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The proximate cause was the popping of an asset bubble.
As for the ultimate cause (and there were likely several contributing) that generated the bubble in the first place, the jury is out on the relative contributions of cheap money, lax lending practices, crowd psychology in investing (flip that house.....), etc. Probably will be economic historians still arguing about it 50 years down the line.
The bubble popped because of a repo run. The issues were never corrected and are worse now than it was. In fact, China is a bubble of epic proportion, that looks to be popping now.
The big institutional investors and those markets are where the music stopped. There is no mystery, just obfuscation.
The oldest propaganda technique is to repeat a lie emphatically and often until it is taken for the truth. Something like this is going on now with regard to banks and the financial crisis. The big bank boosters and analysts who should know better are repeating the falsehood that repeal of Glass-Steagall had nothing to do with the Panic of 2008.
In fact, the financial crisis might not have happened at all but for the 1999 repeal of the Glass-Steagall law that separated commercial and investment banking for seven decades. If there is any hope of avoiding another meltdown, it's critical to understand why Glass-Steagall repeal helped to cause the crisis. Without a return to something like Glass-Steagall, another greater catastrophe is just a matter of time.
The bubble popped because of a repo run. The issues were never corrected and are worse now than it was. In fact, China is a bubble of epic proportion, that looks to be popping now.
The big institutional investors and those markets are where the music stopped. There is no mystery, just obfuscation.
Yeah Im watching the China stuff now. Thats going to get crazy. I am concerned that it will lead to....military adventurism by China as a way to distract its population. Should be interesting times.
I didn't go through the videos but what exactly is predatory lending? I'm guessing lending to people / companies at high interest rates? I mean where does personal responsibility rank? If I want / need a loan, I'm not going to take one that financially doesn't make sense.
Then people say the crisis was started bc banks were too lax with lending, as mandated by the Clinton administration
I'm in the mortgage industry and I can tell you that the housing bubble was created by loose regulations. Stuff like stated income etc, but the blame should go all around because borrowers knew they were giving false incomes in order to qualify. We will not see another housing bubble of that level because of all the new regulations. It's very strict now, but of course there will be more housing bubbles, but not on the same scale.
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