If the US recovered from the financial crisis by 2010-2011, why is everyone in such a tizzy about it?

If the US recovered from the financial crisis by 2010-2011, why is everyone in such a tizzy about it?

Is it just a fundamental misunderstanding of what caused it?

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why would a triple A rating be given to a junk CDO in any rational universe?

>recovered

""""fully"""""" """""""""""recovered""""""""""""""""

t. the Obama administration

The United States hasn't recovered per se. We've just done better than Europe. The problem lies exactly with Obama and the perversion of Keynesian economics.

I'm a monetarist, meaning I agree with Milton Friedman. I like free markets and support monetary stimulus to combat recessions. While i disagree with Keynesians, what we've seen is the creation of "meme Keynesianism."

For example, Obama hiked taxes under his presidency. Now, why would he do this? Keynesians may favor government intervention, but tax cuts are a form of fiscal stimulus. Conservative Keynesians exist, like Greg Mankiw, who think that defense spending and tax cuts are ideal for preventing recessions. Mitt Romney's economic strategy of boosting defense spending while cutting taxes is another example of this.

But Obama basically used the stimulus of 1 trillion dollars to achieve virtually nothing and hiked taxes. Keynesians like Paul Krugman went and defended this because at the end of the day, Keynes has been perverted. Keynes' teachings are now used to justify socialism, even though Keynes wasn't a socialist (even if he said his policies work better in authoritarian governments like Nazi Germany).

I don't understand why this was wrong. It's mathematically sound. The risk of complete default is reduced if you use many loans. If you pool two junk loans of 50% default risk each your risk of complete default becomes 25%. Do this several thousand times and your risk becomes negligible.

did this guy actually have a personality?

but is that the real function of a rating? what is the purpose of "rating" them in the first place?

To give a reliable assessment of how risky an investment is?

>If the US recovered from the financial crisis by 2010-2011
by many metrics we haven't recovered and never will.

rate of employment participation,
rate of homeownership for all americans but disproportionately for minorities,
losses of credit,
losses of wealth by most americans,
losses to retirement accounts,
wealth disparity.
Job availability, particularly for millennials.

These things are fucked and appear to be staying fucked.

Oops, I forgot:
long term employment prospects,
full time employment prospects,
employer sponsored retirement accounts.

those were disappearing since the '90's though. '08 was just the nail in the fucking coffin.

if it was mathetmatically sound then why were "Hundreds of billions of dollars' worth of these triple-A securities... downgraded to 'junk' status by 2010" ?

and furthermore labeled a method to turn "dross into gold" or "ratings laundering"?

are you really going to claim nothing remotely shifty was going on here?

Because most of the jobs that were lost did not come back. There's a record number of people who've given up looking for new work, and much of the new jobs are independent contract gigs/Uber-based economy, and shit-tier retail jobs.

The Western world is finished. Not even in a /pol/ "muslims are the death of Western civilization" kind of way but politically speaking. American relative power (both financial and military) is in decline, regardless of who won the election, while other revisionist states like China are building their own strength. This isn't going to happen just yet mind you, American/Western hard and soft power is still king but change is still in the air.

Ask Marylin Monroe

youtube.com/watch?v=Vg5HIMnPx7k

>Obama basically used the stimulus of 1 trillion dollars to achieve virtually nothing

Fucking this. What the hell was even the theory behind the stimulus? The unemployment rate continued to increase for another 10 or so months after the so called stimulus. I remember the goto libshit excuse at the time was "well yeah but just think how much worse it could have been without the stimulus!".
Even when unemployment was eventually reeled in, no one wanted to admit the fact that previous full time jobs just split up into multiple shitty part time jobs and that millions of working age people straight up dropped out of the work force

Risk pool works as long as the underlying system is not affected. An isolated failure caused by it's own internals is one thing - you have accounted for the risk. Google systemic risk - people were not accounting for it correctly and propping ratings up.

>your risk of complete default becomes 25%
if real estate market plummets, you'll find mortgages defaults suddenly have a high correlation, especially if advisers are telling people to default as the only way to get revised terms. Check your math on correlated events.
also, who said they all had to default? If 1/4 of them default then you have risk > AAA. gtfo here

Obama hiked taxes because congress forced him to in a deal to get the debt ceiling lifted.

Having a debt ceiling at all is astoundingly idiotic. Failing to lift it at a time when much more stimulus was required is even dumber.

BTW why do you support monetary stimulus but oppose fiscal stimulus when monetary stimulus is inadequate to combat the problem?

>Obama hiked taxes

This is disingenuous bullshit and the rest of your post is disregarded. Read up on the tax changes under Obama. Let some cuts expire and extended others except for really high earners. Put some taxes on really high earners investment income for ACA. Made the individual mandate for ACA. There was no tax hike.

the shematih happened in 2015 it caused a collapse hard but they printed and saved it but get ready for a new one

Because he's dumb and people like him are the reason Europe isn't growing.

You need both fiscal and monetary stimulus damnit.