In 2008, when all those big banks merged and handed over control to the feds under the tarp program, seems like they opened up the doors Ed speaks of perhaps....
That movie I had mentioned...."To big to fail" let me sum to the best of my ability to how I interpreted it....
Average Joe was given loans by the bank to buy a house, the American dream. In my opinion, signing an adjustable rate is just a bad idea, but average Joe figured he could pay the loan, figuring if the bank gives it to me, I must be able to keep up with the payments right? Wrong, the banks knew the rates would change and many would loose their house, but they did not care (this is that greed that brings a nation down), as AIG was covering all those bad loans via insurance policy's on those loans, so the banks could not loose. Problem was, they set up way too many of those policies across the entire planet, so if they all were fore closed on same day, it would have basically created a domino effect that would bring the entire market crashing down, like in the late 20's....
The part I liked the most, was when one of the key figures spoke of studying the great depression for the past 30 years. He said it was not the market's crash itself that hit middle America so hard, it was the total in-ability for anyone to get any credit. To buy a home, or stock ones shelves. I asked my grand father about this in his last days now, and he lived through it all, and agreed that that was indeed the major problem for most of America, total lack of any credit, as all their banks obviously collapsed....
What did the government do to fix all this mess in 2008, take 7 billion and inject it back into the system via more loans to create capital, or at least they were hoping they would loan it all out, or did they?
Today I see an email from "money morning" saying the Chinese housing market is about to collapse, and how will it effect gold, was the title to article. It said their housing market is down 40% and the bottom has not been seen yet. This is gonna make our little scare seem like small potatoes....
My point for all this, I feel the events of 2008 were just a short fix, temporary band aid if you will, and who knows what repercussions we still may see from all that yet. I wonder, could decisions then have any affect on what is going on in China now, via their housing market issues?
Edited by Silverhawk74
06/14/2011 11:30 pm
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Posted 06/12/2011 8:09 pm
