2008 Financial Crisis

 2008 Financial Crisis (Financial fraud,  Financial system,  “Economic crisis”,  “Bailout”)

Date	2007 - Present
Interest of	Jörg Asmussen
Description	"an evisceration of some banks by others...a cannibalistic binge billed to the tax-payer"

The Global Financial Crisis, also known as the 2008 Financial Crisis, was systemic event that shook the global financial system during the period from mid-2007 to late-2008.

Many financial institutions (including Goldman Sachs, Bear Stearns & Lehman Brothers) that had been responsible for precipitating the crisis were labeled as "too big to fail" by Treasury Secretary Henry Paulson and were provided emergency funding in the billions of dollars by American tax payers via the Emergency Economic Stabilization Act of 2008.

This event saw the vertical integration of many financial institutions by JP Morgan Chase as many failing financial institutions were bought up by the company.

Official narrative

Oh, naughty Lehman Brothers - well that just shows that some banks are "too big to fail". Anyway, this whole thing is history - check the Wikipedia page title: 2007-2008(!) ... we are beyond it now ...

History

“These days, it’s hard to recall the almost mystical aura with which the financial sector had surrounded itself in the years leading up to 2008. Financiers had managed to convince the public—and not just the public, but social theorists, too (I well remember this) — that with instruments such as collateralized debt obligations and high-speed trading algorithms so complex they could be understood only by astrophysicists, they had, like modern alchemists, learned ways to whisk value out of nothing by means that others dared not even try to understand. Then, of course, came the crash, and it turned out that most of the instruments were scams. Many weren’t even particularly sophisticated scams.”
David Graeber (2018) 

Michael Burry was one of the first outsiders to look into the details of the housing loans and saw that un-creditworthy people had been given loans on a massive scale (by lowering lending standards). Their liabilities sold as subprime mortgage bonds, these repackaged into other financial products until it was not clear, even to institutional investors, what kind of liabilities were at the base.

Problems

The "too big to fail" dogma was known to investment bankers and deep politicians before they cashed in on the concept . In fact 2B2F was used to blackmail governments worldwide, because a meltdown of financial institutions would result in a global disaster. Coldblooded gambling with this racket is known as Moral hazard in financial theory.

Catalyst

The event is considered to have been caused primarily by the foreclosure of thousands of subprime mortgage loans due the aggressive predatory lending strategies of many financial institutions, including the government backed institutions Fannie Mae and Freddie Mac. This was coupled with the wide scale deregulation of so-called "derivative" financial instruments that were used by companies such as JP Morgan Chase to "bet" against the potential failure of mortgage assets that they deemed "likely to fail". However, it must be pointed out, given the structure of the mortgages and lending practice, that it was almost a certainty from the beginning that wide-scale inability to pay will set in at some point (the question of intent arises).

At the peak of the crisis, from November to December of 2008, Bilderberger Robert Rubin pocketed $126 million in cash and stock options during his one month tenure at Citigroup as CEO.

Drug Money

Antonio Maria Costa, head of the UN Office on Drugs and Crime, said that the proceeds of organized crime were "the only liquid investment capital" available to some banks on the brink of collapse during the crisis. He said that a majority of the $352bn (£216bn) of drugs profits was absorbed into the economic system as a result. "In many instances, the money from drugs was the only liquid investment capital. In the second half of 2008, liquidity was the banking system's main problem and hence liquid capital became an important factor," he said. "Inter-bank loans were funded by money that originated from the drugs trade and other illegal activities... There were signs that some banks were rescued that way".

Jail time

Iceland was the only country that showed its bankers that malice will be legally pursued.

 

Related Document

Title	Type	Publication date	Author(s)	Description
Document:Our Spartan Future: Neo-feudalism	Book excerpt	2011	Rosa Koire	Rosa Koire's assessment why policies lead to undesirable outcomes.

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