This disaster was caused by Democratic Senators like Schumer and Clinton (on the Banking committee) forcing banks to make loans to people who were bad credit risks. Schumer and Clinto failed in their basic oversight duty, all to curry favor with "minorities" and illegal immigrants.

Ken Sentis, Varninger, USA

Perception is NOT reality.
An unconstitutional, debt-based, coercion-based ("legal tender"), fiat medium of exchange is merely a mechanism for the clever to steal the labor of the ignorant. It is unsustainable in the long run because "government" (cabal) canNOT control Nature's market forces.

AbleGoodman, Aspen, USA

I thought banks were supposed to be good at investing money?

I don't have confidence in them not losing what I have in there now.

Shahar Helel, Perth, Australia

Where is the US getting the money to bail out its institutions? As far as I know it's several billions in debt to the rest of the world.

Maybe if the US stopped thinking it can do no wrong it may get somewhere.

Big Ger, Truro, England

I wish these articles would quote both sides. Try making an argument sometime instead of just showing the negative opinion.......oh, I forgot! That's what sells the papers!!! Duh!

Janice, Chicago, USA

@ Marion in LA ...good to see someone else sees it the way I do...They busted Argentina's peg to the dollar only to buy back everything the day after for a third of the price...economic mega coup!

Diego, Buenos Aires, Argentina

Tim in St. Louis is dead on. However, with President GWB's wild and crazy belief in the "unwavering benevolence" of the "free market", his minions on Wall Street were only too happy to pass on those hollow securitized mortgages and spread the virsu world-wide.

Dave, Carson City Nevada, USA

I hope that Michael in West Hampton is right. The need is for the US dollar to be gold-backed again - probably valuing gold at $10,000 an ounce - and for the Fed to be a buyer and a seller at that fixed price. Other major currencies should follow suit. Gold equals stability and more confidence.

Geoffrey Woollard, Cambridge, England

Everyone has a bit of the truth, but the bit of truth is oftentimes slanted by one's political or world view. My slant is this: "You can not serve both God and mammon" and "The love of money is the root of all evil".

Thomas, Minneapolis,

I pay $1700 a month for med insurance for my 3 sons, wife and myself . It only covers 70/30 I'm stuck with 30%, if anything goes wrong I'm screwed. I'm going bankrupt tryin to pay these premiums and it goes up all the time. The family man is all but ruined in the US I cant support my family

scott, fresno, usa

Guys,

Whats going to happen is the US will soon monitize the debt and pick up the tab for everybody. Then when we can no longer borrow money from other countries, the US will repudiate the debt, issue a new dollar, and the game will start all over again. Dont worry, be happy.

Michael, West Hampton, USA

Stop acting like victims. Economics have always changed and will continue to do so, as will employment opportunities and trends in what occupations make better choices than others. Decades ago, a corporate career was the "thing". Today, self employment is. You have to adapt, not complain.

robert van der upwich, long beach, ca, usa

Oh, Lord have mercy, Jessy Scholl, pppleas. Someone explain to me in logical economic sense, how in the heck Dubya created the housing bubble? Presidents can't do that...stupid lending institutions do that by lending $$ to folks that should have never received a loan to begin with.

TIM, St. Louis, USA

Anyone who blames one American political party or the other is a clueless idealogue. Both parties have merged to become the Republikrat/Demoblican party, of the globalists, by the multi-national corporations, and owned by Soveriegn Wealth Funds controlled by foreign governments hostile to the U.S.

Tommy Boy, Washington, D.C., USA

A major part of the problem is all the illegal immigrants to whom we are providing health care, education, etc. I have to pay $625 a month for my health care and can't afford to cover my children. I need to find out how to become an illegal immigrant so I can get everything free too!

Suzanne, Dallas, USA

wow, ever heard of the federal reserve? Credit expansion is the culprit, not a president. What you guys are saying is political bantha fodder. Read some more Austrian economics books, thank you.

Jon nielsen, south jordan ut,

Not only is greed running rampant, we no longer have business owners that are loyal to their own country & citizen workers. They continue to sell off their companies to foreigners, then it's us that are out of work eventually. No job, no revenue. I'm sure this goes on in the UK too.

Bobc, Grayson, USA

It is a number of factors. Niqua from Lancaster is half right because part of the blame lies in Democratic factors because we were in a recession during the 1992 election and Bill Clinton used the economy to his advantage and helped create the housing bubble with Republicans in power in congress.

Jessy Scholl, Mandan, ND, United States

What also helped is that the tech bubble burst on President Bush's II's first term and the housing bubble was created because Dubya didn't want to end up like his dad which would be a one term President.

Jessy Scholl, Mandan, ND, United States

I keep reading that this is the worst crisis since 1929. If that is the case then "we ain't seen nothing yet". The problem is we all think this will all pass in a year or two and we will carry on blowing the debt bubble. Those days are over but people have not got the message yet.

Chris, Chipping Norton,

I never disparage my country. We will make it through this crisis.

C. Kaufmann, Jackson, USA

Look to Argentina in the 90's, as model for what is being done to USA now. The same network of power mad financiers took down the Argentine economy, bankrupted the country, then bought it up on the cheap. Our free market economy/democratic republic are being dismantled by emerging Global Empire.

Marion, Los Angeles, United States

Nothing new here. Just more piling on by so called experts that do monday morning quarterbacking. It does not accomplish anything of value.

John, Surprise, USA

Time for the US to crash and burn.

Tim Osman, hartford, us

I'm not stuffing my money in the matress just yet.

John, St. Louis, USA

This article has been corroborated by several traders. The US Central Bank, (The Federal Reserve), has cut rate too low. Too much money was made available for lending and people that could not or should not buy houses bought anyway. The banks are taking a hit on the back end and are going under.

Fernao de Magalhaes, Guayaquil, Ecuador

I have been in retail for over 25 years. How can so called "experts" claim that raising interest rates heads off inflation. My friends, loan interest is a major factor in costs of operations. Interest rate goes up, means you must recover these dollars by raising your cost of goods.

randy, smithboro, USA

Niqua, Lancaster, USA, is completely right! Democrats claimed that "Minorities can't get loans for homes, because of institutional racism in the banking industry".

They then forced the banking industry to create these "sub-prime", no background check loans.

James X, California, USA

Quite amusing really - the present right wing US administration adopting socialist bail out policies at Freddie Mac and Fanny Mae. Go the full measure and Nationalise them why not? Ho-ho.

Stu Peters, Nova Scotia,

You do have to wonder what self full filling impact these experts have on perpetuating the very thing they write about. No doubt some number of people will be begin withdrawing money from their banks as a result of this article. I still remember Greenspan and his comments pre the tech bubble bust.

Keith , Philadelphia, US

Fred,

These are not conservatives who are using our taxes to bail everybody out of trouble. There are no conservaticves in the US Fed. Govt. and there is no difference between Dems and Republicans. They are all in the soup together!

ed, PA, USA

ed, newtown square, usa

lady at east west predicted wells fargo will be gone. thought she was nuts.

jorge, northridge, usa

These so called experts are just trying to keep themselves in the limelight. The true definition of expert is in 2 parts. Ex meaning has been amd spurt meaning a drip under pressure. just think about that definition and you will see that most experts are full of crap.

Dennis, Bacliff, USA

Why do these people have to open their big fat yaps? No one knows for sure what the future will be. All it accomplishes is making people nervous and depressed. Are their egos so out of control that they just have to have the spotlight on them all the time?

Steve Hollar, Lake Elsinore, USA

Paul B, Marshfield, USA


No Paul, what these banks have are willing accomplises in the US governement. These same conservatives who scream about compatition, think nothing of bailing these banks out with taxpayer money.

Fred, Wilmington, USA

Doom and gloom or realism?

There is little doubt that the USA economy is on a cliff edge and the failure of another major financial institution could push it over the edge.

And the gross financial/fiscal mismanagement of the Bush years just adds to the danger.

1929 all over again?

Joe McT, Glasgow, UK

All Central Banks, are privately owned, allowing a great Fascist Clique of Rockefeller's, Rothschild's, and Others, who control them, are the New Emperors, Greedily Distressing and Grabbing properties. Government's duty: Seize Central Banks: Halt Greed's Destruction.

James Thompson, Saint Petersburg, Florida , USA

Rogoff is actually an optimist. This is all just starting, and it is going to be very, very ugly. If you don't believe that, you are in for a real shock. Take my advice - prepare now.

Jim, Clinton, CT, USA

The backstops are in (credit facilities at Fed, U.S. taxpayer money) such that a failure of an institution many times the size of Bear will not be systemic. However the nasty trade off will be an enormous rise in inflation greater than the 1970s.UST 10-yr notes will near 10% before 2013.OBAMANATED

Duncan, Gloucester, USA

Thank you for the balance this article gives to the constant cheerleading coming from Wall Street these days. One cannot turn on the TV without seeing some talking head sounding the "all clear" and advising to get back into the financial stocks. We are NOT out of the woods.

Elwood, Los Angeles, United States of Apathy

Lets go ask another another leading academic economist his opinion and he will probably tell you something completely different. Whats the point? Where were all these geniuses back in 2006?

Tom, Newark, DE,

David Nammory - Good point on de coupling. There is decoupling to some scale, but the complicated investment structures negate much of that. Plus, there are relationships where they weren't expected. Think corn and energy. We'll see which firms had good fin. risk practices in the coming years.

Rob, Milwaukee, USA

There really is some claptrap and hypocrisy written on these comment boards. Yes we are going through tough times economically and yes the desire for profit is part of the cause - "greed " as the self-righteous call it. But its city profits and taxes that pay for welfare, schools, free health etc.

John Harte, Exeter, UK

"Large American banks have greater assets than many small countries and it would take an awful lot for one to fail."

Would that inc places like Zim and others where the COUNTRY has failed ?

Takes a lot but not impossible - and a lot is happening.

Saver, Cardiff, Wales

line six : "Untied States"
Maybe more true that intended, as things begin to come unravelled in the USA!

jonathan, stirling,

What is most interesting is how sure some people of disaster and how eagerly they are looking forward to that eventuality.

James Dill, Lansing, US

Many of the people making comments about the economy, whether in the USA or UK have their own agendas and are, unfortunately, able to to gain publicity for their views.

Some sensibly moderated opinions about growth, inflation , and interest rates would benefit us all.

Tom W, cheshire,

How many of you were around in the late 20's and early 30's? The writing is on the wall. Don't depend on institutions for anything, and I mean anything.

Greg, Charlottesville, USA

Paul Marshfield, you are blind to what's happening. Banking worldwide will crash because of what's happening in the U.S. Google "housing bubble" and study the analysis available. The world will soon see the kind of inflation referred to in Rev 6:6 of the bible.

Wilson Randolph, New York City, USA

And as usual the failed bank executives will retire into the red-ink sunset with their villas and yachts and third homes and off-shore bank accounts and leave the judicial system shrugging their shoulders. So what is wrong in this picture?

Eugene, heidelberg, germany

Every great civiliation has collapsed, and now we have a front row seat to see how it happens - greed and corruption seem to be the common driving factors as history repeats its self!

Scott, Wichita, KS, USA

The root cause of this financial turmoil, IMHO, has been the 'politicization' of the US Fed Reserve, specifically Greenspan. When the party is going strong, we love the bartender. When we sober up, the hangover sets in. Greenspan loved the limelight, and kept the drinks coming - low rates/too long.

Jim Anderson, Boston, US

We have not been here before so there are no comparisons to past financial crisis. Those in charge have a shocking lack of basic economic fundamentals. We are facing the fall of Western Capitalism with the looming question, What will replace it, The Rise of the East or a New Dark Age?

William L. Donlon, Rochester New York , USA

The worst hasn't come yet . The banks still haven't acknowledged all of their losses from the real estate meltdown and they are quickly running out of money. We are in a 'Catch 22' in that credit is tightening just when what it is needed to reverse the housing slump. Greed, greed and stupidity!

mike from nyc, NYC, USA

In the U.S. the blame must go to one place.

Unfortunately as a Democrat, it lies with the Democratic party who forced the lending industry to ease credit/borrowing rules. In doing so, many people who under previous circumstances never would have been able to get home loans suddenly were able to.

Niqua, Lancaster, USA

I am SO sick of the prophets of doom n' gloom! That's the way to do it, scare the bejeebers out of people. Ever hear of a self-fulfilling prophecy? Part of the problem is that these "respected experts" are causing a panic.

Brenda, Atlanta, Georgia, USA

Paul,

The problem is those assets are either overvalued or junk.

Gort, VA,

"Large American banks have greater assets than many small countries and it would take an awful lot for one to fail."

...That's the problem, Paul! There is an awful lot wrong! It's your "too big to fail" mindset that caused the problem. Just plain arrogance.

Jon Whitmore, Binghamton, NY, US

Why has noone been charged for this almight financial hiccup? Surely banks and other financial institutions have breached a number of rules and regulations in allowing this crisis to start, and if they haven't, then governments and regulators should be help liable ?

Paul Singh, London, UK

Amidst all the recent gloom and doom there have been much learned comment that the crisis was over and growth would shortly continue.
What happened to the theory about de coupling?
With markets as volatile as this the only place to hide is in cash and here lies the true demise of equities..

David Nammory, Liverpool,

We keep hearing the worst is yet to come, I think the worst has past. Large American banks have greater assets than many small countries and it would take an awful lot for one to fail.

Paul B, Marshfield, USA

The wheels are about to fall off the Wall Street wagon and no one really knows how bad it could become.

Deregulation of the banking industry has been a huge mistake by Governments across the globe.

And the behaviour of most of the Banks has been simply barking mad.......

Joe McT, Glasgow, UK