The Fed handled $8.4 TRILLION from the auctions of the Treasury securities and hid the money from Congress. The law, Title 12, section 247, requires the Fed to make a “full report” to congress. Hiding that profit from Congress sounds like embezzlement. Ref. 3w scribd dot com message 49040689
These ideas of no government intervention have been around since the time of Adam Smith and the wealth of nations. I agree to a degree with this idea but I still think unfettered capitalism has its own inherent problems and should not be seen as a solution. "The inherent vice of capitalism is the unequal sharing of blessings" Personally I think that I new form of economics will have to evolve out of the boom-bust model
Unemployment is the essential reserve of the army of labor to keep the price of the wage slavery down as to maximise Profit for the criminal ruling/owning class. Capitalism is the wage slavery of immense humanity in a Politically manipulated,tyrannical Market System of artificial scarcity and manipulation to perpetuate the conditions of wage-slavery in the interest of few elite. Capitalism is the organised,legalised robbery of the working class. Capitalism is crime against humanity
Some political intervention is needed. ie not allowing banks to sell derivatives (my simple understanding). The problem is our politicians and bankers are "one and the same." They take risks knowing everything will be fine...for them and theirs no matter what.
Thanks. I think responsibility has been removed from the system by the federal deposit guarantee, the "too big to fail" doctrine. It's interesting to see how these interventions from the New deal era were actually caused by previous interventions i-e banning of branch banking that prevented the stability of the system through risk diversification.
"Today, the currency of America is not backed by any sound value--silver or gold. The note today is something that the government declares they will give you the value in return, but does not name what that value is...This is the number-one fall, and it is very clear that the loss of the power of the American dollar means the loss of the financial power of America."-THE FALL OF AMERICA by the Honorable Elijah Muhammad
Ridiculous. Check your facts. The vast majority of sub-prime loans were originated by Mortgage Bankers, NOT subject to CRA. These were placed in PRIVATE mortgage-backed-securities, not by FNMA/FHLMC.
The social policies, and Bush's promotion of an ownership society, provided a psychological justification for weak underwriting standards, but not much of a financial incentive.
Thats brilliant. So your saying this was not created by the CRA? Ok let me get this straight. The companies that buy these loans willingly did so because they felt that having large amounts of toxic loans, loans that could not be paid off, would be a good thing for their business? They wanted to eat a bunch of bad loans to "GROW" their company? Maybe BOA thought it would be cool to strap financial bombs to their company just to see what it would look like when they explode.
The toxic assets we hear about are not loans, per se, but mortgage-backed securities. At the time of issuance they were rated AAA, so they were hardly considered toxic. And the underlying loans were primarily originated by mortgage bankers (Ameriquest, Option One) who had an incentive to originate as many as possible since Wall Street would buy them all and they'd earn big fee income with no collateral risk. CRA loans are a small fraction of Bank loans and usually held in portfolio.
Oh that is ridiculous. Bush's ownership society stressed personal responsibility.
The CRA dictated that banks be FORCED to give loans to risky applicants. Groups like ACORN an PACA pressured bank executives with tactics such as protesting at their homes and visiting the scjhools their children attended to tell them 'Daddy hates the black man and won't give him a home loan'.
When Bush alerted Congress in 2003 about the mortgage crisis - they threatened to filibuster any attempt at oversight.
Sure, it was a Democratic conspiracy. I'm afraid the facts don't support this. Take a look at where the subprime mortgage came from, it's a fact. See who they were sold to, it's a fact. This was done by Wall Street and Mortgage Bankers, not CRA-regulated banks. And the credit-default swap insurance provided by the likes of AIG helped give a sense that the risk was limited.
There would be no subprime mortgage crisis if people were not defaulting on their home loans. Wall Street didn't cause that.
You could point the finger at some of the predatory lenders - like the one that John Edwards sat on the board of. Or maybe Countrywide - who gave Sen Dodd a sweetheart loan.
At every turn in this crisis the companies involved are tied to Democrats. Fannie and Freddie as well. You know, the government mortgage enterprises Barney Frank assured us was just fine.
And why are people defaulting? Because the bubble burst and they have no equity in their homes? What caused the bubble? Easy/cheap money from the Fed and Wall Street?
Do you think Angelo Mozilo from Countrywide is a Democrat?
so.. basically the whole thing started when federal reserves lowered their interest ratess?
and then that got banks to borrow and invest, borrow and invest, borrow and invest. so they just wanted more and more and theresfore started selling subprime mortgages. then these house owners wouldnt pay. therefore, the banks couldnt pay back their leverage. then the market froze and everyone went bankrupt.
1) The Great depression is partly caused by government intervention. First monetary policy, and secondly with the protectionist Smoot-Hawley Act discussed during summer 29.
2) Hoover was interventionist. The "New deal spirit" policies were born under Hoover. Just for the record FDR during the 32 campaign called Hoover a socialist...
3) Which "rights" are you talking about ? (The "right to" cheap money wasn't a very good idea)
I disagree, the government must intervene with business activities. We only need to look back to the Great Depression, which you didn't really touch upon. Businesses need to be reviewed and more rights need to be given to allow for expansion. The depression in the 1930s worsened because of Hoover's 'hands off' policy. But I propose that we should have economists trying to fix the economy, not a bunch of lawyers.
Horrible explanation.. it goes back to the late 70's, but the government is responsible for this. Republicans and Democrats had a chance to fix it, but they did not (they were looking for votes)
The united states is bankrupt. The free market in the US and the rest of the world cant continue if the controling force is bankrupt. If you live in the US, I feel sorry for your future because financialy, the next 15 years are going to be very sad.
Government interference in the free interactions of people(the market) is ALWAYS an attempt to cheat reality. Insane and childish. It's a game of let's pretend. Let's pretend that everyone has earned and can afford a house. Let's pretend that everyone is equally credit worthy. Let's take money from some people and give it to others so we all can pretend that they are prosperous.
You can fool reality only for so long. Then it all comes crashing down. Reality always wins. Game Over.
This is the best short account of the crisis I've seen.
Regarding "deregulation," there was none as the vid points out. Immediately upon the announcement of his Nobel, Krugman was asked by BBC to explain the deregulation that led to the crisis. Krugman replied curtly "there was no deregulation."
Now we Americans are getting nationalizations that won't soon be reversed. Note that this is on Bush's watch -- he's the greatest socialist in America's history.
It's not that there's much deregulation during this bubble, altought Bush did deregulate lending -- the biggest spree of dereg ran from Jimmy Carter (who started Reagan's deregulations) to something like 2000, when Bush still implemented some deregulation. It's the 'lack' of regulation that was largely at fault.
Centralized economics doesn't work. It creates misallocations of resources... (bubbles). Central banking is central economic control... a socialistic idea. And yet they are granted a monopoly. I wonder what percentage of people think that USD cash is government issued and what percentage realizes they are federal reserve notes (even though it says it right on top). Hell I wonder how many people still think the Federal Reserve is government.
@theoriginalanomaly I am in the Southern U.S. and have an Economic Degree. I did not fully understand how money and the Fed operated until about 2 year ago. Since then, I have informed many people that the Fed is a private corporation. Some argued the point. None of those I told were previously aware. All I can say is welcome to the rabbit hole.
Excellent video. Just brilliant. Thank you. The public and those informing them are fucking useless and have no ability at this stage in the game to kick their thinking out of neutral. It really is frustrating.
I dont know how the line 'deregulation' got into the blame game with such speed and such unchalleged supremacy. It has been some kind of blitzkreig by the regulation hungry lawmakers and useful idiots of the media to make it look like greedy bankers and speculators did this by themselves. Im not even bothered that they got the bailout money. Id like to see them get more, and I mean that even though it goes against many of my values. Govt made them lose, now this is like a lawsuit settlement.
I hear ya! It was a combined effort on the part of everyone from builders to lenders, to appraisers and real estate agents so I dont know what to really blame. NOBODY wanted to call the housing cherade early, or even when it was time. Well, there were a few but they werent too diligent, and for good reason. And we dont learn! Thats why my cynical above remark. The first thing that happens, after bank 'settlement', is more govt support of failing sectors, and without any market strategy!
And I cant blame any of those I just mentioned either. They took the situation that the govt forced into existence and made the most of it. So i dont want to sound like a fool. I think everybody played the hand they were holding, but govt regulation forced a non market directed trend to grab the wheel and lock it into place aiming the vehicle towards a cliff everybody knew was there but nobody knew just how far. So the game is to ride a while and bail before the edge. Not enoguh bailed early.
Funnily enough, the whole bailout is of dubious functionality, as banks are (rightly) very reluctant to lend money out. I think the regulators are finally going to be faced with a crisis they cannot legislate themselves out of. It's cute how the big auto firms also went asking for a "bailout". :)
The music to this video is ANNOYING!!!! Brutal choice of music there "CHAP"!!! Cheerio!
Drudorius 7 months ago
great but turn down the music and turn up the narration
lax80684 7 months ago
This has been flagged as spam show
The Fed handled $8.4 TRILLION from the auctions of the Treasury securities and hid the money from Congress. The law, Title 12, section 247, requires the Fed to make a “full report” to congress. Hiding that profit from Congress sounds like embezzlement. Ref. 3w scribd dot com message 49040689
oldereb38 8 months ago
These ideas of no government intervention have been around since the time of Adam Smith and the wealth of nations. I agree to a degree with this idea but I still think unfettered capitalism has its own inherent problems and should not be seen as a solution. "The inherent vice of capitalism is the unequal sharing of blessings" Personally I think that I new form of economics will have to evolve out of the boom-bust model
LyricalLacerations 1 year ago
Understanding the Financial crisis is really easy - you don't have to be an economics guru - its simple GREEEEEED.
MrDoublehappy 1 year ago
Why did you have to put such a bad background music on an otherwise brilliant explanation?
dilibau 1 year ago 3
This has been flagged as spam show
Unemployment is the essential reserve of the army of labor to keep the price of the wage slavery down as to maximise Profit for the criminal ruling/owning class. Capitalism is the wage slavery of immense humanity in a Politically manipulated,tyrannical Market System of artificial scarcity and manipulation to perpetuate the conditions of wage-slavery in the interest of few elite. Capitalism is the organised,legalised robbery of the working class. Capitalism is crime against humanity
arzoyan 1 year ago
The music is distracting.
themagicofcoupons 1 year ago 2
holy balls the background music is annoying and louder than the voice!
SeaSideClown 1 year ago 10
Some political intervention is needed. ie not allowing banks to sell derivatives (my simple understanding). The problem is our politicians and bankers are "one and the same." They take risks knowing everything will be fine...for them and theirs no matter what.
aaroncoleman3 2 years ago
Thanks. I think responsibility has been removed from the system by the federal deposit guarantee, the "too big to fail" doctrine. It's interesting to see how these interventions from the New deal era were actually caused by previous interventions i-e banning of branch banking that prevented the stability of the system through risk diversification.
unmondelibre 2 years ago
is this THE TRUE EXPLANATION>?
of Financial Crisis
2NE1fanatic18 2 years ago
Part of the explanation, at the policy level, yes.
unmondelibre 2 years ago
"Today, the currency of America is not backed by any sound value--silver or gold. The note today is something that the government declares they will give you the value in return, but does not name what that value is...This is the number-one fall, and it is very clear that the loss of the power of the American dollar means the loss of the financial power of America."-THE FALL OF AMERICA by the Honorable Elijah Muhammad
timothy6x 2 years ago
This comment has received too many negative votes show
Understanding the financial crisis = bloody greedy jews
DDFF232 2 years ago
BS.
This started with BJ Clinton's rewriting of the CRA.
Democrat 'cushy job haven' and politcal contributors Fannie and Freddie fanned the flames for issuing more loans to risky applicants.
Critics saw this was happening in 2003. Bush warned Congress about it. Democrats threatened to filibuster any attmept at oversight.
Republicans continued to warn Congress. Democrats continued to refuse any problem existed. Barney Frank told us Fannie and Freddie were fine.
Democrats own this mess.
dgroundhog 3 years ago
"..rewriting of the CRA".
Ridiculous. Check your facts. The vast majority of sub-prime loans were originated by Mortgage Bankers, NOT subject to CRA. These were placed in PRIVATE mortgage-backed-securities, not by FNMA/FHLMC.
The social policies, and Bush's promotion of an ownership society, provided a psychological justification for weak underwriting standards, but not much of a financial incentive.
williamthomaspowell 3 years ago
Thats brilliant. So your saying this was not created by the CRA? Ok let me get this straight. The companies that buy these loans willingly did so because they felt that having large amounts of toxic loans, loans that could not be paid off, would be a good thing for their business? They wanted to eat a bunch of bad loans to "GROW" their company? Maybe BOA thought it would be cool to strap financial bombs to their company just to see what it would look like when they explode.
Give me a break
earwack 3 years ago
The toxic assets we hear about are not loans, per se, but mortgage-backed securities. At the time of issuance they were rated AAA, so they were hardly considered toxic. And the underlying loans were primarily originated by mortgage bankers (Ameriquest, Option One) who had an incentive to originate as many as possible since Wall Street would buy them all and they'd earn big fee income with no collateral risk. CRA loans are a small fraction of Bank loans and usually held in portfolio.
williamthomaspowell 3 years ago
Oh that is ridiculous. Bush's ownership society stressed personal responsibility.
The CRA dictated that banks be FORCED to give loans to risky applicants. Groups like ACORN an PACA pressured bank executives with tactics such as protesting at their homes and visiting the scjhools their children attended to tell them 'Daddy hates the black man and won't give him a home loan'.
When Bush alerted Congress in 2003 about the mortgage crisis - they threatened to filibuster any attempt at oversight.
dgroundhog 2 years ago
Barney Frank and the Democrats told us there was no problems with Fannie and Freddie, and shame on you for even suggesting such a thing!
McCain warned them in 2005. Same response. Bush warned them 17 times in 2008 alone. Still the Dems kept their ostrich heads buried in the sand.
After all - they had spent the previous 7 years belittling President Bush - how could they heed his warnings now?
I believe Dems knew it was coming - and they did it by design to force this socialist BS on America.
dgroundhog 2 years ago
Sure, it was a Democratic conspiracy. I'm afraid the facts don't support this. Take a look at where the subprime mortgage came from, it's a fact. See who they were sold to, it's a fact. This was done by Wall Street and Mortgage Bankers, not CRA-regulated banks. And the credit-default swap insurance provided by the likes of AIG helped give a sense that the risk was limited.
williamthomaspowell 2 years ago
There would be no subprime mortgage crisis if people were not defaulting on their home loans. Wall Street didn't cause that.
You could point the finger at some of the predatory lenders - like the one that John Edwards sat on the board of. Or maybe Countrywide - who gave Sen Dodd a sweetheart loan.
At every turn in this crisis the companies involved are tied to Democrats. Fannie and Freddie as well. You know, the government mortgage enterprises Barney Frank assured us was just fine.
dgroundhog 2 years ago
And why are people defaulting? Because the bubble burst and they have no equity in their homes? What caused the bubble? Easy/cheap money from the Fed and Wall Street?
Do you think Angelo Mozilo from Countrywide is a Democrat?
williamthomaspowell 2 years ago
so.. basically the whole thing started when federal reserves lowered their interest ratess?
and then that got banks to borrow and invest, borrow and invest, borrow and invest. so they just wanted more and more and theresfore started selling subprime mortgages. then these house owners wouldnt pay. therefore, the banks couldnt pay back their leverage. then the market froze and everyone went bankrupt.
right?
kakalengler 3 years ago
im going to need ppl to stop putting this annoying music on the vid if you want someone to watch this stuff
neanam 3 years ago
1) The Great depression is partly caused by government intervention. First monetary policy, and secondly with the protectionist Smoot-Hawley Act discussed during summer 29.
2) Hoover was interventionist. The "New deal spirit" policies were born under Hoover. Just for the record FDR during the 32 campaign called Hoover a socialist...
3) Which "rights" are you talking about ? (The "right to" cheap money wasn't a very good idea)
Thanks
unmondelibre 3 years ago
I disagree, the government must intervene with business activities. We only need to look back to the Great Depression, which you didn't really touch upon. Businesses need to be reviewed and more rights need to be given to allow for expansion. The depression in the 1930s worsened because of Hoover's 'hands off' policy. But I propose that we should have economists trying to fix the economy, not a bunch of lawyers.
BlueMicrowave 3 years ago
Horrible explanation.. it goes back to the late 70's, but the government is responsible for this. Republicans and Democrats had a chance to fix it, but they did not (they were looking for votes)
moronpolice 3 years ago
The united states is bankrupt. The free market in the US and the rest of the world cant continue if the controling force is bankrupt. If you live in the US, I feel sorry for your future because financialy, the next 15 years are going to be very sad.
submariner176 3 years ago
Government interference in the free interactions of people(the market) is ALWAYS an attempt to cheat reality. Insane and childish. It's a game of let's pretend. Let's pretend that everyone has earned and can afford a house. Let's pretend that everyone is equally credit worthy. Let's take money from some people and give it to others so we all can pretend that they are prosperous.
You can fool reality only for so long. Then it all comes crashing down. Reality always wins. Game Over.
carcabe 3 years ago 4
This is the best short account of the crisis I've seen.
Regarding "deregulation," there was none as the vid points out. Immediately upon the announcement of his Nobel, Krugman was asked by BBC to explain the deregulation that led to the crisis. Krugman replied curtly "there was no deregulation."
Now we Americans are getting nationalizations that won't soon be reversed. Note that this is on Bush's watch -- he's the greatest socialist in America's history.
CNSteeleEcon 3 years ago 6
It's not that there's much deregulation during this bubble, altought Bush did deregulate lending -- the biggest spree of dereg ran from Jimmy Carter (who started Reagan's deregulations) to something like 2000, when Bush still implemented some deregulation. It's the 'lack' of regulation that was largely at fault.
Bellator656 3 years ago
you said it was unintended, but it was in fact intended all along.
cyberpsygen7 3 years ago
Centralized economics doesn't work. It creates misallocations of resources... (bubbles). Central banking is central economic control... a socialistic idea. And yet they are granted a monopoly. I wonder what percentage of people think that USD cash is government issued and what percentage realizes they are federal reserve notes (even though it says it right on top). Hell I wonder how many people still think the Federal Reserve is government.
theoriginalanomaly 3 years ago 13
@theoriginalanomaly I am in the Southern U.S. and have an Economic Degree. I did not fully understand how money and the Fed operated until about 2 year ago. Since then, I have informed many people that the Fed is a private corporation. Some argued the point. None of those I told were previously aware. All I can say is welcome to the rabbit hole.
TheWillwillwill 1 year ago 2
Excellent video. Just brilliant. Thank you. The public and those informing them are fucking useless and have no ability at this stage in the game to kick their thinking out of neutral. It really is frustrating.
snowtrot 3 years ago 6
I dont know how the line 'deregulation' got into the blame game with such speed and such unchalleged supremacy. It has been some kind of blitzkreig by the regulation hungry lawmakers and useful idiots of the media to make it look like greedy bankers and speculators did this by themselves. Im not even bothered that they got the bailout money. Id like to see them get more, and I mean that even though it goes against many of my values. Govt made them lose, now this is like a lawsuit settlement.
FarFromEquilibrium 3 years ago 5
I wouldn't have a problem with it, if it were not from taxpayer's pockets, but out of those of politicians.
Moragauth 3 years ago 3
I hear ya! It was a combined effort on the part of everyone from builders to lenders, to appraisers and real estate agents so I dont know what to really blame. NOBODY wanted to call the housing cherade early, or even when it was time. Well, there were a few but they werent too diligent, and for good reason. And we dont learn! Thats why my cynical above remark. The first thing that happens, after bank 'settlement', is more govt support of failing sectors, and without any market strategy!
FarFromEquilibrium 3 years ago
And I cant blame any of those I just mentioned either. They took the situation that the govt forced into existence and made the most of it. So i dont want to sound like a fool. I think everybody played the hand they were holding, but govt regulation forced a non market directed trend to grab the wheel and lock it into place aiming the vehicle towards a cliff everybody knew was there but nobody knew just how far. So the game is to ride a while and bail before the edge. Not enoguh bailed early.
FarFromEquilibrium 3 years ago
Funnily enough, the whole bailout is of dubious functionality, as banks are (rightly) very reluctant to lend money out. I think the regulators are finally going to be faced with a crisis they cannot legislate themselves out of. It's cute how the big auto firms also went asking for a "bailout". :)
Moragauth 3 years ago 2
The video could be even better without that music and a more distinct voice.
I could just so understand the voice (being no native english listener) but someone with lesser english skills may not.
Skandalos 3 years ago
That music is horrible. Please make another one without it. Pleeease!
MrRichfield 3 years ago
Fantastic, BASIC TRUTHS ABOUT FINANCIAL MELTDOWN.
Come on from a Spanish Cato Supporter!
sito5 3 years ago 4
Great video
This is important and needs more views!
rambo26 3 years ago 4
Excellent video.
Please don't take it down. :-)
legendre007 3 years ago 4