1. Welcome to the forums! Take a second to look at our Beginner's Guide. It contains the information necessary for you to have an easier experience here.

    Thanks and have fun. -NF staff
    Dismiss Notice
  2. Stop Scrolling!
    Attention - When discussing new chapters of an anime or manga, please use a source from the official list of approved sources. If you would like to contribute to the list, please do so in the suggestions section.
    Dismiss Notice
  3. If you write blogs about the current anime season (for linking) or like to add descriptions / impressions on certain series and like to add them to our wiki, then send us a ticket.
    Dismiss Notice
  4. Santi would like to notify you guys about The Alley Banner Contest
    Dismiss Notice

Great Recession 10th anniversary

Discussion in 'The NF Café' started by mr_shadow, Sep 15, 2018.

  1. mr_shadow Minister of State Security Moderator

    Messages:
    32,143
    Likes Received:
    1,393
    Trophy Points:
    1,818
    Joined:
    May 16, 2005
    Reputation:
    Flag:
    Sweden
    It is an image that became a symbol of the global financial crisis — about 20 bankers, their backs turned to the window, attending an emergency meeting at the London office of Lehman Brothers as the firm slid toward collapse.

    Gwion Moore, one of those pictured in the Reuters photograph taken on Sept. 11, 2008, recalled how the growing sense of panic in financial markets contrasted with the mood inside the building at the time.

    “It was almost a festival atmosphere at the bank. We weren’t doing any business. But people were still coming to work and just chatting to each other,” Moore said.

    The photograph caught the moment when he and his colleagues were being told by bosses that things were going to be OK, despite the plummeting Lehman Brothers share price.

    “Senior management thought they needed to get the workforce focused again,” Moore said. “The phrase was stop ‘goofing around and get back to work’. I don’t think anyone took the message very seriously because we went back to doing what we had been doing beforehand. No one was going to trade with us.”

    Within four days, the U.S. government chose not to save the bank, intensifying the already widespread chaos in markets that brought the financial system to its knees and tipped the world economy into a deep recession.

    Moore’s department — European fixed income — was not among the parts of Lehman Brothers that were sold to other banks. Two weeks after the firm’s collapse, his security card stopped working and he was laid off.

    Moore spent six months unemployed before finding a job as a fund manager. He now works in his native Australia.

    UNEMPLOYMENT

    The crisis also shook up the life of Eric Lipps, a U.S. public sector worker, who appeared in another well-known Reuters photograph from the period.

    In late 2009, he was pictured in a long line of people seeking to meet potential employers at a jobs fair in New York.

    At the time, the U.S. unemployment rate had soared to 10 percent, its highest level since the early 1980s.

    Lipps, wrapped up against the cold in a beige raincoat, looked directly into the camera, his face appearing to reflect the despondency of many people at the time.

    “Mercifully I had money so I wasn’t going to be hand-to-mouth,” Lipps said. “Still it was a little nervous time because I didn’t know how long I was going to be unemployed.”

    He was hired again a few months later as a child support enforcement officer in New York, a job he continues to hold.

    Alistair Darling, who was Britain’s finance minister 10 years ago, recalled how his warnings of a looming disaster for the economy, made shortly before the Lehman crash, had generated howls of protest from economists and fellow politicians.

    “But I could see the rupture in the financial system was quite catastrophic,” he said.

    For Darling, now a Labour member of the upper house of Britain’s parliament, the damage done by the crisis in Britain was all the greater for the decision taken in 2010 by the newly elected Conservative-led government to aim for the eradication of the country’s budget deficit in only five years.

    “What is commonly called austerity has prolonged the downturn. It has taken far, far longer to see a recovery and of course the process is by no means complete,” he said.

    EMIGRATION

    Indeed, for many, the damage wrought by the near-meltdown in the world’s financial system and the subsequent debt crisis in many European countries remains deep.

    Jose Manuel Abel bade farewell to his wife and children and left his native Spain in 2012 after losing his job. He worked doing low-paid jobs in Germany before returning to Spain last year.

    He now has a temporary job as a waiter, working 17 hours a day, but he expects to be laid off once the summer tourists stop coming to Chipiona, a coastal town near Cadiz on Spain’s southern Atlantic Coast.

    Unemployment in Spain peaked at nearly 27 percent in early 2013 before falling back to just over 15 percent in the second quarter of this year — still much higher than in many other countries, even five years into an economic recovery.

    “I’m working as a waiter and I don’t have a problem with that because I think that any kind of job is respectable,” Abel said. “I have studies, training and I intend to use them in the future.”

    He is also working with friends to set up a local political party which will contest municipal elections in 2019.

    “I don’t want my kids to suffer and live what I had to live through,” Abel said. “I don’t want to them to migrate and to look for a job opportunity away from this marvelous place.”

     
    Last edited: Sep 15, 2018
    Tags:
  2. GRIMMM The Black Empire

    Messages:
    3,766
    Likes Received:
    255
    Trophy Points:
    488
    Joined:
    Dec 2, 2007
    Reputation:
    The never-ending failure of the capitalist cycle. It paved the path for austerity, an approach that has never worked in its entire history of being tried, as well as the biggest level of inequality since the early 1900s.

    Fuck the banks, and fuck the Governments who bailed them and let them get away with it. Happy anniversary.
     
    • Dislike Dislike x 1
    • Friendly Friendly x 1
    • List
  3. mr_shadow Minister of State Security Moderator

    Messages:
    32,143
    Likes Received:
    1,393
    Trophy Points:
    1,818
    Joined:
    May 16, 2005
    Reputation:
    Flag:
    Sweden
    I was lucky enough that I had just enrolled in my first year of university mere weeks before the crash.

    Meaning I could "hibernate" through the crisis inside a government-owned educational institution, living off government-issued student loans. Since the government can't go out of business (unless you're Greece) I was largely unaffected by the chaos going on in the private sector.

    If I had been slightly older and already in the job market, I might have been fucked. So dodged a bullet there. :blobsweat
     
  4. makeoutparadise I will have my revenge

    Messages:
    36,841
    Likes Received:
    452
    Trophy Points:
    1,239
    Joined:
    Dec 9, 2005
    Reputation:
    Catdank Faction:
    I was in my first Econ class when it hit
     
  5. GRIMMM The Black Empire

    Messages:
    3,766
    Likes Received:
    255
    Trophy Points:
    488
    Joined:
    Dec 2, 2007
    Reputation:
    I wonder how many economics majors wrote their dissertations on the crash. Would have been so much information available it would have been really great for writing.
     
  6. Darkmatter Lion's Sin of Pride

    Messages:
    9,294
    Likes Received:
    656
    Trophy Points:
    618
    Joined:
    Jun 6, 2015
    Reputation:
     
  7. makeoutparadise I will have my revenge

    Messages:
    36,841
    Likes Received:
    452
    Trophy Points:
    1,239
    Joined:
    Dec 9, 2005
    Reputation:
    Catdank Faction:
    I wrote a 10+ paper comparing and contrasting how diffrent countries responded to the recession
     
  8. Drake WORK MAKES YOU FREE

    Messages:
    3,682
    Likes Received:
    218
    Trophy Points:
    443
    Joined:
    Nov 7, 2008
    Reputation:
    You realize the economy would have tanked even harder had the government not bailed them out, right? And the poor would suffer the worst from this, so it's not as if the government was just looking out for bankers.
     
    • Dislike Dislike x 1
    • Agree Agree x 1
    • List
  9. Mider T VM Zombie

    Messages:
    108,626
    Likes Received:
    1,814
    Trophy Points:
    4,394
    Joined:
    Jun 17, 2006
    Reputation:
    I was taking a shit when it hit. I shit bricks.
     
  10. GRIMMM The Black Empire

    Messages:
    3,766
    Likes Received:
    255
    Trophy Points:
    488
    Joined:
    Dec 2, 2007
    Reputation:
    I am aware yes, but the people responsible were never held accountable. That's my main gripe admittedly, but allowing the banks to play casino in the first place was a Government failure.

    You are still correct though, I'm just ranting because of the current economical state that's been left behind and the fact no one was jailed.
     
  11. mr_shadow Minister of State Security Moderator

    Messages:
    32,143
    Likes Received:
    1,393
    Trophy Points:
    1,818
    Joined:
    May 16, 2005
    Reputation:
    Flag:
    Sweden
    GDP change in Top 10 economies (2009)
    (Because the crash happened at the end of 2008, the devastation is more apparent in the growth figures for 2009.)

    1. United States -2.8%
    2. Japan -5.4%
    3. China +9.4%
    4. Germany -5.6%
    5. France -2.9%

    6. United Kingdom -4.2%
    7. Italy -5.5%
    8. Brazil -0.1%
    9. Russia -7.8%
    10. Spain -3.6%
     
  12. GRIMMM The Black Empire

    Messages:
    3,766
    Likes Received:
    255
    Trophy Points:
    488
    Joined:
    Dec 2, 2007
    Reputation:
    China #1.
     
  13. Cardboard Tube Knight Well-Known Member

    Messages:
    86,493
    Likes Received:
    418
    Trophy Points:
    2,313
    Joined:
    Apr 28, 2006
    Reputation:
    Well for anyone how missed last time, we'll be airing rerun here soon.
     
    • Funny Funny x 1
    • Winner Winner x 1
    • List
  14. mr_shadow Minister of State Security Moderator

    Messages:
    32,143
    Likes Received:
    1,393
    Trophy Points:
    1,818
    Joined:
    May 16, 2005
    Reputation:
    Flag:
    Sweden
    Lolyeah.

    Though they too experienced a relative slowdown. They had 14% [sic!] growth in 2007, which dropped to 9.6% in 2008 and 9.4% in 2009.

    Since the Great Recession China has only been back above 10% in one year, 2010. Which was a one-off since that's when their export partners were getting back up from the recession and there was a backlog of demand.
     
  15. GRIMMM The Black Empire

    Messages:
    3,766
    Likes Received:
    255
    Trophy Points:
    488
    Joined:
    Dec 2, 2007
    Reputation:
    Still, being above without dropping to negatives is still quite an achievement. What was the main reason for this?
     
  16. mr_shadow Minister of State Security Moderator

    Messages:
    32,143
    Likes Received:
    1,393
    Trophy Points:
    1,818
    Joined:
    May 16, 2005
    Reputation:
    Flag:
    Sweden
    Communism.

    A lot of China's most important enterprises are state-owned, and in the private sector there are severe restrictions on foreign ownership.

    For example back then AFAIK foreigners could not own more than 33% of the stock in Chinese companies.

    That means the onslaught of defaults in the global financial system did not affect China as directly, since the likes of Lehman Brothers did not own a lot of assets there.

    The negative impact on China came indirectly, by way of The Factory of the World losing a lot of its customers when developed countries could no longer afford to buy as many computers, clothes, and toys as they used to.
     
    • Informative Informative x 2
    • List
  17. mr_shadow Minister of State Security Moderator

    Messages:
    32,143
    Likes Received:
    1,393
    Trophy Points:
    1,818
    Joined:
    May 16, 2005
    Reputation:
    Flag:
    Sweden
    There's all kinds of ripple effect from the GR you can point to.

    For example mass unemployment in the Arab World is what caused the 2011 Arab Spring, which in turn started the Syrian Civil War and gave birth to ISIS.
     
    • Informative Informative x 2
    • List
  18. Cardboard Tube Knight Well-Known Member

    Messages:
    86,493
    Likes Received:
    418
    Trophy Points:
    2,313
    Joined:
    Apr 28, 2006
    Reputation:
    Great Recession 2: Election Boogaloo.
     
  19. mr_shadow Minister of State Security Moderator

    Messages:
    32,143
    Likes Received:
    1,393
    Trophy Points:
    1,818
    Joined:
    May 16, 2005
    Reputation:
    Flag:
    Sweden
    I'm probably gonna re-watch The Big Short (2015).

    That film is crazy good given the seemingly dull and technical subject matter.
     
  20. Drake WORK MAKES YOU FREE

    Messages:
    3,682
    Likes Received:
    218
    Trophy Points:
    443
    Joined:
    Nov 7, 2008
    Reputation:
    To add to what mr_shadow said, another big reason was that China just turned their economy into an investment-oriented one during the recession by spamming construction projects, and now they have a ton of bridges/apartments/whatever that nobody uses. However, that allowed their economy to remain stimulated even when all their trade partners were suffering. But still, that's one of the reasons why they have slowed down a bit now since they have to go back to being an actual economy.
     
    • Like Like x 1
    • Informative Informative x 1
    • List
  21. makeoutparadise I will have my revenge

    Messages:
    36,841
    Likes Received:
    452
    Trophy Points:
    1,239
    Joined:
    Dec 9, 2005
    Reputation:
    Catdank Faction:
    China was one the US the other and German I think, korea might also have been thrown in there
     
  22. mr_shadow Minister of State Security Moderator

    Messages:
    32,143
    Likes Received:
    1,393
    Trophy Points:
    1,818
    Joined:
    May 16, 2005
    Reputation:
    Flag:
    Sweden
    Anti-globalization activists threw black liquid soap across the glass-front of a bank in Paris on Saturday, one of several actions planned in France and Germany in protest against banking practices a decade after the collapse of Lehman Brothers.

    Railing against tax fraud and mega-investments in fossil fuels by the world's biggest banks, the protesters in the French capital lit orange smoke bombs and spilled a fluorescent green liquid on the pavement to symbolize what they called toxic money.

    "Big banks are a driving force of fiscal evasion," said Aurelie Trouve, a spokeswoman for Attac France.

    Thomas Coutrot, another member, said he was convinced that ten years after the collapse of Lehman Brothers the global economy was heading for another crisis.

    "It's inevitable, there's going to be another crisis," Coutrot said.

    "It's absurd and we're not giving into that."

    The demise of Lehman Brothers, a U.S. investment bank, triggered the onset of the global financial crisis from which much of the industrialized world has yet to recover.

    Some key euro zone economies are still not back to their pre-crisis size despite a decade of stimulus and there has been a sharp fall in support for traditional centrist parties, especially on the left, as anti-establishment parties surge.

    In Frankfurt, home of the European Central Bank, Attac protesters strung up "crime scene" tape in front of the Stock Exchange and daubed a bull statue with paint.

    "We want to use this event to make clear that we want a different financial system, one that is not unstable, which is democratically controlled and which does not exploit humans and nature but is beneficial to humans and nature," said Alfred Eibl, Attac spokesman for taxes and financial markets.

     
  23. mr_shadow Minister of State Security Moderator

    Messages:
    32,143
    Likes Received:
    1,393
    Trophy Points:
    1,818
    Joined:
    May 16, 2005
    Reputation:
    Flag:
    Sweden
    School bus driver Michael Payne was renting an apartment on the 30th floor of a New York City high-rise, where the landlord's idea of fixing broken windows was to cover them with boards.

    So when Payne and his wife Gail saw ads in the tabloids for brand-new houses in the Pennsylvania mountains for under $200,000, they saw an escape. The middle-aged couple took out a mortgage on a $168,000, four-bedroom home in a gated community with swimming pools, tennis courts and a clubhouse.

    “It was going for the American Dream,” Payne, now 61, said recently as he sat in his living room. “We felt rich.”

    Today the powder-blue split-level is worth less than half of what they paid for it 12 years ago at the peak of the nation’s housing bubble.

    Located about 80 miles northwest of New York City in Monroe County, Pennsylvania, their home resides in one of the sickest real estate markets in the United States, according to a Reuters analysis of data provided by a leading realty tracking firm. More than one-quarter of homeowners in Monroe County are deeply “underwater,” meaning they still owe more to their lenders than their houses are worth.

    The world has moved on from the global financial crisis. Hard-hit areas such as Las Vegas and the Rust Belt cities of Pittsburgh and Cleveland have seen their fortunes improve.

    But the Paynes and about 5.1 million other U.S. homeowners are still living with the fallout from the real estate bust that triggered the epic downturn.

    As of June 30, nearly one in 10 American homes with mortgages were “seriously” underwater, according to Irvine, California-based ATTOM Data Solutions, meaning that their market values were at least 25 percent lower than the balance remaining on their mortgages.

    It is an improvement from 2012, when average prices hit bottom and properties with severe negative equity topped out at 29 percent, or 12.8 million homes. Still, it is double the rate considered healthy by real estate analysts.

    "These are the housing markets that the recovery forgot," said Daren Blomquist, a senior vice president at ATTOM.

    Lingering pain from the crash is deep. But it has fallen disproportionately on commuter towns and distant exurbs in the eastern half of the United States, a Reuters analysis of county real estate data shows. Among the hardest hit are bedroom communities in the Midwest, mid-Atlantic and Southeast regions, where income and job growth have been weaker than the national norm.

    Developments in outlying communities typically suffer in downturns. But a comeback has been harder this time around, analysts say, because the home-price run-ups were so extreme, and the economies of many of these Midwestern and Eastern metro areas have lagged those of more vibrant areas of the country.

    “The markets that came roaring back are the coastal markets,” said Mark Zandi, chief economist at Moody’s Analytics. He said land restrictions and sales to international buyers have helped buoy demand in those areas. “In the middle of the country, you have more flat-lined economies. There’s no supply constraints. All of these things have weighed on prices.”

    In addition to exurbs, military communities showed high concentrations of underwater homes, the Reuters analysis showed. Five of the Top 10 underwater counties are near military bases and boast large populations of active-duty soldiers and veterans.

    Many of these families obtained financing through the U.S. Department of Veterans Affairs. The VA makes it easy for service members to qualify for mortgages, but goes to great lengths to prevent defaults. It is a big reason many military borrowers have held on to their negative-equity homes even as millions of civilians walked away.

    A poor credit history can threaten a soldier's security clearance. And those who default risk never getting another VA loan, said Jackie Haliburton, a Veterans Service Officer in Hoke County, North Carolina, home to part of the giant Fort Bragg military installation and one of the most underwater counties in the country.

    “You will keep paying, no matter what, because you want to make sure you can hang on to that benefit,” Haliburton said.

    These and other casualties of the real estate meltdown are easy to overlook as homes in much of the country are again fetching record prices.

    But in Underwater America, homeowners face painful choices. To sell at current prices would mean accepting huge losses and laying out cash to pay off mortgage debt. Leasing these properties often won’t cover the owners’ monthly costs. Those who default will trash their credit scores for years to come.

    DREAMS DEFERRED

    Special education teacher Gail Payne noses her Toyota Rav 4 out of the driveway most workdays by 5 a.m. for the two-hour ride to her job in New York City's Bronx borough.

    “I hate the commute, I really, really do," Payne said. "I’m tired.”

    Now 66, she and husband Michael were counting on equity from the sale of their house to fund their retirement in Florida. For now, that remains a dream.

    The Paynes’ gated community of Penn Estates, in East Stroudsburg, Pennsylvania, is among scores that sprang up in Monroe County during the housing boom.

    Prices looked appealing to city dwellers suffering from urban sticker shock. But newcomers didn’t grasp how irrational things had become: At the peak, prices on some homes ballooned by more than 25 percent within months.

    Today, homes that once fetched north of $300,000 now sell for as little as $72,000. But even at those prices, empty houses languish on the market. When the easy credit vanished, so did a huge pool of potential buyers.

    Eight hundred miles to the west, in an unincorporated area of Boone County, Illinois, the Candlewick Lake Homeowners Association begins its monthly board meeting with the Pledge of Allegiance and a prayer.

    Nearly 40 percent of the 9,800 homes with mortgages in this county about 80 miles northwest of Chicago are underwater, according to the ATTOM data. Some houses that went for $225,000 during the boom are now worth about $85,000, property records show.

    By early 2010, unemployment topped 18 percent after a local auto assembly plant laid off hundreds of workers. At Candlewick Lake, so many people walked away from their homes that as many as a third of its houses were vacant, said Karl Johnson, chairman of the Boone County board of supervisors.

    “It just got ugly, real ugly, and we are still battling to come back from it,” Johnson said.

    While the local job market has recovered, signs of financial strain are still evident at Candlewick Lake.

    The community’s roads are beat up. The entryway, meeting center and fence could all use a facelift, residents say. The lake has become a weed-choked “mess,” “a cesspool,” according to residents who spoke out at an association meeting earlier this year. Association manager Theresa Balk says a recent chemical treatment is helping.

    Annual homeowner's dues of $1,136 are being stretched to pay for all the upkeep. But those fees may be a big deterrent for many would-be buyers at Candlewick Lake, said association board member Randy Budreau.

    “A gated community like this, with our rules and fees, it may be just less attractive now to the general public,” he said.

     
  24. mr_shadow Minister of State Security Moderator

    Messages:
    32,143
    Likes Received:
    1,393
    Trophy Points:
    1,818
    Joined:
    May 16, 2005
    Reputation:
    Flag:
    Sweden
    Do you figure McCain could have beaten Obama if the crash hadn't happened two months before the 2008 election?

    In most democracies people tend to blame the incumbent government for economic downturns, so the Republicans losing the presidency probably became inevitable after Lehman. But what about before?
     
  25. GRIMMM The Black Empire

    Messages:
    3,766
    Likes Received:
    255
    Trophy Points:
    488
    Joined:
    Dec 2, 2007
    Reputation:
    I don't think so. Regardless of the crash I think Obama was good at talking, charming personality, and he was due to become the first black president. It was a historic opportunity, even though he was a corporate democrat. The people liked him and he was more "down to earth".
     
  26. mr_shadow Minister of State Security Moderator

    Messages:
    32,143
    Likes Received:
    1,393
    Trophy Points:
    1,818
    Joined:
    May 16, 2005
    Reputation:
    Flag:
    Sweden
    Was there a change of government in the nearest election following the recession?

    1. United States - Yes (2008)
    2. Japan - Yes (2009)
    3. China - No (2012)
    4. Germany - No (2009)
    5. France - Yes (2012)

    6. United Kingdom - Yes (2010)
    7. Italy - Yes (2013) [caretaker technocrat government from 2011]
    8. Brazil - No (2010)
    9. Russia - No (2012)
    10. Spain - Yes (2011)

    YES: 6
    NO: 4

    For most of the "no's" I think they benefited from the fact that their elections did not fall sooner than two years after the crisis, giving the voters some time to cool down and forget about what happened. Germany is the anomaly here, where Merkel survived re-election just one year after the meltdown.
     
  27. hcheng02 Well-Known Member

    Messages:
    9,649
    Likes Received:
    103
    Trophy Points:
    419
    Joined:
    Apr 22, 2006
    Reputation:
    You would still have Bush screwing up the Hurricane Katrina response as well as getting America stuck in Iraq which was by then already known to be a quagmire. There was also the case of McCain picking Sarah Palin to be his Vice President, which back in the day was actually a deal breaker for many people due to the fact that she was pretty much obviously unqualified to be potential President.
     
  28. mr_shadow Minister of State Security Moderator

    Messages:
    32,143
    Likes Received:
    1,393
    Trophy Points:
    1,818
    Joined:
    May 16, 2005
    Reputation:
    Flag:
    Sweden
    I remember the last decade in part as one of punning acronyms, where we blamed all the world's ills on the PIGS (Portugal, Italy, Greece, Spain) and hoped to construct a new global economy from the BRICS (Brazil, Russia, India, China, South Africa).
     
  29. Darkmatter Lion's Sin of Pride

    Messages:
    9,294
    Likes Received:
    656
    Trophy Points:
    618
    Joined:
    Jun 6, 2015
    Reputation:
    Too bad BRICS devolved into IC. Brazil's economy is in a turmoil, Russia has sanctions, and I'm not sure about South Africa.
     
  30. Roman Emperor

    Messages:
    32,798
    Likes Received:
    1,244
    Trophy Points:
    1,468
    Joined:
    Jul 30, 2009
    Reputation:
    Catdank Faction:
    I was kinda in the same boat there. I finished uni in 2008 and then my master's in 2009, so I never really felt the effects of the crisis as badly as I would have if I went to uni after the crash.
     
Loading...