Unfettered Capitalism Fails

[yiostheoy]

...time and time again. It doesnt work.
Here are at least 18 of the failures.
1800, 1823, 1837, 1857,1880, 1896,1900, 1903, 1907, 1929, 1937, 1938,1946, 1963, 1969, 1987, 1989 and 2008.

That happens because capitalism like any other economical and political system is not perfect.
Someday capitalism will fall forever and another impefect system will take its place.
In other word it's possible capitalism will end up like communism

Capitalism has already been replaced.

Really?
Replaced by whom? You mean some kind of "neo-capitalism"?

The state regulates trade more and more every year.


At what point should we declare it dead?

Good question!
Maybe when all trades will be regulated or nationalised!

Regulation is simply the matter of making sure companies pay for their own clean up and/or do not abuse safety net programs like FDIC etc.

A classic failure of proper regulation is the "too big to fail" phenomenon of the big banks.

Lehman Brothers was not too big to fail, but they triggered the 2008 recession when they did lose all their money and fail.

All the big banks that were foolish enough to invest in Lehman Brothers (like Citibank) were too big to fail while others (like WAMU) were merged out of business (into B of A etc).

 

[PurpleOwl]

What would be a definition of the term "unfettered"?

No government meddling. No regulation. No subsidies. No government infrastructure. No government schools. No welfare. No social security. No Medicare. No Medicaid. In other words, The U.S. government as it existed in 1914.

most of those existed before 1914

Wrong. You don't know squat about American history. That true of most snowflakes

other than medicaid and social security everthing you listed existed before 1914....are you people so fucking retarded you think public schools didn't exist before 1914?

 

[yiostheoy]

...time and time again. It doesnt work.
Here are at least 18 of the failures.
1800, 1823, 1837, 1857,1880, 1896,1900, 1903, 1907, 1929, 1937, 1938,1946, 1963, 1969, 1987, 1989 and 2008.

That happens because capitalism like any other economical and political system is not perfect.
Someday capitalism will fall forever and another impefect system will take its place.
In other word it's possible capitalism will end up like communism

Regulated capitalism is what we have now.

The regulation attempts to prevent abuses.

Sometimes it does and sometimes it does not.

 

[yiostheoy]

What would be a definition of the term "unfettered"?

No government meddling. No regulation. No subsidies. No government infrastructure. No government schools. No welfare. No social security. No Medicare. No Medicaid. In other words, The U.S. government as it existed in 1914.

most of those existed before 1914

Wrong. You don't know squat about American history. That true of most snowflakes

other than medicaid and social security everthing you listed existed before 1914....are you people so fucking retarded you think public schools didn't exist before 1914?

Wash your mouth out with soap!

 

[Votto]

...time and time again. It doesnt work.
Here are at least 18 of the failures.
1800, 1823, 1837, 1857,1880, 1896,1900, 1903, 1907, 1929, 1937, 1938,1946, 1963, 1969, 1987, 1989 and 2008.

That happens because capitalism like any other economical and political system is not perfect.
Someday capitalism will fall forever and another impefect system will take its place.
In other word it's possible capitalism will end up like communism

Capitalism has already been replaced.

Really?
Replaced by whom? You mean some kind of "neo-capitalism"?

The state regulates trade more and more every year.


At what point should we declare it dead?

Good question!
Maybe when all trades will be regulated or nationalised!

It's all a game. Does the state own an entity in name like the Fed? LOL.

It's like Freddie and Fanny May, they were government creations that the government chose to let become "privatized".

During the Vietnam war they could not balance the books, back when they actually tried to balance the books, so they let them go.

However, after the credit crisis it was evident that they were never privatized at all. The taxpayers still had their back as they continued to get special perks that no can compete with.

 

[PurpleOwl]

...time and time again. It doesnt work.
Here are at least 18 of the failures.
1800, 1823, 1837, 1857,1880, 1896,1900, 1903, 1907, 1929, 1937, 1938,1946, 1963, 1969, 1987, 1989 and 2008.

That happens because capitalism like any other economical and political system is not perfect.
Someday capitalism will fall forever and another impefect system will take its place.
In other word it's possible capitalism will end up like communism

Capitalism has already been replaced.

Really?
Replaced by whom? You mean some kind of "neo-capitalism"?

neo liberalism maybe?

 

[Windship]

You are proof that 65 years of corporate backed, gov indoctrination does work

Corporations are a government creation dingleberry

Ok, and....

 

[EverCurious]

Tehon It's a snarled mess of trade agreements made over the past like 30 years or so...

Just as an off hand example in 2010 we started a Korean free trade agreement. (Political Economy - Obama, Lee outlined U.S.-Korea trade deal in Seoul, official says - Obama had put in a 5 year sunset re automobiles from Korean manufacturers, which sunset and last I heard a unilateral renegotiation was not reached) Most of it's WTO who dictates that developed countries give "undeveloped" countries a break - which China and Japan are [in so far as our existing trade deals are concerned]) Renegotiation has prior failed - if it's because Obama didn't try or because China/Japan flat out refused is up for debate.

I'll see if I can find at least one of them from China later this afternoon.

 

[ThunderKiss1965]

...time and time again. It doesnt work.
Here are at least 18 of the failures.
1800, 1823, 1837, 1857,1880, 1896,1900, 1903, 1907, 1929, 1937, 1938,1946, 1963, 1969, 1987, 1989 and 2008.

Sorry but t U.S. Economy
Stock Market Crash of 2008

Follow the Timeline to Understand Why It Crashed

• 
  
  
  • SHARE​
  • PIN​
  • EMAIL​

​

A trader gestures as he works on the floor of the New York Stock Exchange September 29, 2008 in New York City. U.S. stocks took a nosedive in reaction to the global credit crisis and as the U.S. House of Representatives rejected the $700 billion rescue package, 228-205. Dow Jones Industrials fell as much as 700 points in midday trading. Photo by Spencer Platt/Getty Images​

US Economy

​

• 
  
  
  • GDP and Growth
    • Recessions
    • Economic Sectors
    • Natural Disasters
    • GDP by Year
  • Economic Theory
  • Supply
  • Demand
  • National Debt
  • Fiscal Policy
  • Monetary Policy
  • Trade Policy
  • Inflation
  • U.S. Markets
  • World Economy
  • Economy Stats
  • Hot Topics
  • Glossary

VIEW ALL ​

By Kimberly Amadeo
Updated September 08, 2016
The stock market crash of 2008 occurred on September 29. The stock market, as represented by the Dow Jones Industrial Average, fell 777.68 points in intra-day trading. That was the largest point drop in any single day in history. It was because Congress rejected the bank bailout bill. But the crash had been building for a long time.
The Dow hit its pre-recession, all-time high on October 9, 2007, closing at 14,164.43.
Less than 18 months later, it had dropped more than 50% to 6,594.44 on March 5, 2009. That wasn't the largest decline in history. During the Great Depression, the stock market took a 90% hit. But this fall was more vicious. It took only 18 months, compared to three years during the Depression. What caused the crash? Follow this timeline below to understand exactly how it happened.
2007

The Dow opened the year at 12,459.54. It rose fairly steadily throughout most of the year, despite concerns about a slowdown in the over-heated housing market. In fact, there had been warning signals as early as 2006 that the housing market was starting to falter. The Commerce Department warned on November 17, 2006, that October's new home permits were a whopping 28% below the October 2005 rate. Housing prices were falling in 2006, triggering the default of subprime mortgages. But government officials didn't think the housing slowdown would affect the rest of the economy.
By August 2007, the Federal Reserve recognized that banks had a liquidity problem. It began adding liquidity by selling its reserves of Treasuries and accepted subprime mortgages from the banks as collateral. Shortly after the Dow hit its peak, some economists warned about the potential general impact of widespread use of collateralized debt obligations and other derivatives.
By late November, Treasury Secretary Hank Paulson launched a bank-funded Superfund to purchase toxic debt. However, as the year drew to a close, the BEA revised its estimate of third-quarter GDP growth, (Gross Domestic Product) up to a phenomenal 4.9%. It seemed the healthy U.S. economy could shrug off a housing downturn, and financial market liquidity constraints, as 2007 drew to a close. The Dow ended the year just slightly off its October high, at 13,264.82.
2008

By the end of January, the BEA announced that GDP growth was a paltry .6% for the fourth quarter of 2007. The economy lost 17,000 jobs, the first time since 2004. The Dow shrugged off the news, and hovered between 12,000-13,000 until March. On March 17, the Federal Reserve intervened to save the failing investment bank Bear Stearns, the first casualty of the subprime mortgage crisis. The Dow dropped to an intra-day low of 11,650.44 but seemed to recover. In fact, many thought the Bear Stearns rescue would keep markets from sliding below 20% of the October high, and avoid a bear market.
By May, the Dow rose above 13,000 again and it seemed the worst was behind us.
In July 2008, the subprime mortgage crisis had spread to government sponsored agencies Fannie Mae and Freddie Mac, requiring a government bailout. The Treasury Department guaranteed $25 billion in their loans and bought shares of Fannie's and Freddie's stock. The FHA to guaranteed $300 billion in new loans. The Dow closed on July 15 at 10,962.54. It rebounded above 11,000 for the rest of the summer.
September 2008

The month started with chilling news. On Monday, September 15, 2008, Lehman Brothers declared bankruptcy. The Dow dropped 504.48 points.
On Tuesday (September 16), the Federal Reserve announced it was bailing out insurance giant AIG. It made an $85 billion "loan" in return for 79.9% equity, effectively taking ownership. AIG had run out of cash. It was scrambling to pay off credit default swaps it had issued against now-failing mortgage-backed securities.
On Wednesday (September 17), money market funds lost $144 billion. Investors panicked, switching to ultra-safe Treasury notes. The Dow fell 449.36 points.
On Thursday (September 18), markets rebounded 400 points. Investors learned about a new bank bailout package. On Friday (September 19), the Dow ended the week at 11,388.44. It was only slightly below its Monday open of 11,416.37.The Fed established the Asset-Backed Commercial Paper Money Market Mutual Fund Liquidity Facility (AMLF). It loaned $122.8 billion to banks to buy commercial paper from money market funds. On September 21, the Treasury guaranteed $50 billion worth of money market funds. The fact that the Fed has announced this new purchase program shows that credit markets are still partially frozen.
On Saturday, September 20, Hank Paulson and Ben Bernanke sent the bank bailout bill to Congress. The Dow bounced around 11,000 until September 29 . That's when the Senate voted against the bailout bill. The Dow fell 777.68 points, the most in any single day in history. Global markets panicked, as well:

• 
  
  
  • The MSCI World Index dropped 6% in one day, the most since its creation in 1970.
  • Brazil's Bovespa was halted after dropping 10%.
  • The London FTSE dropped 15%.
  • Gold soared to over $900 an ounce.
  • Oil dropped to $95 a barrel.

To restore financial stability, the Federal Reserve doubled its currency swaps with foreign central banks in Europe, England, and Japan to $620 billion. The governments of the world were being forced to provide all the liquidity for frozen credit markets. (Source: "Stocks Crushed," CNNMoney, September 29, 2008. "Fed Pumps $630 Billion into Financial System," Bloomberg, September 29, 2008. "Stocks Plunge After Congress Rejects Bailout," September 29, 2008. "Bank bailouts sweep Europe," CNNMoney, September 29, 2008)
October 2008

Congress finally passed the bailout bill in early October, but by now panic had set in. The Labor Department reported that the economy had lost a whopping 159,000 jobs in the prior month. On Monday, October 6, the Dow dropped 800 points, closing before 10,000 for the first time since 2004.
The Federal Reserve fought the ongoing banking liquidity crisis by lending $540 billion to money market funds.That gave the funds enough cash to meet a continuing barrage of redemptions. Since August, more than $500 billion was withdrawn from money markets. That's where most businesses park their overnight cash. Businesses were hoarding cash because LIBOR rates were high. That's because banks have been reluctant to make loans.
JPMorgan Chase managed the Fed's Money Market Investor Funding Facility (MMIFF). It purchased up to $600 billion of certificates of deposit, bank notes, and commercial paper that would come due in 90 days. The remaining $60 billion came from the money markets themselves, who must purchase commercial paper from the MMIFF. (Source: Federal Reserve, Press Release, October 21,2008; "Fed to provide $540 billion to aid money funds," Bloomberg, October 21, 2008)
The Fed also coordinated a global central bank bailout. It quickly lowered the Fed funds rate to just one percent. But the LIBOR bank lending rate rose to its high of 3.46%.
The Dow responded by plummeting 13% throughout the month. By the end of October, the BEA released more sobering news. The economy had contracted 0.3% in the third quarter. The nation was in recession. (Source: CNN Money, The Week That Broke Wall Street, October 6, 2008)
November 2008

The Labor Department reported that the economy had lost a staggering 240,000 jobs in October. The month revealed more bad news. The AIG bailout grew to $150 billion, Treasury announced it was using part of the $700 billion bailout to buy preferred stocks in the nations' banks. The Big 3 automakers asked for a Federal bailout. By November 20, 2008, the Dow had plummeted to 7,552.29, a new low.But the stock market crash of 2008 was not yet over.
December 2008

The Federal Reserve dropped the Fed funds rate to zero, its lowest level in history. The Dow ended the year at a sickening 8,776.39, down nearly 34% for the year.
2009

The Dow climbed to 9,034.69 on January 2, 2009, in a burst of optimism. Investors believed that the new Obama Administration could tackle the recession with his team of economic advisers. But the bad economic news continued. The Dow plummeted to 6,594.44 on March 5, 2009. This was the true market bottom.
Soon afterward, Obama's economic stimulus plan instilled the confidence needed to stop the panic. On July 24, 2009, the Dow reached a higher high. It closed at 9,093.24, beating its January high. For most, the stock market crash of 2008 was over.
But scars remained. Investors remained skittish throughout the next four years. On June 1, 2012, they panicked over a poor May jobs report and the eurozone debt crisis. The Dow dropped 275 points, and the 10-year benchmark Treasury yielddropped to 1.443 during intraday trading. This was the lowest rate in more than 200 years. It signaled that the confidence that evaporated during 2008 had not yet returned to Wall Street.

• 
  
  
  • LIST

he 2008 crash was not unfettered capitalism. It was intrusive Government that caused the housing crash.

No. It was deregulation of the banks that allowed predatory lending to people that couldnt afford it. And they knew it as they knew when the bubble bursts the taxpayer will bail them out. It is the responsibility of the bank to make sound loans. Look it up.

The Government forced banks to lend to people who couldn't afford it. That is intrusive.

 

[Windship]

...time and time again. It doesnt work.
Here are at least 18 of the failures.
1800, 1823, 1837, 1857,1880, 1896,1900, 1903, 1907, 1929, 1937, 1938,1946, 1963, 1969, 1987, 1989 and 2008.

Those are simply called "business cycles".

You study them in Economics in college and grad school.

They are simply the price of business freedom.

Business freedom is the price of innovation.

Innovation is the price of prosperity.

The only thing you can do about the breakdown ends of business cycles is safety net programs like unemployment programs.

What a bunch of horse shit. What do you call it when the fed issues a bond? What does that bond represent? How much interest does that bond hold? After issuing, how much of a cut does the bank take? After selling the bond to the fed, how much of a SECOND cut does the bank steal? Its debt based economy is what the fed dictates. They create currency that is worthless because it carries debt with it and is backed by nothing but....faith?...lol, really?. There is no way to avoid it. It is how the criminal capitalists devised it. All from tax payer "dollars. The greatest ponzi scheme ever devised.

 

[Windship]

...time and time again. It doesnt work.
Here are at least 18 of the failures.
1800, 1823, 1837, 1857,1880, 1896,1900, 1903, 1907, 1929, 1937, 1938,1946, 1963, 1969, 1987, 1989 and 2008.

Sorry but t U.S. Economy
Stock Market Crash of 2008

Follow the Timeline to Understand Why It Crashed

• 
  
  
  • SHARE​
  • PIN​
  • EMAIL​

​

A trader gestures as he works on the floor of the New York Stock Exchange September 29, 2008 in New York City. U.S. stocks took a nosedive in reaction to the global credit crisis and as the U.S. House of Representatives rejected the $700 billion rescue package, 228-205. Dow Jones Industrials fell as much as 700 points in midday trading. Photo by Spencer Platt/Getty Images​

US Economy

​

• 
  
  
  • GDP and Growth
    • Recessions
    • Economic Sectors
    • Natural Disasters
    • GDP by Year
  • Economic Theory
  • Supply
  • Demand
  • National Debt
  • Fiscal Policy
  • Monetary Policy
  • Trade Policy
  • Inflation
  • U.S. Markets
  • World Economy
  • Economy Stats
  • Hot Topics
  • Glossary

VIEW ALL ​

By Kimberly Amadeo
Updated September 08, 2016
The stock market crash of 2008 occurred on September 29. The stock market, as represented by the Dow Jones Industrial Average, fell 777.68 points in intra-day trading. That was the largest point drop in any single day in history. It was because Congress rejected the bank bailout bill. But the crash had been building for a long time.
The Dow hit its pre-recession, all-time high on October 9, 2007, closing at 14,164.43.
Less than 18 months later, it had dropped more than 50% to 6,594.44 on March 5, 2009. That wasn't the largest decline in history. During the Great Depression, the stock market took a 90% hit. But this fall was more vicious. It took only 18 months, compared to three years during the Depression. What caused the crash? Follow this timeline below to understand exactly how it happened.
2007

The Dow opened the year at 12,459.54. It rose fairly steadily throughout most of the year, despite concerns about a slowdown in the over-heated housing market. In fact, there had been warning signals as early as 2006 that the housing market was starting to falter. The Commerce Department warned on November 17, 2006, that October's new home permits were a whopping 28% below the October 2005 rate. Housing prices were falling in 2006, triggering the default of subprime mortgages. But government officials didn't think the housing slowdown would affect the rest of the economy.
By August 2007, the Federal Reserve recognized that banks had a liquidity problem. It began adding liquidity by selling its reserves of Treasuries and accepted subprime mortgages from the banks as collateral. Shortly after the Dow hit its peak, some economists warned about the potential general impact of widespread use of collateralized debt obligations and other derivatives.
By late November, Treasury Secretary Hank Paulson launched a bank-funded Superfund to purchase toxic debt. However, as the year drew to a close, the BEA revised its estimate of third-quarter GDP growth, (Gross Domestic Product) up to a phenomenal 4.9%. It seemed the healthy U.S. economy could shrug off a housing downturn, and financial market liquidity constraints, as 2007 drew to a close. The Dow ended the year just slightly off its October high, at 13,264.82.
2008

By the end of January, the BEA announced that GDP growth was a paltry .6% for the fourth quarter of 2007. The economy lost 17,000 jobs, the first time since 2004. The Dow shrugged off the news, and hovered between 12,000-13,000 until March. On March 17, the Federal Reserve intervened to save the failing investment bank Bear Stearns, the first casualty of the subprime mortgage crisis. The Dow dropped to an intra-day low of 11,650.44 but seemed to recover. In fact, many thought the Bear Stearns rescue would keep markets from sliding below 20% of the October high, and avoid a bear market.
By May, the Dow rose above 13,000 again and it seemed the worst was behind us.
In July 2008, the subprime mortgage crisis had spread to government sponsored agencies Fannie Mae and Freddie Mac, requiring a government bailout. The Treasury Department guaranteed $25 billion in their loans and bought shares of Fannie's and Freddie's stock. The FHA to guaranteed $300 billion in new loans. The Dow closed on July 15 at 10,962.54. It rebounded above 11,000 for the rest of the summer.
September 2008

The month started with chilling news. On Monday, September 15, 2008, Lehman Brothers declared bankruptcy. The Dow dropped 504.48 points.
On Tuesday (September 16), the Federal Reserve announced it was bailing out insurance giant AIG. It made an $85 billion "loan" in return for 79.9% equity, effectively taking ownership. AIG had run out of cash. It was scrambling to pay off credit default swaps it had issued against now-failing mortgage-backed securities.
On Wednesday (September 17), money market funds lost $144 billion. Investors panicked, switching to ultra-safe Treasury notes. The Dow fell 449.36 points.
On Thursday (September 18), markets rebounded 400 points. Investors learned about a new bank bailout package. On Friday (September 19), the Dow ended the week at 11,388.44. It was only slightly below its Monday open of 11,416.37.The Fed established the Asset-Backed Commercial Paper Money Market Mutual Fund Liquidity Facility (AMLF). It loaned $122.8 billion to banks to buy commercial paper from money market funds. On September 21, the Treasury guaranteed $50 billion worth of money market funds. The fact that the Fed has announced this new purchase program shows that credit markets are still partially frozen.
On Saturday, September 20, Hank Paulson and Ben Bernanke sent the bank bailout bill to Congress. The Dow bounced around 11,000 until September 29 . That's when the Senate voted against the bailout bill. The Dow fell 777.68 points, the most in any single day in history. Global markets panicked, as well:

• 
  
  
  • The MSCI World Index dropped 6% in one day, the most since its creation in 1970.
  • Brazil's Bovespa was halted after dropping 10%.
  • The London FTSE dropped 15%.
  • Gold soared to over $900 an ounce.
  • Oil dropped to $95 a barrel.

To restore financial stability, the Federal Reserve doubled its currency swaps with foreign central banks in Europe, England, and Japan to $620 billion. The governments of the world were being forced to provide all the liquidity for frozen credit markets. (Source: "Stocks Crushed," CNNMoney, September 29, 2008. "Fed Pumps $630 Billion into Financial System," Bloomberg, September 29, 2008. "Stocks Plunge After Congress Rejects Bailout," September 29, 2008. "Bank bailouts sweep Europe," CNNMoney, September 29, 2008)
October 2008

Congress finally passed the bailout bill in early October, but by now panic had set in. The Labor Department reported that the economy had lost a whopping 159,000 jobs in the prior month. On Monday, October 6, the Dow dropped 800 points, closing before 10,000 for the first time since 2004.
The Federal Reserve fought the ongoing banking liquidity crisis by lending $540 billion to money market funds.That gave the funds enough cash to meet a continuing barrage of redemptions. Since August, more than $500 billion was withdrawn from money markets. That's where most businesses park their overnight cash. Businesses were hoarding cash because LIBOR rates were high. That's because banks have been reluctant to make loans.
JPMorgan Chase managed the Fed's Money Market Investor Funding Facility (MMIFF). It purchased up to $600 billion of certificates of deposit, bank notes, and commercial paper that would come due in 90 days. The remaining $60 billion came from the money markets themselves, who must purchase commercial paper from the MMIFF. (Source: Federal Reserve, Press Release, October 21,2008; "Fed to provide $540 billion to aid money funds," Bloomberg, October 21, 2008)
The Fed also coordinated a global central bank bailout. It quickly lowered the Fed funds rate to just one percent. But the LIBOR bank lending rate rose to its high of 3.46%.
The Dow responded by plummeting 13% throughout the month. By the end of October, the BEA released more sobering news. The economy had contracted 0.3% in the third quarter. The nation was in recession. (Source: CNN Money, The Week That Broke Wall Street, October 6, 2008)
November 2008

The Labor Department reported that the economy had lost a staggering 240,000 jobs in October. The month revealed more bad news. The AIG bailout grew to $150 billion, Treasury announced it was using part of the $700 billion bailout to buy preferred stocks in the nations' banks. The Big 3 automakers asked for a Federal bailout. By November 20, 2008, the Dow had plummeted to 7,552.29, a new low.But the stock market crash of 2008 was not yet over.
December 2008

The Federal Reserve dropped the Fed funds rate to zero, its lowest level in history. The Dow ended the year at a sickening 8,776.39, down nearly 34% for the year.
2009

The Dow climbed to 9,034.69 on January 2, 2009, in a burst of optimism. Investors believed that the new Obama Administration could tackle the recession with his team of economic advisers. But the bad economic news continued. The Dow plummeted to 6,594.44 on March 5, 2009. This was the true market bottom.
Soon afterward, Obama's economic stimulus plan instilled the confidence needed to stop the panic. On July 24, 2009, the Dow reached a higher high. It closed at 9,093.24, beating its January high. For most, the stock market crash of 2008 was over.
But scars remained. Investors remained skittish throughout the next four years. On June 1, 2012, they panicked over a poor May jobs report and the eurozone debt crisis. The Dow dropped 275 points, and the 10-year benchmark Treasury yielddropped to 1.443 during intraday trading. This was the lowest rate in more than 200 years. It signaled that the confidence that evaporated during 2008 had not yet returned to Wall Street.

• 
  
  
  • LIST

he 2008 crash was not unfettered capitalism. It was intrusive Government that caused the housing crash.

No. It was deregulation of the banks that allowed predatory lending to people that couldnt afford it. And they knew it as they knew when the bubble bursts the taxpayer will bail them out. It is the responsibility of the bank to make sound loans. Look it up.

The Government forced banks to lend to people who couldn't afford it. That is intrusive.

True. Bush pushed for the banks to make bad loans and they knew it. They knew, like now, tax payer dollars were ready.

 

[Iceweasel]

It was deregulation of the banks that allowed predatory lending to people that couldnt afford it. And they knew it as they knew when the bubble bursts the taxpayer will bail them out. It is the responsibility of the bank to make sound loans. Look it up.

You can't afford the loan so the banks force you to sign for one? WTF? The government put pressure on the banks to increase their loans for homes sales and the banks came up with a solution to make it feasible with adjustable mortgages so who's the bigger culprit?

 

[Tehon]

Tehon It's a snarled mess of trade agreements made over the past like 30 years or so...

Just as an off hand example in 2010 we started a Korean free trade agreement. (Political Economy - Obama, Lee outlined U.S.-Korea trade deal in Seoul, official says - Obama had put in a 5 year sunset re automobiles from Korean manufacturers, which sunset and last I heard a unilateral renegotiation was not reached) Most of it's WTO who dictates that developed countries give "undeveloped" countries a break - which China and Japan are [in so far as our existing trade deals are concerned]) Renegotiation has prior failed - if it's because Obama didn't try or because China/Japan flat out refused is up for debate.

I'll see if I can find at least one of them from China later this afternoon.

I can save you the trouble. We don't have a trade deal with China. Nor was clearing a path for China's ascension into the WTO about selling goods into China. It was about allowing US manufactures access to cheap labor to manufacture goods which they could then import back to the US, the largest consumer market on the planet.

 

[Windship]

It was deregulation of the banks that allowed predatory lending to people that couldnt afford it. And they knew it as they knew when the bubble bursts the taxpayer will bail them out. It is the responsibility of the bank to make sound loans. Look it up.

You can't afford the loan so the banks force you to sign for one? WTF? The government put pressure on the banks to increase their loans for homes sales and the banks came up with a solution to make it feasible with adjustable mortgages so who's the bigger culprit?

The banks are because they are the power. They have the money. Isnt it the responsibility of the company to operate in the companies best interest? If workers made enough wages, they COULD afford those loans. Keep driving wages down. Good idea. Remove the purchasing power from the population yeah, good job guys. Thats why china is now the number one consumer nation over the US. As soon as china's wages increased, they surpassed us.

 

[Iceweasel]

It was deregulation of the banks that allowed predatory lending to people that couldnt afford it. And they knew it as they knew when the bubble bursts the taxpayer will bail them out. It is the responsibility of the bank to make sound loans. Look it up.

You can't afford the loan so the banks force you to sign for one? WTF? The government put pressure on the banks to increase their loans for homes sales and the banks came up with a solution to make it feasible with adjustable mortgages so who's the bigger culprit?

The banks are because they are the power. They have the money. Isnt it the responsibility of the company to operate in the companies best interest? If workers made enough wages, they COULD afford those loans. Keep driving wages down. Good idea. Remove the purchasing power from the population yeah, good job guys. Thats why china is now the number one consumer nation over the US.

That's what I thought. You are wearing blinders. The government has the power, people can say no to banks and go elsewhere.

 

[bripat9643]

What would be a definition of the term "unfettered"?

No government meddling. No regulation. No subsidies. No government infrastructure. No government schools. No welfare. No social security. No Medicare. No Medicaid. In other words, The U.S. government as it existed in 1914.

most of those existed before 1914

Wrong. You don't know squat about American history. That true of most snowflakes

other than medicaid and social security everthing you listed existed before 1914....are you people so fucking retarded you think public schools didn't exist before 1914?

Wrong. We had no government regulatory agencies. No government built infrastructure. No government subsidies. No Medicare. No welfare. And very few government schools

 

[bripat9643]

...time and time again. It doesnt work.
Here are at least 18 of the failures.
1800, 1823, 1837, 1857,1880, 1896,1900, 1903, 1907, 1929, 1937, 1938,1946, 1963, 1969, 1987, 1989 and 2008.

Sorry but t U.S. Economy
Stock Market Crash of 2008

Follow the Timeline to Understand Why It Crashed

• 
  
  
  • SHARE​
  • PIN​
  • EMAIL​

​

A trader gestures as he works on the floor of the New York Stock Exchange September 29, 2008 in New York City. U.S. stocks took a nosedive in reaction to the global credit crisis and as the U.S. House of Representatives rejected the $700 billion rescue package, 228-205. Dow Jones Industrials fell as much as 700 points in midday trading. Photo by Spencer Platt/Getty Images​

US Economy

​

• 
  
  
  • GDP and Growth
    • Recessions
    • Economic Sectors
    • Natural Disasters
    • GDP by Year
  • Economic Theory
  • Supply
  • Demand
  • National Debt
  • Fiscal Policy
  • Monetary Policy
  • Trade Policy
  • Inflation
  • U.S. Markets
  • World Economy
  • Economy Stats
  • Hot Topics
  • Glossary

VIEW ALL ​

By Kimberly Amadeo
Updated September 08, 2016
The stock market crash of 2008 occurred on September 29. The stock market, as represented by the Dow Jones Industrial Average, fell 777.68 points in intra-day trading. That was the largest point drop in any single day in history. It was because Congress rejected the bank bailout bill. But the crash had been building for a long time.
The Dow hit its pre-recession, all-time high on October 9, 2007, closing at 14,164.43.
Less than 18 months later, it had dropped more than 50% to 6,594.44 on March 5, 2009. That wasn't the largest decline in history. During the Great Depression, the stock market took a 90% hit. But this fall was more vicious. It took only 18 months, compared to three years during the Depression. What caused the crash? Follow this timeline below to understand exactly how it happened.
2007

The Dow opened the year at 12,459.54. It rose fairly steadily throughout most of the year, despite concerns about a slowdown in the over-heated housing market. In fact, there had been warning signals as early as 2006 that the housing market was starting to falter. The Commerce Department warned on November 17, 2006, that October's new home permits were a whopping 28% below the October 2005 rate. Housing prices were falling in 2006, triggering the default of subprime mortgages. But government officials didn't think the housing slowdown would affect the rest of the economy.
By August 2007, the Federal Reserve recognized that banks had a liquidity problem. It began adding liquidity by selling its reserves of Treasuries and accepted subprime mortgages from the banks as collateral. Shortly after the Dow hit its peak, some economists warned about the potential general impact of widespread use of collateralized debt obligations and other derivatives.
By late November, Treasury Secretary Hank Paulson launched a bank-funded Superfund to purchase toxic debt. However, as the year drew to a close, the BEA revised its estimate of third-quarter GDP growth, (Gross Domestic Product) up to a phenomenal 4.9%. It seemed the healthy U.S. economy could shrug off a housing downturn, and financial market liquidity constraints, as 2007 drew to a close. The Dow ended the year just slightly off its October high, at 13,264.82.
2008

By the end of January, the BEA announced that GDP growth was a paltry .6% for the fourth quarter of 2007. The economy lost 17,000 jobs, the first time since 2004. The Dow shrugged off the news, and hovered between 12,000-13,000 until March. On March 17, the Federal Reserve intervened to save the failing investment bank Bear Stearns, the first casualty of the subprime mortgage crisis. The Dow dropped to an intra-day low of 11,650.44 but seemed to recover. In fact, many thought the Bear Stearns rescue would keep markets from sliding below 20% of the October high, and avoid a bear market.
By May, the Dow rose above 13,000 again and it seemed the worst was behind us.
In July 2008, the subprime mortgage crisis had spread to government sponsored agencies Fannie Mae and Freddie Mac, requiring a government bailout. The Treasury Department guaranteed $25 billion in their loans and bought shares of Fannie's and Freddie's stock. The FHA to guaranteed $300 billion in new loans. The Dow closed on July 15 at 10,962.54. It rebounded above 11,000 for the rest of the summer.
September 2008

The month started with chilling news. On Monday, September 15, 2008, Lehman Brothers declared bankruptcy. The Dow dropped 504.48 points.
On Tuesday (September 16), the Federal Reserve announced it was bailing out insurance giant AIG. It made an $85 billion "loan" in return for 79.9% equity, effectively taking ownership. AIG had run out of cash. It was scrambling to pay off credit default swaps it had issued against now-failing mortgage-backed securities.
On Wednesday (September 17), money market funds lost $144 billion. Investors panicked, switching to ultra-safe Treasury notes. The Dow fell 449.36 points.
On Thursday (September 18), markets rebounded 400 points. Investors learned about a new bank bailout package. On Friday (September 19), the Dow ended the week at 11,388.44. It was only slightly below its Monday open of 11,416.37.The Fed established the Asset-Backed Commercial Paper Money Market Mutual Fund Liquidity Facility (AMLF). It loaned $122.8 billion to banks to buy commercial paper from money market funds. On September 21, the Treasury guaranteed $50 billion worth of money market funds. The fact that the Fed has announced this new purchase program shows that credit markets are still partially frozen.
On Saturday, September 20, Hank Paulson and Ben Bernanke sent the bank bailout bill to Congress. The Dow bounced around 11,000 until September 29 . That's when the Senate voted against the bailout bill. The Dow fell 777.68 points, the most in any single day in history. Global markets panicked, as well:

• 
  
  
  • The MSCI World Index dropped 6% in one day, the most since its creation in 1970.
  • Brazil's Bovespa was halted after dropping 10%.
  • The London FTSE dropped 15%.
  • Gold soared to over $900 an ounce.
  • Oil dropped to $95 a barrel.

To restore financial stability, the Federal Reserve doubled its currency swaps with foreign central banks in Europe, England, and Japan to $620 billion. The governments of the world were being forced to provide all the liquidity for frozen credit markets. (Source: "Stocks Crushed," CNNMoney, September 29, 2008. "Fed Pumps $630 Billion into Financial System," Bloomberg, September 29, 2008. "Stocks Plunge After Congress Rejects Bailout," September 29, 2008. "Bank bailouts sweep Europe," CNNMoney, September 29, 2008)
October 2008

Congress finally passed the bailout bill in early October, but by now panic had set in. The Labor Department reported that the economy had lost a whopping 159,000 jobs in the prior month. On Monday, October 6, the Dow dropped 800 points, closing before 10,000 for the first time since 2004.
The Federal Reserve fought the ongoing banking liquidity crisis by lending $540 billion to money market funds.That gave the funds enough cash to meet a continuing barrage of redemptions. Since August, more than $500 billion was withdrawn from money markets. That's where most businesses park their overnight cash. Businesses were hoarding cash because LIBOR rates were high. That's because banks have been reluctant to make loans.
JPMorgan Chase managed the Fed's Money Market Investor Funding Facility (MMIFF). It purchased up to $600 billion of certificates of deposit, bank notes, and commercial paper that would come due in 90 days. The remaining $60 billion came from the money markets themselves, who must purchase commercial paper from the MMIFF. (Source: Federal Reserve, Press Release, October 21,2008; "Fed to provide $540 billion to aid money funds," Bloomberg, October 21, 2008)
The Fed also coordinated a global central bank bailout. It quickly lowered the Fed funds rate to just one percent. But the LIBOR bank lending rate rose to its high of 3.46%.
The Dow responded by plummeting 13% throughout the month. By the end of October, the BEA released more sobering news. The economy had contracted 0.3% in the third quarter. The nation was in recession. (Source: CNN Money, The Week That Broke Wall Street, October 6, 2008)
November 2008

The Labor Department reported that the economy had lost a staggering 240,000 jobs in October. The month revealed more bad news. The AIG bailout grew to $150 billion, Treasury announced it was using part of the $700 billion bailout to buy preferred stocks in the nations' banks. The Big 3 automakers asked for a Federal bailout. By November 20, 2008, the Dow had plummeted to 7,552.29, a new low.But the stock market crash of 2008 was not yet over.
December 2008

The Federal Reserve dropped the Fed funds rate to zero, its lowest level in history. The Dow ended the year at a sickening 8,776.39, down nearly 34% for the year.
2009

The Dow climbed to 9,034.69 on January 2, 2009, in a burst of optimism. Investors believed that the new Obama Administration could tackle the recession with his team of economic advisers. But the bad economic news continued. The Dow plummeted to 6,594.44 on March 5, 2009. This was the true market bottom.
Soon afterward, Obama's economic stimulus plan instilled the confidence needed to stop the panic. On July 24, 2009, the Dow reached a higher high. It closed at 9,093.24, beating its January high. For most, the stock market crash of 2008 was over.
But scars remained. Investors remained skittish throughout the next four years. On June 1, 2012, they panicked over a poor May jobs report and the eurozone debt crisis. The Dow dropped 275 points, and the 10-year benchmark Treasury yielddropped to 1.443 during intraday trading. This was the lowest rate in more than 200 years. It signaled that the confidence that evaporated during 2008 had not yet returned to Wall Street.

• 
  
  
  • LIST

he 2008 crash was not unfettered capitalism. It was intrusive Government that caused the housing crash.

No. It was deregulation of the banks that allowed predatory lending to people that couldnt afford it. And they knew it as they knew when the bubble bursts the taxpayer will bail them out. It is the responsibility of the bank to make sound loans. Look it up.

The Government forced banks to lend to people who couldn't afford it. That is intrusive.

True. Bush pushed for the banks to make bad loans and they knew it. They knew, like now, tax payer dollars were ready.

The CRA forced banks to make bad loans.

 

[PurpleOwl]

What would be a definition of the term "unfettered"?

No government meddling. No regulation. No subsidies. No government infrastructure. No government schools. No welfare. No social security. No Medicare. No Medicaid. In other words, The U.S. government as it existed in 1914.

most of those existed before 1914

Wrong. You don't know squat about American history. That true of most snowflakes

other than medicaid and social security everthing you listed existed before 1914....are you people so fucking retarded you think public schools didn't exist before 1914?

Wrong. We had no government regulatory agencies. No government built infrastructure. No government subsidies. No Medicare. No welfare. And very few government schools

seriously who brainwashed you?

 

[EverCurious]

China Relations Act of 2000 - China WTO Trade Relations: Details Of The USA - China Trade Agreement with Export Opportunities

(Full bill - H.R.4444 - 106th Congress (1999-2000): To authorize extension of nondiscriminatory treatment (normal trade relations treatment) to the People's Republic of China, and to establish a framework for relations between the United States and the People's Republic of China. )

 

[bripat9643]

No government meddling. No regulation. No subsidies. No government infrastructure. No government schools. No welfare. No social security. No Medicare. No Medicaid. In other words, The U.S. government as it existed in 1914.

most of those existed before 1914

Wrong. You don't know squat about American history. That true of most snowflakes

other than medicaid and social security everthing you listed existed before 1914....are you people so fucking retarded you think public schools didn't exist before 1914?

Wrong. We had no government regulatory agencies. No government built infrastructure. No government subsidies. No Medicare. No welfare. And very few government schools

seriously who brainwashed you?

No one brainwashed me. That's why I know the facts and not some pinko version of American history. Can you name an example of government built infrastructure prior to 1914?