'Things Fall apart the Centre does not Hold' -The Battle to save Wall Street, 2008
Bank deregulation in the 1990s, the pressure to increase home ownership thereby encouraging lax mortgage standards, very low interest rates which created a liquidity bubble, and the system of Wall Street bonus payments that encouraged short term risk taking all served to create the conditions for Wall Street to crash.
A problem in the markets was predicted and the interconnectedness of global financial markets left them vulnerable to a panic. Could they prepare for an actual crisis? No, they could not do so unilaterally or collectively, the US government had to act.
The main gamblers, they played with people's lives, came from poor backgrounds, yet, were elevated to positions of major responsibility and proceeded without caution to generate profits and pay bonuses even when their financial institutions were facing bankruptcy. They only cared about shareholder profit. The six months between Bear Stearns and Lehman's failure witnessed desperate scenes with foul language and unilateral actions threatening other institutions. Profit for shareholders was supreme and so was the main motivation, their model of financing and investing had truly become too risky. Toxic assets and their purchase were critically endangering the major banks and financial institutions.
Greed is good, the foul language and mannerisms of the great financial masters ensured they were exposed as wearing the Emperor's New Clothes along with the inevitable feet of clay. One CEO, his sobriquet 'The Gorilla' was quite apt.
'America no longer has an exemplary just and well ordered society.' Power and wealth are concentrated in the hands of a tiny self serving elite. The current occupant of 1600 Pennsylvania Avenue, Washington D.C., USA is more concerned with the number of zeros in his bank account than the plight of the bottom 50% of the population whose income has declined steadily over the last three decades. The consequences were the many working class families who had mortgages which they could not pay and they lost their homes and were forced to work in low paying jobs without prospects. These people's votes led to the demagogue who cares only about his re-election, securing the White House with the help of the Deplorables which he has abandoned. The clown in the White House is a danger to society with right wing extremists appearing in the streets threatening all with the self same clown's approval. Total chaos and anarchy is not a welcome prospect.
Source: Too Big to Fail, Andrew Sorkin, Penguin