Hello all: I hope your Friday is treating you well!
Last night I watched the HBO documentary "Too Big to Fail". It was riveting. It was all about the financial meltdown of 2008. I have to say I'm probably in the majority in that I had no idea how serious the crisis was.
Paul Giamatti plays Ben Bernanke and William Hurt plays Secretary Paulsen in "Too Big to Fail". They also look a lot like the real characters, especially Giamatti. Giamatti playing Bernanke sums it up best when he tells Congressmen that the Great Depression started due to an absence of credit; unemployment came later. In the movie, Paulsen fields a phone call from Geoff Immelt of GE saying they can't borrow money. Paulsen was shocked.
Could "Too Big to Fail" happen again? Absolutely. What came out of it was eleven banks controlling over 70% of the nation's business. But in the movie Paulsen reminds the CEO's of the banks (some were portrayed as pretty greedy) that if they failed everything else is moot.
I find it interesting that Secretary Geithner recently offered a fairly pessimistic view on growth for our nation over the next few years. Although it may not have been what we wanted to hear, he may be right. We have double the debt we had before the crisis and a lot of it is because of the bailout done in 2008.
What do I think the solution is? It can start with pricing that is fair and affordable. Look at the price of oil, for example. Recently OPEC (the consortium of oil producing nations) chose not to lower the barrier on a barrel of oil. So the price stayed at over $100/barrel when a lower pricepoint is needed and justified.
The stock market has reacted negatively to this news and I wouldn't be surprised if the market goes lower. Of course this is good for mortgage interest rates but I would honestly like to see some positive signs regarding our economy instead. The onus is on our elected officials, etc. to put pressure on the oil companies, etc. to be realistic about what they charge the consumer. Otherwise, they are choking off a recovery just to line their own pockets. Companies can talk all they want about future projections of consumption, etc. but if they tamp recovery now they may fail due to it.
Again, I think "Too Big to Fail" is a distinct possibility again. I'm not a really a doom and gloom guy but I also hope we learned our lesson last time. So what do you think? I'm curious. Thanks for reading and if you haven't seen the movie, watch it. It is riveting!
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