Journal CauseWithoutARebel's Journal: Wanna know what the lead-up to the depression... 1
.... looked like? Look no further than the IndyMac collapse.
IndyMac Bank was taken over by federal regulators yesterday after a week that saw Charles Schumer (D-NY) publicly announce, in effect, that IndyMac was collapsing. This triggered a run on the bank that withdrew nearly $1.5 billion dollars in liquidity (cash) from the bank's coffers.
Oops.
It's hard to feel bad for the collapse. When the mortgage crisis is discussed, it's often pointed out that figuring out who is responsible for originating any particularly bad loan is difficult. IndyMac originators, however, made it their job to give out "bad" loans (in theory, they were for the repair of single family homes or first time purchasers with less than excellent credit histories).
If the managers who ran IndyMac, and the originators who worked there, all wind up on the street selling apples off a cart and eating out of garbage cans, I won't feel bad in the least.
If you've been getting your financial news from major media outlets - especially Murdoch-owned media - you don't have a full appreciation for just how dangerously unstable our whole economy is right now. People have been arguing on the networks about whether or not we're going into or are already in recession, but if they told the truth, they'd be warning people to prepare the very real possibility of depression.
At this point, the only string holding us back from one is the little bit of yarn that's managed to relegate most of the destruction wrought by the mortgage crisis to the financial sector. If that poison seeps into our already-weak manufacturing, retail or tech sectors, we'll be in for a loooooong ride down and an even longer stay at the bottom.
Most people are practicing wilful ignorance ... (Score:2)
They still have their head in the sand. Even this spring, the majority of people who bought in the last 5 years thought that their house was worth more, not less, than when they bought it.
They had excuses, like "It's different here" and "Our location is better."
These were the same "logical reasons" that they overpaid for their places in the first place.
Everyone with any brains has been saying for months that this recession will be the worst since the early 70's, and possibly the worst since the Great