When the computer and internet was being widely used by companies in the 1990's financial firms including commercial banks began to engage in high frequency trading. As I mentioned in previous blogs thanks to Clinton era deregulation commercial banks were allowed to engage in activities previously reserved for investment banks. At the time the tech bubble was underway. This meant that the economy was being reorganized around high frequency trading rather than productive activity such as innovation. Also, technology companies would eventually spend more money on patent lawsuits than developing new products. Jobs were going overseas during this time and automation was displacing workers. When the tech bubble crash in the year 2000 most investor did not learn their lesson.
A similar pattern took place in the housing market from the early 2000's to the 2008 financial crises. In the wake of the 2008 crash the financial service company Lehman Brothers was allowed to go bankrupt and go out of business. However, insurance company AIG, Wells Fargo, JP Morgan Chase, Morgan Stanely, and Goldman Sachs were all bailed out with tax payer dollars. These firms issued along with other banks issued mortgage back bonds that defaulted when the housing market collapsed in 2008. This was the result of commercial banks giving mortgages that did not require any the borrower to have any assets or income. These loans became known as NINJA loans. In the aftermath of the 2008 crash many of the financial firms that would have gone under had it not been for the bailouts became more powerful and profitable than ever. Their political clout has increased dramatically in recent years because of lobbying and donations to political campaigns. Many small banks were allowed to fail. As I mentioned in previous blogs the financial industry is growing as a percentage of the economy. The bailouts allowed the elites to get the black budget that I mentioned in a previous blog even more off the books. Also, it enabled the banking industry to solidify its control over America. None of the bankers responsible for the 2008 crash were punished by law enforcement. Several financial firms were fined, but the fines were not large enough to sway them to change their behavior. Indeed, the financial industry still issues mortgage back securities.
In the aftermath of the 2008 recession the Federal Reserve immediately took action to improve the economy by lowering interest in the largest every bond buying spree. This lowered the cost of capital for business and eased the flow of money. Also, mortgages and car loans were cheaper. However, this action by The Federal Reserve caused a bubble in the stock market. As a result of the recent innovation such as virtual reality, there is a second tech bubble. It is unknown when the tech bubble will collapse. On the other hand, the economy has not reached prosperity so it is unlikely to collapse any time soon.
One effective way to take back control of our nation from the banking industry is to utilize a community bank or a credit union for banking needs. Also, buy food from a farmers market and save more money. If the middle class is financially secure the economy is less likely to implode. I will explain how to save money further in depth in later blogs.
A similar pattern took place in the housing market from the early 2000's to the 2008 financial crises. In the wake of the 2008 crash the financial service company Lehman Brothers was allowed to go bankrupt and go out of business. However, insurance company AIG, Wells Fargo, JP Morgan Chase, Morgan Stanely, and Goldman Sachs were all bailed out with tax payer dollars. These firms issued along with other banks issued mortgage back bonds that defaulted when the housing market collapsed in 2008. This was the result of commercial banks giving mortgages that did not require any the borrower to have any assets or income. These loans became known as NINJA loans. In the aftermath of the 2008 crash many of the financial firms that would have gone under had it not been for the bailouts became more powerful and profitable than ever. Their political clout has increased dramatically in recent years because of lobbying and donations to political campaigns. Many small banks were allowed to fail. As I mentioned in previous blogs the financial industry is growing as a percentage of the economy. The bailouts allowed the elites to get the black budget that I mentioned in a previous blog even more off the books. Also, it enabled the banking industry to solidify its control over America. None of the bankers responsible for the 2008 crash were punished by law enforcement. Several financial firms were fined, but the fines were not large enough to sway them to change their behavior. Indeed, the financial industry still issues mortgage back securities.
In the aftermath of the 2008 recession the Federal Reserve immediately took action to improve the economy by lowering interest in the largest every bond buying spree. This lowered the cost of capital for business and eased the flow of money. Also, mortgages and car loans were cheaper. However, this action by The Federal Reserve caused a bubble in the stock market. As a result of the recent innovation such as virtual reality, there is a second tech bubble. It is unknown when the tech bubble will collapse. On the other hand, the economy has not reached prosperity so it is unlikely to collapse any time soon.
One effective way to take back control of our nation from the banking industry is to utilize a community bank or a credit union for banking needs. Also, buy food from a farmers market and save more money. If the middle class is financially secure the economy is less likely to implode. I will explain how to save money further in depth in later blogs.
References
"The Black Budget" Catherine Austin Fitts
https://www.youtube.com/watch?v=w0mimIp8mr8&t=4s
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