Photo by Mary Ellen Mark. Her work is a lot like Margaret Bourke-White during the 1930’s Depression era in America. Think it couldn’t happen again? [INCOG]
by Jeff Davis
This one pretty much speaks for itself, a CNBC news article reports: “In an exclusive interview with CNBC.com, Wilbur Ross, chairman and CEO of WL Ross & Co., says he sees possibly as many as a thousand bank closures in the coming months. And this will create opportunities for investors.”
Opportunities? Battles, massacres, and natural disasters create “opportunities” for vultures. Never mind the rest of this gibberish. This character says -and he’s probably right- that the collapse of the Western world’s entire financial system will create “opportunities.” Well, sure. Any rich people who didn’t invest in any of the banks and mortgage lenders or financial institutions, which are currently going bankrupt, will no doubt be able to buy lots of foreclosed houses at bargain prices.
When the dust finally settles on the current subprime crisis, there will be four or five huge multi-national mega-banking monstrosities where as before there were several thousand smaller banks.
Notice that our government is selectively bailing out some institutions while others are going on the trash heap of history. According to existing law NONE of these PRIVATE institutions should be getting bail outs. Most of these lending institutions are failing because they chose to make subprime loans out of pure, unadulterated greed. They deserve to go bankrupt. The only people who legally are entitled to bail outs are people with bank accounts, which are covered by FDIC insurance.
The subprime crisis is growing beyond all imaginable bounds. The Freddie Mac and Fannie Mae bail out could cost about one trillion dollars, possibly a lot more. This only covers about 40 to 50 percent of the home mortgages made in the US. Imagine doubling that cost.
Mortgage lenders, banks and financial investing firms are the first financial dominoes to be knocked over. Eventually the crisis will spread to other parts of the economy. New home construction will fall off sharply as much stricter requirements for home loans are put into effect (assuming anyone will want to make a home loan in the future). Construction supply firms will be badly affected. Real estate agents will be checking their cell phones to see if they’re still working as the real estate market goes almost dead.
The hyper-inflation of 1920’s Weimar Germany ended up making paper money virtually worthless. [INCOG]
People tend to spend a lot less money when they suspect a Depression is right around the corner. New car sales will drop off sharply. Our economy is about two-thirds dependent on consumer spending so once the panic starts spreading, the crisis will spread to all segments of our economy. It’s a good idea to start saving money while you still have a job and do everything you can to prepare for what could be a Second Great Depression.
Nobel Prize Winning Economist: Crisis As Bad As Great Depression Or Worse
Former chief economist for the world bank says “you have to be in fantasy land to say that everything is fine”
Two time Nobel-prize winner and former chief economist of the World Bank, Joseph Stiglitz has warned that the current financial crisis will continue for at least another eighteen months and in many ways represents a worse situation than the one faced by Americans during the great depression of the 1930s.
Stiglitz is no stranger to positioning himself in opposition to the establishment on the economic front. In October 2001 he caused controversy when he exposed rampant corruption within the IMF and blew the whistle on their nefarious methods of inducing countries to fall under their debt before stripping them of sovereignty and hollowing out their economies.
Over the next twelve months, Stiglitz predicts that house prices will continue to fall, more mortgages will go into foreclosure and more financial firms will be put into crisis.
“I am particularly worried about what I call the ‘real economy’. Basically when the financial system starts getting weak, it is not in a position to provide credit, to provide loans, to provide mortgages and that means in turn that housing prices are going to fall further, businesses are going to contract, unemployment is going to grow and it is a downward vicious cycle…
In a long term prediction 22 months ago, Stiglitz told listeners of the Alex Jones show that he believed a global economic crash would occur within 2 years. With major financial institutions now folding every week, others touting mergers just to stay afloat and stocks continually plummeting on a daily basis it seems that prediction is coming to pass. Read more here
For the first time in this unfolding financial crisis, I felt personally scared by the news. Not about my money, but about the potential for catastrophe. The Federal Reserve’s lightning rescue of AIG has the smell of systemic fear. The house of global finance is on fire and everyone is running for the exits, no sure way to turn them around. What’s next? The question itself is ominous, because there are no good answers.
It’s The Derivatives, Stupid Why Freddie, Fannie and AIG had to be bailed out and how private banking (The Fed) is buying the world’s largest insurance company — with taxpayer’s money!
The answer may have less to do with saving the insurance business, the housing market, or the Chinese investors clamoring for a bailout than with the greatest Ponzi scheme in history, one that is holding up the entire private global banking system. What had to be saved at all costs was not housing or the dollar but the financial derivatives industry; and the precipice from which it had to be saved was an “event of default” that could have collapsed a quadrillion dollar derivatives bubble, a collapse that could take the entire global banking system down with it.
Post by way of http://newsfromthewest.blogspot.com/