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This is not a forum for general discussion of the Financial crisis of 2007-2009, personal opinions regarding its causes, government handling of the crisis etc, or anything else not related to improvement of the article, . Any such messages will be deleted or refactored. Please limit discussion to improvement of this article. You may wish to ask factual questions about Financial crisis of 2007–2009 at the Reference desk, discuss relevant Wikipedia policy at the Village pump, or ask for help at the Help desk.

Archives:

• Archive 1

Contents 1 Disambiguation, Merger, Categorization, General clean-up, etc. 2 Clinton - Deregulation => Wasn't it Reagan? 3 Cause/Sub-Prime Lending section weaselness 4 AIG Crisis & Systemic Risk 5 Merger proposal 6 Global political effects 7 Possible Vandalism 8 Meeting of September 18, 2008 9 Did Oil Price Volatility Cause the Financial Crisis? 10 Tagged multiple issues 11 Multiple issue tag 12 Leibowitz foreclosures 13 Pytel memorandum 14 Remove "Predatory lending" section 15 1863 National Bank Act 16 So Wikipedia has a total different way to identify recession? 17 Real Estate Crisis 18 Multiple issue tag 19 70 Trillion as a cause, POV and original research 20 Multiple issue tags 21 Update? 22 Name 23 Maiden Lane transactions

[edit] 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 [1] 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 [[2]]. 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))

[edit] 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)

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.

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 [[3]]. 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))

[edit] 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)

[edit] 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)

[edit] 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

• Global financial crisis of 2008–2009
• Late 2000s recession
• Subprime mortgage crisis
• Financial crisis of 2007–2009

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 2007–2009 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)

[edit] 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://en.wikipedia.org/wiki/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://en.wikipedia.org/wiki/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)

[edit] 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)

[edit] 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)

[edit] 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.

[edit] Tagged multiple issues

[edit] 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 GlutFarcaster (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 PointFarcaster (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)

[edit] 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)

[edit] 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)

[edit] 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)

[edit] 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)

[edit] 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)

[edit] 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)

[edit] Multiple issue tag

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

[edit] 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)

[edit] 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))

[edit] 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)

[edit] 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)

[edit] 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)