Are We Heading For A Bigger Global Financial Crash Than 2008?

What Recovery? Since 2008, Disaster Capitalism Is Still Running Amok On The Global Market

It is common knowledge  that the crash of 2008 was dreadful. But it seems that the very rough financial ride is not over as signs of an economic recovery in the United States are on a steep decline. The unemployment figure remains high, and the real estate market -except for some very select areas- is still in the toilet. Vast area of America are waste land where bargain prices real estate is a dime a dozen. Detroit is the ground zero of this disaster capitalism  market. An “entry” property in this no-man land landscape is $25,000, and you can buy a mansion of a former car industry executive  for what you would  pay for a run down house in the worst areas of Los Angeles.

Other grim real estate markets are Arizona, Nevada and Florida. In Phoenix, houses which used to sale for around $250,000 before the 2008 crash, are now sold for as low as $75,000. Shark investors, both US citizens and foreign, are smelling the blood and moving in these disaster markets to pick up properties. They either pay cash for it, or credit allowing they put a very large down payment. This is for one simple reason: banking institutions are not lending much at the moment.

Banks Are Not Lending

Do you remember the “good old days”? When you used to receive 10 invitations to apply for a credit card every week. It is likely that this enthusiastic  peddling to put you more in debt has stopped, unless your credit score is incredibly high. Regardless, and back to the real estate crisis, almost 100 percent of the properties moving in this market are bank owned properties, and the banks selling the properties are interested in cash deal to offset  the toxic assets still overcrowding their balance sheets. The fact that the banks are not lending has of course a negative impact on the recovery of the housing market at large. Banks have become distressed  landlords having to dump their properties during a depressed market.

But the banks are not losing, you are. They created the real estate bubble while reaping the huge benefits. In 2008 they got your money, shot-gun-wedding style, in an astronomical amount to shore up a system at the “edge of a precipice”. But now, the banks don’t want to lend you money, your own money, and  they might just take your house away.

Financial Crisis In Europe

Even so the economic situation is bad in the United States, the current predicament of Europe is even worse. It  is bleak. In southern Europe, countries  such as Greece, Spain and Portugal are either insolvents or close to it. This, in return, is creating a  stressful situation in which the richest countries of the EU-Germany and France-have to support financially the ones on the brink of financial collapse such as Greece. The IMF is also dealing with the European problem, but the transition period within the institution will make decision making more problematic.

Everyone remember the trauma of the financial-quake of 2008, but considering that none of the root problems such as the crippling cost of the wars in Iraq, Afghanistan, Pakistan and Libya  have been addressed, now with part of the European Union on the brink of a financial collapse,  we could have a global aftershock even bigger than the one in September 2008.

 

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2 Responses to Are We Heading For A Bigger Global Financial Crash Than 2008?

  1. +1 Vote -1 Vote +1antifa_action
    June 20, 2011 at 8:07 am

    All signs are pointing to this happening sooner rather than later, and any measures that are being taken by financial institutions, markets, and governments will prove only to protect and increase the holdings of a select few while increasing the eventual, and immanent, disastrous impact on the other 99+ % of us. Capitalism is failing and no one is willing to admit it. Like a drunk on a downward spiral it seems as though we are destined to hit rock bottom before we straighten up and build a sustainable future.

  2. Vote -1 Vote +1barf
    June 27, 2011 at 9:46 pm

    i have been saying this since the lehman debacle. the amount of debt, and the fed printing money out of toilet paper is a recipe for a complete collapse of the monetary system. and after they close the banks, we will have to exchange any cash into some new form of toilet paper…

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