The Financial Mess & Solution Explained In 3 Minutes
The presentation above is the quickest and best primer you'll ever see on what led to this. A shorter version: greed and deception. But if you flip through those slides you'll be able to explain it to others. Thanks to Bruce at The River Blog for retrieving it.
What it doesn't explain is deleveraging. That's what's so unpredictable, unknowable, since the closest known financial event was when all the railroads were used to back bonds back in the 1860s and they were way over-leveraged and it all went bad in 1871 and things like international commerce and eating food shut down for awhile. Multiply that by a factor of 7.5, add it to the dollar going off the gold standard in 1974, subtract a little Great Depression, and divide by a regression analysis accounting for the compression of time and space. You've got at least two, two-plus years of fairly intense trouble ahead which could also develop into a prolonged Dark Ages. Sound like a strong statement? The S&P Case-Shiller National Home Price Index reported that prices sank a record 18.2% during the last three months of 2008, compared with the same period in 2007. More of the same if some people don't get their heads out of their own I'm sure very sweet-smelling asses immediately.
A credible and consistent economic plan is called for, i.e., The One We Don't Got. This would need to include monetary policies widely viewed in the US as unorthodox. Easy money, zero-rate policy, hard stimulus that builds infrastructure and making the debt-failed sectors of the housing market solvent, philosophy be damned. Plus foreclosure forbearance. Under everything is The Land, and on it people live. This is pretty simple stuff. Fuck the banks, they're fucking fucked anyway. Nationalize them and re-privatize later.
The more people we keep in their homes and working, the faster we get out of this. And along the way we better get rid of the All Growth Is Good economic assumption. Because that does not begin to describe the world we're heading into.