Talk:2007–2008 financial crisis/Archive 1

This is an archive of past discussions. Do not edit the contents of this page. If you wish to start a new discussion or revive an old one, please do so on the current talk page.

Archive 1

Archive 2

Archive 3

THE ROOT PROBLEM IS THE COLLAPSE OF AN ENORMOUS HOUSING BUBBLE IN THE US HOUSING MARKET

I have summarised, and in places wholesale copy-pasted, parts of a review article by the first economist to spot the housing bubble... IN AUGUST 2002!!! Unbelievable, just unbelievable that US politicians and the US finance industry could be so incompetent and complicit in such a catastophe. The reason the US economy is just, well, nuked is because in the first instance the US just lost close to 50% OF GDP - FIFTY-PERCENT OF GDP!!!! - in housing wealth. Because of the financial industry repackaging and selling on these bubble mortgages, these junk mortgages, the effects have been spread far and wide, notably including Europe, as other companies within and without the United States have bought them up bundled in with other debt. And the knock-on effect of the collapsed bubble, i.e. financial companies and banks holding these junk mortgages and thus taking huge losses on them as house prices went into freefall and foreclosures went into orbit, has been a loss in stock wealth of an even greater amount than that lost in housing wealth. In total, the US just lost GDP in wealth. I'll repeat that: The United States of America just lost, in total, GDP. In Dean Baker's words, "No economy can lose that much wealth and not be in serious trouble."

Please, if you don't understand the crisis, if you don't understand the credit-crunch, just read the stuff by Dean Baker. He writes in English, he's got total respect and concern for ordinary people, and he's been right about it all the way through - see for your self. He blogs daily at Beat The Press. —Preceding unsigned comment added by 86.145.183.67 (talk) 00:05, 26 January 2009 (UTC)

This Whole Financial Crisis started in July 2007 with the collapse of 2 Bear Stearns Hedge Funds

The whole Financial Crisis still unfolding (November 2008) started in July 2007. Definitely did. This is when 2 Bear Stearns (remember them?) hedge funds went belly-up and filed for bankruptcy.

Within weeks, August 2007, RAMS home loans, one of Australia's biggest home loan originators, went bankrupt in Australia as a direct knock-on effect from the problems at Bear Stearns. RAMS could no longer borrow money on the cheap and the funding simply dried up. Since then, the financial crisis has been roiling the globe, and only recently has developed into a full-blown economic crisis.

Bear Stearns - July 2007 http://www.investopedia.com/articles/07/bear-stearns-collapse.asp http://www.matrixeconomy.com/index.php?option=com_content&view=article&id=48:wed-july-4-2007-show-bear-stearns-a-bad-mortgage-implications&catid=1:latest-news&Itemid=53 http://www.generationaldynamics.com/cgi-bin/D.PL?xct=gd.e070718 http://topics.nytimes.com/top/news/business/companies/bear_stearns_companies/index.html?inline=nyt-org http://leaderswedeserve.wordpress.com/2007/09/13/bear-sterns-and-the-art-of-making-money-in-tough-times/ RAMS Home Loans - Global Effects Begin - August 2007 http://www.whocrashedtheeconomy.com/?m=200708 http://immobilienblasen.blogspot.com/2007/08/rams-home-loans-fails-to-refinance-a6.html http://www.smh.com.au/news/Business/RAMS-Home-Loans-extends-rollover/2007/08/16/1186857644013.html http://scandalum.wordpress.com/2007/08/

I don't have time to write this up, but if this article is to be written up properly, it needs to focus on this beginning of the "crisis" and also talk about what led to the crisis. Afterall, homebuilding in the US, and house prices in the US, started to fall in 2006 for that matter - the shit just didn't hit the fan until early July 2007 with the Bear Stearns blow-up. You can add these links as well. From Wall Street Journal - http://www.princeton.edu/~pkrugman/ted-spread-wsj.gif TED Spread - http://www.weblo.com/domain/available/tedspread.com/ 202.139.104.226 (talk) 09:19, 3 November 2008 (UTC)

What's needed is a portal

This is worst financial/economic crisis since Great Depression. At first, I was going to suggest merging this article with sub-prime mortgage crisis one, but that page is getting pretty darn big which reflects the scope of the problem. Europe is also experiencing the real estate burst as well. Golgo-13 (talk) 05:24, 24 September 2008 (UTC)

A portal would be useful, perhaps even a wikiproject. This matter, while difficult, is probably one of the most significant events of the 21st century. I'm quite disappointed with its treatment on the Main Page. Fred Talk 12:40, 30 September 2008 (UTC)

Fred, you and your friends have made a good start on this but what I miss is more geographical perspective. Much of the article is based on the evolving situation in the United States. It is not easy to find information about Europe (including individual countries), Russia, China and the rest of Asia. Would it be useful to add separate chapters on these or perhaps even links to new articles? And how would a portal cope with this rapidly evolving situation?- Ipigott (talk) 07:15, 5 October 2008 (UTC)

I think both a portal and a dedicated WikiProject are quite justified for this event. Perhaps a WikiProject first to consolidate manpower. __meco (talk) 22:03, 7 October 2008 (UTC)

Hourly changes

This situation is changing hourly as the crisis has come to a head. Fred Talk 14:21, 19 September 2008 (UTC)

article

why does this incredibly re-hashed article about the sub-prime mortgage crisis need to exist?.I think the whole situation just encompasses the crisis itself....really odd to just use such a generalized tittle too...Rodrigue (talk) 06:09, 20 September 2008 (UTC)

When the crisis began to affect the entire financial system, the emphasis needed to be changed to reflect that. This article is about a world wide financial crisis caused by the subprime mortgage crisis, not about the crisis itself. Detailed information about all the different sorts of mortgages, regulation of them, how and why they were securitized belongs there. What belongs here is information about the general financial crisis which resulted. Fred Talk 12:30, 20 September 2008 (UTC)

What you call rehashing is a broad outline. The generalized title relates to the information that the liquidity crisis and bailout efforts to cope with it date to August 9, 2007. Fred Talk 12:42, 20 September 2008 (UTC)

Scope of the article

Please see this quote, from The New York Times news analysis piece "But Will It Work?" [1]:

"“What we’re looking at now is simply an amplified version of what we’ve been in since last August,” Mr. Bernstein added. “You’re witnessing a sudden death instead of a slow bleed.”

Jared Bernstein is a senior economist at the labor-oriented Economic Policy Institute

Fred Talk 09:45, 21 September 2008 (UTC)

Cause

was caused by the abolition of the uptick rule in July 2007

I removed this dubious claim; a multitude of causes have been cited for the crisis in press reports. -- Beland (talk) 06:06, 25 September 2008 (UTC)

You are free to remove it but it is obvious it was the sole cause of the crisis, though I concede it is difficult to understand; furthermore arguing the media cites many causes does not negate it.

I concede causes have many tributaries nonetheless had the Uptick Rule not been abolished on July 6th, shorters in finance stocks would have had to uptick and could not have shorted down banking stocks.

see eg a press report 4 weeks after it's abolition:

http://www.usatoday.com/money/markets/2007-08-09-volatility_N.htm —Preceding unsigned comment added by 86.129.128.81 (talk) 00:48, 28 September 2008 (UTC)

LONGSHOT GEORGE:... it is my opinion that there is an unsigned article which allows new technology to become part of a-liquid-involvement at UN treasury levels - notice the liquidity of the technology market in comparrison and wonder how it can remain as confidently stable as does in markup ideologies - ths because it has weighleighed such involvements | my proof of this is UN resolution in 2005 mentions one [unicorn bias] technical to schooling importance where the rest of the resolutions become concerned with the war - either way somewhere 'mm' there is a peice of paper saying - sign this technical article towards entire treasury... —Preceding unsigned comment added by 86.152.174.162 (talk) 10:03, 9 October 2008 (UTC)

Merge proposal

The following discussion is an archived discussion of the merge. Please do not modify it. Subsequent comments should be made in a new section on the talk page. No further edits should be made to this section.

There is no consensus at this time to merge to two articles Economic crisis of 2008 and Financial crisis of 2007–2008.
Yellowdesk (talk) 00:22, 13 October 2008 (UTC)

Resolved

– Re: merge with Economic crisis of 2008 - tags now gone from there and here (ignore the newer, different, merge tags with their own attached discussions). 84user (talk) 09:21, 11 October 2008 (UTC)

The proposed merger is inappropriate as the liquidity crisis surfaced in August, 2007 and has different causes and dynamics than the oil crisis and the food crisis which have been lumped together with the financial crisis in economic crisis of 2008. Fred Talk 02:31, 26 September 2008 (UTC)

Oppose the proposed merger for now. -- Yellowdesk (talk) 03:07, 26 September 2008 (UTC)
Oppose and differentiate these two could be very different articles, but they need names and leads which will fully differentiate them. 2008 article may be more properly called Economic crisEs of 2008, as it refers to many crises throughout the world. There are many financially centered articles which should be better linked and given a main article (probably here). The other article can act as a broader overview of economic issues throughout the world and their many causes. The titles of both articles are likely to change as events continue and become better understood. NJGW (talk) 03:21, 26 September 2008 (UTC)
Oppose From the current perspective, the subjects are different, although related, with shared causes. Each seems of significance to merit its own article. Future events may dictate differently. --Rye1967 (talk) 11:48, 26 September 2008 (UTC)
Stongly Oppose ~127k hits in Google News for the term Bailout. The article easily stands on it's own. Speedy this proposal, anyone? Ronnotel (talk) 14:05, 26 September 2008 (UTC)
Merge or, preferably, distinguish names and leads As per NJGW the names and leads must differentiate the articles. If not, there will be perennial calls to merge. davidwr/(talk)/(contribs)/(e-mail) 05:09, 27 September 2008 (UTC)

commentI think a merge with Liquidity crisis of September 2008 is much more appropriate, since the majority of the article here is all about that month. The Economic crisis of 2008 is just a way of deal with nitpickers who didn't want that article to be called the 2008 global recession. See the link below to comment on this further. NJGW (talk) 20:16, 28 September 2008 (UTC)

I agree with the above comment. It might also be helpful if each related article contains an appendix showing all related articles.--JohnnyB256 (talk) 10:18, 29 September 2008 (UTC)

Oppose, qualified. (if I have a say, not being a registered member). My reasoning is similar to Rye1967's. While causes are diverse and somewhat separate (there are common elements which contributed to all three), the current situation draws from each, in that each is escalating the others. At this point in time all three are interacting, and none can be resolved without taking into account the dynamics of the other two. Use this as the umbrella survey article, go into more detail in the others. -Tenebris —Preceding unsigned comment added by 207.112.27.206 (talk) 04:25, 30 September 2008 (UTC)
Oppose I've just added some more info about the effect this had in China. ^{(Hypnosadist)} 11:24, 4 October 2008 (UTC)

The above discussion is preserved as an archive of the proposal. Please do not modify it. Subsequent comments should be made in a new section on this talk page. No further edits should be made to this section.

Merge proposal2

Resolved

– Re: merge with Liquidity crisis of September 2008 (now Global financial crisis of September–October 2008) - tag is now gone from here and Fred has marked it as resolved over there on 9 October 2008.

A discussion about this is already underway at Talk:Liquidity crisis of September 2008#Merger with Financial crisis of 2007-2008. Please discuss there. NJGW (talk) 19:12, 28 September 2008 (UTC)

(moved comment to the discussion linked to above to keep the discussion in one place)

Proposal to remove the merge proposal templates

Resolved

– Merge with Economic_crisis_of_2008 - tag is gone; merge with Global financial crisis of September–October 2008 (was Liquidity crisis of September 2008) - tag is also gone. So I have now struck through my proposal below. 84user (talk) 08:57, 11 October 2008 (UTC)

If there is no evident consensus for a merge, could the two templates be removed from the articles? The last comment was an oppose on 4 October for the first proposal, and a comment on 28 September for the second here which directs to Talk:Liquidity crisis of September 2008#Merger with Financial crisis of 2007-2008 where the decision might be to just wait. I agree with the just wait opinion (for months or years). The Economic crisis of 2008 appears to cover the economy (or at least should due to its title) while this one appears to list fiscal and monetary events, and also appears to have better worldwide coverage. If they are not to be merged, I agree the leads in both articles need to better clarify the difference. But, I'm not an expert on any of these subjects, so what do others think? -84user (talk) 21:50, 7 October 2008 (UTC) (I struck through my proposal above, as resolved IMO) 84user (talk) 08:57, 11 October 2008 (UTC)

Possible background cause

Agency’s ’04 Rule Let Banks Pile Up New Debt Fred Talk 20:27, 3 October 2008 (UTC)

A couple more for those interested: Factcheck.org and Globalresearch.ca. NJGW (talk) 08:49, 4 October 2008 (UTC)

Also Breaking Views. Fred Talk 13:24, 4 October 2008 (UTC)

Should some mention be made of Warren Buffett's interview with Charlie Rose in which he said a Depression is possible? [2]--JohnnyB256 (talk) 13:35, 4 October 2008 (UTC)

Lead paragraph

Forgive a newbie spouting off, but I'm wondering if perhaps the lead paragraph should be written differently. It begins by giving background, which is good but I think it belongs elsewhere. Perhaps the beginning should describe a bit more what this crisis is and what it has done. Does that make sense?--JohnnyB256 (talk) 13:26, 4 October 2008 (UTC)

It could be improved, but should be treated as a credit crisis, not as a stock market crash. That occurred but always in the background causing it as the failure of routine credit transactions between banks to function normally. The subprime mortgage crisis which caused all the bad paper needs to be mentioned also. Fred Talk 17:54, 11 October 2008 (UTC)

Huge sections of this article were deleted

Resolved

– Nothing deleted, only some sections were moved to Global financial crisis of September-October, 2008. 84user (talk) 09:21, 11 October 2008 (UTC)

Huge sections of this article were deleted. Was it vandalism? I thought the vote for merger was opposed and lost? http://en.wikipedia.org/w/index.php?title=Financial_crisis_of_2007-2008&diff=244134928&oldid=244121405 —Preceding unsigned comment added by 71.131.4.194 (talk) 15:28, 9 October 2008 (UTC)

Yes, no, and yes (I think). The sections "Federal Reserve actions to lower interest rates and stimulate the economy" through to "Week of October 5, 2008" (with the detailed week by week events) were moved from Financial crisis of 2007-2008 to Global financial crisis of September-October, 2008 (used to be Liquidity crisis of September 2008.) These were the two edits that made the move: diff1 and diff2. The move looks Ok in that nothing was lost. See also Talk:Global financial crisis of September-October, 2008#Merger with Financial crisis of 2007-2008. -84user (talk) 19:27, 9 October 2008 (UTC) I fixed last section moved. 84user (talk) 19:32, 9 October 2008 (UTC)

Glad I came here

Wow, I need to redirect Great Depression of 2008-2009. Another editor is trying to work on the same project, and you guys are much more along than he is. -- Matthew Glennon (^T/_C\^D) 14:54, 10 October 2008 (UTC)

I redirected said article here. It was dead in the water, and you have a lot of work done already. Great job, this is really how we need to cover the subject anyway. -- Matthew Glennon (^T/_C\^D) 14:58, 10 October 2008 (UTC)

Wow, talk about needless fear mongering! Great depression of 2008-2009? LowLevelMason (talk) 21:02, 10 October 2008 (UTC)

Fear mongering? Maybe... maybe not [3], but more importantly it is definitely commentary requiring a time machine. NJGW (talk) 21:05, 10 October 2008 (UTC)

Why didn't you call it the collapse of capitalism? Fred Talk 17:55, 11 October 2008 (UTC)

Whether or not this is technically a Depression, or whether it will become a technical depression, is debatable. What is certain however is that some people have called the current economic crisis a depression. Specifically... I have seen it referred to as the "Greater Depression" and "Depression 2.0". These references in themselves seem somewhat noteworthy if only to illustrate a segment of the populations concern or misunderstanding. But if this crisis does become a full-blown depression... it seems reasonable that there will be a common name for it that people might try to search for -- and this page seems like a reasonable result for such a search. --Nihilozero (talk) 14:41, 25 March 2009 (UTC)

new name

If, as is possible/probable, this crisis continues through 2009 or beyond, what will be a good name for this article and a possible category encompasing this article's subject? Hmains (talk) 00:54, 12 October 2008 (UTC)

You're a bit premature in asking. We don't make news here, we only report what's happening. You should check this out instead. NJGW (talk) 02:30, 12 October 2008 (UTC)

Any ending date we include in the title, even 2008, implies a known terminus to the event. Reasonable projections currently are generally a "two year recession", but there is no reason, with appropriate action, and change in public mood, the situation could not be turned around in a few days. (Hint, declare credit default swaps issued without adequate reserves illegal contracts.) Fred Talk 10:40, 12 October 2008 (UTC)

Fred, your hint has piqued my curiosity. However I am still trying to understand what these Credit default swaps really are, so I asked several questions on Talk:Credit default swap. Meanwhile, has any government representative in the UK or US made such a suggestion? I assume you mean treat the naked CDSs as uneforceable gambling debts? I might ask at one of the Wikipedia:Reference desks after a day or so. -84user (talk) 14:20, 16 October 2008 (UTC)

I suggest a rename of this article to Late 2000s global financial crises to match the newly renamed Late 2000s recession using '2000s' in the WP sense of 2000-2009. That way we rather eliminate the ending year problem Hmains (talk) 05:21, 19 December 2008 (UTC)

Agreed. It is now 2009 and no analyst or news organization has claimed that this event is over or will be ending shortly. Ranever (talk) 03:33, 7 January 2009 (UTC)

I agree but I must correct you. No reliable analyst has said it will end soon.

How about "Great Depression II"? 140.251.135.222 (talk) 21:03, 18 February 2009 (UTC)

We shouldn't judge this as a 2nd Great Depression until it passes and we can view it in hindsight which is, as the saying goes, 20/20. Also the Great Depression was worse than the current crisis and naming it that would be an exaggeration. I am not saying it won't get that worse, I think it will, but it hasn't yet so we shouldn't name it that right now.

I realize that "2nd Great Depression" may or may not prove to be a technical misnomer, but if this period is widely referred to as a depression, shouldn't misnomers redirect here too? I really don't know, but I think it will become more of an issue as the crisis expands. BTW... in global terms the current situation IS more harsh than the Great Depression. More people are starving than at any other time in the recorded history of the world and hundreds of millions hardly even have access to clean drinking water due to the polluting progress of industrial civilization over the past 70 years or so. Just some things to consider. Cheers! --Nihilozero (talk) 14:51, 25 March 2009 (UTC)

This page is about the financial crisis, not about the economic recession, depression, crisis or whatever you want to call it. There is an article for that. I don't understand why you want to create confusions in this article as you already made in another section to introduce a political thesis. --Pgreenfinch (talk) 15:06, 25 March 2009 (UTC)

Removed ref to position paper

A paper by a certain professor Akbar Torkbat was cited in a lone sentence. I removed it. Many prominent professors of economics and related disciplines undoubtedly have their own opinions, theories, and models of the economic crisis. There is no reason to cite this one here, unless new sections are going to be introduced to cover various positions. Torkbat's notability/credibility/what-have-you is also questionable. 24.160.175.196 (talk) 04:23, 16 October 2008 (UTC)

To use Wikipedia terminology: it was totally POV. 24.160.175.196 (talk) 04:24, 16 October 2008 (UTC)

Image query

I uploaded this image just now, would it have any application for the Historical background section; or any related financial crisis article? - Roy Boy 04:53, 26 November 2008 (UTC)

~~Perhaps, but I think that including this image would infer that the crisis was caused by or had something to do with the top 1% accumulating more wealth--only history can judge that. Same goes for the image currently on there (financial's share of GDP), I don't think that should be there either. Ranever (talk) 03:37, 7 January 2009 (UTC)

Another merge idea

What's the difference between this and subprime mortgage crisis? We already have too many "crisis" articles. 140.247.249.98 (talk) 17:04, 12 December 2008 (UTC)

Requested move

I suggest that we move this article to "Financial crisis of 2007–2009" now, if nobody objects. --Eivind (t) 14:59, 8 January 2009 (UTC)

I'd like to see a better name. With the one you suggest will may well be here again in 2010 and 2011 seeking a similar rename. Vegaswikian (talk) 00:34, 9 January 2009 (UTC)

Support While I agree with the previous comment, I think the proposed title is ok until history gives us an acceptable one. We won't know the scale and length of the crisis until much later but we do know that it is ongoing. --Regent's Park (Boating Lake) 01:33, 9 January 2009 (UTC)

I previously suggested Late 2000s global financial crises since 'late 2000s' covers the time period in question and I still think this should be the name. Hmains (talk) 03:38, 9 January 2009 (UTC)

If it keeps going on to next year we'll still have to change it, since that would be the early 2010s. Zazaban (talk) 21:52, 10 January 2009 (UTC)

Where's the crunch?

I'd like to see some answers in this article that should be here.

1) Could someone point at any source that shows it's harder to get credit? Like "in 2006, total outstanding loans to consumers was $x and to companies it was $y. Within a few months it had dropped a whopping z%, banks having a useless stockpile of $xxx money they refused to lend out". If the heart of the problem lies in banks refusing to lend money, i would like some figures to support that vision.

2) Why haven't interest rates gone up as much as one would expect if money is so hard to get? I can refinance my house at a better rate than 6 months ago, which is pretty odd considered banks suspect everyone not to pay their mortgage.

3) If everyone stops spending money on cars and whatever, they will want interest on their account (and get it as well). Banks would go bankrupt if they would pay interest but don't do what they are supposed to do, lending it to other people, wouldn't they?

Please, enlighten me. Joepnl (talk) 03:40, 22 January 2009 (UTC)

Good question. I asked on another article talk page: where are the statistics showing there are fewer loans of fewer dollars in what countries? No answer in hand.Hmains (talk) 07:06, 22 January 2009 (UTC)
- Pretty weird that nobody is answering on the most important subject there is at this moment. I'll have to add nasty templates to this article if nobody does soon. Joepnl (talk) 02:08, 23 January 2009 (UTC)

If there are reliable sources that say that the credit markets have dried up, then we say that the credit markets have dried up. It is not for us (at wikipedia) to analyze stats and decide whether it is harder to get credit or not. But, as for your points, can't comment on 1. On 2, it is pretty straight forward, interest rates are low because the feds are keeping it low. If you can finance your house, it is likely because your credit is good and/or fannie mae is guaranteeing your loan. If, on the other hand, you had been a small business looking to borrow cash to cover business expenses, the story would be different - harder access to loans and higher rates. (Try financing your piano purchase instead of your home purchase!) Finally, as for 3, since interest rates are low (have you seen the interest on your account lately!), it makes sense for banks to hoard your deposits and not lend them out (why risk losing the principal), than to lend out the money. Of course, some non-home money is available, it is just that the rates are astronomical (credit card debt, your piano loan, that sort of thing!) which gets some revenue for the banks (but, have you seen their p&l statements recently?). --Regent's Park (Boating Lake) 02:47, 23 January 2009 (UTC)

I haven't taken the trouble to figure out what edits need to be made to the article, but there is plenty of evidence of a credit crunch. In the United States, this is expressed, for example, by developments such as the commercial paper market, which has been noticeably smaller since September, and the sharply increased premiums on junk bonds. The Fed's latest Beige Book includes this discussion (names of cities refer to Fed districts):

Regarding credit conditions, Boston reported that credit availability continues to be a major barrier to commercial real estate activity, and San Francisco noted that the availability of credit remains quite constrained. The New York and Atlanta Districts indicated a general tightening of credit standards, while Kansas City noted tighter standards for commercial real estate and commercial and industrial loans. Credit standards were described as unchanged to tightening further by Cleveland and Richmond, while Dallas noted that depository institutions maintained tight credit standards. Chicago reported that credit conditions remained tight. Credit quality declined or remained a concern in the New York, Philadelphia, Cleveland, Chicago, Kansas City, Dallas, and San Francisco Districts. Default rates on commercial loans are expected to rise in the Boston District. Richmond indicated mixed reports on credit quality.

The TED spread, which is discussed in the article, also remains elevated, though much less so than in September and October. However, the relative drop in this index may be because of the FDIC guarantee of bank debt, and not something that has broader positive indications for the economy. John M Baker (talk) 16:48, 23 January 2009 (UTC)

a small statistics table showing the crunch facts would be very helpful: easy to understand what is happening at a glance. Where are the stats? Hmains (talk) 20:22, 23 January 2009 (UTC)
- Exactly. Tight standards don't imply a crunch, lower sales don't either. The TED spread could be an indication but it's simply not the number that should be in the very first paragraph. There must be reliable sources out there besides companies blaming their failures on banks. Joepnl (talk) 21:02, 23 January 2009 (UTC)

Actually, tight standards are precisely what is meant by a credit crunch. Also, while I rather like the idea of a statistics table, most of the statistics are national statistics and thus lack the worldwide scope of this article, TED spread arguably being an exception. John M Baker (talk) 23:15, 23 January 2009 (UTC)

Redirected Term: financial tsunami

The term "financial tsunami" redirects to this page.

What is the origin for the usage? —Preceding unsigned comment added by 116.48.130.205 (talk) 07:01, 30 January 2009 (UTC)

copyvio

As of this version http://en.wikipedia.org/w/index.php?title=Financial_crisis_of_2007%E2%80%932009&oldid=268689936 section 4 is copied verbatim from reference 14. The note at 14 states "This is taken wholesale from Dean Baker's non-copyrighted, freely-available review article." However the actual source clearly asserts copyright on every page. While the regular editors of this article are addressing this copyright violation, they may also wish to evaluate the reliability and appropriate weight for this source. - 68.6.148.56 (talk) 18:58, 5 February 2009 (UTC)

Agreed. I have removed the section in its entirety. If permission to include is made available (and documented on the talk page), the material can be reincorporated. I suggest, however, that only a brief summary be appropriately included per WP:Weight (see note from 68.6.148.56 above). The section before the deleted one is also problematic but I'll look at it later. --Regent's Park (Rose Garden) 19:17, 5 February 2009 (UTC)

Origins and Scope of the Housing Bubble

This paragraph contains this statement (my emphasis):

"In cases where a home is valued far lower than the amount of the outstanding mortgage, homeowners may be to able to effectively pocket hundreds of thousands of dollars (or pounds if you are in the U.K.) by simply walking away from their mortgage."

As I understand it, the law in the UK is substantially different. Whereas in the US you can just 'hand the keys back' at or shortly before the point of foreclosure and have the mortgage debt written off, in the UK you can be pursued by your mortgage lender for the outstanding debt for a number of years after repossession (the British English term for foreclosure). This is the case even if the bank repossesses your home and then sells it at a loss: unless you're declared bankrupt, they can pursue you for the difference, plus outstanding interest and administration costs. I don't have the legal facts and figures at my fingertips, but someone might like to either delete the text in parentheses or add a couple of sentences explaining the difference. LDGE (talk) 21:53, 10 February 2009 (UTC)

Removed Knol article

I have removed a link to a Knol article several times asking the IP editors to show their rationale for continuing to add the link to several articles without comment. As a user-generated site, Knol is not considered a reliable source, and there's no indication that the author of this article has any authority or notability.Flowanda | Talk 06:52, 15 February 2009 (UTC)

Obama

"January 2009: U.S. President Barack Obama proposes federal spending bill approaching $1 trillion in value in an attempt to remedy financial crisis [46]"

@_______@

Won't that hurt us more than it will help us? —Preceding unsigned comment added by 66.203.21.135 (talk) 14:52, 19 February 2009 (UTC)

Effect on Different countries and regions?

I have spotted Spanish crisis of 2008–2009 which is basically a Spanish perspective on this global event. Should there be articles covering various countries' responses? Maybe a template pointing to articles on the various causes, national impacts, responses etc? TrulyBlue (talk) 14:34, 23 February 2009 (UTC)

There is the global crisis and also how it plays out in each country. Spain is a good example of a unique situation that receives only minimal coverage in the global media. They, for example, suffered a housing crash. That alone makes a separate article worthwhile. Fred Talk 13:51, 6 March 2009 (UTC)

What about the Riots in Europe?

Greece was not just about that teenager getting shot. France is having huge protests. Luxury cars are getting torched in Germany. British police are expecting more aggressive protests this year as well. It seems like these consequences/responses really ought to be mentioned somewhere in this article about the crisis.

http://www.thestar.com/News/World/article/552544 http://www.guardian.co.uk/uk/2009/feb/23/police-civil-unrest-recession http://www.timesonline.co.uk/tol/news/world/europe/article5559773.ece http://www.rferl.org/content/Russia_Riot_Police_Detain_100_At_Economic_Crisis_Protest/1362050.html http://www.youtube.com/watch?v=tsVVQJ5t31o&feature=related http://article.wn.com/view/2009/01/21/Riots_in_Eastern_Europe_as_Crisis_Bites/ --Nihilozero (talk) 09:47, 3 March 2009 (UTC)

Unrest maybe, but to talk about the "Riots in Europe" is an abusive generalization and media stereotype. But maybe that Europe be ablaze is your whishful thinking ;-) --Pgreenfinch (talk) 14:14, 3 March 2009 (UTC)

It is journalistic coverage, by the way, one source is here in Business Week. The global financial crisis has been rated as the most serious threat to United States security by its intelligence agencies. That assessment ought to be included in our article. Fred Talk 14:34, 6 March 2009 (UTC)

This talk section is getting a little sloppy (probably my fault) but now the question is becoming not one of relevancy but one of trolling and changes amounting to vandalism. Hardships and instability are what make this crisis a crisis and the socio-political impact has been widely and clearly covered by various credible news sources. Pgreenfinch has not made constructive arguments, has made inappropriate edits, and has accused others of a POV violation while clear not examining his own. --76.204.95.45 (talk) 22:15, 6 March 2009 (UTC)

Huh? What are you talking about? Parliaments have been stormed, Iceland was overthrown, Greece went nuts, etc. And these things were very much in response to the financial crisis which this article is supposed to be about. Failing to mention these things in their appropriate context is ridiculous. I have provided just a few of several available links, videos even, and I wonder if you looked at them at all. Riots in Europe because of this crisis is not a generalization or a stereotype -- it is a fact, even according to the participants of these factually cited events. --Nihilozero (talk) 20:54, 3 March 2009 (UTC)

Do you even know what is a riot? Or a "mass riot" as you titled that new messages. Did you see blood running everywhere in the streets? How many politicians were hanged at the trees ? Try to be serious! Demonstrations, unrests, protests, or whatever, but riots certainly not. --Pgreenfinch (talk) 22:45, 3 March 2009 (UTC)

First of all... yes, there have been riots directly related to this crisis (which is partly why the financial meltdown is actually a crisis and not just some aberrant financial data). Secondly... blood everywhere and politicians hanged is setting the bar pretty high for a riot -- although there has been violence, looting, and destruction of property (i.e. banks and luxury cars). But even if you (wrongly) feel that riot is too hard a word, this article about the crisis does not mention anything about riots, protests, or demonstrations (all of which have taken place in response). The failure of this article to connect the plainly drawn dots between these incidents is a serious shortcoming. And I do not need to be insulted about my "whishful thinking" or my clear understanding of what a riot actually is. If as a historical document this page would like to make it seem like no one anywhere rose up in response to this financial crisis, so be it... but I think the lack of completeness diminishes wikipedia as a credible source. --Nihilozero (talk) 02:16, 4 March 2009 (UTC)

imho, Greece really was about the teenager; France is having their usual protests because if there weren't the French wouldn't be the French, cars get set fire to in Germany (and especially in the suburbs in Paris) since quite a few years, and the British expecting riots is not something that needs mentioning. I happen to live in Europa, and I can assure you there simply are no riots or protests or plain vandalism that wouldn't have been there if there would be no crisis. I wouldn't even know what the protesters demands would be. "Stop the crisis"? "Hang the greedy"? "Back to the gold standard now"? "No more fractional reserve banking"? "No more tax money for failing banks"? I wonder which parliament "got stormed", which overthrowing took place in Iceland (new elections is not exactly a revolution), and -apart from the tiny anarchist group- how many Greek went "nuts". Do you have any sources for these bold statements? Joepnl (talk) 03:27, 4 March 2009 (UTC)

Sorry Joepnl, but I'm not convinced that living in Europe makes you an expert on all things European. Despite your assurances, it seems like you may not be in touch with all of the protests and protest sentiments across Europe. There are several sources for what I'm talking about (a few I've provided) and it is beyond political interpretation that these things are happening pointedly because of the financial crisis. There have been riots/protests/demonstrations directly related to this economic crisis and they need to be mentioned in this article about the crisis. It seems to me that some people may have non-neutral political reasons for wanting this information kept off the page -- perhaps because they don't really understand what's happening or perhaps because they don't want any attention drawn to the reality of it. --Nihilozero (talk) 04:24, 4 March 2009 (UTC)

Maybe you want to politicize the article,something rather out of topic, but if you do so, avoid interpreting facts to play on the spectacular and present things as massive, which is not at all the case. --Pgreenfinch (talk) 18:54, 4 March 2009 (UTC)

Living in Europe doesn't exactly make me an expert, but I'm certain I would have noticed riots related to this lemma. Again, can you name one reliable source linking any riot-like event in Europe to the current crisis? I also wonder what kind of POV you can possibly have to want this mentioned. Joepnl (talk) 02:04, 5 March 2009 (UTC)

It seems that the problem is possibly one of definitions. What is a crisis? What qualifies this particular economic phenomenon a crisis? And what are the effects of the crisis? It seems to me this financial crisis is a crisis because it threatens the average persons material security in many situations. That being the case, there have been protests, demonstrations, and yes... even riots in response to the current economic meltdown. This seems beyond dispute to me, has been all over the news, demonstrations have been videotaped, and all this can be confirmed with a few quick web searches to credible links. The question of whether these things have been happening in response to the crisis is ridiculously uninformed. What one really must wonder is WHY these things are not mentioned in the article about the financial crisis since they are in part what confirms it as a crisis. Social instability as a direct consequence of threatened material security seems beyond politics and protests are occurring in communist and neo-liberal western nations. Is this a crisis or not? What are the effects on the average person? And how are average people around the world reacting to their threatened material security? Without this information this article about the collapse is shamefully lacking.

Governments across Europe tremble as angry people take to the streets Riots in Latvia Clashes in Iceland Mass strikes in Greece about the economy Protests in Lithuania Protests in Russia Violent unrest rocks China as crisis hits --Nihilozero (talk) 05:40, 5 March 2009 (UTC)

You say yourself that economic factors can be at stake. So why link it directly to the financial crisis. This is your own theory and it is non sequitur. You clearly want to politicize this article with your own views. If one day there is a widespread riot, create an article about it, attribute it to some clear phenomena not to a vague general indirect cause, and it will be up to the readers to judge its relevancy. As it is, that POV/OT section has to be removed. --Pgreenfinch (talk) 09:03, 5 March 2009 (UTC)

His viewpoint is shared by United States intelligence agencies, see "CIA Adds Economy To Threat Updates White House Given First Daily Briefing" By Joby Warrick Washington Post Staff Writer Thursday, February 26, 2009. The daily briefing given to the President of the United States daily on security threats posed by the crisis is called the Economic Intelligence Briefing. Fred Talk 15:30, 6 March 2009 (UTC)

Boy, spook speculations now? What else ;-)) --Pgreenfinch (talk) 16:07, 6 March 2009 (UTC)

Identification of possible problems by intelligence professionals is distinguishable from "speculation". Keep in mind our purpose, to set forth plainly, and without bias, the nature of the event. This edit demonstrates inappropriate bias. It is not necessary to adapt the foreign policy goals of the Imperium to accord respect to those whose professional duties are to inform the American executive and legislature. Fred Talk 18:05, 6 March 2009 (UTC)

Sorry Fred, I don't see much difference between a "possibility" as a body presents it and a "speculation" from that body. Speculation is not an insulting word by the way, to speculate on the future, rightly or wrongly (only the future can tell) is something that everybody does everytime it takes a decision that is not pure routine. Of course, you can take out the word "spook" but that does not change the fact that that impressive body presents an estimate not a proven fact. Therefore the "purported" word I used is far from being biased when I take the context you refer to. Now if you have a better adjective to express it, I'm always ready to learn better English. :-) --Pgreenfinch (talk) 19:36, 6 March 2009 (UTC)

Pgreenfinch, the article clearly sates that three governments have ALREADY fallen due the crisis this article is about. This is not speculation. This has already happened. WAS 4.250 (talk) 16:57, 7 March 2009 (UTC)

You are making less sense now than when you were misrepresenting the meaning of "riot" above. I gave links to major news sites about the riots, demonstrations, and general unrest around the world which was explicitly related to the financial crisis and perceived economic mismanagement by all the respective governments. And the 2009 Riga riot actually DOES have it's own wikipedia page which discusses the connection to the economy. Maybe you don't want to believe that widespread unrest is a problem, but POV aside... political instability IS being caused by this financial crisis. This is a verifiable fact. You can try to hide the facts, but shouldn't be allowed to do so in regard to such an important issue. Those who do not recognize the reality of current events are condemned to live through them in ignorance. --Nihilozero (talk) 12:14, 5 March 2009 (UTC)

The CIA gives a daily presentation about political instability related to financial crisis and Pgreenfinch doesn't think that political instability related to the economic crisis is relevant to the financial crisis article?! This is getting ridiculous. The unrest has clearly and overtly been related to the economic crisis by a number of sources coming from a number of editors. I think the POV problem is not ours, but rather is the problem of one who has supposedly been involved in the banking industry as an executive. Repeatedly changing the title of the section amounts to trolling vandalism and I wish Pgreenfinch would give it a rest. --76.204.95.45 (talk) 22:15, 6 March 2009 (UTC)

You keep your insults for you, please, as the troll and vandalism is from those who politicize this article for their own agenda, and as you keep making an inconsistent general relation as a personal thesis of which you don't have the least serious source. You know perfecly well as if you would make a wikipedia article with that medley presented as a real topic, such an article will not live for more than a month. As for the CIA, which is a US body, it does not have the least authority to decide what the rest of the world is about and anyway wikipedia is not the spokesperson of the CIA. All this is completely flawed and does not honor what should be a neutral encyclopedia. --Pgreenfinch (talk) 23:25, 6 March 2009 (UTC)

That comment violates the Wikipedia:Civility policy. Stop calling other editors nasty names just because they disagree with you. Admins can block you if you keep it up. WAS 4.250 (talk) 16:47, 7 March 2009 (UTC)

This article should definitely cover:

In 2009, the world-wide financial crisis produced economic hardships that caused people in many places around the world to publicly protest and demand government action.

"the trauma of crash, slump and meltdown [has produced] the biggest protests across the former communist bloc since the days of people power." - Governments across Europe tremble as angry people take to the streets
"Violent protests over political grievances and mounting economic woes shook the Latvian capital, Riga, late Tuesday, leaving around 25 people injured and leading to 106 arrests." - Riots in Latvia
"Protesters in Iceland's capital Reykjavik have clashed with police during a demonstration over the handling of the financial crisis." - Clashes in Iceland
"Greeks disgruntled by their country's economic woes ramped up protests against the government on Wednesday, shutting down airports and disrupting many public services." - Mass strikes in Greece about the economy
"Protesters held demonstrations throughout Russia on Saturday, offering largely subdued, but pointed criticism of the government's economic policies as the country continues to sink deeper into an economic morass." - Protests in Russia
"Bankruptcies, unemployment and social unrest are spreading more widely in China than officially reported" - Violent unrest rocks China as crisis hits

WAS 4.250 (talk) 17:57, 5 March 2009 (UTC)

Stop playing on the non sequitur please! This article is not even about economic crises. Also to relate those various local events under the same general cause, without any serious source that support such a general conclusion, is certainly an imaginative personal research, but perfectly POV. That section has nothing to do in this article, whatever your agenda. --Pgreenfinch (talk) 19:02, 5 March 2009 (UTC)

The reliable sources provided above correctly source the claims made and also specifically say those events were due to the financial crisis this article is about. Your claims, on the other hand, are nonsensical original research backed by nothing other than assertion. Wikipedia is not the place for your original research whether in adding or deleting information. WAS 4.250 (talk) 16:30, 7 March 2009 (UTC)

LOL! Pgreenfinch keeps talking about supposed POV inspiring the need for these relevant facts to be included, but now I've noticed on his user page that he is/was an "Ex finance and banking executive and international consultant" No wonder he doesn't like to think about or take notice of the unrest and hostility towards banking and economic officials! Talk about an agenda! Ha. --76.204.95.45 (talk) 01:32, 6 March 2009 (UTC)

Why the ad hominem? Are you suggesting I fostered the crisis? I was not even active in that area and I am completely independent. Btw the section taht some tries to put in the throat of the readers is about hostility to gvts not to banking, which shows the attempt in that section to promote antigovernmental spirit, a purely political intention. Personnally, btw, I even warned several time about the lax US monetary policy that led to the bubble and crash, so to use Europe as a red herring is a joke. You can even find some of my own analyses in (among others) [4], [5] and [6]. Above all I have a whole site that I started 10 years ago and that is quite alive and kicking about financial market flaws [[7]]. Certainly if somebody does not have moralistic and under the belt lessons to receive from activists, it is me. What I don't see is why wikipedia would disinform and manipulate the events against the European gvts. This generalization is stereotyped, unsourced, an original research, unconsistent and non sequitur, out of topic and politically POV. Sorry that your ad hominem remark to hide such overwhelming flaws is falling flat on its belly, and tell me who is ridiculous and trying to promote an agenda? This section is a tumor instilled to politicize the article according to some partial views, period. --Pgreenfinch (talk) 08:16, 6 March 2009 (UTC)

The reliable sources provided above correctly source the claims made and also specifically say those events were due to the financial crisis this article is about. Your claims, on the other hand, are nonsensical original research backed by nothing other than assertion. Wikipedia is not the place for your original research whether in adding or deleting information. WAS 4.250 (talk) 16:30, 7 March 2009 (UTC)

Well, I did not know that "nonsensical" was a term of "civility". Btw, do you consider also that the insults, harassment and ad hominem I met were "civil" thus are not to be denounced? This little anecdotal asymmetry apart, I agree fully with you that "n...l original research backed by nothing other than assertion" is not encyclopedic wikipedia-wise, which is what I always said about that section that does not give a single source that links together the events presented, that present them as one and the same phenomenon. It is only in that section, under the wikipedia label, no less, that this bundling is made. If this is not biased and original research what is it? Another thing, let us take it as another anecdote, the article is about the financial crisis, not the economic crisis, with both their own WP article, OK ? So how come that section has been carefully placed in the first instead of the second? Nobody finds it a bit strange, if not telltale? Nothing political here? Well, maybe I'm seeing things and am...nonsensical. ;-)) --Pgreenfinch (talk) 22:59, 7 March 2009 (UTC)

In addition to exhibiting generally obtuse logic and writing unintelligible sections with self-promoting citations, Pgreenfinch is now removing the information about political instability and linking to another page. He has also spammed my personal talk page. Another person has already informed him about his assorted inappropriate actions, but it doesn't appear he is going to stop violating the policies and the spirit of wikipedia civility. --Nihilozero (talk) 11:33, 8 March 2009 (UTC)

First thing before you talk of inappropriate actions and fancy they are due to others, would be to look at your owns, as I mention in a section below. That you feel embarrrassed that I spot them and therefore try to have me blocked is of course understandable. --Pgreenfinch (talk) 13:08, 8 March 2009 (UTC)

Suggested consequences for the theory

The title of this section "suggests" that the "theory" is not substantiated or confirmed and may not have a place on this page. Citing one online editorial, in German, doesn't seem to qualify it's place. Also... this line: "So, by analogy, a "bubble", e.g. the mortgage crisis and its consequences, is a genuine non-equilibrium event, and has a finite lifetime which needs to be calculated or estimated, as is also true for the recovery-time from any crisis." Seems like this might be original research or something. IDK. But I think the section may need to be moved, removed, or perhaps mentioned only as an external link (although I doubt it would qualify even for that). --Nihilozero (talk) 02:02, 7 March 2009 (UTC)

This section is directly related to the topic, at the difference of the one that tries to manipulate readers about a widespread political unstability. It seems also less original research and above all less POV, actually purely technical and back to basics, no political fancy here. The question of what to do to avoid such events in the future is crucial. In my opinion [8], in case somebody is interested in the real topic (of which I can have some doubt seen the above debate that sustained a diversion of the article towards a political red herring), it is more a matter of anticipation by an independent global financial monitoring body and court applying basic principles, therefore not via new bureaucratic regulations as several regulations were among the causes of what happened (for example the capital adequacy rules incited banks to develop securitization). Anyway this section should be reestablished and developped. Well, its title could be improved so that the section be less self-serving and open to all theoretical evolution that the crisis starts to induce, something like "Theoretical research induced by the crisis). Its pure suppression is troll and vandalism, to use terms that were used lately (and in that case abusively) by a participant. --Pgreenfinch (talk) 07:54, 7 March 2009 (UTC)

Proposed theoretical solutions to the financial crisis is one thing, but this poorly titled section which cited only one opinion piece (written in German), is not worthy of this Wikipedia article. Additionally... it seems like the contributor may have introduced some esoteric original research/opinion that may or may not have made any sense to anyone other than the author. I see no reason, however, why opinions of prominent and noteworthy economists or think tanks shouldn't be included in terms of proposed solutions to this crisis. But the section would need a reasonable title and would need to be placed in a reasonable spot. It would also have to be written in sensible language while giving equitable space to opposed schools of economic thought. --Nihilozero (talk) 10:02, 7 March 2009 (UTC)

Nihilozero, I agree with you. Pgreenfinch, please stop spamming us with stuff writen by Peter Greenfinch. WAS 4.250 (talk) 17:10, 7 March 2009 (UTC)

Disambiguation, Merger, Categorization, General clean-up, etc.

I like this page, but there are several pages of a very similar nature with varying degrees of difference -- ranging from Late 2000's recession, to analysis of individual months in the market and economy. Something needs to be done to differentiate these pages and/or make them work together. Better categorization, well-orchestrated mergers, and a general linking of the pages is something that needs to be done to increase the usefulness of these articles. I don't have the greatest editing/coding skills for this sort of thing, but perhaps some others have the skills and ideas about how to make this overall topic more streamlined? --Nihilozero (talk) 23:06, 7 March 2009 (UTC)

Your duplication of the same political thesis in two articles is not exactly cleaning up and streamlining. Well, I had to correct it, which you should have done when realizing that I was right about the OT. But maybe I will be as usual accused of vandalism for correcting one. On the other hand the deletion that I sustained [9] of a politicized article has contributed to such clarification. --Pgreenfinch (talk) 11:17, 8 March 2009 (UTC)

Pgreenfinch, stop being a vandal and a troll. Please don't spam my talk page again. Your added sections have been self-promoting and unintelligible. Your obtuseness about the economic protests and political instability has been tiresome, and your political POV has become obvious when trying to add links to "Obama's bear market" and so on. Information that is relevant to similar articles can be cross-posted and, since these pages are not yet well organized or differentiated, people should find similar information when searching for "Depression 2.0" or "Greater Depression" (which currently link to different but similar articles). And this brings up the broader issue to other, less obnoxious, editors... these pages need to be streamlined. Several articles could probably be melded into one. I would suggest using the title "Greater Depression" or "Depression 2.0" because, although it's not been officially classified as a depression proper yet, those seem to be the terms that many people are using to refer to the current economic crisis. And the fact that it has not been formally classified as a depression yet could be mentioned in the opening remarks of the article. The point is... those are the common expressions and that's what people are likely to be looking for. Also, one of these titles would prevent us from having to update all the page titles as we enter into a new decade and the economic situation unfolds. There's a 2008-2009 page, this 2007-2009 page, a Late 2000's recession page, and pages dealing with individual months and individual issues related to this crisis. Streamlining is essential. --Nihilozero (talk) 12:08, 8 March 2009 (UTC)

About what you call "spam", I would not insist on your wikilink bombing and also your attempt to suppress one of my answers to another participant in the debate. Your interpretation about my opposition to the "Obama bear market" article, a biased article which has been consensually deleted as I proposed precisely because it was POV, is really staggering. All this makes me wonder if you are not a bit nervous that I don't gobble the attempts to politicize wikipedia. About your strange "crossposting" arguments in favor or maintening an invasive spin while bizarrely accusing somebody else of manipulation, I recommend you again to verify how logical they are by digging into the non sequitur article. As for the article mergers, as long as it is not a way to play on semantics, which I hope is not your intention (everything should be done to avoid representativeness heuristic, framing (economics) and linguistic confusions), why not. I'm ready to enter such debates, you know how I like those exchanges, even if you find them tiresome when they don't match your views. BTW, personnally I would use another word than tiresome when I face insults, accusations and ad hominem just because I try to avoid that personal opinions get wikipedia-certified and exploited by other media that might state then: "wikipedia declares that we are in a world of political instability".--Pgreenfinch (talk) 12:59, 8 March 2009 (UTC)

If I misread your position on the so-called "Obama Bear Market" article, I stand corrrected. This is something that I am able to do. But the opposite would seem par for the course in your book. Your ridiculous self-promoting sections & self-referenced citations, vandalism, inability to recognize (or at least use) simple logic, spamming, and general trolling... are still the norm for you. Hopefully, I will be able to resist allowing you to steal any more of my time. --76.204.95.45 (talk) 17:15, 8 March 2009 (UTC)

One last thing... what you repeatedly fail to recognize is that the economic crisis has been politicized in the actual confirmed reality of real life outside of wikipedia -- and this in itself is noteworthy when people take to the streets and politically act because of it. If as you put it, "wikipedia declares that we are in a world of political instability," that would be a simple truth. It is not an incredibly bold statement in a world of war, famine, economic crisis, riots, protests, etc., to maintain that that this is a world of political instability (at least to some degree in some locales). It's like saying, "people have emotions" or "the weather changes and it sometimes storms." It's not a bold opinionated statement, it's a verifiable truth. If you want to argue extent and degree, that's fine. But that's not even what's stated in the section you vandalize after we have tried to explain it to you. What's stated is this: there is political instability related to the financial crisis -- and this is a confirmed and cited reality as people are overtly protesting (and more) in response to the economic crisis. It's basic cause and effect -- very simple to understand for most people. Also... by not recognizing the similarities and related nature of the terms "economic" and "financial" you are looking absolutely ridiculous as you keep mentioning the supposed "non sequitur" which actually isn't a non sequitur at all. And now, hopefully, I will be able to resist allowing you to troll away any more of my time. --76.204.95.45 (talk) 17:51, 8 March 2009 (UTC)

You are going on with some insults, your usual generalization from a few events, and pure interpretations, the only thing new is a few generalities that seems, sorry to say, a bit out of context. I didn't buy this and still don't buy it. Good night, I don't want to "steal your time". --Pgreenfinch (talk) 23:13, 8 March 2009 (UTC)

The biggest issue I have with this article is this: It is written from a purely American (that is the United States of America) point of view and furthermore one that is anti-establishment. It puts the blame of the financial woes of wealthy and middleclass of the G20 squarely on America and its "crooked" or "stupid" financial institutions and government. It should be merged and it does not follow the proper policies here on Wiki: see Recentism [[10]]. In defense of my argument where is the financial crisis of 2001 or 1983? This is recent and slanted anti-establishment and full of both anti-American and European sentiment. The best place for this is under the year events for the 2000's decade or as a note in the year entry for 2008 or 2009. (Svenelven (talk) 17:57, 10 November 2009 (UTC))

Cause/Sub-Prime Lending section weaselness

The paragraphs after the weasel words "some believe" are unencyclopedic. The cited NYT article isn't an appropriate reference (it was a prediction and doesn't necessarily describe this particular crisis). The first sentence demonstrates a misunderstanding; Fannie and Freddie don't originate loans. There is no reference for the claims about CRA, which the editor conflates with Fannie and Freddie.

In fact, these statements contradict the CRA article. The "tinkering", as the editor put it, in 1995 was deregulation, which allowed lenders to claim they were in compliance by lending to projects only peripherally related to the under-served.

Then we have more weasality:

It is felt by many that this was done to help a stagnated home ownership [...] The result was a push by the administration for greater investment, by financial institutions, into riskier loans.

The editor then misleads with the statement:

[...] from 1993 to 1998 it was shown that $467 billion of mortgage credit poured out of CRA-covered lenders

...and doesn't establish why this is relevant, or provide any context. "CRA-covered" means every FDIC insured bank.

Ben Bernanke and Sheila Baer (chair of the FDIC) both call what this editor is trying to suggest a "myth" (both are Republican, as well). I took this from the references in the CRA article.

According to the Fed, in 2006 84% of sub-prime mortgages were issued by institutions not covered by the CRA. Here is a very readable article from McClatchy on the subject. Additionally, foreclosure filings rose much faster among middle-income and higher-income home buyers than among the poor.

I'm disturbed that people find the narrative of poor (and minority) people causing the crisis attractive. It just isn't true.

Anyway, this subsection should be scrapped. I would just go ahead and do it, but I've seen the edit wars in this article's history. I'm just hoping that reason will prevail and we can improve this important article without a fight. demonburrito (talk) 21:31, 8 March 2009 (UTC)

That section mistakingly conflates increasing loans to the poor and middle class with lowering criteria for loans. The banks pleaded for this to be done. The government sold it to the people with rhetoric about helping the poor and middle class and turning America into an "ownership society". Short term financial gain by the financial sector and short term political gains by politicians and bubble mentality by home buyers brought us to the mess we are in. WAS 4.250 (talk) 20:32, 9 March 2009 (UTC)

Well, I won't say whether or not I agree with all of your statements. What we can say, objectively, is that the section contains factual errors, has no proper references, and is not encyclopedic. In addition, imho, it is WP:FRINGE and not WP:NPOV. I suspect that if we simply insist on references, and follow the fringe and npov guidelines, all will be well.

While I don't want to talk about my political opinions on a current event, I will take your comment to be supportive of replacing the section. In case anybody wants to weigh in, my plan is to wait until tomorrow to put a neutrality template on the section, and then 72 after scrap it. demonburrito (talk) 21:52, 9 March 2009 (UTC)

The section does have proper sources. But it is poorly written. Dead-tree sources are proper sources - they do not have to be online. For non-BLP claims, it is considered best at Wikipedia not to throw away things just because they need fixing. That section needs to be improved, not thrown away. WAS 4.250 (talk) 00:43, 10 March 2009 (UTC)

Umm... Thanks for the tips? I don't think I was ever under the impression that "dead-tree" sources were improper, and I don't think there is anything in my comments that would suggest that. The reference is improper, imo, because of the reasons I stated at the top of this thread; ie, its bearing on the "Crisis of 2007-2009" and the claims made in the section is not clear.

I think we are having a semantic difficulty with "scrap". Sorry if I was unclear. The section Causes->Sub-Prime Lending will remain. The three paragraphs of fringe and weasel words will not. One paragraph noting the theory, along with a link to the CRA article will suffice to give it due weight. demonburrito (talk) 01:09, 10 March 2009 (UTC)

Sounds about right. Improve the section your way, and I'll modify that if I see fit and so on. You know ... the wiki way. WAS 4.250 (talk) 01:27, 10 March 2009 (UTC)

AIG Crisis & Systemic Risk

Aig and the news about AIG and need to save AIG to prevent systemic risk played a larger role in the overall crisis as the subprime and general housing bubble deflation were not adequate to case the more general crisis. That general crisis occurred with news of AIG and need to prevent systemic risk via AIG bailout; this news escalated the crisis substantially (along with Lehman Bros failure) to cause a global pullback in spending; that global pullback is the real cause of the crisis; and so the overall crisis went through stages, subprime, gernal housing, 3) gold % oil price spikes , 4) Fed Res squeezing monetary supply to stop gold & oil price spikes, % liquidity crisis from Fed Res squeezing causing Lehman Bros failure and AIG failure but for federal bailout, THEN 5) the global pullback in spending. In that order ...

More details on AIG Crisis at Paulson & AIG Loan Info

/s/ Willy, Market Guru 69.121.221.97 (talk) 06:51, 19 April 2009 (UTC)

Merger proposal

ok, who in their right mind think that it's clever to have this and Global financial crisis of 2008–2009 presented to the average reader? I read and edit wikipedia for years and I can't see the differences unless I read several pages for Unicorn's sakes. --AaThinker (talk) 22:50, 31 March 2009 (UTC)

Ok, let's see

This is a mess gentlemen, however "distinct" you may think they are technically. The spirit of an encyclopedia in being defined in distinct sections is being violated. --AaThinker (talk) 22:55, 31 March 2009 (UTC)

This could only remain in its current form and saved only if it used a clever portal or disambiguation page. --AaThinker (talk) 22:56, 31 March 2009 (UTC)

Yeah. It's a mess. Current consensus is apparently to slowly evolve our way forward as the crisis unfolds. Even the right name to call this crisis has not been determined by the world community. Things will become clear over the next 12 months. Don't rush it. In the meantime, feel free to reduce redundancy in increments. WAS 4.250 (talk) 21:55, 1 April 2009 (UTC)

Does anyone know how to make a sandbox where we could all work on combining these articles? --Nihilozero (talk) 15:40, 6 April 2009 (UTC)

I think this article has stumbled into a very important meta-Wikipedia conceptual stickiness. It's probably nobody's fault. The only way out of the conundrum ("economic event of year xxxx") may have to be new and cutting-edge. Mydogtrouble (talk) 19:34, 4 November 2009 (UTC)

One makes a sandbox by editing something like: Talk:Financial crisis of 2007–2009/sandbox. WAS 4.250 (talk) 21:52, 6 April 2009 (UTC)

Let us be practical. The first immediate step is to get rid of the cross-pollution between the financial and economic articles. Those two sides are linked (although not fully) but each has its own aspects, so better make them clear and not drown them with indirect considerations. A pair of scissors, some wikilinks, and bingo, things get clearer to prepare a merger beween the various financial articles that also overlap. Of course, some subarticles (by financial and economic sectors, by regions or countries...) can be built or developped. Oh, another thing, but that might be developped in one of those subarticles that would deal to the role played by the overleverage produced by the lax US monetary policy, that seems to be the common mother of the economic (personal debt, foreign trade imbalances, commodity prices...) and financial excesses (securitization, equity funds, derivatives and hedge funds...) that led to the twin crises. --Pgreenfinch (talk) 08:16, 2 April 2009 (UTC)

There seems to be a tendency for Great Recession as a name for the whole thing. IMF, for example--Alex1011 (talk) 08:48, 25 May 2009 (UTC)

Can those of you who have been editing this article for longer help me understand how you would like this article to differ from the subprime mortgage crisis article? I've been taking some of the topics in there and including within the framework you guys established here for the most part. You could probably merge this article into that one without losing a step. Most of the edits I've made over the past few weeks have essentially made this more like the subprime article. Are there particular sections here you like a lot that we could put into the other article and then essentially delete this one? I like the section here on the weaknesses in the capitalist system that contributed to the crisis, which is not in the other. The remainder is now pretty similar.Farcaster (talk) 09:01, 16 June 2009 (UTC)

I suggest merging and re-directing this article to Subprime mortgage crisis. We can delete the stub Global Economic Crisis of 2007-2009.Farcaster (talk) 02:16, 19 July 2009 (UTC)

THe proposed merger should certainly take place, but the "Subprime mortgage crisis" is just an aspect of it (and primarily a US one at that), so it certainly ought not to be the merger target. --John Maynard Friedman (talk) 11:29, 27 August 2009 (UTC)

Merge Global financial crisis of 2008–2009 and Financial crisis of 2007–2010 into Global financial crisis of 2008–2009; but don't merge either of them to Late 2000s recession. Financial crisis is a part of recession. They are not the same thing. Also, Late 2000s recession article is already too long. Netrat (talk) 15:36, 15 September 2009 (UTC)

Global political effects

Whatever the Europe bashers would have wished for, the yesterday Europarliament elcetions has shown political stability. European citizens are not the wild cards that some purported experts who see things from the outside would pretend, a thesis on which a fanciful section of this article was built. In fact the global political effects of the crisis are until now microscopic:

A very, very slow advance towards global democratic governance (a thing I admit I wish for, but, as I admit also, is still far from taking place).
very isolated political troubles (a thing that might disappoint some activists, but that they might prefer not to see, which would explain the reaction of denial when seeing that I deleted this POV, OR, OT and redundant section)

More generally, until now it seems that there is not enough food to create an article on the Global political effects of the crisis. But it does not mean that nobody should try. At least a specific article would help to avoid polluting this one with half-baked speculations. There is even less reason, except maybe some activist agenda, to insist in pushing - into an already overlong (and opinion-plagued) article about financial aspect - an out of topic and highly speculative section, which already invades two other articles. I hope the propagandists would stop that POV harassment. --Pgreenfinch (talk) 10:07, 8 June 2009 (UTC)

The Political Instability section was heavily discussed previously. Several people contributed to the section which has several citations from serious incidents all over the world. See: http://wiki.alquds.edu/?query=Talk:Financial_crisis_of_2007%E2%80%932009/Archive_1#What_about_the_Riots_in_Europe.3F And while Pgreenfinch talks about an activist agenda, he has made little secret of the fact that he is an international banking consultant. The fact is... there are real world political effects directly brought about because of this financial crisis and they deserve to be mentioned on this page (as well as on other related pages until they can be sorted out and/or consolidated). --Nihilozero (talk) 04:23, 11 June 2009 (UTC)

I see that you are still in the non sequitur mode. It is not because a few people share your views and support your POV in thios article that it has any sense or basis. I'm surprised that the fact that I have some technical competence should demonize me and forbid me to denounce fake arguments as well as out of topic things. On the other hand that you declare yourself an activist put your interpretations in perspective. I explained many time and extensively why such presentations were speculative and illusive. Since then, all events (and lack of them!) confirm what I said. WP is not a place for propaganda, you should realize that. --Pgreenfinch (talk) 07:50, 11 June 2009 (UTC)

Non sequitar mode? A)There is a financial crisis in regard to the world economy --> B)There are various (cited) political consequences directly related to that crisis. The only non sequitar is when you bring up your supposed technical competence. Hiding the political consequences of this financial crisis does a disservice to the readers of wikipedia and all the people who built the heavily cited section. It is a shame that all the reasonable debate about this section can get thrown out the window with a quick delete by someone who obviously has an agenda which revolves around hiding the real world consequences of, and the reactions to, this crisis. --Nihilozero (talk) 12:03, 11 June 2009 (UTC)

Now the generalization and framing mode. Presenting mice as elephants. And some added personal attribution and demonization. Wikipedia is not made for that. Leaving you ranting. --Pgreenfinch (talk) 12:51, 11 June 2009 (UTC)

YOU are the one who is deciding for everyone that the cited incidents are "mice" and not worth mentioning -- and so you arbitrarily deleted the section. This despite contributions to the section by multiple people citing several sources -- and after much discussion on the previous talk page. --Nihilozero (talk) 20:53, 11 June 2009 (UTC)

Arranging a patchwork of speculative sources built on a few incidents into a "big" story convinced only you and those who share your POV. Events proved those speculations to be wrong. The "radical activist" stuff did not hold water. C'est la vie. --Pgreenfinch (talk) 22:18, 11 June 2009 (UTC)

The notable events cited speak for themselves (of course now they are a little more buried in the archives). Wikipedia is not supposed to be present articles about the economy merely from the banker's and the government's POV. --Nihilozero (talk) 04:03, 12 June 2009 (UTC)

I will state it in a more general way, WP is not supposed to frame events and to manipulate readers. That is what you don't seem to grasp. --Pgreenfinch (talk) 06:38, 12 June 2009 (UTC)

You seem to think that fully informing people with relevant information is manipulating them and, in a way, I suppose it is. --Nihilozero (talk) 01:13, 13 June 2009 (UTC)

Being of the curious type, I would be interested that you explain why a hardened radical activist embraces the usual Europe bashing by anglosaxon medias and agencies. Naivety or opportunism? Anyway, Wikipedia is not a conduit for manipulation, propagandism and entryism. Specifically via plain lies and deliberate malicious interpretations, as the ensuing events / non events have shown. --Pgreenfinch (talk) 07:41, 13 June 2009 (UTC)

I would be interested in knowing why an "ex-finance and banking executive and international consultant" would not want the heavily cited political repercussions of the banking industry to be revealed. You have some nerve accusing me of being a liar when you so readily hide the facts. It's sad that wikipedia editors can't keep up with de-constructive acts of people who will not abide by the general consensus of the discussion page and the work that several people put into building an interesting, relevant, and informative section. --Nihilozero (talk) 04:37, 15 June 2009 (UTC)

Hold your horses, pal, spare us the Derrida philosophy, and also the ad'hominem, that divert the question I asked. The current situation just shows that you were the v.i.c.t.i.m. of blatant lies and decoys (as current events show) by medias and agencies that have their agenda. I was just asking why you fell for them and took the bandwagon. Strange for an activist that would normally be more suspicious of such outfits. I like to understand puzzles. To say that you had no intention to enlighten us about it would have been enough, without the superfluous rant. Oh, btw, if there is one day a real global political instability due to the financial crisis, don't hesitate to start an article. I might even cooperate in the sorting between manipulative and reliable sources. --Pgreenfinch (talk) 08:42, 15 June 2009 (UTC)

If you weren't intending to call me a liar that's one thing, but you certainly weren't clear about that (as you often aren't). And in any case... you haven't offered up much of an apology for your poorly chosen words. As for the serious political consequences... destabilization has occurred undoubtedly to a greater or lesser extent in various locales. Undoubtedly so. You just don't want to hear about it or allow others to hear about it. And more could be said about the ongoing political climate created by this economic disaster. But why would people want to keep contributing to pages when apologist shills keep deleting their work? And you speak of "ad hominem attacks" when it is you who bring up my radical perspective in relation to your "ex-finance and banking executive and international consultant" views. So if you want to write off millions in the streets protesting overtly with signs about the economy, or any number of other serious protests -- to say nothing about the daily CIA briefing given daily to the president about political instability related to the financial crisis --( http://wiki.alquds.edu/?query=Talk:Financial_crisis_of_2007%E2%80%932009/Archive_1#What_about_the_Riots_in_Europe.3F ) I believe you are being obtuse, naive, and/or deceptive. You don't want balance, you want only your perspective (or lack of it) to be seen. And that is very much against the spirit of wikipedia in my opinion. I will leave it to the other editors to review the archived discussion page (while also considering similar ongoing incidents in the world). Others agreed with me while adding to the section which you keep deleting. How anyone could think that there was not political destabilization related to this is beyond me. The cited incidents clearly show otherwise. --Nihilozero (talk) 02:56, 16 June 2009 (UTC)

All I see is added stability: European elections results, tiny (but charming) Iceland asking to join the Euro, French (ritual as I explained) monthly demonstration down to a trickle, nothing about Greece in the radar, monetary issue to be solved in (small) Latvia... To create a big story about a purported political global destabilization from a patchwork of second rate events is what is beyond me, as it was obvious from the start that it was fitting some medias and "counsellors" agenda. They might not be to proud now, but don't worry, they will find new pretences at Europe bashing, and maybe you will be more wary then. As I said you were victimized, the lies were not your making, I can heartily express regret if what I wrote could be understood differently. You were trapped into a dead end, by what seemed an opportunity to back your visions. C'est la vie, as I said. This would have been only your problem if you and those that share your POV did not try to force wikipedia in that dead end. But less us not cry over spilled milk. --Pgreenfinch (talk) 08:26, 16 June 2009 (UTC)

Possible Vandalism

I'm just an economics student so I may not be up on all the lingo but I think this is vandalism "Impose haircuts on bondholders and counterparties prior to using taxpayer money in bailouts." cause I don't know I won't touch it but if it is lingo maybe it should be changed in guidance with the plain english policy of wikipedia.--AresAndEnyo (talk) 07:53, 16 June 2009 (UTC)

I don't know policy. I linked to the wikipedia article on Haircut_(finance). --Lightenoughtotravel (talk) 14:55, 4 July 2009 (UTC)

Meeting of September 18, 2008

I don't find any mention of the meeting between the Federal Reserve Bank, the US Treasury, and the US Congress, which took place on September 18, 2008. Not only in this article, but in any on Wikipedia. I also do not see any mention of the news the next day, where US President Bush said the people responsible would be prosecuted. If it's not the most important days in the post modern US history, it has to be the most bizarre.

Is there a reason this information is no where to be found? Not sure this page is the correct place to add it, because this stuff just seems a mess. Would a time line of events be appropriate for this? MBThomason (talk) 19:31, 24 June 2009 (UTC)

That was a big day; would have paid alot to be a fly on that wall! Drop it into the timeline article. You can find it through the template.Farcaster (talk) 20:48, 24 June 2009 (UTC)

Do you have any reference to a reliable source which documents this alleged meeting and threat of prosecution? JRSpriggs (talk) 20:50, 24 June 2009 (UTC)

See 'Meltdown:The end of the age of greed' by Paul Mason, published by Verso. Chapter 1 Midtown Meltdown will shed some light on this meeting. TimMassey (talk) 21:36, 30 August 2009 (UTC)

I would not take seriously any source which talks about an "age of greed". Greed is a universal human attribute which, like the force of gravity, is always present. See Meltdown: A Free-Market Look at Why the Stock Market Collapsed, the Economy Tanked, and Government Bailouts Will Make Things Worse. JRSpriggs (talk) 14:58, 1 September 2009 (UTC)

Did Oil Price Volatility Cause the Financial Crisis?

Regarding addition of wiki reference link to causes section (link below). Agreed analysis is unusual - but unlike other speculations on cause given appears to be backed up by data. Accept also that wiki in most cases not a reliable source - but this might be a special case. Why ? Because the analysis makes sense and may just be right. Suggest read the cut and paste summary below and think about it viz....

Summary: A cause for the financial crisis is described that differs from the emerging conventional wisdom. It is proposed that a shift in interest occurred within the global financial industry in the mid-2000s that altered incentives from protecting shareholders to promoting self-interested "cashing-out". The underlying reason for this shift is suggested to be increasing volatility in the price of oil and its downstream effects on investment risk.

Novel data is provided to demonstrate that a distinct series of pulsed spikes in oil price volatility initiated in the mid to early 2000s (see Figure 9). The price shock of 2008, when oil peaked at over $140 a barrel, is shown not to be an isolated event. Instead, the oil shock of 2008 is the most recent of a series of 6 spikes in oil price instability that initiated 5 to 6 years ago. This multi-year pattern of volatility appears to be unprecedented, is ongoing and may be a natural process that results from being on the down-slope of the production curve since "Peak Oil".

Importantly, the 6 individual spikes in oil price variance each precede 6 corresponding pulses in volatility in the inflation rate, the S&P 500 index and the price of gold - indices strongly tied to the confidence of financial professionals to make accurate predictions about investment risk. It is proposed as evidence consolidated that growing unpredictability in oil-price was causing increasing uncertainty to investment outcomes, the necessary and sufficient conditions emerged for:

1) Expansion of the "shadow banking system" and

2) Unregulated value extraction (i.e. looting) from this sequestered pool of capital.

Finally, it will be shown that the "Black Tuesday" stock market crash of October 1987 could have provided the first unequivocal demonstration that a spike in oil price variance was sufficient in its own right to induce a sudden increase in investment uncertainty (see Figure 14). Lessons learned on oil volatility shocks from "Black Tuesday" are suggested to have guided the avaricious response of the global financial industry to the present crisis. edit —Preceding unsigned comment added by

http://ideas.wikia.com/wiki/Volatility_in_the_Price_of_Oil_since_Hubbert%27s_Peak_and_Investment_Risk

68.59.17.174 (talk) 01:14, 6 July 2009 (UTC)

As a general rule, we shouldn't be judging that material from a questionable source is particularly convincing. If the material is convincing, then journalists, economists, or someone should pick it up, investigate and publish in a recognized reliable source. Until then, I don't think it's reasonable to include this. CRETOG8(t/c) 06:28, 6 July 2009 (UTC)

As if on cue, this mornings article in the NYTimes (07/06/09)..."Swings in Price of Oil Hobble Forecasting". Dots not quite connected, but a "reliable" citation source may be on its way. Why not beat them to the punch ?Gourdie (talk) 14:44, 6 July 2009 (UTC)

Hello, that's not how Wikipedia works. It's the exact opposite actually. We need a reliable source _first_, then we can include the information. Also, assuming this hypothesis turns out to be true, keep in mind that a reliable source will be included in the article, not the article you are linking as Wikia is not reliable, regardless if then info is correct or not. --McSly (talk) 16:55, 6 July 2009 (UTC)

Hi, "...keep in mind that a reliable source will be included in the article". What if it appeared likely to a reasonable observer that the "reliable source" had lifted original ideas, data and/or analysis (uncredited) from the original unreliable source? Gourdie (talk) 16:04, 7 July 2009 (UTC)

Then the reasonable observer is free to contact the author of the Wikia article and the author is free to do whatever they like with the information. None of this has anything to do with Wikipedia.--McSly (talk) 16:47, 7 July 2009 (UTC)

Thanks McSly, I get it. Not that it applies in this case (yet) and please don't take this the wrong way, but as a general principle it is troubling that you appear to be suggesting that a plagiarized source in a "reliable publication" will be given precedence over a primary source. My thought is that in reality Wikipedia, prospectively, may not work in such a hard and fast manner.

Multiple issue tag

TONE: (1)The lead is too ambiguous.

Neutrality & original research: Multiple factual problems right off the bat:

Problem statements

(2)"In the years leading up to the start of the crisis in 2007, high consumption and low savings rates in the U.S. contributed to significant amounts of foreign money flowing into the U.S. from fast-growing economies in Asia and oil-producing countries. This inflow of funds combined with low U.S. interest rates from 2002-2004 resulted in easy credit conditions, which fueled both housing and credit bubbles."

What? Wall Street created a market for easy credit in the US not foreign money...they bought every loan made...there were 150-200 independent mortgage writers operating without license.

This contradicts the Subprime mortgage crisis article Scribner (talk) 02:10, 13 July 2009 (UTC)

(3)"Major U.S. investment banks and government sponsored enterprises like Fannie Mae played an important role in the expansion of higher-risk lending."

Wholesale POV. By comparison, the GSE's would be about 15% as culpable as Wall Street but you're (Farcaster) lumping them both together in with original research.

(4)"The U.S. Congress allowed the self-regulation of the derivatives market."

Greenspan fought for an unregulated derivatives market since 1997, at least. He fought against Brooksley Born in 1997 who urged regulation. Phil Gramm's influence in the "Commodity Futures Modernization Act of 2000" gets the credit in the real world, not "U.S. Congress allowed..."

Some statements in this article and the Causes of the Financial Crisis of 2007-2009 directly contradict the main article of the Subprime mortgage crisis...I'll add more this week Scribner (talk) 02:31, 13 July 2009 (UTC)

(5) Whitewashing on causes in the background section of this article Wall Street's entrance and market dominance of subprime lending in 2003 created the "Boom and bust in the housing market" more than interest rates and foreign monies. Key to all of this is the Wall Street rating agencies falsely rating 3.2 trillion in MBS. Scribner (talk) 20:26, 13 July 2009 (UTC)

Please respond to the corresponding numbers below this line

(1) I've added more specificity to the intro. Trying to summarize this is no picnic so give it a shot.Farcaster (talk) 05:03, 14 July 2009 (UTC)
(2) We've covered elsewhere. President Bush and Fed Chair Bernanke talk about how nearly $800 billion of foreign money was coming in at the peak to invest here. It was one of many factors that drove down interest rates and created/took advantage of easy credit conditions. I've simplified the statement to say foreign inflow, rather than discuss trade deficits at that point (e.g., consumption in excess of production). See also Krugman mentioned in (5) below.Farcaster (talk) 05:03, 14 July 2009 (UTC)
(3) The points are all cited. "Important role" is fair, I think. The NYT times article says that Fannie had between 20% and 40% of the market share of subprime MBS issuance. But it also guaranteed $5 trillion in mortgages via MBS of various types. It is the elephant in the room in the mortgage market, so its behavior has indirect effects. See NYT-Pressured to Take More Risk, Fannie Reached Tipping Point There is no definitive source out there on % to blame, so the market share figure is the best we have. There is a separate section in the article for investment banks and for Fannie/Freddie. You could probably make some simple edits here to satisfy yourself as to balance.Farcaster (talk) 05:03, 14 July 2009 (UTC)
(4) Congress passed that law; I'll say that instead.Farcaster (talk) 05:03, 14 July 2009 (UTC)
(5) Multiple sources talk about the importance of foreign funds flowing in; I've used Bush and Bernanke as they summarize it in plain language. It is a big deal; I came to appreciate that late in the game. Here is one from Krugman that supports this view also: Krugman - Revenge of the Glut Farcaster (talk) 05:03, 14 July 2009 (UTC)

Response Wall Street created this market by rating junk investments as AAA. They ran out of the people to lend to, so they kept lowering lending standards in 2004, '05. Yet, the mbs sold to investors were still rated AAA. This crisis was caused by Wall Street's rating agencies, not the investors that got duped into buying junk investments that had been rated AAA. Scribner (talk) 03:06, 24 July 2009 (UTC)

(6) I think there is fair coverage there of the causes. You can appreciate how tough that part is. Please try to edit that to emphasize the investment banks more. Note they appear there in the intro and have their own section.

Scribner if you read the first few paragraphs of Bernanke-Four questions cited you'll see we have an authoritative source for the information you question above. Further, you are well aware that Fannie and Freddie played an important role. Whether that is 15% or 30%, who knows. Fannie's market share in subprime issuance was significant. Fannie and Freddie guarantee nearly $5 trillion in mortgages--almost 50% of all mortgages. You and I both agree their role is far less important than the investment banks, but it is still an important role. The best source on that one is NYT-Pressured to Take More Risk, Fannie Reached Tipping Point Farcaster (talk) 04:30, 13 July 2009 (UTC)

Like I said it's POV original research that omits important and subsequent statements like the following: "One important consequence was a housing boom in the United States, a boom that was fueled in large part by a rapid expansion of mortgage lending. Unfortunately, much of this lending was poorly done, involving, for example, little or no down payment by the borrower or insufficient consideration by the lender of the borrower's ability to make the monthly payments. Lenders may have become careless because they, like many people at the time, expected that house prices would continue to rise..."

Once again, there needs to be consistency in causation among these articles and your edits are neither consistent nor factual. I'm going to post every objection this next week. I don't need to read a long Benaneke speech to know that Wall Street rating agencies falsely rated 3.2 trillion in mbs and that the Wall Street investment banks' speculation was built on the premise that home prices would continue to rise 8-10% a year. This type of information needs to be on the front end of the article. Scribner (talk) 05:07, 13 July 2009 (UTC)

I welcome your help in editing here. The quotes you mention actually have a corresponding section in the article. You and I, plus our resident Libertarian JR Spriggs, are the main editors recently. I think your comments above are more combative than they need to be. I think you will find the information cited. Plus, I know you appreciate the challenge of describing this from a variety of perspectives. I think between the three of us we can build a solid cause article. However, we should avoid picking our pet cause. You saw the recent data in the WSJ that questioned whether it was ARM's or negative equity that were the main driver of foreclosures in 2008, so the ARM argument should be balanced. As the crisis has progressed, defaults are now across the spectrum of loans. I also have come to think about this (as described in the first paragraph) that we have a series of factors that made the markets fragile and a series of trigger events. Bernanke argues that the mortgage market was such a trigger, part of a broader set of problems. Please read the two articles above that I mentioned, plus the "Giant Pool of Money" by NPR, which has its own section here.Farcaster (talk) 05:20, 13 July 2009 (UTC)

Bernanke disagrees with you. See the citation below. This is the conventional wisdom now, not controversial really anymore. Subprime article has similar statements in the background section near the beginning. (unsigned)

I've started numbering the objections. As mentioned, I'll read through the article this week and continue listing the objections. If need be I'll rewrite the objectionable edits to match the main article(s), and I'll rewrite lead if no one beats me to the task. Scribner (talk) 05:49, 13 July 2009 (UTC)

Looking through the article, there are very few statements that are tagged as original research or POV, etc.

It seems to me it might have been better to tag them first then assess whether the entire article required the multiple tags.

Personally I think the header article tags can go while the remaining problematic statements are clearly identified so they can be dealt with.

In my experience, that is the prefered way in wikipedia to proceed. Andysoh (talk) 20:55, 27 September 2009 (UTC)

I agree with you. The content in the subprime mortgage crisis article is very similar (I moved much of that article here a long time ago) so I'll support you in removing the tags.Farcaster (talk) 21:28, 27 September 2009 (UTC)

Leibowitz foreclosures

I'm not sure the Leibowitz bit belongs where it is. In his op-ed he's strictly arguing that negative equity is a strong predictor of foreclosures versus other things, like "liars loans". I find some of his reasoning odd, but maybe it's clearer in his academic paper (working paper here, which I haven't read yet).

Anyway, the issue is that most of the section is talking about causes of the overall crash in the mortgage market--that's mostly attributable to the bubble and MBS's losing value when the bubble burst. That's different than defaults and foreclosures on specific mortgages. I just don't want it to look like Leibowitz is arguing something stronger than he really is-in that editorial he's talking about foreclosures, not the overall mortgage crisis. CRETOG8(t/c) 11:14, 21 July 2009 (UTC)

Appears as though Leibowitz built as study around the obvious. We're omitting facts like 60 percent of subprimes were refinances. Some home buyers never intended on paying off the loan, etc. Terms like 'mortgage equity withdraw' are missing from the article altogether. I guess JRSpriggs likes the study because it appears to claim that those who faithfully pay and build equity are less likely to foreclose. Scribner (talk) 15:48, 21 July 2009 (UTC)

So that we know what we are talking about, the text of the paragraph in dispute is:

Economist Stan Leibowitz argued in the Wall Street Journal that the extent of equity in the home was the key factor in foreclosure, rather than the type of loan, credit worthiness of the borrower, or ability to pay. Although only 12% of homes had negative equity (meaning the property was worth less than the mortgage obligation), they comprised 47% of foreclosures during the second half of 2008. Homeowners with negative equity have less financial incentive to stay in the home.< ref>WSJ Leibowitz - New Evidence On Foreclosure Crisis</ref>

where I have deliberately broken the "ref" so that we can see and use the link here on the talk page. The thrust of his paper appears to be that the problem is not that the borrower has a low credit rating nor that the structure of payments is non-standard; rather the problem is that the down payment is insufficient to protect against a drop in housing prices. Because when the homeowner's equity is wiped out (or nearly so), he cannot refinance and he stands to lose nothing by walking away from the mortgage.
In any case, the fact that you disagree with his conclusion is not a sufficient reason to remove the paragraph which reports a study by a serious economist in a respectable journal (which presumably verified his work). Thus it is a reliable source. JRSpriggs (talk) 18:30, 21 July 2009 (UTC)

It's already mentioned in the article in the background section. The premise of the study's use here is wrong because subprime borrowers didn't have a choice as to what type of loan they got. In fact, I don't recall the numbers but a lot of people that qualified for prime, conventional loans were given ARMs because they generated higher fees. Scribner (talk) 18:43, 21 July 2009 (UTC)

JRS, Two points of response:

I'm not necessarily arguing that this bit shouldn't be included. The paragraph as-is is OK with me. I'm afraid that including it as-is in its current section gives the false impression that Leibowitz is blaming low homeowner equity for the overall crisis. He might do that somewhere else, but not in the WSJ piece. So I would think it needs to be offset a bit more, by drawing attention to the "it's only about foreclosures" or putting it in a different section or something.
As near as I can tell, the research hasn't been published in a peer-reviewed journal. The WSJ opinion page itself isn't a reliable source in all regards because it's opinion with a pretty predictable slant. Leibowitz has a working paper up on SSRN. I could go either way on whether these things altogether make for a WP:RS or not--as long as it's attributed to Leibowitz rather than stated as fact, it's probably OK. CRETOG8(t/c) 18:50, 21 July 2009 (UTC)

Also, the 292% increase in subprime loans (the real bubble) that occurred between 2003 and 2006 were ARMs and never had a chance to get beyond the teaser rates to start building equity. Scribner (talk) 20:59, 21 July 2009 (UTC)

Scribner, don't argue that the essay is wrong. Like it or not, "wrong" doesn't matter here. CRETOG8(t/c) 00:55, 22 July 2009 (UTC)

Yes facts matter. This is an opinion editorial, and it's not to be taken as fact on merit of a notable author or publisher. This a minority of one individual, WP:UNDUE in this case on top of being wrong. Scribner (talk) 05:33, 22 July 2009 (UTC)

Pytel memorandum

I'm not convinced the analysis by Greg Pytel is notable. I can't find it mentioned in any mainstream news reports or other significant sources, although it appears in a number of letter-to-the-editor sections and blogs. As for it being "accepted as an expert evidence and published by the British Parliament House of Commons Treasury Committee", you can see here there are many memorandums which were so accepted and published, many of which appear to be the equivalent of constituent letters, not particularly important expert testimony. It may be Pytel's analysis is significant, but I don't see evidence of it yet. CRETOG8(t/c) 00:09, 23 August 2009 (UTC)

In response:

In which case, as a result of this removal, Wikipedia is banned from mentioning or making any reference to it regardless whether in the future its editor sees evidence that this analysis is "significant". If it is insignificant for Wikipedia now, it is better if it stays that way.

AT

BTW: it is "memoranda" NOT "memorandums" —Preceding unsigned comment added by 81.152.182.139 (talk) 00:26, 23 August 2009 (UTC)

Remove "Predatory lending" section

I think the section of the piece headed "predatory lending" needs to come out. None of the points made in the section are properly referenced.

The John Hawke letter cited in the section does not define predatory lending. In fact, it says "the OCC does not have a formal definition of 'predatory lending'". The reference related to Countrywide bait and switch tactics are wholly unreferenced. The reference regarding the California AG suit against Countrywide doesn't detail the suit at all--the settlement was actually with 42 states, not just CA--and the quotation from the reference relates to subprime loans, not predatory loans. The "friends of Angelo" reference is OK, but it has nothing to do with predatory lending. The Ameriquest reference discusses mortgage fraud, not predatory lending. Unless somebody wants to redo this section with material that can be properly cited, I am going to delete it. Bond Head (talk) 04:04, 30 August 2009 (UTC)

here's a reference to check and incorporate: http://www.washingtonpost.com/wp-dyn/content/article/2008/02/13/AR2008021302783.html "In 2003, during the height of the predatory lending crisis, the OCC invoked a clause from the 1863 National Bank Act to issue formal opinions preempting all state predatory lending laws, thereby rendering them inoperative. The OCC also promulgated new rules that prevented states from enforcing any of their own consumer protection laws against national banks. The federal government's actions were so egregious and so unprecedented that all 50 state attorneys general, and all 50 state banking superintendents, actively fought the new rules." Mulp (talk) 00:34, 31 August 2009 (UTC)

That citation is is an opinion piece by Eliot Spitzer published three weeks before it became public that he is a whore monger. Can you come up with something better than that? Bond Head (talk) 17:40, 15 September 2009 (UTC)

Although the section appears to have gotten proper references for some sentences, there are still some quite major un-cited assertions made that either need citations or need to come out. BaseTurnComplete (talk) 21:27, 18 November 2009 (UTC)

1863 National Bank Act

related link to crisis? 1863 National Bank Act see http://www.washingtonpost.com/wp-dyn/content/article/2008/02/13/AR2008021302783.html Mulp (talk) 00:34, 31 August 2009 (UTC)

So Wikipedia has a total different way to identify recession?

Absolutely every single economist defines a recession when GDP falls for two quarters. The Venezuelan GDP fell 1.0% last month and is already in recession while the Brazilian GDP fell for over four quarters in a row but they are an economy in "acceleration" give me a break. There's alot of double standards here and Wikipedia showed to be very anti-Venezuelan. Therefore I'm just going to stop this nonsense by deleting the image unless Wikipedia changes the colour of the Venezuelan map over that incoherent map. Thanks. 201.248.69.228 (talk) 21:41, 12 September 2009 (UTC)

Real Estate Crisis

More than only a financial crisis, is a real estate crisis, followed by a financial crisis. Real estate is the initial cause of the crisis.--Nopetro (talk) 12:21, 13 September 2009 (UTC)

Real estate was one of the major causes of the crash. But this article is about the economic crisis in general. If you want, you can make it clearer in the article itself about the importance of real estate in the current recession. Nonamer98 (talk) 16:37, 7 November 2009 (UTC)

Actually, Late-2000s recession is the article about the crisis in general. This article is just about the financial aspects — the virtual disappearance of credit. The real estate aspect which started the whole thing is covered by Subprime mortgage crisis as the redirect at Real estate crisis indicates. See also the article on United States housing bubble and the other articles mentioned in the template Template:Financial crisis under the heading "Major dimensions". JRSpriggs (talk) 09:16, 9 November 2009 (UTC)

Multiple issue tag

Items 1, 2, 3 and 5 are still a problem. Scribner (talk) 01:18, 8 November 2009 (UTC)

Multiple issue tags

Can some other editors please weigh in on the banners in this article? I see no need for them, except perhaps for the global perspective part. Other than Scribner, who has issues with this article and what are those issues? Scribner's points have been refuted long ago.Farcaster (talk) 15:23, 10 November 2009 (UTC)

The tags have been in place since July and the majority of the issues still haven't been addressed. Additionally, another editor has tagged this article with a "Doesn't represent World view". There needs to be a determination of whether or not this article is specific to the U.S. or the world economy. Scribner (talk) 17:59, 10 November 2009 (UTC)

Why is this article still here? It represents a United States worldview and furthermore it is that of anti-establishment in slant. Wiki's Recentism rules would apply as it lays blame on Wall street in the US as the source of the trouble and blames lack of regulation, this may not hold up to future scrutiny. Also if this is such a distinct article, where is the Financial crises of 1975 (oil shocks), 1983 (recession), 1998 (recession) and 2001 (terrorism)? At best this should be added to this page Global Recession This article has gained ground as a movement for political activism, under the guise of impartial, freely accessible, facts and knowledge. It needs to be combined somewhere else and should cease to be as an individual article. (Svenelven (talk) 00:09, 11 November 2009 (UTC))

Update?

However, as of April 2009, many of the proposed solutions have not yet been implemented. These include:

It is currently 12:39, 11 November 2009 (UTC). Viriditas (talk) 12:39, 11 November 2009 (UTC)

As far as I can see, none of them have been implemented as of 11 November 2009. Which is quite fortunate since they would hurt the economy. JRSpriggs (talk) 10:35, 12 November 2009 (UTC)

Maiden Lane transactions

See Talk:Maiden Lane LLC#Merge discussion for a proposal to merge Maiden Lane LLC, Maiden Lane II LLC, and Maiden Lane III LLC into a new article, called Maiden Lane transactions (the NY Fed term for the three transactions). Thanks. 66.167.48.80 (talk) 20:20, 17 November 2009 (UTC)

70 Trillion as a cause, POV and original research

I've removed the sentence in italics from the lead for the following reasons: 70 trillion dollars did not cause Wall Street to buy subprimes, blend tranches, incorrectly rate them as AAA and sell them to the world. I realize that's what Bernanke is pushing. That's fine, but don't put it in the lead as a statement of fact as one of the major causes. Others like Krugman for one and me for another, disagree. Deregulation and failed regulation caused the subprime crisis, not the amount of money looking for investments. Krugman's on record for disagreeing.

Financial innovation and easy credit conditions, among other factors, connected the nearly $70 trillion global fixed income investment pool to the housing markets of developed nations significantly for the first time in the early 2000s, resulting in a massive housing bubble. Scribner (talk) 06:12, 10 November 2009 (UTC)

Tough to make an OR claim when Bernanke, Krugman and NPR all support the idea. Whether you agree or not is irrelevant. Here's Krugman blaming the flow of capital: Krugman-Revenge of the Glut Krugman actually says in his book (The Return of Depression Economics) that it wasn't deregulation as much as it was failure to regulate the shadow banking system in the first place. It's on page 162, quoted in the section on the shadow banking system. Here's the Giant Pool of money article (which won the Peabody) that quotes the $70 trillion amount and puts forth the thesis that I included in the summary. NPR The Giant Pool of Money I've reverted your stuff (again). Please see if you can get consensus before you change the lead in; might be education for you about this community.Farcaster (talk) 06:57, 10 November 2009 (UTC)

From your link to Krugman's Op-ed: "Well, you could say that American bankers, empowered by a quarter-century of deregulatory zeal, led the world in finding sophisticated ways to enrich themselves by hiding risk and fooling investors." Obviously, a reference to the investment banks hiding risk in ratings and fooling investors with ratings.

and: "failure to regulate the shadow banking system in the first place." is a reference to Greenspan allowing self-regulation of investment banks.

The 70 trillion wasn't the cause or even one of the causes. It may be a reason the bubble grew as large as it did, however. Scribner (talk) 08:06, 10 November 2009 (UTC)

Thanks for some acknowledgment of what I'm saying. Here is Krugman's quote: "Yet the crisis for the most part hasn't involved problems with deregulated institutions that took new risks. Instead, it has involved risks taken by institutions that were never regulated in the first place." He does assign some blame to deregulation, but he says that effect was small compared to not regulating the investment banks. "anything that does what a bank does...should be regulated like a bank." He said this failure was "the core of what happened." He's done some op eds where he blames certain deregulatory actions (like the St. Germain Act - "Reagan did it" but I think his book is a more developed argument.Farcaster (talk) 15:18, 10 November 2009 (UTC)

I think you're missing the point, if you attempt to lay the blame of the subprime crisis at the foot of the 70 trillion in investments, which really blames the consumer, then you'll need to add equal time to Krugman's protest of this idea. I think we differ on blame: you seem to blame the consumer and I blame Wall Street. Most Republicans do blame the government's goals of home ownership. Most Democrats blame Wall Street. Obviously, both are to blame but to varying degrees. Scribner (talk) 21:21, 10 November 2009 (UTC)

Let's just add The deregulation and failed regulation of U.S. financial institutions created an environment of easy credit conditions, higher risk types of loans, such as adjustable rate mortgages, that when combined to the nearly $70 trillion global fixed income investment... and it tells the truth, is congruent with other wiki articles and solves the edit. Scribner (talk) 21:51, 10 November 2009 (UTC)

Lots of ideas in one sentence. Give it a shot and I'll comment here. I suggest this sequence, which is more chronological; summarize as you see fit: a) Fed lowers interest rates due to recession & fears of deflation; b) Giant pool of $70 trillion demands better returns than treasury bonds can provide; c) Wall St. answers with MBS and CDO (financial innovation), borrowing significantly and buying these instruments; d) Rating agencies didn't understand risks and give favorable ratings, further encouraging investors; e) Housing bubble builds; f) Homeowners reach record debt levels and housing prices get so high relative to income that mortgages become unaffordable; g) Housing bubble bursts/housing prices tank/delinquency and foreclosures; h) MBS and CDO values tank; i) Wall St. banks collapse; j) Stock markets and economies affected; k) Governments respond; l) Some critics argue that government pressure on GSE, deregulation and lack of regulation contributed to the problem also.

Krugman, Bernanke and NPR aren't that far off on causes. They of course assign different weights, as we do. Chronological narrative like this hopefully is agreeable; no need to say which is more important (we say weight is debated in first paragraph).Farcaster (talk) 23:42, 10 November 2009 (UTC)

No, once again, you're placing blame on the 70 trillion. Deregulation and failed regulation are primary causes you're omitting. Some of the analysts at the rating agencies knew the subprimes were worthless and the methods flawed. Remember the talk of conflict of interests with rating agencies? It's like saying, "I robbed the bank because they have so much money." Yes, but you still robbed the bank. Scribner (talk) 01:11, 11 November 2009 (UTC)

Part L) is the regulation. Part d) is the rating agencies.Farcaster (talk) 01:28, 11 November 2009 (UTC)

L) Who are "some critics", you mean like Greenspan in his testimony before congress. Very humorous. Actually, the fact that there's a Precora-type investigation on-going to determine the causes really does need to be mentioned in the lead. Scribner (talk) 02:08, 11 November 2009 (UTC)

I agree with mentioning the investigation.Farcaster (talk) 05:47, 11 November 2009 (UTC)

Deregulation needs to be emphasised. Deregulation was both cause and symptom of an accelerating cycle of USD debt creation, to allow trade deficits with Asia and the Middle East to progress, to preserve OPEC and Asian props to the USD and maintain its status as reserve currency. The subprime crisis was an endgame consequence of having lifted regulations throughout the system over a period of decades (since 1971) and effectively handing power over to private bankers. What we see now are governments scrambling to regain control and put in place new types of regulation for a global economy that has outmoded the legacy institutions left over from Bretton Woods. This relationship between the financial elites and the political elites and the pressure to deregulate is critical to an understanding of events.FrankSz (talk) 21:11, 24 November 2009 (UTC)

Wider Effects

I know someone will reprimand me because im lazy, but having briefly looked at this page there doesnt seem to be anything about the wider effects on society or anything like that, it looks like its just about economics, doesnt really cover it very well. 86.131.215.157 (talk) 13:42, 16 December 2009 (UTC)

Proper noun ?

Why is Global Financial Crisis capitalized? Has the term attained proper noun status? Plse. check and correct. 99.11.160.111 (talk) 16:08, 16 December 2009 (UTC)

Concentration of wealth (Plutocracy)

Looking for comments on this, as I believe the subject should be mentioned prominently in Background and causes. - Roy Boy 20:29, 1 January 2010 (UTC)

I've edited these articles for some time and I haven't found a prominent economist that believes wealth concentration was a primary cause (yet; we're still in the middle of this). Mark Zandi covers about every angle of the crisis in his book "Financial Shock" and there is no significant mention of income inequality as a cause. Martin Wolf of the Financial Times has said he does not see the linkage. Bear in mind also that wealth concentration can be seen as a result of many other policies (e.g., the Reagan and Bush tax cuts, globalization/free trade/technology/political policies that are weakening the unions, business customs that allow top executives to get enormous bonuses for doing a lousy job, etc. I think you would enjoy Paul Krugman's book "The Conscience of a Liberal" which gets into the income equality in-depth. Here is a video link where he describes his views. Krugman-Income Equality If you feel strongly about this issue, perhaps attack it from the angle of how executive pay and incentives contributed to the crisis; thee sections are relatively thin.Farcaster (talk) 20:57, 1 January 2010 (UTC)

I'll try to expand my research as you suggest, but the myriad of factors listed above gives rise to wealth concentration. Each factor / historical trend in of itself, as I understand it, doesn't give rise to massive destabilization in an economy. Even bogus risk assessments of financial instruments can only do as much damage as the amount of wealth put into them; which if inequality reins is disproportionate to the real economy and has real consequences. Otherwise such blunders can be absorbed by its respective sector.

I know it is a simplification, but huge bubbles and bonuses cannot occur without wealth concentration. When one bubble burst (the internet) the wealth bubble simply moved onto the next sector and saturated it; creating said bubble(s) and encouraging bad practices and lax enforcement. Note, Reagan is why 1980 is specifically marked on the chart. I get the impression economists deem the very wealthy validating capitalism. I agree when someone builds a better mouse trap. Sam Walton did that, his children did not. (or its simply a COI as "prominent" economists have very wealthy friends)

The weak inheritance tax (estate tax) is likely the larger problem (that isn't touched by the article(s)), as this is the mechanism that allows wealth to concentrate over a generation, and has a different dynamic than creating the wealth. Bonuses and incentives encouraging gambling is indeed a bad practice and increases market volatility (especially on false gains), I want to reiterate that can only bring an economy to its knees if its top heavy, with "too much" money available to gamble in the first place. Sociologically big risks are taken to lure bigger money, making the top heavy economy prone to tipping. The rest seems to be distracting details of who done it and how. Enron is indeed a fascinating story, but deregulation opening large loopholes in previously stable sectors was the problem any company would have eventually exploited.

Deregulation doesn't happen by itself. It takes political will and lobbyists, those don't come for free. It takes significant wealth to make that happen.

Does any economist address this in a straight forward manner? - Roy Boy 05:31, 2 January 2010 (UTC)

"this" being Plutocracy and its role in undermining market stability. - Roy Boy 14:23, 2 January 2010 (UTC)

Automate archiving?

Does anyone object to me setting up automatic archiving for this page using MiszaBot? Unless otherwise agreed, I would set it to archive threads that have been inactive for 30 days and keep at least ten threads.--Oneiros (talk) 12:29, 13 February 2010 (UTC)

Agree auto archiving in order, but think 90 days more appropriate for cycle, didn't know you could set a min to leave unarchived. 72.228.177.92 (talk) 18:12, 14 February 2010 (UTC)

Done--Oneiros (talk) 17:55, 17 February 2010 (UTC)

Clinton - Deregulation => Wasn't it Reagan?

I just read this article and it gave me the impression that it was Clinton who deregulated everything. But didn't deregulation start with Reagan? Who was a big fan of Milton Friedman??? And wasn't it Reagan who put Greenspan in power, notably because his predecessor was against the liberalization of the banking sector and against the introduction of new "innovative" banking methods?

Ein Deutscher aus Freiburg

No. The key deregulations that broke down the separation of banks from doing riskier investment, insurance and other activities was passed under Clinton. See Robert Rubin who has helped lead Citibank to where it is now. Reagan deregulated the airlines, but I don't think that has much to do with the current financial crisis. ChildofMidnight (talk) 17:28, 8 March 2009 (UTC)

Sorry, but you are wrong. One of the main reasons Greenspan followed Volcker was that Greenspan supported the regan-deregulations of the banking sector: http://query.nytimes.com/gst/fullpage.html?res=9B0DEEDA1339F930A35755C0A961948260

(VOLCKER OUT AFTER 8 YEARS AS FEDERAL RESERVE CHIEF; REAGAN CHOOSES GREENSPAN; NY Times June 3, 1987)

You should be able to find plenty of serious articles about this fact... And sorry again! Reagan did a lot against communism. And his "Reaganomics" worked great 20 years ago. But they probably should have been reformed in the meantime. Because the deregulations HE started lead to the massive destruction of American wealth&importance we can watch today. Ein Deutscher aus Freiburg

I won't put it in the article because its obviously a POV not shared by most people, but it really makes me sick to see people blaming the current mess on "deregulations" because they know, or at least should know that the financial industry is already the most heavily regulated industry (after healthcare, perhaps) in the world. It is the most extreme form of stupidity to blame the current crisis on a lack of regulations. Billions have been spent to adhere to those regulations, and still there is a crisis. "All of a sudden there is a crisis", and the thousands of civil servants on the lookout didn't see it happen. And what do you think is the problem? Not enough regulations! There seems to be something very strange with economics that doesn't exist for physics or whatever, people keep insisting that the facts are not really facts and that more regulations is the solution. LOOK AT THE FACTS. And stop your righteous "We don't want simple gravity. We need to invest in better gravity, one that helps us all instead of just the rich", "we want a better world", "we want to stop people from being selfish" or whatever catchphrase happens to sound good enough to believe. The mess we're in is created by regulations, and more regulations is obviously not the solution. I really don't understand your mindset. It may be a religious-like thing, but then again, God burying dinosaurs just to test our faith sounds pretty sane compared to blaming this crisis to a lack of regulations. I really, really do not understand your mindset. Joepnl (talk) 02:24, 10 March 2009 (UTC)

I fully agree, regulations, now the ever present buzzword and mantra, were part of the problem (they encouraged off balance sheet operations for example). Those usually overcomplex and unappliable rules try to prevent ...past anomalies but are soon obsolete in case of new - therefore different - situations. We cannot count on them to bring solutions. I wrote something about that, but some censors (the same who bizarrely seem to accept fully that several articles be vandalized with the same copy and paste political spam) would consider that I cannot put a link that explain my arguments, even in a discussion page, so sorry not to give you that link. To sum it up, that article about overconfidence in economic regulation considers that governance based on a few common sense principles and above all on much anticipation, and exercized by a global authority (as finance is global), would be much more effective than a maze or regulations. --Pgreenfinch (talk) 09:21, 10 March 2009 (UTC)

o o o o o Pgreenfinch, Joepnl, and anyone else who argues that deregulation was NOT a causal factor are either extremely ignorant, or outright lying to advance a neo-liberal economic agenda. I covered many of the hearings in the House Banking Committee in 1989 to 1993, when Henry Gonzalez was chairman, and the issues of financial derivatives and off-balance sheet liabilities were being considered. I saw how the money center banks were able to stifle and sabotage meaningful regulation time and time again. I heard then SEC-head Richard Breeden, under intense and heated questioning from Chairman Gonzalez, defend a hands-off approach to financial "innovation." I repeat, Pgreenfinch, Joepnl, and anyone else who argues that deregulation was NOT a causal factor are either extremely ignorant, or outright lying. o o o o o —Preceding unsigned comment added by 99.194.8.227 (talk) 05:34, 20 February 2010 (UTC)

I am very sorry, but one really gets the impression that this article was written by some guys from the banking sector. Because yes, DEREGULATIONS IN THE BANKING SECTOR STARTED WITH REAGAN. And it is very difficult to ignore this fact, espescially when all major medias are reporting about it right now." the financial industry is already the most heavily regulated industry"=> Never heard about Madoff and the many others? This sounds like "Out of space" to me??? Ein Deutscher aus Freiburg —Preceding unsigned comment added by 87.176.242.9 (talk) 10:25, 10 March 2009 (UTC)

Madoff? Isn't that a perfect example of regulations that haven't worked? And yes, you could see that from the moon. Ponzi schemes have been illegal for ages in case you didn't notice. I guess you are proposing a new law, "this time Ponzi Schemes are really forbidden"? No that's not good enough. "This time Ponzi schemes are really, really forbidden, except of course when it's called social security, in which case everyone has to take part." Joepnl (talk) 14:18, 10 March 2009 (UTC)

Exactly. How could the banking system be so overregulated, when the old "ponzy Scheme" trick can still destroy so much wealth in your country? And then how can you pretend that there has been overregulation in the US? I would also like to mention, that our German Finance Minister Peer Steinbrück explained to the US&UK governments long before the crisis that it would be urgent to implement more regulation. In hindsight he was absolutely right. Anyway, yes DEREGULATIONS IN THE BANKING SECTOR STARTED WITH REAGAN:

http://query.nytimes.com/gst/fullpage.html?res=9B0DEEDA1339F930A35755C0A961948260

=> "The main philosophical difference between Mr. Volcker, a Democrat, and Mr. Greenspan, a Republican, appears to be in their views of the structure and regulation of the banking system. Mr. Volcker has tended to resist deregulation of banks while Mr. Greenspan is more favorably disposed to it."

Sincerely, this "Financial crisis of 2007–2009" article is extremely unbalanced. Obviously some banking-people or others are trying to influence this article in order to fight more regulations. And in order to blame Clinton and the Democrats for all the problems. Ein Deutscher aus Freiburg —Preceding unsigned comment added by 87.176.217.174 (talk) 16:47, 10 March 2009 (UTC)

Ah come on, what Madoff did was ALREADY forbidden, there was no "missing regulation". This information is one click away Madoff Securities LLC was investigated at least 8 times in 16 years by the United States Securities and Exchange Commission (SEC) and other regulatory authorities.[80] , but you just don't want to read anything, because it wouldn't fit into your "more regulations is all we need" world view. It is the SEC that failed in the Madoff case, NOT a lack of regulations. If regulation works, you will want more regulation. If it fails you see it as proof we need more of it. Stop your stupid heads I win, tail you lose game. Joepnl (talk) 17:04, 10 March 2009 (UTC)

Reagan may not have deregulated everything; the deregulation ideology moved into view and action with Thatcher before Reagan. This ideology was sponsored by rich and powerful people as well as organisations in Britain, Europe, and the US which are described in Brian Crozier's book 'Free Agent'. There was a whole international network that worked for freedon but meant deregulation and small government.

I am not sure how helpul it is to fingerpoint who did what first; the ideological underpinning from Thatcherism/Reaganomics, which was the same thing in green as we would have said in German, is where the fault lies.

I agree. One may argue that that deregulation started with Reagan & Thatcher but their successors continued that trend, and I think it is fair to say that deregulation was ocurring right up until the point that the wheels fell off. Also, financial deregulation was a key goal of almost every country between 1980 and 2007. The European Union had a common passport that allowed many types of financial organisation to operate in multiple members states, pretty much every nation except North Korea opened its markets more.

Although British and then European deregulation was led by the Thatcher administration, US deregulation began under Carter. Banks were increasingly finding loopholes to Glass Steagall, and no serious attempt was made to stop them. I do not know if this was a formal policy, or simply that so many things went wrong under Carter (oil crises, Israel, inflation, etc that they may simply have not had the energy to do anything.

In any case, there were several changes of government in every nation that deregulated, none chose to roll it back, regardless of political philosophy, except for some changes in regulation of consumer finance. Ironically, some of those improvements in the rights of consumers turned out to make things worse, some even assert that this was a primary cause of the crisis. —Preceding unsigned comment added by DominicConnor (talk • contribs) 20:11, 1 March 2010 (UTC)

It is often said, that the crisis confirmed Marx with his prediction that capitalism must ultimately implode. Let's use another German phrase which Marx, a native German speaker, might have had in mind to enhance our understanding: Capitalism will saw off the branch on which it is sitting.

I would like to float another cause for the crisis, which a scholar (I am not one) might explore. I once read a book called 'The Laundrymen' which described illegal money flows, from drugs, guns, and tax havens to fraudsters in the finance system. It said there somewhere that the illegal economy would be about the size of the legal economy, and if the illegal economy were taken out of the equation, the global finacial system would collapse.

Since Set. 11 we have a lot more monitoring of money movements. Is it not conceivable that this net has caught a sizable chunk of the illegal economy which caused the collapse of an already fragile system? This does not help us much in the current situation but the better we understand the causes, the better we can prepare to avoid another global crisis.

It is fascinating to read that they released the financial institutions from the net capital rule in 2004, and in no time at all they have indeed sawn off the branch on which they were sitting.

Can we build a monument for Hank Paulson to remind future generations how NOT to do it? 121.209.49.104 (talk) 01:09, 26 April 2009 (UTC)

It is unclear if the practice of using ones own investment, rebundled and repurchased from third parties, as collateral for the hedge on that very investment comes from deregulation or lack of enforcement. Most would agree firms using such methods should at minimum be rated the worst rating. This has not been done in the US or Britain in the last few years. Free-marketers should recognize that deliberate collusion on faking the ratings was criminal conspiracy. Bureaucrats should recognize that the prior regulatory system was either not enforced, or that previous bureaucratic methods are to blame. One or the other must be true. Mydogtrouble (talk) 19:25, 4 November 2009 (UTC)

The biggest issue I have with this article is this: It is written from a purely American (that is the United States of America) point of view and furthermore one that is anti-establishment. It puts the blame of the financial woes of wealthy and middleclass of the G20 squarely on America and its "crooked" or "stupid" financial institutions and government. It should be merged and it does not follow the proper policies here on Wiki: see Recentism [[11]]. In defense of my argument where is the financial crisis of 2001 or 1983? This is recent and slanted anti-establishment and full of both anti-American and European sentiment. The best place for this is under the year events for the 2000's decade or as a note in the year entry for 2008 or 2009. (Svenelven (talk) 17:34, 10 November 2009 (UTC))

An extra controversy

Although the bad effects of the credit bubble are easy to see, I'd like to point out that in this period China, India and a few hundred million people scattered around the world, mostly in Asia moved from a state of abject poverty to a point where honest, smart people in the West see them as a threat as equals.

Where did the money for this come from ?

Sure they work cheap, (but not so cheap now), but the machines et al cost serious money, and the demand created by the credit bubble gave them a market. Making stuff without a market, doesn't work, you need both.

So, I assert that the credit bubble took a very large number of people out of poverty, maybe a whole billion, not out of charity, but if none of your children die of hunger, when you live you in a place that 20 years ago had horrific child mortality, you ain't going to care are you. —Preceding unsigned comment added by DominicConnor (talk • contribs) 20:18, 1 March 2010 (UTC)

This is not a forum for general discussion of the article's subject. Wikipeterproject (talk) 20:54, 1 March 2010 (UTC)

US centric

This is a very US centric article, which is a big problem being that this is a global phenomena. --TIAYN (talk) 13:21, 8 February 2010 (UTC)

I'll concur especially as much of the US response was ultimately driven by the UK and the Eurozone. The section "Credit markets and the shadow banking system" fails to mention the actions of the UK treasury at all, which actually drove the global response, including that of the USA. The original US plan was only to purchase toxic assets under TARP and not to recapitalise the banks and issue loan guarantees, however they were forced down this road after the UK elected this path, as failure to do so would make the US banks non-competitive (no-one is going to lend money to a non-guaranteed US bank when there is a guaranteed UK/Euro alternative). Eurozone banks quickly followed the UK model, adding to the pressure on the US. 59.101.33.190 (talk) 12:00, 28 February 2010 (UTC)

DominicConnor (talk) 21:52, 8 March 2010 (UTC)I agree, although it is hard to say that any given response was driven in any direction, objectively all we can say today is that event A happened before event B. This is because different players have varying speeds at which the can or will act, and given the politicisation of the situation governments/regulators are sticking to the line that they are "cooperating", so I'd favour phrasing as "the ECB did X, then the Fed did Y", unless there is evidence that X caused Y.

Name

Is the crisis over? If not, then why does the title seem to suggest that? 60.240.41.159 (talk) 23:42, 12 November 2009 (UTC)

No, it does not appear to be over yet. If an ending date is not specified then some people will complain that it implies that the crisis will go on forever (see the naming disputes about Late-2000s recession on its talk page). If and when it continues into 2010, then the article will be renamed. JRSpriggs (talk) 17:36, 14 November 2009 (UTC)

The late-2000s recession ended in mid-2009. Viriditas (talk) 22:50, 24 November 2009 (UTC)

I don't agree. The name is wrong. It implies, erroneously, that it both began in 2007 and ended in 2009. This is not only incorrect but contributes to moral hazard. This should be called The Global Financial Crisis as it is commonly known. Should it be one day deemed to be over, the title can be changed to "The Global Financial Crisis of ..." FrankSz (talk) 19:37, 20 November 2009 (UTC)

Most users are aware that the recession is still in effect (seeing the high unemployment rates). I agree with JRSpriggs that the name could (and will) be changed on 1 January 2010 to "The Global Financial Crisis of 2007-2010." Nonamer98 (talk) 03:44, 1 December 2009 (UTC)

...or just "The Global Financial Crisis of 2007-(present)"?64.47.91.34 (talk) 03:14, 15 December 2009 (UTC)

As of today, most developed economies are no longer in "crisis" mode, rather recovery mode. Technically the recession has ended in the US, UK, Germany, Japan, Australia and Canada and there was no recession in large major developing economies like Brazil and China. I think this should be reflected in the article. 208.12.121.254 (talk) 01:08, 25 March 2010 (UTC)

I agree and will move it. Racepacket (talk) 11:29, 1 January 2010 (UTC)

Economy

I would be interested in seeing a paragraph tieing in these recent recessioary years with the economic downturn of mid-2001, if someone deems it a relevant point.76.28.99.174 (talk) 17:30, 26 March 2010 (UTC)

Added before or around Section 1.2

Somewhere in this whole discussion though there needs to be mention of the United States Legislature rejecting the option to make Mortgage Insurance (MI) tax deductible in the Late 1990’s as a possible/probable cause of the Crisis. The decision not to allow this deduction based on the “cost” in tax payer dollars is a major contributing factor to the Crisis. There is some date in there where they defeated a bill that would have moved MI to tax deductible and then did so in subsequent sessions as well until I believe 2008 when they now will allow it for a short time? The lack of a tax deduction paved the way for the infamous 80/10/10 mortgage because now you could get a mortgage with a blended interest rate that would have a payment less than a standard 90% Loan to Value (LTV) mortgage with Mortgage Insurance and the added interest would be tax deductible. This in turn provides the statistical basis for the 80/15/5 and finally by around 2002 the 80/20. Followed by the easing of credit requirements even on the 80/20’s until you could get an 80/20 No Income No Asset loan on a Non-Owner Occupied property that started to be available in late 2004 and early 2005. All in the name of the “tax benefit” and without regard on a loan by loan basis as to whether that the Loan would be repaid. The Mortgage Insurance industry began to run from even providing contract underwriting for these questionable products around late 2005 due to the perceived risk of even doing the underwriting on them and especially since they were not insuring them. Thus we lost the checks and balances system that had been in place since the 80’s with structured oversight in what was being offered in the mortgage arena for risky loans that were over 80% LTV.

Hopefully someone with a better grasp on how to write something worthy of Wikipedia could address this issue in a way that would make sense. Specturm (talk) 23:04, 3 February 2010 (UTC) Specturm

Unlikely. Many places around the world where even mortgage payments are not tax-deductible, even just on the other side of the 49th parallel, escaped the greater part of the collapse. Discussion of the financial vehicles themselves, independent of the tax question, is already in the article. - Tenebris —Preceding unsigned comment added by 216.254.156.180 (talk) 00:29, 29 March 2010 (UTC)

Crisis to Crises

Although all the financial crises taking place around this time started around the same period, not all were stemming form the same cause, and they took place in multiple countries. Therefore I suggest the page's title be changed to "Financial crises of 2007-2010" Whalen207 (talk) 04:50, 23 February 2010 (UTC)

You are most likely right, but I think the whole event has rolled into one in the press and public consciousness and is commonly referred to as a single crisis. Wikipeterproject (talk) 07:41, 23 February 2010 (UTC)

There is a also a preference in the Wikipedia MOS for article titles to be in the singular. LK (talk) 05:27, 24 February 2010 (UTC)

I don't think that would apply in this type of situation; see for instance September 11, 2001 attacks. Tisane (talk) 05:04, 12 April 2010 (UTC)

Financial crisis = recession?

Are the financial crisis and the recession one and the same? Because it sure feels like we're still in a recession. Tisane (talk) 05:08, 12 April 2010 (UTC)