Posted 2 years ago on May 30, 2012, 9:08 a.m. EST by JackHall
This content is user submitted and not an official statement
“The USA is a free country, meaning we are free to succeed or to fail. Our founding fathers and our Constitution ensured these freedoms, not entitlements or handouts”
A little history is nice to know. Who are the real idiots here? How many times has the economy crashed? You’d expect people in the financial sector could learn from their mistakes instead of making the same ones over and over with increasing severity, or finding new ways to screw things up!. Each a worse debacle than the earlier one.
Panic of 1873
The Panic of 1873 triggered a severe international economic depression in both Europe and the United States that lasted until 1879, and even longer in some countries. The depression was known as the Great Depression until the 1930s, but is now known as the Long Depression. The panic was caused by the fall in demand for silver internationally, which followed Germany's decision to abandon the silver standard in the wake of the Franco-Prussian war.
In 1871, Otto von Bismarck extracted a large indemnity in gold from France and ceased minting silver thaler coins. The first symptoms of the crisis were financial failures in the Austro-Hungarian capital, Vienna, which spread to most of Europe and North America by 1873. It was one of a series of economic crises in the 19th and early 20th centuries. In Britain, the result was two decades of stagnation known as the "Long Depression", which weakened Britain's economic leadership in the world.
Panic of 1884
The Panic of 1884 was a panic during the Recession of 1882-85. Gold reserves of Europe were depleted and the New York City national banks, with tacit approval of the United States Treasury Department, halted investments in the rest of the United States and called in outstanding loans. A larger crisis was averted when New York Clearing House bailed out banks in risk of failure. Nevertheless, the investment firm Grant & Ward, Marine Bank of New York, and Penn Bank of Pittsburgh along with more than 10,000 small firms failed.
The Depression of 1882-85 or Recession of 1882-85 was a recession in the United States that lasted from March 1882 to May 1885, according to the National Bureau of Economic Research. At 38 months in length this is the third-longest recession in the NBER's chronology of business cycles from 1854 to present. Only the Great Depression and Long Depression of 1873?79 are longer.
Panic of 1893
The Panic of 1893 was a serious economic depression in the United States and began in 1893. This panic was an extension of the Panic of 1873, and like that earlier crash, was caused by railroad overbuilding and shaky railroad financing which set off a series of bank failures. Compounding market overbuilding and a railroad bubble was a run on the gold supply and a policy of using both gold and silver metals as a peg for the US Dollar value. The Panic of 1893 was the worst economic crisis to hit the nation in its history to that point and, some argue, as bad as the Great Depression of the 1930s.
Panic of 1907
The Panic of 1907, also known as the 1907 Bankers' Panic, was a financial crisis in the United States. The stock market fell nearly 50% from its peak in 1906, the economy was in recession, and there were numerous runs on banks and trust companies. Its primary cause was a retraction of loans by some banks that began in New York and soon spread across the nation, leading to the closings of banks and businesses. The 1907 panic was the fourth panic in 34 years.
The Great Depression was a dramatic, worldwide economic downturn beginning in some countries as early as 1928. The beginning of the Great Depression in the United States is associated with the stock market crash on October 29, 1929, known as Black Tuesday and the end is associated with the onset of the war economy of World War II, beginning around 1939.
The Bush family and the S&L Scandal of 1989
What is important to note about the S&L scandal is that it was the largest theft in the history of the world and US tax payers are who was robbed.
The problems occurred in the Savings and Loan industry as they relate to theft because the industry was deregulated under the Reagan/Bush administration and restrictions were eased on the industry so much that abuse and misuse of funds became easy, rampant, and went unchecked.
There are several ways in which the Bush family plays into the Savings and Loan scandal, which involves not only many members of the Bush family but also many other politicians that are still in office and still part of the Bush Jr. administration today. Jeb Bush, George Bush Sr., and his son Neil Bush have all been implicated in the Savings and Loan Scandal, which cost American tax payers over $1.4 TRILLION dollars (note that this is about one quarter of our national debt).
Real estate bubble
A real estate bubble or property bubble (or housing bubble for residential markets) is a type of economic bubble that occurs periodically in local or global real estate markets. It is characterized by rapid increases in valuations of real property such as housing until they reach unsustainable levels relative to incomes and other economic elements.
As of 2007, real estate bubbles have existed in the recent past or are widely believed to still exist in many parts of the world, especially in the United States, Britain, the Netherlands, Italy, Australia, New Zealand, Ireland, Spain, France, Poland, South Africa, Israel, Greece, Bulgaria, Croatia, Canada, Norway, Singapore, South Korea , Sweden, Baltic states, India, Romania, South Korea, Russia, Ukraine and China.
U.S. Federal Reserve Chairman Alan Greenspan said in mid-2005 that "at a minimum, there's a little 'froth' (in the U.S. housing market) ? it's hard not to see that there are a lot of local bubbles" . The Economist magazine, writing at the same time, went further, saying "the worldwide rise in house prices is the biggest bubble in history". Real estate bubbles are invariably followed by severe price decreases (also known as a house price crash) that can result in many owners holding negative equity (a mortgage debt higher than the current value of the property)
History of U.S. Stock Market Crashes
The Crash of 2000 == From 1992-2000, the markets and the economy experienced a period of record expansion. On September 1, 2000, the NASDAQ traded at 4234.33. From September 2000 to January 2, 2001, the NASDAQ dropped 45.9%. In October 2002, the NASDAQ dropped to as low as 1,108.49 - a 78.4% decline from its all-time high of 5,132.52, the level it had established in March 2000.
The cause of crashes:
1. Corporate Corruption. Many companies fraudulently inflated their profits and used accounting loopholes to hide debt. Corporate officers enjoyed outrageous stock options that diluted company stock;
2. Overvalued Stocks. There were numerous examples of companies making significant operating losses with no hope of turning a profit for years to come, yet sporting a market capitalization of over a billion dollars;
3. Daytraders and Momentum Investors. The advent of the Internet enabled online trading â€“a new, quick, and inexpensive way to trade the markets. This revolution led to millions of new investors and traders entering the markets with little or no experience;
4. Conflict of Interest between Research Firm Analysts and Investment Bankers. It was common practice for the research arms of investment banks to issue favorable ratings on stocks for which their client companies sought to raise capital. In some cases, companies received highly favorable ratings, even though they were actually in serious financial trouble.
More than $8 TRILLION gone
Needless to say, Citigroup's nightmare spooked the entire financial sector: Goldman Sachs fell 5.7%. Wells Fargo dropped 7.7%. Morgan Stanley plunged 10.2%. Bank of America cratered 13.9%. And JP Morgan Chase crashed 17.9%.
For someone who doesn’t know what they are doing, they are being overpaid.
YouTube - Wall Street Bailout - Passing Toxic Assets to taxpayers.url