Ten years ago, the nation's banking system collapsed, prompting a massive federal bailout that likely prevented a second Great Depression - but couldn't contain the enormous instability that still plagues the American economy and which contains the seeds of a potential sequel.
In 1998 the big banks and brokerage firms did business and copied the money-losing trades of hedge fund Long-Term Capital Management, faced gargantuan losses and were saved by a Federal Reserve-crafted bailout.
The Lehman collapse sparked a panic that quickly spread to the remaining players: Goldman Sachs, Morgan Stanley, Citigroup, Bank of America, etc.
The remaining banks survived, so a Great Depression was averted, replaced by a Great Recession instead when banks became stingier with their cash, businesses folded and unemployment shot up.
Banks like Citigroup, Bank of America and even JP Morgan - albeit the best-run bank in the country - have their Wall Street risk-taking and FDIC-insured banking deposits for average people under one roof.
Plus, the banking system has its risks more concentrated than ever because a greater percentage of assets are held by fewer players than in 2008.
Money manager Blackrock holds more than $6 trillion in assets - more than JP Morgan, which has more than any other US bank.
https://nypost.com/2018/09/09/the-feds-havent-done-whats-needed-to-prevent-the-next-bank-mega-bailout/
In 1998 the big banks and brokerage firms did business and copied the money-losing trades of hedge fund Long-Term Capital Management, faced gargantuan losses and were saved by a Federal Reserve-crafted bailout.
The Lehman collapse sparked a panic that quickly spread to the remaining players: Goldman Sachs, Morgan Stanley, Citigroup, Bank of America, etc.
The remaining banks survived, so a Great Depression was averted, replaced by a Great Recession instead when banks became stingier with their cash, businesses folded and unemployment shot up.
Banks like Citigroup, Bank of America and even JP Morgan - albeit the best-run bank in the country - have their Wall Street risk-taking and FDIC-insured banking deposits for average people under one roof.
Plus, the banking system has its risks more concentrated than ever because a greater percentage of assets are held by fewer players than in 2008.
Money manager Blackrock holds more than $6 trillion in assets - more than JP Morgan, which has more than any other US bank.
https://nypost.com/2018/09/09/the-feds-havent-done-whats-needed-to-prevent-the-next-bank-mega-bailout/
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