How We Should Be Preparing For The Next Banking Crisis

Ever since the financial crisis, Americans have begun to see bubbles everywhere they turn. The damage wrought by the real estate bubble has been so extensive that the nation is rightfully terrified that another asset bubble is inflating beneath our noses, preparing to wreck the American economy at the drop of a hat. Bubble-phobia has now become issue number one for those who reject Ben Bernanke’s aggressive regiment of monetary stimulus, as they think it may be inflating bubbles in everything from real estate to Treasury bonds.

Ever since the financial crisis, Americans have begun to see bubbles everywhere they turn. The damage wrought by the real estate bubble has been so extensive that the nation is rightfully terrified that another asset bubble is inflating beneath our noses, preparing to wreck the American economy at the drop of a hat. Bubble-phobia has now become issue number one for those who reject Ben Bernanke’s aggressive regiment of monetary stimulus, as they think it may be inflating bubbles in everything from real estate to Treasury bonds.

For years, student loans have been the only option for most of the students to receive a decent education in one of U.S. best universities. However in the recent years, the increasing number of default on student’s debts drew the public’s attention.

Spanish banks have already shed 30,000 jobs in ins banking crisis. Another 20,000 cuts are due in 2013, along with pay cuts and reduced pension contribution. In response Spain's Banking Unions Announce Strikes. Workers at three of Spain's bailed-out banks will stage strikes in coming weeks as they fight mass layoffs, unions said on Monday, spreading industrial unrest to a sector where walkouts have so far been rare.

THE Congressional Budget Office has once again revised down the estimated budget cost of TARP—the bank rescue bill passed in 2008. The government is now expected to get back all but $25 billion of the money dispensed under the bill. As of August, the total loss was anticipated to be around $66 billion, and back in March the cost was pegged at $109 billion.

I think the idea that Fannie Mae and Freddie Mac somehow “caused” the housing bubble or the financial crisis is nonsense. But as Megan McArdle observes, the Fannie/Freddie bailout looks set to have a far higher net cost than the TARP or AIG bailout. Interestingly, this most expensive action also seems to me to have been the least-scrutinized and least-controversial.

Linus Wilson submits:It was Lehman Bothers that failed when its short-term creditors pulled their money out of the bank. Bear Stearns was bailed out by Federal Reserve guarantees that facilitated a sale to JPMorgan Chase (JPM).