Stock Market Bubbles

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1637 Tulip Mania: The First Economic Bubble 8 min video

Tulip Mania (The Real Story) Part 1 1 of 3 videos

1720 South Seas Bubble: First Major Manipulation of Financial Markets 6 min video

South Sea Bubble 1720 1 of 5 videos
Mississippi Bubble 1720

Mississippi Bubble 300 ears Later

1987 Market Crash 11 min video

The Stock Market Crash of 1987 | Cancel Crash
1929 The Great Crash 58 min video
2000 Tech Bubble of 2000 Some saw it coming 7 min video

The Dot Com Bubble 10 min video
 2008 Financial Crisis

Financial Crisis 2008 Explained

2008 Financial Crisis The Real Truth

The Crash 2008: Ten Years On 1 of 4 videos on recent political economy


Another Financial Crisis Could Be Coming 30 min video
financial architecture, naked default swaps, and no skin
(insurable risk) in the game gambling.
Editor's Note:
  Financial Architecture Analysis correct but

Bailout Tracker indicates bank bailouts were paid back.

Financial Crisis 2018-2019? blames debt for 2008 and FED's response to
the next economic slowdown will dramatically lower Aggregate Demand

2018 Stock Market Crash Coming! 12 min video based high debt

Explicable Mystery of National Debt national debt not important

People loved dot-com companies until they didn’t.
They loved credit default swaps until they blew up.
Now they love cash-burning companies.

“When the music stops, in terms of liquidity, things will be complicated.
Chuck Prince on debt-fueled private equity deals before the economy collapsed.
Companies have a strong incentive to play by the rules of the day.
Competitors are giving out cheap loans, then you dole out cheap loans or lose market share.
Worry about the long-term risks, but you might be out of a job by then.

Uber Technologies Inc was born in an era of low interest/cheap capital..

Investors have been happy for companies to burn through war chests chasing growth.
Uber happily had operating losses of more than $10 billion in three years
Rival Lyft Inc. lost almost $1 billion last year but remains above its private-market value.
Tesla Inc. has gone back to its money-losing ways. 
The stock is still more valuable than Ford Motor Co., which
blew past profit estimates last quarter.
Netflix Inc.’s negative free cash flow last year amounted to nearly $3 billion, same this year.

Of course, if it were so easy to separate money wasters from business visionaries, there wouldn’t need to be a market.

But the world changes—sometimes suddenly. The economy can collapse. The rules of the game can change.
market has been rewarding growth stocks over traditional value investments, but someday that will change. 

Summarized by Walter from Eric Newcomer Bloomberg Article.


The Michael Hudson Report: The “Next” Financial Crisis and Public Banking as the Response

Posted on  by 

Left Out, a podcast produced by Paul Sliker, Michael Palmieri, and Dante Dallavalle,

‘The Hudson Report’ is a Left Out weekly series

In this episode of The Hudson Report,  implications of the flattening yield curve, the possibility of another global financial crisis, and public banking as an alternative to the current system.

Can you explain what the yield curve signifies, and if all these signals I just mentioned are forecasting another economic crisis?

Michael Hudson normally you have to pay a higher rate on the pretense that the interest-rate premium is compensation for risk. Banks and the wealthy get to borrow at lower rates.

Right now  short-term rates  are even higher than the long-term rates.  Unnatural unless  you look at what the economy is doing.

The economy’s been in a recession ever since 2008, as a result of what President Obama did by bailing out the banks and not the economy at large.

GDP is up.” but if you look at what they count as GDP, you find a primer on how to lie with statistics. Imputed rents for rising rents that homeowners would have to pay if they had to rent their houses from themselves. That’s about 6 percent of GDP right there.

A result of the 10 million foreclosures imposed on the economy by not writing down the junk mortgage debts to realistic values, companies like Blackstone bought up many of the forfited properties so there are fewer homes that are available to buy. Rents are going up all over the country as homeownership has dropped by abut 10 percent meaning more people have to rent. When more people have to rent, the rents go up and when rents go up, people lucky enough to have kept their homes report these rising rental values to the GDP statisticians.  Actually is a rent rise is overhead but it’s counted as rising GDP. That confuses income and output with overhead costs.

The other jump in GDP is paying more money to the banks as penalties and fees for arrears on student loans and mortgage loans, credit card loans and automobile loans.

The statistical pretense is that they’re taking the risk on making loans to debtors that are going bad.

There making profits on these bad loans because the government has guaranteed student loans mortgages loans made by the FHA that the banks are getting penalty charges on. What’s good for the GDP here is awful for the economy at large!
This is bad news, not good news.

Investors see that the economy is not growing so they’re bailing out, taking their money and running. There’s only one safe place to put your money: short-term treasuries. You don’t want to buy a long-term Treasury bond, because if the interest rates go up then the bond price falls. So you want buy short-term Treasury bonds. There’s nowhere else to put it in the real economy, because the real economy isn’t growing.

What has grown is debt  State and local budgets are broke as a result of pension commitments that exist because politicians cut taxesto get elected.

Commercial property rents are in trouble because as the economy shrinks, stores are closing down and more commercial mortgages owners are in arrears.

If his protectionist policies interrupt trade, you’re going to see companies being squeezed by lower export sales and rising import cost.

Banks are having problems of they hold Italian government bonds because Germany is unwilling to use European funds to bail them out.

Italy may exit the euro increasing the chance of anarchy. So people are parking their money in the short term debt and not investing in economic growth.

So a rise in demand for these short-term Treasuries indicates investors and businesses find too much risk in the economy to invest long-term.

Some think we need not worry near term about a  crisis because our regulatory infrastructure is sound compared to before 2008Are the shortcomings of Dodd Frank? Have recent policies  the law made us more vulnerable.

Point one People who say don't worry wrecked the economy  and to them “more sound” means government is going to bail out the banks at public expense all over again/

The five largest banks have grown much larger since 2008 because  depositors and companies think crooked that it grows so fast are too big to fail and I should move money to the crooked big bank

Large banks approved and captured regulators by approving Federal Reserve members and members of the local and smaller bank regulatory agencies.

Second, bank lobbyists have convinced Congress to de-tooth the Dodd Frank Act.  Banks are very heavily into the same derivatives that’s brought down AIG. They bet trillions on on which way currencies or interest rates will move. They avoid regulation by using a special-purpose entity. So the banks avoid back up capital agains derivitive gambling. Someone will be on the  losing Lehman Brothers side resulting in rolling defaults.

The Trump administration de-tooth to the Consumer Financial Protection Agency and banks believe they can follow the Wells Fargo, use a fraud based model and earnings are soaring.

They are growing, making high profit and ony pay a tiny penalty for cheating their customers.. So more banks are jumping on the high-risk consumer exploitation bandwagon.

 Recently the Democracy Collaborative publoishe The Crisis Next Time: Planning for Public ownership as Alternative to Corporate Bailouts. It calles for a transition from private to public banking. 

Lets suppose that back in 2008 Obama and Wall Street had not blocked Sheila Bair from taking over Citigroup and other insolvent banks She felt they had gambled on derivitives, were incompetent, and were outright crooked. Citibank would be operated as a public bank. How would this be different?

A public bank wouldn't
make corporate takeover loans and raids.
lend to payday loan sharks.
redline local branch and post office banks.
gamble on derivatives
make junk mortgage loans

A public bank would 
make loans to local branches replacing payday loan sharks
serve small depositors, savers and consumers with checking accounts
check clearing automatic bill paying
help finance basic production and basic consumption
wouldn’t engage in consumer fraud

Banks have sort of turned away from small customers, low-income neighborhoods, and they’re not lending much to businesses. More American companies are issuing their own commercial paper and pay interest more than pension funds or mutual funds can get from the banks. Vanguard and others are buying this commercial paper.

We’re still in the 2008 crisis! This is the middle stage of that crisis. The crisis was caused by not writing down the bad debts, which means the bad loans, especially the fraudulent loans. The economy’s been limping along ever since. They say there’s been a recovery, but even with the fake lying with statistics – with a GDP rise – the so-called “recovery” is the slowest that there’s been at any time since World War II. What is growing, it’s mainly the financial and real estate sector, and monopolies like health care that raise the costs of living and crowd out spending in the real economy.

Pensions shoul be paid out current income, not financialization.
Economy has to be de-financialized,
Slow economic shrinkage a break in the chain of payments crisis.

Related links

Markets Speculation and the state 120 min video

Cycle Analysis 

U.S. Economic Normality 1945-2015    p 2  

International Normality Adjustments   

Great Recession  

Great Recession in Perspective