The market hits its high in October 2007.
The over-leveraged housing market began collapsing in late 2007, leading the stock market to have its worst beginning of the year on record in 2008 (only to be surpassed by the start to 2009).
Leverage caused Bear Stearns to fall apart in the Spring of 2008 (sold to JPM Chase). When Lehman Brothers failed in the Fall, Hank Paulson acted swiftly to bail out AIG and its counterparties, thus saving Goldman Sachs, his alma mater.
As the global economy continued to unwind and market continued to fall, the US elected a President with virtually no real experience aside from his work as an associate professor at the University of Chicago. His approach to managing an economy in crisis replicated his management of a graduate level class, and he convened special discussion groups to ponder this implications of a failing banking system.
In response, markets fell further in early 2009. The government bought large stakes in all major banks, GM and Chrysler, and removing the notion of moral hazard and nationalizing risk. The President and Tim Geithner, his new Treasury Secretary, acted swiftly to create every stumulus under the sun. Unemployment rose to 10% (and effectively much higher). As a result, the US deficit and debt spiralled out of control, yet the Chinese have continued to purchase and we have effectively become a subsidiary of China.
Most recently, the dollar has begun to collapse in full force as the government has continued to hold interest rates low. The stock market, inexplicably has rallied over 60% since the low, yet nobody is in it.
And, if that doesn't all sound crazy enough, our President has won the Noble Prize!
Sponsor Updates and Offers
|
|
|
Related Articles:
Does Wall Street Have a Death Wish? by soczie - Aug 05, 2008
Federal Reserve Begins First Meeting of 2009 with No Flexibility by soczie - Jan 27, 2009
When Obama Loses, there will be blood on the streets of Chicago by JRodgers - Jul 07, 2008
Bear Stearns Won't be a Going Concern on Monday by JRodgers - Mar 14, 2008
Treasury Should Pay off Debts with $68 Billion in Repaid TARP Funds by JRodgers - Jun 10, 2009
Stocks Jump on Reports Buffet Considering Stake in Bear Stearns and End of GM Strike by Sam Cass - Sep 26, 2007
Goldman Sachs and JP Morgan are Saddled with Debt they Cannot Sell by JRubinstein - Jul 18, 2007
Richard Hormats, Vice Chairman of Goldman Sachs Discusses the Cost of War with Charlie Rose by MBANewlyMinted - Aug 02, 2007
Market Ripe to Sell Covered Call Options on Goldman Sachs by Sam Cass - Aug 14, 2007.
Add to reading list
