I can selectively read wikipedia too:"The late-2000s financial crisis, also known as the Global Financial Crisis (GFC) or the "Great Recession", is considered by many economists to be the worst financial crisis since the Great Depression of the 1930s. It resulted in the collapse of large financial institutions, the bailout of banks by national governments and downturns in stock markets around the world. In many areas, the housing market also suffered, resulting in numerous evictions, foreclosures and prolonged unemployment. It contributed to the failure of key businesses, declines in consumer wealth estimated in the trillions of U.S. dollars, and a significant decline in economic activity, leading to a severe global economic recession in 2008.
The financial crisis was triggered by a complex interplay of valuation and liquidity problems in the United States banking system in 2008. The bursting of the U.S. housing bubble, which peaked in 2007, caused the values of securities tied to U.S. real estate pricing to plummet, damaging financial institutions globally. Questions regarding bank solvency, declines in credit availability and damaged investor confidence had an impact on global stock markets, where securities suffered large losses during 2008 and early 2009. Economies worldwide slowed during this period, as credit tightened and international trade declined. Governments and central banks responded with unprecedented fiscal stimulus, monetary policy expansion and institutional bailouts. Although there have been aftershocks, the financial crisis itself ended sometime between late-2008 and mid-2009.
Many causes for the financial crisis have been suggested, with varying weight assigned by experts. The United States Senate issued the Levin–Coburn Report, which found "that the crisis was not a natural disaster, but the result of high risk, complex financial products; undisclosed conflicts of interest; and the failure of regulators, the credit rating agencies, and the market itself to rein in the excesses of Wall Street."
Critics argued that credit rating agencies and investors failed to accurately price the risk involved with mortgage-related financial products, and that governments did not adjust their regulatory practices to address 21st-century financial markets. The 1999 repeal of the Glass–Steagall Act of 1933 effectively removed the separation that previously existed between Wall Street investment banks and depository banks. In response to the financial crisis, both market-based and regulatory solutions have been implemented or are under consideration."
Late-2000s financial crisis - Wikipedia, the free encyclopedia
"Fannie Mae, the nation's biggest underwriter of home mortgages, has been under increasing pressure from the Clinton Administration to expand mortgage loans among low and moderate income people and felt pressure from stock holders to maintain its phenomenal growth in profits. In addition, banks, thrift institutions and mortgage companies have been pressing Fannie Mae to help them make more loans to so-called subprime borrowers... In moving, even tentatively, into this new area of lending, Fannie Mae is taking on significantly more risk, which may not pose any difficulties during flush economic times. But the government-subsidized corporation may run into trouble in an economic downturn, prompting a government rescue similar to that of the savings and loan industry in the 1980s."
Lower interest rates encourage borrowing. From 2000 to 2003, the Federal Reserve lowered the federal funds rate target from 6.5% to 1.0%. This was done to soften the effects of the collapse of the dot-com bubble and of the September 2001 terrorist attacks, and to combat the perceived risk of deflation.
A "flood" of funds (capital or liquidity) reached the USA financial markets. Foreign governments supplied funds by purchasing USA Treasury bonds and thus avoided much of the direct impact of the crisis. USA households, on the other hand, used funds borrowed from foreigners to finance consumption or to bid up the prices of housing and financial assets.
The Fed then raised the Fed funds rate significantly between July 2004 and July 2006. This contributed to an increase in 1-year and 5-year adjustable-rate mortgage (ARM) rates, making ARM interest rate resets more expensive for homeowners.
USA household debt as a percentage of annual disposable personal income was 127% at the end of 2007, versus 77% in 1990.
In 1981, U.S. private debt was 123% of GDP; by the third quarter of 2008, it was 290%.
Fannie Mae and Freddie Mac, two U.S. Government sponsored enterprises, owned or guaranteed nearly $5 trillion in mortgage obligations at the time they were placed into conservatorship by the U.S. government in September 2008.
Moral hazard: Uncle Sam as sugar daddy - Outside the Box - MarketWatch
You missed the point. Investment banks invest in banks, various corporations and businesses, and governments. Your "protect the commercial and forget the investment" argument is flawed on its face because of the enormous role played by investment banks in the world economy (without even considering the merger of investment and commercial bankers).If Glass Steagall had not been repealed there would not have been the "interconnected intricacies of the market", that's the point.
You mean the same democrats who each received hundreds of thousands of dollars from campaign contributions from large multi-national corporations and their lobbyists? The same democrats who bought stock in various companies after voting to bail them out or subsidize them? What about Warren Buffet and his hedge fund? Did you care to read into his vested interests on the matter? PLEASE...check out OpenSecrets.org (for some reason, the Center for Responsive Politics' website isn't loading right now, but come back to it).You were talking about corporate influence of politicians, there has never been a bigger avenue for corporate influence than through the Citizens United ruling. The Democrats just voted to end insider trading even though the GOP tried to stop them.
That's a wonderful idea! Instead of private citizens voluntarily paying for their own candidates, let's have politicians and their cronies decide to spend the public's tax money on themselves.That's exactly what it means, it eliminates the influence of corporate funding in election campaigns, so you no longer have politicians being beholden to rich sponsors.
Which liberals? The ones taking gifts from corporations in order to vote a certain way or finagle regulations to suit the interests of MNCs?Then your stated desire for less corporate influence has no credibility, at least not with liberals.