Friday, July 11, 2014
Was the Stock Market Crash of 2008 a Fake Out? Just a few years later its like nothing ever happened.
Was the Stock Market Crash of 2008 a Fake Out? In Retrospect the Big Financial Crash of 2008 Looks to Be a Media Fabricated Event? with the Passage of Time the Financial Markets Very Quickly Recovered. People May Wonder Why If They Were Suckered into Selling when They Should Have Been Buying Lex Loeb Contributor Network . It is December 2009 a year after the great financial crash of 2008. Was there a conspiracy to rock the markets and cause the crash? Some seasoned financial investors and bankers were able to look at that crisis while it was happening and say to themselves, "This is unreal." Most of the rest of the population , especially the people with a lot less experience and memory of financial markets, were immediately sucked into the prevailing state of fear and hysteria to sell out at a loss just to escape the negative biased news media coverage that saturated the entire financial atmosphere world wide. Was it a conspiracy? The markets have recovered very quickly and the general financial media is just too quick to give credit to the big government solutions with trillions of dollars of spending that unfortunately seem less and less to have had much of any relationship to the positive general recovery. The Tarp funds did not all need to be spent and the stimulus funding looks to have been a complete fraud as a massive transfer of wealth to insiders. The evidence is not clear that TARP and Stimulus funding necessarily saved the system as we don't have any way to find out what would have happened if no such government programs went into effect except that parts of the economy quickly recovered without any special credit and without any government interventions and still the government takes credit. In general most Americans must sort of wonder why the government changed the too big to fail policy instead of propping up failing companies to begin with at the moment before the crash instead of egging on the failures and then going to congress to get huge new allocations to flush the system full of cash. The prevailing theory that that government is the last resort sounds fine and well but there were other means by which companies in trouble saved themselves without government intervention including Warren Buffets private extensions of credit as equity financing. When solvent banks like Washington Mutual were experiencing runs in spite of FDIC insurance guarantees Americans were wondering if there were not hidden politics behind the atmosphere of fear and hysteria. At the time of the crash and year leading up to it that those making predictions of a coming crash were mostly looking to profit from it as short sellers. George Soros was speaking out in advance that we were coming off the super bubble of all time and that seemed to become a self fulfilling prophesy. Soros wanted to completely destroy the Bush Administration and replace it with a socialist command and control economy with administrators that favor cartels controlling natural resources and the development and exploitation of natural resources. Conspiracy? Head fake? Unnecessary fear and panic? The quick recovery of the markets, the economy and financial system start to make one wonder if everything was in super bubble mode as Soros was telling the world at the time. Just as expected, after the crash commodities started going back up to their record highs again. That bubble doubled? Companies that maybe should have been left to fail and replaced by the open market place are still on government corporate welfare something that the so called liberals complained about and complained about and now support as if the bible tells them to do so. The federal reserve could have opened it's discount lending window to most of the entire economy but only did to big central banks while crushing smaller ones all the time pointing the finger at Milton Friedman who said that cash infusions would prevent a crash. Friedman never said that the cash should be limited to insiders and special interests the way we all saw it unfold in Washington. The whole economy could have been instantly re inflated with cash and confidence if the government simply declared a tax holiday for individuals and businesses for 2008 and instead went to congress to borrow money for their general obligations without creating all brand new government offices and programs. This is why suspicion of a conspiracy seems to be valid. The government could have propped up a few bad banks under the old too big to fail logic and headed off the crash starting instead of letting the domino's start falling the way they actually did! Everything the government did seemed to favor special interests at the expense of society and that now has led to an incredible gold bug bubble. Americans should have been watching North Korea in Horror a few weeks ago when Kim Il Sung's government announced their government was going to replace the old currency with a new currency and only allow each individual to trade $45 worth of old currency for new currency. The American people don't understand that their government in Washington, DC is behaving in exactly the same way entering cap and trade treaties and creating cap and trade legislation or taking existing health care and giving them less than they already have . In North Korea the government shot to death a few people who had fiends go to government exchange offices to trade in more than the $45 they were allowed to trade for new currency themselves. That is the same horror here with Nancy Pelosi making laws that anyone without health care insurance would be criminally fined for not having it. The US Constitution is supposed to require just compensation for any taking of private property so the sort of thing happening in North Korea can't happen here. Unfortunately it can happen here because lawyers have found ways around the wording in the constitution with tax schemes. Government could very well do the exact same thing the North Koreans did because it has happened here before under FDR. President Franklin Roosevelt forced Americans to sell the government their gold at $25 an once the same way government had Prohibition a few years earlier by legislative decree. After the gold was in government hands Roosevelt raised the price of gold to $35 and those who sold the gold to the government were essentially treated just as bad as the citizens of North Korea because of the dollar devaluation FDR devised. For some reason most indoctrinated Americans don't understand that that was a rather crooked tactic forcing people to sell their assets and then devaluing the money they gave them in return! The gold bubble is based on fears of potential inflation not the probability that they may all be sitting ducks for government grabbing their gold eventually when time comes. Suddenly it will be illegal for American citizens to hold gold bullion and they must sell to the government whose priorities are to grow itself to heaven as far as infinity goes. The whole financial collapse of 2008 and the government knee jerk reactions to fix the problem left a bad taste of something like North Korea's currency exchange in the mouths of those who were not inside game players. Now that Americans hear about the president talking about spending left over TARP fund on unrelated to tarp causes like "job creation" and the need for more stimulus funding Americans are getting angry because more and more are realizing they are being played as suckers for the direct benefit of someone else. This is helping to temper the greed that would really get markets moving in the opposite direction and a lingering fear which is creating new commodities bubbles like the one in gold. It could be we really were in a Soros super bubble but that means we can probably expect an even deeper coming market collapse. Government with the help of the media can create those conditions in an instant if they want to. Yes, the markets maybe recovering too quickly! Remember sub prime mortgage nonsense? It still has not affected real estate prices in every state. The state of Oregon refused to lower property taxes in the recession this year as one example even where real market values fell and some prices actually increased in favorable local markets. So why was the sub prime story so enormous and supposedly connected to all the financial failings? It was less than 10 percent of mortgages that were sub prime. Then the crash happened and other mortgages were under water. Just a year later the whole thing looks like a giant fake out because of how quickly markets recovered. All the nonsense about the negative psychology having something directly related to sub prime mortgages just expires as a viable theory after no long term relationship to that sad old sappy over played financial media construct died away. People who benefited from the TARP financial bailout money will take credit for that being the cause of the market recovery unfortunately the evidence of any relationship is still scarce. Secretary of the Treasury Tim Geitner and Bernake the head of the federal reserve can take all the credit for TARP they want and for trillions in stimulus spending. Unfortunately for the TARP theory now in December 2009 we find out that much less of TARP money outlays from congress were actually needed and the President is looking for a new extra legal way to spend some 200 unused unprinted allocated dollars that have nothing to do with emergency TARP legislation. Many of the banks receiving funding were quickly able to repay their TARP funds with in one year. What made the catastrophic market collapse so bad that these funds were required in the first place? Surely the added liquidity prevented some damage to the economy but having paid back that liquidity one now wonders if an other type of emergency liquidity could have been introduced to stop the panic and benefit the majority of people unnecessarily led to panic? Recovery from the collapse is not complete on a par value basis but it is clear that the mass psychological panic has long ago subsided. As FDR said there was nothing to fear but fear itself. That fear did not come to people out of the blue. No. As a financial news junkie and someone who reads much of the print media and watches the cable TV news stations religiously I plainly saw what looked like a conspiracy of negative sentiment information being broadcast. The outlets like CNBC And Bloomberg were manufacturing a very negative market story with one dr doom type short seller or academic after an other reinforcing the likelihood and even the necessity of having a big market crash on every show they did. I had no idea who Rubini was until a friend of mine told me she had read about his predicting the crash and was telling me I should be following his every word. That sounded like a self fulfilling prophesy to me. Roubin -Smini was my thought until one day I was watching Cramer on CNBC and he was telling his audience to sell virtually everything they owned because the end of financial market time was upon us. OK they are going too far with this story and it does not matter how sound the markets and financial system is they want it to break down and they are aiming at credit default swaps and various other derivatives. The writing was on the wall then. Bear Sterns had already collapsed and Lehman was going to be the next victim along with Washington mutual and some other institutions. It is still not determined that there was necessarily so structurally wrong with all of these institutions that they had to crash and burn in a psycho thriller panic as they did. In Japan the country was able to keep a lot of dead companies alive for a very long time as zombie companies without the crash and burn mentality found in the big USA crash and burn panic of 2008. After the fact and seeing the markets restore themselves quickly with shining resilience now late in 2009 people who were induced to panic realize they may have been fl eased. The short seller talking heads on CNBC and Blomberg telling them to sell wildly stopped on the way down and started buy what you were selling at give away prices and have by now realized tidy profits. Were you spooked just to get you to unload your assets at unfavorable prices? Chances are you were but you got what you deserve because of your ignorance about financial markets. Buyers want the lowest price they can get and some will try to convince sellers if they don't sell soon they will loose their chance to sell or that they should be scared to keep their assets because they might loose them. Sellers want buyers to buy at the highest possible price but also have to fear the buyers walking away or finding something different to use their money on. The market crash created some of the best asset buying conditions in history and people continued selling when they should have been buying. It took half a year for most to realize they missed their chance or never should have sold. Markets instantly compensated for the market fears by going to cash which questions what the role of Federal Reserve might have been as too much cash bidding on treasury notes automatically lowered interest rates to some degree. Then there was way too much cash liquidity in the economy and the banks froze in fear and cash hoarding which was obviously a temporary reaction but not the way it was portrayed in the news as the end of the financial world. Some developing overseas markets recovered much faster than the US Market and they clearly are in much more of a super bubble than anything the US was in 2007 and 2008. The public memory is short and soon new fears and hysteria will be the latest fad. The whole global climate change industry is based on the idea that because life is an experiment we can't risk not really knowing if there is or is not real climate change due to human activity but must immediately act but only with big government telling us we have to trade in more for less. As Ross Perot said there is this big sucking sound. It is not coming from NAFTA nor the Mexican Border or Even From Canada or China. No its coming from Washington DC as usual with lots of facilitation from the dominant "liberal" media. .