Very interesting book. This book spells out the cause of the 2008 financial meltdown. I haven't read anything that really spells it out before although I've tried since 2008 to figure it out.

Wow the lefties keep saying it was greed, how convenient a thing to say when the real cause was changing from sound lending practices that had worked for 60 years to "fair" lending practices so everyone could own a home whether they could pay or not. As if banking wasn't the most regulated business in America! And of course Dodd/Frank didn't touch the real cause, Freddie and Fannie.

It all started with Clinton when he lowered capital reserve requirements for banks and Fannie Mae(GSE) lowered the qualifications for lending. Funny Fannie Mae had only half the capital requirements of commercial banks.The GSEs were supposedly private enterprise but the head guy, Jim Johnson was intensely political and knew how to turn the screws of government. Getting rid of Glass Stegal allowed commercial and investment banks like Travelers and Citi to merge again after being forbidden for 60 years which resulting in banks getting too big to fail. Clinton also stopped issuing 30 year treasuries. That left only the toxic mortgage 30 year paper as a replacement.

Can't blame it all on Clinton though. The clueless W and Greenspan kicked the can down the road when it could have been stopped. The rating agencies like S&P also contributed by rating bad loans as AAA. We didn't learn a thing from the Savings and Loan fiasco of the 1980s!

I don't know how much politics and politicians played a role but it seems to me banks should bear the brunt of blame. Most all banks started issuing a loan that required no job, no credit history and no collateral - it only required the applicant to provide a credit rating number. Banks knew people couldn't repay these loans but they wanted to compete with other banks that did offer these loans. And lets not forget the ARM loans they pushed too.

I've also run into stories where Real Estate agents helped people give higher loans than they could afford and up-sell far more house than clients could afford to buy. It doesn't seem to me the Real Estate agents gave back huge commissions when people got foreclosed on.

Then of course there is society pressures of spending lots of money to furnish every single room of a large house.

There should be plenty of blame to go around but I don't know we're gonna start by blaming Clinton? I've listen to lots of programs about the banking crisis and the language becomes very complex when they start talking about strange insurance policies and credit default swaps and corporate paper, etc. By I could be wrong, its just seems Clinton is a prime scape goat. If his policies were so wrong then why didn't the next president just reverse them? Hey I could be wrong too but my opinion is that banks got to have more than 50% of the blame.

Back in 1999 I prepared for a long term bear market in stocks due to over investment and too much industrial capacity. The economy is much worse today with much more debt, aging demographics, and insolvent zombie financial institutions.

1999 was also the year I planted my first citrus plants; three satsumas and one meyer lemon, and two of the four are still alive today. The two that did not survive died of root rot.


The economy is not likely to average more than 1 to 2 percent growth per year with much higher taxes coming, continued deleveraging, and weak consumer demand. Employers fear uncertainty about taxes and lack of demand and as a consequence decide not to expand and increase employment. This is the new normal than will continue for years and maybe even decades! Printing money and devaluing the dollar is NOT a solution to these problems! When the corrupt politicians are finished we will have much higher taxes, the dollar will have less purchasing power, and much more debt. They only like to talk about reducing the deficit but are unwilling to follow through. Deficits occur when the government spends too much, but I fear when they are forced to do something about the deficit they will increase taxes without cutting enough spending.

Neither party is innocent.

Both have benefited from banks and financial institutions via their election donations.

Sometimes one president cannot fix the previous administration with a wave of his hand unless he has the full cooperation of the Senate and House.

Glass Stegal was repealed during the Clinton period. It was championed by Hank Paulson, then CEO of Goldman Sachs and then the Treasury Sec under Bush 42.

Frank Dodd is but a shadow of Glass Stegal.

After 1,316 speeches to date, my question is...WHERE ARE THE JOBS ?? - Millet (520-)

Have you noticed that obama no longer says "I will not rest until ...."