A new report from the Dallas Fed this week concludes that the 2008 financial crisis has cost just the US more than $6 trillion to date, and with ongoing costs continuing, could be closer to $14 trillion through its legacy of swollen public debt, lost resources and permanently diminished household financial strength. Moreover, still too big to fail banks continue to cost and threaten the real economy as well as the basic tenants of capitalism:
Deemed “too big to fail,” these financial intermediaries lacked discipline and accountability leading up to the crisis and proved largely immune to the downside of their excessive risk taking. This special treatment violated a basic tenet of American capitalism: All people and institutions have the freedom to succeed and also to fail based on the merits of their actions. In a way, the 2008–09 bailouts exacted an unfair and nontransparent tax upon the American people…
Although unprecedented fiscal and monetary action in the throes of panic during 2008–09 may have prevented a full-blown depression, such intervention did not come without significant costs. Society must deal with the consequences of a swollen federal debt, an expanded Federal Reserve balance sheet and increased regulations and government intervention for years to come.” See the whole report: Assessing the costs and consequences of the 2007-09 financial crisis and its aftermath
Bloomberg’s Max Abelson talks about risks to banks five years after the collapse of Lehman Brothers and ensuing financial crisis. Here is a direct video link.
Sanford Weill, former Chairman & CEO of Citigroup, discusses the impact of the Dodd-Frank Act on the banking industry and the need for more “transparency” in the financial sector, amid new regulations. Here is a direct video link.
And oh yes, btw, US housing risks resume as violently higher interest rates over the past few months have suddenly cut demand out from under over-inflated prices once more.