2008 Never Ended And It’s Going To Happen Now

This fight is about to get ugly

The 2008 crash will happen again — and it’ll be much, much worse than last time.

I was only 11-years-old at the time but can distinctly remember my parents and other adults freaking the fuck out.

It was weird experiencing both 9/11 and 2008 at such a young age. 9/11 was visible, so it made sense why we were fighting back, why so many cried, and why so many were angry.

2008 was invisible, yet it destroyed lives over a longer period of time. It was a slow-motion suicide for millions of Americans.

To this day many of those same middle-class Americans don’t understand why it all happened. And this is why it’s going to happen again.

How the 2008 Housing Crisis Happened

“They weren’t being stupid, they just didn’t care. They knew the taxpayers would bail them out.” — The Big Short

When real estate crashed it took everything down with them. The economy wasn’t too big to fail, it was too big it had to fail.

Here’s how it happened —

In 2008, banks started intentionally lending to lower-middle-class Americans who couldn’t pay them back. The keyword there is ‘intentionally.’

They lent to people with rock-bottom credit scores, no income verification, and little assets to their names. Loans were being handed out like candy. It didn’t take long before these low-class Americans decided it was smarter to not pay back the banks at all.

When the banks realized the real estate market was already screwed, instead of crying wolf, they repackaged their loans into piles of bad loans (also known as CDOs) and sold them off as “AAA” rated investments.

Yes, I’ve seen the Big Short and it was awesome.

Unbeknownst to investors, the safest AAA bets were full of home-buyers who weren’t going to pay their loans back. The banks just made them look pretty and had rating agencies pass them off as A-Ok. Talk about a circle jerk.

Anyone buying these AAA mortgage bonds was buying crap, but thinking they were getting a blue-chip investment. It wasn’t just investment banks who were about to get screwed, however.

Millions of ordinary Americans were tied up in these “AAA” investments through stock ownership or with their pensions. So when those mortgage bonds began to collapse everyone died. It’s as if the banks took out grenades laid down on them and killed everyone.

Then Americans began to spend less resulting in retail stores making less and firing thousands of workers. It was a horror show.

2008’s Biggest Takeaway

In summation, this is what happens when your economy isn’t based on anything but financial speculation.

American’s aren’t producers anymore, we’re consumers.

Our wealthiest people are guys like Warren Buffet, George Soros, and Carl Icahn who do nothing but move money around. Besides Elon Musk, the days of creating products to obtain wealth are dead.

This is a sign of bad things to come. An economy built on manufacturing has a solid foundation. So when your biggest industry is lending money and guessing on what’s going to happen — i.e. shorting stocks like AMC or GME— then your economy is a house of cards.

By the way, Warren Buffet hasn’t beaten the S&P 500 for the last ten years. Chew on that.

How the 2008 Housing Crisis is Going to Happen Again

When big banks fail they will get bailed out by the federal reserve. You will not. As George Carlin once said, “it’s a BIG club, and you ain’t in it.”

Now financial institutions are making risky bets again — as investors did with those mortgage bonds and CDOs — by purchasing derivatives.

Once you understand derivatives you’re going to get angry. I promise you.

Derivatives are investments that “derive” their value from the performance of other underlying assets whether that be a contract, an asset, an interest rate or virtually anything that can be “securitized” (turned into an investment).

Call and put options in the stock market are derivatives. Shorting a stock is a derivative. Derivatives amplify your gains, but they also amplify your losses. It’s extremely risky, especially if you’re borrowing on margin.

The derivatives market isn’t regulated. This is because in 2000 President Bill Clinton passed something called the CFMA or the Commodity Futures Modernization Act which made it impossible for anyone to properly regulate the derivatives market.

Shortly after, gambling became Wall St's favorite pastime. Here’s how much the derivatives market is worth, but first some context —

• The entire cryptocurrency market is worth a combined $2 trillion
• The combined value of the whole world’s real estate market is $270 trillion
• The total stock market value is $95 trillion

All crumbs compared to derivatives!

The combined value of the derivatives market is anywhere between $600 trillion to $1 quadrillion. The U.S. economy is a big bear spinning plates while balancing on a beach ball. It’s fun while it lasts, but tragic when the bear falls off and starts fucking eating people.

Here’s Where the Bad Investments Are Today

We already saw the derivatives market falter this year. You remember, don’t you? No! It was with GameStop (GME). Historically speaking, GameStop was the most shorted stock in existence.

Wall Street is used to sticking their hands too many times in the cookie jar and not being punished for it. This time it blew up in their faces.

While the Reddit community that led the charge was certainly full of crazies, internet trolls, and nearly-broke retail investors, it made sense for Wall Street to do everything in its power to shut them down.

Institutional investors were overexposed —they were spinning too many plates — and didn’t realize they made a fatal mistake by overextending themselves.

GME will happen again — likely with many other assets on the market.

The second place where Wall Street is overextended is in CMBS or Commercial Mortgage-Backed Securities. These are predatory loans that are given to commercial small businesses, which, unfortunately, took a big hit during the COVID-19 pandemic.

Many experts postulate these businesses losing 5 to 10% of their income. However, a recent academic study revealed the data to be much higher and that banks like Goldman Sachs and Citigroup were inflating the income of their reports.

Just as in the 2008 housing crisis, it’s good to make everyone think everything is ok — until it’s not.

Bottom Line

America had a good run.

100 years isn’t bad for an empire. After all, the candle that burns brightest also burns out the fastest.

Our economy is built on lies. And these liar loans will naturally crush the American dollar when all the spinning plates fall.

Additionally, we also have investors and internet dwellers savvy enough to point out all the cracks in the system. Bitcoin would not be this big if we weren’t in an information economy. The message is spreading to get out of the dollar — and do it fast.

All of this isn’t even mentioning the spinning plate of trusting the dollar no matter how much the Fed inflates. After all, they did print one-fourth of all money ever created last year alone.

I’m optimistic about people, but I’m not optimistic about systems that are allowed to unilaterally do as they please. Trust in American institutions is at an all-time low. Prepare yourself for the worst, hope for the best, and don’t be surprised by anything in-between.

For the first time, I’m going to add sources because this took a shit ton of research and help online. Do yourself a favor and watch the film The Big Short ASAP.

Reddit Post: https://www.reddit.com/r/Superstonk/comments/o0scoy/the_bigger_short_how_2008_is_repeating_at_a_much/

Andrei Jikh (Crypto YouTuber): https://www.youtube.com/watch?v=glhhCZJZZb0&t=218s

Matt Taibbi and Joe Rogan: https://www.youtube.com/watch?v=L0BHAD4tQwQ&t=496s

The Intercept: https://theintercept.com/2021/04/20/wall-street-cmbs-dollar-general-ladder-capital/

Ever since I was a child it was my dream to become a financial advisor. Unfortunately, it never came true. Therefore I am not a financial advisor and you should do your own research and not just listen to random people on the internet. Nothing contained in this publication should be construed as investment advice.

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