“Capitalism is the astounding belief that the most wickedest of men will do the most wickedest of things for the greatest good of everyone.” John Maynard Keynes
America is the only country that went from barbarism to decadence without civilization in between.
a vast-variety of things caused the meltdown.
Causes of the late-2000s financial crisis - Wikipedia, the free encyclopedia
1.1 The U.S. housing bubble and foreclosures
1.2 Sub-prime lending
1.2.1 Mortgage underwriting
1.2.2 Mortgage fraud
1.2.3 Down payments and negative equity
1.2.4 Predatory lending
2 Risk-taking behavior
2.1 Consumer and household borrowing
2.2 Home equity extraction
2.3 Housing speculation
2.4 Pro-cyclical human nature
2.5 Corporate risk-taking and leverage
3 Financial market factors
3.1 Financial product innovation
3.2 Inaccurate credit ratings
3.3 Lack of Transparency (behavior) and Independence in Financial Modeling
3.4 Off-balance sheet financing
3.5 Regulatory avoidance
3.6 Financial sector concentration
4 Macroeconomic conditions
4.1 Interest rates
4.2 Globalization and Trade deficits
4.3 Chinese mercantilism
There were a few causes, but a lot of it came from deregulation of the banks and the high leverage rates the banks then took when making their loans. The extremely large leverage they took eventually blew the system wide open. Now did it cause the housing bubble? No, that was there and known though. So while knowing their was a bubble, they still leveraged as high as they could and got government to remove restrictions to allow them to leverage even higher. And when the bubble popped, they should have lost their shirts. There was a still a lot of undesirable things going on in wall street as well due to lack of regulation. But the banks behavior and choices were a huge multiplier that really helped break the system to the degree to which it became broken.
You know the time is right to take control, we gotta take offense against the status quo
Originally Posted by A. de Tocqueville
So you're saying the financial sector is guilty of lie by omission? I wouldn't argue that. What I would argue is that they had a moral obligation to allow an authoritarian stance about it. They act like used car dealers with their "once it's off the lot, it's a sale" mentality. The burden goes on the ultimate consumer to do a little research and not act like a tool.Originally Posted by Ikari
Gipper and A Pierce already talked about the main cause. We deregulated banks enough to let them do what they wanted, but the government continued to insure against risk. The banks knew they were going to get bailed out if they did something stupid, so we should not be shocked that they allowed themselves to do something stupid. When you combine this with easy money and lax fraud enforcement we shouldn't be surprised that a huge bubble formed.
Originally Posted by johnny_rebson:
These are the same liberals who forgot how Iraq attacked us on 9/11.