Sunday, August 05, 2018
CNN 2000s: financial crises, mainly 2008: How evil capitalists like "me" caused them
CNN’s “The 2000’s” continued tonight with a presentation of the financial crises in the decade. Here’s the basic link.
In 2001, maybe shortly after 9/11 as I recall, Enron started to unfold, leading to bankruptcy and collapse. In fact, I recall an ABC Nightline program on Enron on Dec. 12, and I was told of my own layoff on Dec. 13.
Later some other companies (MCI WorldComm) were found to have cooked the books and collapsed. I had a friend who had returned to MCI to work in 1994 and moved to Colorado with them.
Then in the mid subprime mortgages were used to help brokers make money, and enable people without steady large incomes to afford higher home prices than they could have according to ordinary due diligence. The house of cards would fall, first with Bear Sterns in March 2008, and then many brokerages starting on Sunday September 15, finally leading to the collapse of AIG, which had engineered the over-securitization with credit default swaps.
Anderson Cooper had been covering Hurricane Rita and wading on Sept 14 and had to hurry home for the Black Sunday, which I watched on my basement computer. Mother hadn’t a clue.
Under Paulsen (said to be a Democrat at heart) at Treasury, George W. Bush decided to do the bailouts. (Fannie Mae had been taken under in early September.) Congress refused to pass it the first time, but did so the second with more pressure from John McCain. So the banks were bailed out, while works suffered unprecedented layoffs and portfolio shrinkage.
I came out of this pretty well in a few months. I have refused jobs selling mortgages to consumers. Maybe I made some adjustments in August to my own and mother’s porfolios seeing the end coming, What, selling short?
I was the evil capitalist. But I punished the bad behavior of others.
Wasn’t it an autistic doctor who started a hedge fund who made the market collapse? He liked numbers and games more than he liked patients. (“The good doctor”?)
Fox News says that chasing a 6% yield caused everything to collapse in 2008.
Finally the episode covers the lives that Bernie Madoff ruined.