The next, worse financial crisis

[steve2470]

http://www.marketwatch.com/story/the-next-worse-financial-crisis-2011-07-06



BOSTON (MarketWatch) — The last financial crisis isn’t over, but we might as well start getting ready for the next one.

Sorry to be gloomy, but there it is.

Why? Here are 10 reasons.

1. We are learning the wrong lessons from the last one. Was the housing bubble really caused by Fannie Mae, Freddie Mac, the Community Reinvestment Act, Barney Frank, Bill Clinton, “liberals” and so on? That’s what a growing army of people now claim. There’s just one problem. If so, then how come there was a gigantic housing bubble in Spain as well? Did Barney Frank cause that, too (and while in the minority in Congress, no less!)? If so, how? And what about the giant housing bubbles in Ireland, the U.K. and Australia? All Barney Frank? And the ones across Eastern Europe, and elsewhere? I’d laugh, but tens of millions are being suckered into this piece of spin, which is being pushed in order to provide cover so the real culprits can get away. And it’s working.

[ixion]

1. And here's the one that will take us out:

6. The derivatives time bomb is bigger than ever — and ticking away. Just before Lehman collapsed, at what we now call the height of the last bubble, Wall Street firms were carrying risky financial derivatives on their books with a value of an astonishing $183 trillion. That was 13 times the size of the U.S. economy. If it sounds insane, it was. Since then we’ve had four years of panic, alleged reform and a return to financial sobriety. So what’s the figure now? Try $248 trillion. No kidding. Ah, good times.

Once that goes off, we're all screwed.

[Jim Warren]

2. George sWill

I like how he tries to wind back the sub-prime housing bubble to the mid 90's Clinton era, fucking revisionist stooge.

[Jim Warren]

3. 2, 3, 4,

2. No one has been punished.
3. The incentives remain crooked.
4. The referees are corrupt.

and the Eric Holder JD sits on it's thumbs.

[CrispyQ]

6. "...and the Eric Holder JD sits on it's thumbs."

A little exaggeration, don't you think? He's busting dispensaries, after all. }(

[Ruby the Liberal]

4. Good summation

I am in the industry and do not disagree with a thing he said.

Its nauseating.

[mmonk]

5. CDOs, unregulated deriatives, and Gramm-Leech- Bliley.

The truthful reasons for the financial and housing collapse. It is still largely unaddressed.

[ixion]

7. it's entirely unaddressed, and further, it's so large now

that it really isn't addressable in any conventional sense.

$248 TRILLION dollars. That's only a couple trillion away from a quarter-of-a-quadrillion dollars, which is many orders of magnitude larger than then entire US GDP.