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I thought this was a great explanation of the causes and ideas to avoid this same thing happening again. Although, I'm betting it does happen again since greed knows no boundaries. It's a shame more people don't educate themselves on the society they live in because mass media does a really really poor job of informing.
 
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btbell_lt | 10 andere besprekingen | Aug 1, 2022 |
Argues that the US should commit $100B/year to science research to grow the entire economy and cites historic cases of this happening (like TVA, military bases, etc.) that benefited more than just well educated researchers.

Even though the argument was good it didn't need to be a 200 page book. You would have learned as much from a blog post.
 
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eatonphil | May 8, 2022 |
This is one of a number of books that I have read about the financial meltdown of 2008-2009. This book focuses on the large U.S. banks and financial institutions like Citicorp, Wells Fargo. Goldman Sachs, Bank of America, J.P. Morgan etc. The main argument of this book is that there should be no banks that are “too big to fail.” Since Reagan, efforts at bank regulation were significantly loosened or eliminated. Oversight was problematic. Too many bankers became part of both Republican and Democratic administrations and pushed big bank agendas. The Fed and the government bailed out the banks in 2009 and let taxpayers foot the bill for the greed and bad judgment of bank CEOs and the failure of regulators and credit agencies to perform their jobs.

This book was written in 2010. Sadly little has changed..

LIsted below are some notes from the book...

In the 1790s, Jefferson was particularly worried that the Bank of the United States could gain leverage over the federal government as its major creditor and payment agent, and could pick economic winners and losers through its decisions to grant or withhold credit.

Hamilton believed that the government should ensure that sufficient credit was available to fund economic development and transform America into a prosperous, entrepreneurial country.

The Panic of 1907, which nearly brought the financial system crashing down, clearly demonstrated the risks the American economy was running with a highly concentrated industrial sector, a lightly regulated financial sector, and no central bank to backstop the financial system in a crisis.

But from 1980 until 2005, financial sector profits grew by 800 percent, adjusted for inflation, while nonfinancial sector profits grew by only 250 percent.

The government bailout of the S&L industry cost more than $100 billion, and hundreds of people were convicted of fraud.

This was the first example of what came to be known as the “Greenspan put”—the idea that if trouble occurred in the markets, the Fed would come to their rescue. Greenspan cut interest rates sharply in 1998 following the Russian crisis and in 2001 following the collapse of the Internet bubble, each time helping to cushion the impact of the downturn and arguably pumping up the next bubble.

The fourth money machine of modern finance—after high-yield debt, securitization, and arbitrage trading—was the modern derivatives market.

As a result, in 2004–2006, as subprime lending reached its peak in both volume and innovation, Fannie and Freddie were pushed out of large parts of the market, because the loans being made violated their underwriting standards and because the Wall Street banks were so eager to get their hands on those loans.

With low interest rates, banks could raise money from depositors virtually for free; they could borrow cheaply from each other; they could borrow cheaply at the Fed’s discount window; they could sell bonds at low interest rates because of FDIC debt guarantees; they could swap their asset-backed securities for cash with the Fed; they could sell their mortgages to Fannie and Freddie, which could in turn sell debt to the Fed; and on and on.

They did not take harsh measures to shut down or clean up sick banks. They did not cut major financial institutions off from the public dole. They did not touch the channels of political influence that the banks had used so adeptly to secure decades of deregulatory policies. They did not force out a single CEO of a major commercial or investment bank, despite the fact that most of them were deeply implicated in the misjudgments that nearly brought them to catastrophe.

This is how capitalism is supposed to work. Failure should be punished, not rewarded. The government should be the backstop protecting society against a financial collapse, but it should exact a price for that protection.

The end of “too big to fail” will reduce large banks’ funding advantage, forcing them to compete on the basis of products, price, and service rather than implicit government subsidies.

… (meer)
 
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writemoves | 10 andere besprekingen | Oct 26, 2021 |
Read in 2012 - pre-Goodreads.

Review 11.30.17 - I was very interested in the financial meltdown as I work in the finance industry. It was a rough time.
 
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Chica3000 | 10 andere besprekingen | Dec 11, 2020 |

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