Why did the 2007-2008 financial crisis happen? More importantly, how do we prevent another one from happening?
>>69249011
Jews
By voting for trump
You can't prevent it.
Capitalism is practically uncontrollable without ruining it given our current tech.
The only thing that may be able to make a planned economy possible is hitting a technological singularity with AGI being heavily involved.
>>69249011
People that read nothing but Nazi memes will say "Joos".
In fact, it was the combined result of
1. New and unreliable financial products, with unforeseen risks
2. Said risky financial products were popular because the traditional means of investment gain came to a halt - with other words, the real, non-financial industry stagnated, did not grow
3. Said slow to non-existant growth rates resulted in people clinging to the housing market for investment, creating a bubble that bursted
4. This explains why the countries with housing and financial industry bubbles, sich as Spain and Ireland were hit the hardest, whilst countries with "real" industries, such as Germany, had less trouble
Overall, it is a result of stopping real GDP growth and investors still expecting stable capital growth.
People always posting stupid bullshit here.
Financial crysis happend because of housing bubble in US that spread across world
Government bureaucrats got little shekels from big banks and they rulled out law that is baking up banks giving loans to anybody.
So anybody could get loan no matter how retarded they are because government promised to pay it off
And u can imagine what happend
>Why did the 2007-2008 financial crisis happen?
>Reagan and Clinton deregulated the banks
>this allowed the banks to take on more risk
>in the mean time Wall St. kept making up bullshit derivatives, which are investment vehicles that depend in some complicated way on other investments
>lots of derivatives were dependent on home loans
>banks were giving out home loans like candy
>lots of people had savings invested in these derivatives
>suddenly the market realizes that there is no way most people will be able to pay their mortgage
>everything goes to shit
>government bails out bankers with taxpayer money with the excuse that many people's savings are tied up in those investments
>More importantly, how do we prevent another one from happening?
>re-regulate the banks and Wall Street
>nationalize banks after they fail
>break up big banks
>>69249011
You can't stop it, China's outrageous growth will eventually stop and then the entire world will be fucked, considering we still haven't even recovered from the 2008 crash.
Capitalism is a shitty system, but we're stuck with it until someone invents something better.
>>69249011
Watch the Big Short, it explains a lot.
>>69250123
>Capitalism is a shitty system, but we're stuck with it until someone invents something better.
But we already did...
>>69250123
India will drive the economic growth? No?
>>69249564
You socialists are just as bad as the libertarians.
Look, nobody gives a shit about the hypothetical socialist utopia that you dream of. We are discussing a real issue in the real world and real possible immediate and feasible political and economic solutions.
Frankly Marxist analysis won't cut it, in this regard.
>>69250123
As long as we aren't invested too much in China why should we be hurt?
Aren't our trade relationships mostly related to manufacturing?
By not giving loans to niggers.
>>69249614
>>69249969
>>69249979
Interesting posts.
>>69249011
People made bad investments thinking they were good investments, doubled down, and then the bubble burst and everything went to shit.
I'll try to make this brief.
In 2002 Paul "Kick the can" Krugman said:
"To fight this recession the Fed needs…soaring household spending to offset moribund business investment. [So] Alan Greenspan needs to create a housing bubble to replace the Nasdaq bubble."
This is exactly what happened. The Bush administration initiated an act, where the Federal National Mortgage Association (Fannie Mae) and Federal Home Loan Mortgage Corporation (Freddie Mac) (government funded and controlled enterprise) where given a GIGANTIC cash injection over a period of time. This was done in order to restore the markets from stagnation and recession (after the Nasdaq bubble, banks became reluctant take loans and give loans. This is VERY bad in a Keynesian economy).
What happened was that the banks loaning directly from Freddie Mac and Fannie Mae were given an incentive to fool as MANY people they could, into taking subprime (shitty loans from the banks' point of view) mortgage loans. Who takes loans like this? Mostly people who'd have no chance of paying back. They do this because giving more loans equals taking more of those good loans from Freddie and Fannie. Because they are subprime (again, meaning the probability of the loaners actually paying back is meh) loans, the banks were very interested in selling them to other banks (yes, you can sell your >>bonds<< with those you loan money to, to others).
WHO in their right mind, would buy these shitty fucking. No one. That's where rating companies (rating loans based on the "security" of them, again, just meaning what the odds are of you getting the money if you buy) come in. There was subsequently to the crisis, a huge scandal over rating companies having overrated TONS of these subprime loans, fooling banks AROUND THE WORLD. (As to why the crisis hit the entire global economy and ended banks in several countries SO swiftly).
>>69249979
Very well put my dutch friend. I don't think we've done anything in the US to prevent something like that from happening again.
>>69249979
This is the answer, /thread.
Neokeynesian/neoliberal economic policies.
>>69252874
So, when the money supply runs out at Freddie Mac and Fannie Mae (which is now harvesting from the loans they gave to the banks, from the banks having sold their loans off) the house prices AGAIN drops as demand falls.
When house prices fall, people with loans thinking they could pay it off with high housing prices, well, they can't do shit but say "lol sorry, bank" and default.
Banks around the world don't get their money. Banks get nervous. Banks stop trading to secure their assets. Market stagnates. Crisis 2008 begins.
>>69249011
https://www.youtube.com/watch?v=R0sOp60ZqYI
Time to shortsell
Shemitah has only just begun
>>69249011
>Why did the 2007-2008 financial crisis happen?
>>69249979
Also I would like to denounce posts such as this one. Regulating the banking sector, as a means to stop "Made in Washington" bubbles, is NOT desirable and does not prevent government-sponsored enterprise from creating new bubbles, by being in direct affiliation with the Federal Reserve.
It would simply be another meaningless government takeover of the private sector.
>>69250977
Economies are driven by growth. For the past 10 years or so China was responsible for like 30% of the entire world's growth.
Recently it also seems like the Chinese are about to cause a worldwide real estate bubble. They've been inflating home prices like crazy and buying hotel chains and whatnot (just this week an insurance chinese company made a $13 billion bid for a hotel chain).
>>69253487
Can you elaborate more?
>>69249011
Obama went on a shopping spree with money we didn't have.
>>69249011
America did it
>>69249614
>>69249969
>>69249979
These. Please, Americans, I don't care who you elect, just fix this
>Reagan and Clinton deregulated the banks
That's all we ask.
I didn't even know we had a break down until 2010. Family was living like British royalty
>>69249011
Norwegian brother, a financial collapse is inevitable. There is no way to get out of it without sacrificing several countries, or starting another major war (war has always been good for business).
The best you can do is to prepare for what's coming. A six month supply of food, water and any prescription drugs you need is a bare minimum. Get a firearm (in Norway you can legally own a lot of them by simply obtaining a hunting license) and don't tell anyone about what you're storing.
>>69255734
>The best you can do is to prepare for what's coming. A six month supply of food, water and any prescription drugs you need is a bare minimum. Get a firearm (in Norway you can legally own a lot of them by simply obtaining a hunting license) and don't tell anyone about what you're storing.
I don't think so. I'm not mentally ill.
Or NEET.
>>69255050
Firstly, read >>69252874 and >>69253179.
tldr: Goverments rely on bubbles to fight recessions, which in turn creates new recessions.
Regulating the banking system is not necessary. You don't need to break up big banks. There is no such thing as "too big to fail". There is only government-sponsered enterprise. After 2008, Ben Bernanke (chairman of The Federeal Reserve) fought the recession by pumping banks full of cash, and bailing them out (emergency economic stabilization act of 2008).
The housing bubble would NEVER have grown to that size it did, if it wasn't fueled by the endless streams of Federal Reserve loans. In free market scenario, the amount of banks with sufficient excess savings would have been in an equilibrium with the demand for these savings. The worst case scenario would have been that the recession would have dragged on for a few more years.
Regulating the banking sector would do nothing in terms of preventing bubbles, as they are always, upon analysis, created by government influence on the market, creating artificial environments to stimulate a desirable situation. Much like a drug addiction though, when the stimulus is gone, you have to go through a detox. When a market stimulus stops, the market will head towards its true steady state.
Didn't the ratings agencies essentially say "lol freedom of speech" when pressed about their fraudulent ratings?
How in the fuck are they still considered a useful metric when they pretty much outright said themselves that the ratings are just opinions and not based on any actual analysis? How many AAA ratings out there are absolute garbage wrapped in gold foil?
This shit is infuriating
How hard is it exactly to implement a regulation of the banks or just kill them all together like based Jackson?
>>69249979
>deregulated
Into the trash it goes
>>69249011
>>69253709
From what I hear they are buying up most of canada and selling homes to the chinese that come there only. If I'm not mistaken they have no regulation of foreigners buying land and property in canada but a moose fucker would know what is going on better.
>>69256233
That's your choice, and I respect that. Don't say you weren't warned, though.
Also, about the mentally ill part.. You do have insurance right? And you probably have a smoke detector and fire extinguisher as well? Wouldn't you be kind of a hypocrite to think that you aren't responsible for your own safety and survival, or are you blindly depending on your government to take care of you in a disaster?
>>69256233
mentally ill is building an ark after the flood has come
We never really fixed it. We're still in a liquidity trap that is now almost a decade old. Almost all of the fiscal and monetary tools have not worked well, or at all. This casts serious doubts on our current models.
t. my economics professors
One speculated this shit is going to bust open so hard it will be like The Great Depression II, but with more muslims.
>>69257268
https://www.youtube.com/watch?v=QqOtSokKRxs
If you're interested in an interesting take on the coming economic situation, watch this guy.
>>69257050
Sounds like a plan.
>>69257268
Isn't the markets more liquid than ever?
>>69249011
Back in the 1950s (for example), if you wanted a mortgage, you went to the bank or a building society. The bank manager would look at your circumstances and make absolutely sure you could pay the debt (because his ass was on the line if you didn't) and you had to jump through a lot of hoops to get the money. The contract was between you and the lender. There were only two parties involved. You pay money every month to the lender. Simple.
Jump forward to the nineties and the derivatives market exploded. This allowed debts (mortgages, for example) to be packaged together and sold on as debt instruments. This meant that your bank/building society could sell your mortgage (along with lots of other mortgages) in big packages to investment banks and the investment banks could sell them in turn to investors. This now means that your mortgage payments don't go to your bank any more - they don't even go to the investment bank - they're paid to investors who pocket the cash.
Why is this bad? Well, it means that your bank/building society/lender doesn't have to examine your financial status as thoroughly as they did in the old days because they know that no matter what, they can now sell your mortgage on and it's then an investor's problem if you don't pay and not theirs. This meant that lenders were giving mortgage loans to absolutely fucking everyone. The problem with this is that if there's an economic downturn, people can't pay their mortgages any more and these debt instruments become worthless - investors lose money, the investment banks lose money, insurance companies lose money.
This is the simplified version.
What happened in 2008 is all of these fucker swept all this under the carpet to keep the money rolling in until the whole fucking system exploded.
Download "INSIDE JOB" - it explains the whole thing. Be warned though, you'll want to go hit things afterwards.
The crisis happened because fucking leftists and socialist scum ruin EVERYTHING for us money-making, worthy people.
Fuck I hate them. If the government didn't give into cucks and just let the banks and the free market do their thing none of it would have happened.
>>69260028
And another thing - guess who deregulated the financial markets to make all this possible?
Bill Clinton. And he pissed all over a woman - Brooksley Born - to do it.
So the next time a feminist Hillary shill is talking about how she'll take on the big banks, throw that shit in her face.
Government did it. Government always does it, all bubbles are created or immensely bloated by government fiddling with credit or increasing the supply of money.
>>69256249
Thank you, i didn't have the words to explain all that.
>>69249011
>More importantly, how do we prevent another one from happening?
You don't. Modern finance is a Ponzi scheme. Pic related is just one measure of debt in the US. The GDP is somewhere around ~$17,000,000,000,000, or less than a third of that debt. That doesn't get into unfunded liabilities such as Social Security and whatnot. Those obligations will not be met. Period. It's just a question of when, not if.
>>69260220
You are saying that people on welfare can get loans?
>>69260766
If we didn't have to pay for free-loaders more money would be in the free market's hands to fix whatever comes up promptly.
Notice how as soon as a liberal President gets into power everything comes tumbling down. Not saying he caused it, but it's a good example for my reasoning.
>>69261047
The crisis was in full swing before Obama was anywhere near the WH, you fucking idiot. Go read a book.
>>69261341
Yeah, and the anti-war liberal idealogy was ALSO in full swing by that time. Obama getting into office was the straw that broke the camel's back, the banks and CEOs just couldn't handle that amount of leftism anymore. I don't blame them.
>>69261479
You know you have no fucking idea what you're talking about, right? Like not even the basics behind what happened.
>>69260766
They did previous to 2007.
NINJA loan was a term made up by banking insiders, No Income No Job. The banks were giving money to anyone that applied regardless of their qualifications because they would package up the loans and sell them off as Mortgage backed bonds which were historically very safe investments. The banks would sell off their risks in the loans to bond holders AND make a commission in the sale of the bond.
>>69249011
>>69261047
You make it sound like economic downturns didn't exist before welfare.
>>69261755
cont...
then they would give out more loans and package them up as bonds AND make a commision and then they would give out more loans and package them up as bonds AND...
>>69249011
Kill the Jews involved with Banking & never let anymore return
plain and simple
>>69249011
Not that averting one would help you, when you're supporting muslims with money from depleting oil reserves.
>>69261717
>the basics
Yeah, here they are.
>banks and the free market do extremely well
>suddenly leftists begin to creep into government and society
>regulation and anti-free market practices fuck everything up
>those same leftists try to blame innocent CEOs and bankers
>>69261886
I never said that, idiot. Of course they happened, yet their longevity and impact was lessened by rightist people with an actual fucking brain doing their job. They didn't react to adversity by blaming white people and getting liberal arts degrees.
>>69262165
Can you name some of these regulations they enacted that contributed to the financial collapse?
A few examples, perhaps?
>>69262165
>yet their longevity and impact was lessened
Based on what logic exactly?
Implement a more Libertarian type of government so the banks will be independent of the government and act the same as any other company. If another banking crisis happens then we will see a Darwinist type battle happen within the banking system and the best companies will come out on top or new ones will rise to compete with them.
>>69262351
>examples
Look around you. Notice how the economy is only looking up now idiot leftists are turning right. I don't need specifics on what regulations, the fact that regulations even existed is an affront to the free market. Nice going, fucking cuck.
>>69262371
>something bad happens
>instead of whining about "MUH INEQUALITY" people get shit done
>suddenly the economy is doing fine again
That logic, idiot lefty fuck.
>>69262548
This guy fucking gets it. Regulation and whining will just keep things bad and make things worse.
>>69262842
>That logic, idiot lefty fuck.
So nothing but just what fits your personal opinons. Got it.
>>69262165
>>regulation and anti-free market practices fuck everything up
It was lack of regulation that caused it, you fucking chump. Specifically this:
>http://en.wikipedia.org/wiki/Commodity_Futures_Modernization_Act_of_2000
And latterly, specifically the ratings agencies being corrupted by money from the big IBs. Zero oversight.
People implored Clinton to nip this shit in the bud in 2000 because it was a fucking disaster waiting to happen (because the big IBs just can't help themselves) and he nixxed it and bent over for the banks.
Stop talking about shit you know nothing about.
>>69262978
There was regulation though, so your point is entirely moot. Maybe if instead of whining about "Muh incompetent bankers I'm jealous of their well-earned money!" you idiots could have worked on a fix.
Oh, no. Instead you just want to control the free market's healing potential even more. You must be fucking masochistic.
>>69262842
>Regulation and whining will just keep things bad and make things worse.
Absolute de-Regualtion would also result in problems. Think about it. When was the last time a fucking billionaire said "You know what? I'm rich enough, lets just go sit on my ass and bathe in money for the rest of my life."
>>69249011
Jews
You know what to do
>>69263259
>billionaires are going to use their rightfully-earned position to gain more wealth
>this is a bad thing
Jealousy is not a good way of shaping your political ideology, leftist idiot.
>>69249011
>Why did the 2007-2008 financial crisis happen? More importantly, how do we prevent another one from happening?
1. gov forced banks to make sketchy home loans.
2.We had low interest rates for too long, then greenspan raised interest rates continuously for a few years...
3. when all loans defaulted, fannie and freddie mac (corrupt government sponsored enterprises), which collateralized and guaranteed these mortages collapsed.
4. mortage paper became worthless, causing banks like lehman brothers to collapse.
5. AIG had been insuring these mortages against default, and almost collapsed, but was bailed out.
how do we prevent another one from happening?
gov should get out of the mortgages market and let banks decide who deserves a home loan.
>>69263259
Even if the money is just going to the billionaires there must be a transfer or product and or service to make the exchange happen unless if we have a lot of regulation. With a lot of regulation you can take a whole side of the deal out of the equation and only 1 side gets a product, service, and or money while the other does not.
>>69263435
Nigger I am by no means a leftist. If anything I am smack in the middle of the two camps you wannabe redpilled fucks sling shit at each-other from.
I dont give a fuck if someone makes a ton of money. What i have a fucking problem with is these dicks using their money to screw over the common man. You see this shit all the time here in America just look at the fucking anti-competitive monopolistic shit you see the large telecom companies get into. That is not Capitalism that is a fucking Oligopoly. Shit like that needs to be broken up with a fucking hammer. Then de-regulate all you want but As soon as that type of shit happens again the government needs to step in.
>>69264234
>What i have a fucking problem with is these dicks using their money to screw over the common man.
Then fucking go and do better. If you're not willing to put in the hard work and cunning then why the FUCK do you think that others who did so should suck your lazy dick with leftist shit like "welfare" and "wealth redistribution.
You should consider yourself lucky that the rich are good enough to create jobs. I know that when I get rich (I'm temporarily embarrassed right now) I'm going to horde the fucking lot instead of giving anything out to you ungreatful tossers.
>>69249011
Over financialization. The largest sectors of profit became speculative unregulated markets that became increasingly divorced from any tangible assets or physical creation. A smaller financial meltdown happened in the eighties when this began but this was largely limited to Wall Street. The meltdown pushed back the problem and the internet boom made it irrelevant for most of the nineties. But overtime the banks pushed for increasing deregulation or simply innovated around regulation, and when the internet bubble burst a massive push towards easy money occurred to offset losses. The value of the new securities being offered skyrocketed along with housing prices independent of any real market value, and when a natural correction occurred of these faulty investments and prices naturally lowered huge amounts of supposed assets where wiped out. The world economy was so over saturated and overly invested in the real estate financial bubble that its failure made regular market operations nearly impossible to the point of collapse.
>>69263542
You seemed to have failed at step one anon.
Banks were not forced to make sketchy home loans.
Try again.
>>69249614
All that + Jews.
>>69265046
kek
>>69249614
Banks were under pressure to make it easier for minorities to get loans.
They were handing out huge mortgages with virtually no proof of income.
They bundled those up and sold them like hot potatoes ...as if they were good investments.
They are already starting the same process again.
>all the false information in this thread
holy fucking shit
You are all fucking retarded.
>>69264779
>I'm temporarily embarrassed right now
Fucking hell man. I laughed so fucking hard at that shit.
>>69263542
this 100x, read this post fucktards
>>69265668
Why, you think I'm joking? Fucking leftists I swear.
>>69249011
You enforce existing antitrust, racketeering, and truth in lending laws.
The root of the problem is a relaxed attitude toward lawlessness. Same with immigration.
>>69265360
The banks were never under any such pressure.
They happily threw out garbage mortgages because they knew they could sell them through securitization and lose any risk to themselves.
Not to mention that around half of all the fraudulently originated loans came from entities that weren't even under the Community Reinvestment Act. They literally had zero "pressure to make it easier for minorities to get loans" and yet spewed out countless garbage loans with glee.
Now why would an entity knowingly create terrible loans if they weren't forced to, anon?
>>69265603
what happened then, o enlightened swedecuck?
>>69249011
>Why did the 2007-2008 financial crisis happen?
I think for basically the same reasons the Great Depression happened, just on a smaller scale.
>>69249011
Watch The Big Short. It's a (mostly) true story about the housing collapse. Basically, big banks made a whole bunch of subprime (shitty) loans. They put all of them together in housing bonds and people invested in those bonds. Since everyone needs new houses all the time, the idea was that the bubble would never pop. However, it only took a few of these mortgages to fail for the whole thing to come crashing down. Investors got greedy and started investing in "futures" and "virtual shares", which are basically like betting that someone is going to win a bet. So there was a huge amount of everyone's money behind the housing market, even if they didn't realize it. After interest rates spiked in 2007, the mortgages started to fail. The BBB ratings were being handed out like candy at a parade, so bonds were rated AAA but had a whole bunch of subprimes included in them. When they started to fail, banks thought they could reverse the process by putting more money into these bonds and waiting it out. By the time they realized how much they fucked up, it was too late, they lost billions. Investors who had stock in those banks lost billions when they went bankrupt.
In the end, the government bailed out the largest of the banks (we've all heard the phrase "too big to fail") because they figured that these banks failing would throw the US into a depression worse than the 30s. So we went into a recession.
>>69264987
True, they weren't forced. The problem was that the people giving the loans made tons of money off just procuring the mortgage in the first place, and since the rating companies didn't give a shit (because they got money from it too), the shitty loans made it into the "good" consolidated bonds. The banker's made such a huge commission, they could care less about who was getting the loan, as long as they were getting paid.
Nobody's worded it well, but tl;dr: Bill Clinton made a bunch of policies to increase home ownership despite that economists have said for a century that affordable housing is impossible to achieve through government. The result was poor people owning homes they couldn't afford.
What nobody has mentioned yet is the repeal of Glass-Steagal, implemented during the Great Depression specifically to prevent this.
Tl;dr: BILL CLINTON FUCKED UP EVERYTHING
>>69265668
>I'm temporarily embarrassed right now
It's a joke that con-artists use to extort money from people. So yes.
>>69266875
I mentioned it, but not by name. Glass-Steagal's repeal allowed the banks to fuck people on a fixed-rate mortgage, which caused the mortgages to fail.
>>69266875
>>69267038
All the banks which crashed during the crisis were solely investment banks; Glass-Steagal didn't have a lick to do with it.
Just fuck off and leave the financial sector alone.
I swear to god, I have to sit through so many presentations telling me to be a good boy and don't be a meanie and crash those markets again or you'll be in big trouble!
I get it, fuck, just shut up about it already.
>>69249969
>Government bureaucrats got little shekels from big banks and they rulled out law that is baking up banks giving loans to anybody.
so literally jews.
/thread
>>69249274
This. Good going Mexico.
>banks gave out mortgages they knew were likely to fail
>they ground these CDOs into shares, and made note receivable sausages
>they did some mathematical sophistry that made it seem like these minced mortgage patties would have good returns
>rating agencies vouched for this bullshit math because banks threatened to drop them for another rater if they didn't
And then people bought them and made certain assumptions about how much money they had based upon the fictional returns these junk loans
>>69264987
>Banks were not forced to make sketchy home loans.
Banks were sued if they didn't generate mortgages for minorities, who were usually high risk, subprime borrowers.
A climate of subprime lending developed because government was too involved in trying to reduce risk with a variety of schemes, namely fannie mae and freddie mac, which simply made the bubble bigger.
Here's a good summary I think:
https://en.wikipedia.org/wiki/Subprime_mortgage_crisis
>>69268648
Can you give some examples of these alleged suits?
And can you name the penalty for noncompliance with the Community Reinvestment Act while you are at it?
How much could an FDIC insured banking entity be fined for not adhering to the CRA?
And what about the massive swath of mortgages that were originated by non-FDIC entities and thus were not under any CRA obligation?
>>69265360
they weren't under any pressure, but the banks insured said loans knowing they would fail so they would be fully reimbursed. basically betting against their customers.
>>69268941
The government was the sole biggest buyer of MBS
