I recently read a book about Ivar Kreuger, the famed “Match King” of the 1920s. Kreuger attempted to monopolize the match manufacturing industry on an international scale by obtaining state monopolies from national governments in exchange for large loans. His amazing financial record got him on the cover of Time magazine in October 1929, just as the stock market crash was beginning. Less than three years later, his companies teetering on the edge of bankruptcy and his crude forgeries of Italian bonds coming to light, he shot himself. Yet the author concludes that, for most of his career, his companies produced real profits and excellent returns for investors – he wasn’t simply a world-class swindler who single-handedly brought on a world crisis. It brings home the fact that great financial crises and collapses are not usually tied to a single individual or industry – the blame tends to be more widespread. It takes much more than a Kreuger or Madoff to light the fuse.
All of this comes to mind when perusing the official edition of The Financial Crisis Inquiry Report, the final report of the National Commission on the Causes of the Financial and Economic Crisis in the United States. Note: This official edition is complete, including all 129 pages of dissenting views. I’m no economist, but it seems clear that a series of interlocking corporate and government practices and missteps, extending far beyond any one person, company or sector, caused the economy to tank.
It’s also interesting to see how quickly events recede in the mind. When was the last time you heard about the downfall of Lehman Brothers? Reading this report transports me back to those very scary weeks a little more than two years ago, when everything that had seemed so secure in the economy suddenly displayed all of the characteristics of a wooden skyscraper full of termites.
This book is no easy read, but its subject is compelling, faced as we are with the aftermath of the crisis. It’s a serious report for serious times, and the voluminous dissenting views show how uncertain root causes can be, accept them or not as you will. You can find The Financial Crisis Inquiry Report here, buy a copy of the official edition, including all of the text of the dissenting views, here, or get it at a library.
In many countries a higher standard of living than our parents is practically a birthright.
As the US economy begins to disintegrate, civil unrest may become increasingly violent and widespread. The anticipation of massive unrest may be the real reason why the Department of Homeland Security has contracted with a Halliburton subsidiary to build massive new domestic detention camps …….
Paying interest on unpaid interest will soon accelerate the debt crisis.
[...] The Financial Crisis: Why? – His amazing financial record got him on the cover of Time magazine in October 1929, just as the stock market crash was beginning. Less than three years later, his companies teetering on the edge of bankruptcy and his crude forgeries of … [...]
Useful resource…
Here is one of the best posts we saw on the subject…
As long as we’re printing money, nothing is too big to fail. We continue to plunge into the financial abyss.
What is clear is that the regulatory system must be changed immediately. The report reminds me of the development of the financial crisis in Greece when the EU officials had information about the country’s rising debt and irresponsible government spending but they didn’t disclose it for some unknown reasons. Nobody has shouldered the blame thus far which is pretty sad.
a crise financeira é geral ? ou so´em alguns paises…
é um tema muito interesante, para observação da industria e comercio geral…
It is very important article. I’m a colaborater of the local news paper “A UNIÃO” in the Azores in the same island were USA has an Air Field 65th Air Base Wing, Lajes-Terceira.
Please inform me by e-mail.
Victor J.P. Ramos
All of the material from this blog is in the public domain and may be reprinted.
EXCELLENT ARTICLE!THE QUESTION IS VERY SIMPLE:”FINANCIAL CRISIS!WHY?”.AND THE ANSWER INCLUDES THE EXAMINATION OF SOME CONDITIONS!FOR EXAMPLE:-WHO CONTROLS THE GLOBAL BANK SYSTEM TODAY?
-WHO CONTROLS THE MULTINATIONAL COMPANIES?
-AND ABOUT THE NATIONAL CURRENCY OF THE U.S.A.(AMERICAN DOLLAR)?WHO HIDDEN BEHIND IT?CONCLUSION:THE ECONOMIC CRISIS , ALL OVER THE WORLD , IS MADE!NOT REALLY!
[...] The Financial Crisis: Why? [...]