Will history repeat itself (again)? Housing is back to the 2008 levels before the crash, and interest rates are headed higher.
Are you prepared this time?
So what happened? Could it be blamed on a lack of government regulation and easy lending in the US housing market? That hardly seems accurate. Low qualification loans had a large part to play, but so did greed which inspired brokers and realtors to leverage up into multiple properties, often at the expense of their own clients.
This documentary is a four-part look into the world of greed and recklessness which brought down global financial markets and pushed the US economy to the brink of a modern Great Depression.
"Light touch regulation" in the UK gave British bankers a free hand to push their risk tolerance into unprecedented heights. The perfect setting for the perfect storm.
As is usually the case during a contraction of this magnitude, reluctance to lend by banks exacerbated the problem exponentially.
Eventually, people started to fight back.
How can we prepare for the next crisis? Is the last one actually over or are we entering the next phase, when interest rates around the world start to rise from zero and even below zero in some countries. What will happen as all this excess liquidity dries up? How deep will the next recession go?
Beginning with the collapse of Bear Stearns, "Inside The Meltdown" (2009) describes financial events that gripped Wall Street and the U.S. federal government, in 2008.
The solvency of even bigger institutions is also examined, including Fannie May, Freddie Mac, Lehman Brothers, and AIG.
Government, Wall Street, and media insiders give their views on what happened. Interviewees include: Barney Frank, Chairman of the House Financial Services Committee, David Faber, anchor of CNBC, several executives associated with Bear Stearns and Lehman Brothers, financial writers for the N.Y. Times, an NYU economist, and others.
Throughout the documentary, two men played critical roles in this financial crisis: Treasury Secretary Henry Paulson, and Fed. Chairman Ben Bernanke.
While Frontline's overall description of events is factual, its analysis is shallow and superficial. One could get comparable information simply by reading news headlines.
But much worse is the slant of Frontline's overall presentation. Frontline's analysis conveys the impression that these kinds of financial crises occur from time to time. No one is to blame. And thank goodness we had great leaders like Paulson and Bernanke to see us through this meltdown. WRONG!
Almost nothing is mentioned in the program about Paulson's connection to Lehman Brothers' rival Goldman Sachs.
No discussion is given to matters related to "fraud" or "corruption". There's not a word about how the bailout money was spent.
All of those interviewed, without exception, are institutional "insiders" who, it could be argued, have a vested interest in whitewashing the whole sorry episode. No critique of these insiders' views or counter argument is given ... at all.
What do you think??