As I recall, everything was OK until Bush and Paulson came out...

[kentuck]

and said that the system would collapse unless we gave them 700 billion dollars before the weekend? There was no hint that we were so close to collapse. After their pronouncement, the whole world went into shock. Now, I wonder if it was necessary. They did immediately bail out AIG, Washington Mutual, and a few other bad apples, but would our economic system have collapsed at that time if Bush and Paulson had not scared the crap out of the entire world? I wonder...

[Buzz Clik]

1. That's not my recollection.

It was a series of incidents and commercial failures that had just about every economist in the country stuffing money in their mattresses.

[tabatha]

2. Did you see this:

http://www.liveleak.com/view?i=ca2_1234032281

[RB TexLa]

3. If people had wanted to withdraw a couple of trillion out of North American money market accounts

yes, it would have collapsed.


A lot of people knew this was happening that day, but, because of insider trading rules couldn't tell people. Honestly there was great fear around that a terrorist attack was coming.

[Mike 03]

4. No, this disaster had roots that were spreading quickly. Homeowners had been getting

into increasingly severe trouble for a couple of years, and Bear Stearns failed in spring of last year, I think. Those were two "shots across the bow." But the truth of the matter is that many economists have been scared shitless for a number of years as our account deficit has been growing exponentially since 2001. There is plenty of documentation thanks to the WWW. Also, a number of important books were published in the early 2000s that warned of precisely this scenario. I even believe that Krugman has been ringing to gong for years. So have the analysts at Prudent Bear, PIMCO, Franklin funds, and quite a few others. Steven (or Stephen) Roach at Morgan Stanely has been screaming about this since 2002.

ON EDIT: What am I saying? Greenspan warned about this back in the 90s. Once it was clear that the dot.com crisis was a bubble that had moved to the real estate market, and that lax lending policies were permitting people who had no business owning hopes to buy them, this scenario was set in stone. It was also Greenspan's fault for lowering interest rates to almost nothing. Money was too easy.

[Blue_In_AK]

5. I think I saw on PBS last night that this week's Frontline

will talk about what was going on inside the markets as the collapse was happening.

Here's the promo - "Inside the Meltdown"

http://www.pbs.org/wgbh/pages/frontline/story/2009/02/banking-at-the-brink.html

“Nobody cared if they could afford the payments, because the act of buying the house itself meant that you were going to get rich.”
Peter Schiff, economic commentator

For those struggling to make sense of the economic crisis, help is on the way. Inside the Meltdown is producer Michael Kirk's gripping account of how the country ended up in the worst financial crisis since 1929. The program airs Tuesday night on PBS and will be watchable online after that. This preview excerpt tracks the crisis back upstream to a key source -- the government's failure to heed early warnings on the housing bubble, and the havoc that ensued as a result.

[Bluebear]

6. THANK GOD IT PASSED!

:eyes:

[mmonk]

7. As an investor, I saw it (or felt it) before they had the courage

to come out from hiding.

[kimmerspixelated]

8. I'm inclined to lean your way.

While I was shopping today, I kept thinking that so much of what has affected the economy has come from the mouths of the talking heads in the media. Sure, things were bad, pretty tight, I think due to the longtime over inflated gas prices for one thing, which laid the groundwork for further demise, but when it was constantly drummed into our heads, we decided maybe we shouldn't spend much anymore, and then the house of cards started falling. Sure the housing bubble was a disaster in the making, but I still say the doom, doom, doom talk carried us over the cliff.