The Global Financial Crisis In One Terrifying Sentence
Michael David White
BusinessInsider.com
4-3-2012
In the beginning man created the housing bubble when dishonest banks loaned money to unqualified home owners whose jointly illegal activities were ignored by a sleeping financial press and an incompetent regulatory army who both failed to awaken the FBI and SEC and other financial-crime prosecutors from pursuing criminal charges including those against Wall Street bankers who knowingly sold bad assets with grossly erroneous ratings to highly leveraged investors (including themselves) who had all gorged to the hilt on the FED’s cheap money leveraging their losses and destroying their entire equity accounts which bankrupted our major financial institutions who were saved by bailouts but not before triggering a global financial crisis during which all lenders on all continents lost all faith in each other because they all knew about their own garbage mortgage holdings bundled into black-box securities whose staggering losses panicked banks again due to the known unknown of massive pools of unregulated derivatives which pay off in the event of a financial default and whose opacity re-double-spooked investors thereby multiplying a crowded stampede into high-quality high-liquidity assets and setting the pattern thereby for what we can expect to be an endless loop of panic lasting a decade or two as terror is continually re-discovered by global markets now concentrated on European banks who made overleveraged housing investments many in housing bubbles much more crazy-Ponzi than that of America’s 120-year-power-ball bubble and further exacerbated by bankers depending upon the ultra safety of sovereign-debt requiring that old magical no-money-down equity investment for their loans to European governments of which many or all are now strangulating themselves after having accumulated 60-plus years of socialist labor laws and entitlement obligations but now those asphyxiating restrictions and promises are revealed as unworkable and un-payable when new borrowing must end and is unaffordable but still the Europeans while they are pathetic and bankrupt they have not achieved the scale of otherworldliness which is The Great & Terrible Japanese Zombie where probably a decade ago the hard-working island people passed from broke bankrupt castoffs to an immortality of strange insolvent phantasms as the aftermath of a gargantuan real estate crash circa 1990 was met not with punishing bankruptcy and brutal failure and tears of blood in the streets but with zero interest rates and un-failed banks and twenty years of the-best-coked-up Keynesian stimulus money can buy after which they now have achieved beautiful trains and walk to work on perfect sidewalks but are debilitating-ly compromised by macroeconomic cardiac arrest one-percent growth and a government debt approximately 2.5 times greater than what a country borrows to wage full-scale-all-out-total world war and now they have a payback period it’s something like 50 years or 100 years a multi-generation mortgage and Japan proves that fiscal stimulus and zeroed-out rates in post-bubble countries doesn’t work but also that extend-and-pretend can allow for decades of make-believe by putting off catastrophe a very very long time and overall don’t you think given this catalogue of the state-of-the-world how can anybody comprehend the variables in our Pandora’s box or otherwise predict the future except to believe that surely it is reasonable that panic will return and less-liquid and riskier assets like stocks will fall off a cliff and dive straight down in a perfectly parallel and symmetrical downfall mirroring that distant past in what started in the United States at the beginning of the beginning of the financial crisis six years ago now what was considered a pause in the explosion of home prices which has segued to a reality show a “Real Life for Homeowners” who have finally accepted a depression in property values that they never imagined when at the very beginning man created the housing bubble (Please return to the beginning of Calamity’s Sentence)…
