and embrace the Tea Party platform because he believes in it?

"Is he cynically using those positions to elbow his way into the conversation because he knows GOP primary voters are made mostly of the far-right base?

"I have my own theory, out there though it may be. He could believe in all that stuff, or he could be using those issues to position himself, but there is a third possibility.

"Trump could be pulling the biggest prank in the history of American politics.

"If he still believes in single-payer health care and higher taxes for the rich, he could be playing the GOP for fools with a fake run that is already scrambling the RNC's eggs.

"Could it be that Trump is the greatest political mole/troll we've ever seen?

I report, you decide."

The Mad Genius of Donald Trump | Truthout

 

[georgephillip]

The politicians operate on greed and fear. Telling everyone that there was a "new" right to own a house. Threatening the financial institutions with law suits for red lining. Creating a way for poor people to own homes gets votes, telling people the hard truth, doesn't

The people who bought a home operated on greed and fear. accepting something for nothing often ends up with bad consequences.

The hard truth is that poor people didn't cause this.

The entire federal government (including Fannie and Freddie) owned or guaranteed only 32 percent of seriously delinquent loans despite holding 67 percent of all mortgages. “Private-label” mortgage-backed securities ~ snip ~ generated only 13 percent of outstanding loans but was responsible for 42 percent of serious delinquencies.

Link

Alt A loans were fraud, pure and simple, made to feed the maw of the unregulated casino that is the derivatives market. As long as you got your origination fees and Wall St bought the debt and sold it to those suckers, who gave a shit if you bring down the house. Poor people getting FHA, VA, CRA loans didn't kill the housing industry, fraud and greed did. Flippers on interest only, brokers promising to re-fi you into a fixed rate when the AR kicks in. Speculators that hallucinated that housing would never stop rising. These were the folks that did it on the loan origination end, not poor people.

As of the second quarter of 2010, FHA loans had a serious
delinquency rate of 8.4 percent, as compared to 28.3 percent for actual subprime
loans and 6.8 percent for prime conforming loans.

Link

And we want to keep the titans free from contributing a greater share to the country that bends over then doesn't press charges.

When you compare Wall Street's latest looting with the S&L crisis of the 1980s, it's almost as if they occurred in two separate countries.

There were numerous prosecutions in the 80s with Charles Keating representing the biggest catch among the titans of that time.

By contrast, those responsible for today's credit crisis have all escaped the courts. William Black was a deputy director of the FSLIC in the 80s and currently teaches economics and law at the University of Missouri:

"Just how serious is this credit crisis? What is at stake here for the American taxpayer?

Black: Mopping up the savings-and-loan crisis cost $150 billion; this current crisis will probably cost a multiple of that. The scale of fraud is immense.

"This whole bank scandal makes Teapot Dome [of the 1920s] look like some kid's doll set. Unless the current administration changes course pretty drastically, the scandal will destroy Barack Obama's presidency.

"The Bush administration was even worse. But they are out of town. This will destroy Obama's administration, both economically and in terms of integrity."

Black offered the above opinion in April of 2009, and then went on to summarize the problem at that time:

"With most of America's biggest banks insolvent, you have, in essence, a multitrillion dollar cover-up by publicly traded entities, which amounts to felony securities fraud on a massive scale.

"These firms will ultimately have to be forced into receivership, the management and boards stripped of office, title, and compensation.

"First there needs to be a clearing of the air -- a Pecora-style fact-finding mission conducted without fear or favor. [Ferdinand Pecora was an assistant district attorney from New York who investigated Wall Street practices in the 1930s.]"

While the FCIC took testimony it was a pale imitation of Pecora's digging. The titans have survived their latest crime without a single one of them facing charges.

That almost guarantees we'll relive this history as well during the next few years.

Jack Willoughby: The Lessons of the S & L Crisis

 

[georgephillip]

The financial crisis of 2008 should have changed your mind about something. From Wiki:

"The output of goods and services produced by labor and property located in the United States—decreased at an annual rate of approximately 6% in the fourth quarter of 2008 and first quarter of 2009, versus activity in the year-ago periods.[180]

"The U.S. unemployment rate increased to 10.1% by October 2009, the highest rate since 1983 and roughly twice the pre-crisis rate.

"The average hours per work week declined to 33, the lowest level since the government began collecting the data in 1964.[181][182]

"The very rich lost relatively less in the crisis than the remainder of the population, widening the divide between the economic classes. Thus the top 1% who had a share of 34.6% of the nation's wealth in 2007 increased their share to 37.1% by 2009."

The richest 1% of Americans then demanded taxpayer bailouts to ensure their "fair share" of the nation's wealth weren't compromised, and Republicans and Democrats in congress were happy to comply.

What consequences did the crisis and bailout have on our level of national debt?

"In early 2008, the CBO projected that debt as a percent of gross domestic product would fall from 36.8 percent to 22.6 percent at the end of 2018.

"In contrast, the latest CBO forecast has debt soaring to 75.3 percent of GDP in 2018.

"What caused this stunning reversal, which in dollar terms works out to a $10 trillion swing for end-year 2018 debt, from $5.1 trillion to $15.8 trillion?

"Almost all of this increase is due to the severe recession that followed the financial crisis of late 2008.

"This lowered output and employment, and therefore reduced tax revenue."

The financial crisis of 2008 should have changed some conservative minds about how big business, big government and the richest 1% of Americans collaborate to socialize cost and privatize profits.

Fiscal Conservatives Dodge $10 Trillion Debt: Simon Johnson - Bloomberg

Yep. How much were we paying for a gallon of gas back then? What is happening again as we play here now? Connect the dots.

Some of the money the rich don't pay in taxes goes into speculation. Gas and food have good returns at the moment but watch out for water.

Unless there is an economic awakening in the US similar to what's occurring across the Arab world, within the next two decades at the latest, the events of 2008 will play out again; however, banks that were too big to fail in 2008 will have become institutions that are too big to save.

Then what?