Posts Tagged ‘recession’

The Credit Crunch Explained

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How to Ruin the Economy in Seven Easy Steps – Johan Norberg

Complete video at: http://fora.tv/2009/09/01/Financial_Fiasco_The_US_Infatuation_with_Home_Ownership

Author and historian Johan Norberg gives an abbreviated version of the events that caused the housing bubble and primed the financial crisis.

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How was it possible that in a world where thousands of people regulated financial markets the whole system crashed down? And should we now give more power to central banks, government agencies, politicians, and regulators? Isn’t that what brought us here in the first place?

Financial Fiasco digs deep into the foundation of the economic meltdown, revealing how it was the product of conscious actions by decisionmakers in companies, government agencies, and political institutions, and by consumers. Financial Fiasco tells the compelling story of how rate-cutting by the Federal Reserve inflated the real estate market and fueled increased risk-taking in the financial markets; how new government policies to promote home ownership blasted air into the credit bubble; how new financial instruments, credit-rating requirements, and accounting rules intended to prevent cheating backfired; and much more. – Cato Institute

Johan Norberg is a senior fellow at the Cato Institute and a writer who focuses on globalization, entrepreneurship, and individual liberty. Norberg is the author and editor of several books exploring liberal themes, including a history of liberal pioneers in Swedish history. His book In Defense of Global Capitalism, originally published in Swedish in 2001, has since been published in over twenty different countries.

Norberg’s articles and opinion pieces appear regularly in both Swedish and international newspapers, and he is a regular commentator and contributor on television and radio around the world discussing globalization and free trade. Prior to joining Cato, Norberg was head of political ideas at Timbro, a Swedish free-market think tank, from 2003 to 2005.

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Jobs, consumer credit, Fannie & Freddie

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Duration : 0:8:32

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Market sell off, homebuyer tax credit, inflation & rents

Schiff Report Video Blog Oct 28th, 2009 Also check me out on
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Duration : 0:9:57

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Edge of Depression? Glenn Beck and Others think so. Is Hyperinflation next? Or is this just Hype.

I personally think that with enough smoke and mirrors, our economy can be held together for about four more years. We are in uncharted waters; we have never had circumstances just like these before. Our circumstances now are not like those back before the Great Depression; this is not your Grandpa’s, or Great Grandpa’s America. So because of that, no one can predict what is coming next, they can only make an educated guess.
jbranstetter04

Easy Credit
Here’s a key point for those who say history is repeating itself: The American economy was fueled by easy credit in the 1920s.
Eric Rauchway, a professor of history at the University of California at Davis, says that between 1920 and 1929 the total volume of consumer debt rose from $3.3 billion to $7.6 billion, and real debt per household doubled.
“Americans were going more and more into debt to buy more big-ticket household items—cars, laundry machines and so forth,” he says. “This was a novelty, driven by new ideas of what people needed.”
This was the advent of consumerism. And widespread advertising. And celebrity culture: Some of the first American celebrities, such as Charles Lindbergh and Ernest Hemingway, came to center stage in the 1920s.
Now, according to a recent issue of U.S. News & World Report, the average American with a credit history owes more than $16,000, excluding mortgages. The personal savings rate (income minus spending and taxes) “has hovered close to zero for the past several years.” A new Standard & Poor survey finds that one in five credit card users in the U.S. is having occasional troubles paying their credit card or loan balances every month.
And the admixture of consumerism, advertising and celebrity swirl around the planet.
Global Economy
As Americans were borrowing more and more to drive the economy of the 1920s upward, people the world over began borrowing money from America.
“There was a network of debt between countries,” says Rauchway, author of The Great Depression and the New Deal: A Very Short Introduction. “But most importantly, much of this debt was owed eventually to creditors in the United States.”
As a result, a lot of countries depended on continuing lending from the U.S. to keep them afloat while they tried to rebuild their economies after the damage of the Great War of 1914-18.
Today, national economies are intertwined. Other countries are lending money to the U.S., and America’s domestic miasma is affecting the financial footing of many nations. (For instance, angry Asian investors gathered in Singapore a few days ago to ask the central bank to help them recoup lost savings that were tied to Lehman Brothers and other faltering financial institutions, according to AFP.)
The finance ministers from the Group of Seven leading industrial nations met in Washington recently to adopt a global strategy to deal with the worldwide financial meltdown.
“We are in this together and will come through this together,” President Bush said.
Speculators Flourished
The 1920s “experienced a speculative bubble, built around easy credit,” says Randall Parker, an economics professor at East Carolina University and author of Reflections on the Great Depression.
All of the financial innovations that were considered new at the time, such as installment credit and the ability to buy stocks on margin, Parker says, “brought people from the fringes into the market to keep the bubble going. People separated themselves from the fundamentals. And everybody believed that the sky was the limit.”
In the 1920s, most everyone was saying that this was a new economy and all the old rules did not apply, Parker says. “We know from economic history — they said the same things in Japan in the 1980s and during the Internet bubble of the 1990s — that when you hear those words it is time to run like hell.”
The same is true today, he adds. “People are saying that all the old rules don’t apply. That it’s a new economy. I say run like hell.”
Rest of article: http://www.iconocast.com/B000000000000065/X7/News1.htm

Duration : 0:6:28

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What is Credit? 1 of 2

Now, more than ever, there is an imperative need for people to understand the nature of credit in a capitalist society. In a time when we are seeing the high seas of finance increasingly rocked by rolling crisis and systemic instability, from Enron to the sub-prime mortgage debacle to the dot.com bubble to the asian financial crisis- in such a time it is imperative that average citizens develop a useful critique of the way credit functions in the global economy.

Full text of the video can be read at:

http://kapitalism101.wordpress.com/what-is-credit/

Duration : 0:8:42

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CNN Full Story 6/16/2007 – Credit Piggybacking On Seasoned Trade Lines To Raise Credit Score

Learn more at www.undergroundfinancial.com (Special interest webmaster John Coates on primetime news again) this time helping people stay in their homes a year before the recession of 2008 that really started hurting the American people in Late 2006.

The Government was only 2 years to late in helping the American people restructure their debt. Leaving many Americans no other choice, those people that could afford it took matters into their hands and piggybacked on a network of credit investors to make their homes affordable.

Duration : 0:7:11

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CNN Full Story 6/16/2007 – Credit Piggybacking On Seasoned Trade Lines To Raise Credit Score

Learn more at www.undergroundfinancial.com (Special interest webmaster John Coates on primetime news again) this time helping people stay in their homes a year before the recession of 2008 that really started hurting the American people in Late 2006.

The Government was only 2 years to late in helping the American people restructure their debt. Leaving many Americans no other choice, those people that could afford it took matters into their hands and piggybacked on a network of credit investors to make their homes affordable.

Duration : 0:7:11

Continue reading CNN Full Story 6/16/2007 – Credit Piggybacking On Seasoned Trade Lines To Raise Credit Score…

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Credit Crunch Anthem

Comedy Credit Crunch song starring Bush and Brown. Sit back, relax and forget about the recession for 2 min 26 sec! www.rebelvirals.com

Duration : 0:2:27

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Credit Crunch Anthem

Comedy Credit Crunch song starring Bush and Brown. Sit back, relax and forget about the recession for 2 min 26 sec! www.rebelvirals.com

Duration : 0:2:27

Continue reading Credit Crunch Anthem…

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