Lightning is Striking Again ...

Is it just that we don't have the right people at the Federal Reserve
Board?

Or is capitalism as we know it a "serial killer" when it comes to
investment bubbles?
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"This is like deja vu all over again." -- Yogi Berra
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And why do we keep suffering from these partial breakdowns in the
economy and the financial system -- not just once in a lifetime, but
every 5-10 years or so?

A. 1973-1975: Arab oil embargo, oil price spike, followed by US and
world recession


B. 1975 - 1980: Problems with "stagflation" or combined inflation
and high unemployment in US, Western Europe.


C. 1979 - Iranian Revolution and "Second Oil Crisis," causing
intensified inflation and unemployment in US


D. 1980 - 1982: Federal Reserve raises short-term interest rates to
fight inflation; result is deep recession in the US and around the
world.

In the US, average unemployment rate during this recession ises above
10% during the worst months; average African American unemployment
rate hits a peak of more 20%, with almost a 50% jobless rate for
young African American men.

http://en.wikipedia.org/wiki/Early_1980s_recession


E. 1981 - 1983 and after: Third World debt crisis threatens future
of US, European banks.


Living standards in Latin America, Africa, East Asia fall as
governments strive to repay Western bankers; US government intervenes
to head off default by Mexico; hundreds of billions of dollars in
Western bank loans to Third World borrowers have to be written off.


Although now forgotten by US media, the Third World debt crisis still
continues to haunt the less developed countries and impoverish their
people today:


http://www.newint.org/easier-english/money/debt.html


F. "Black Monday" 1987 - Dow Jones Industrial Average on Wall Street
plunges 508 points, touches off brief worldwide panic in securities
markets.


In this crisis, stock prices also plunge sickeningly in Hong Kong,
Australia, Spain, Canada, the UK and New Zealand.


http://en.wikipedia.org/wiki/Black_Monday_(1987)


G. Late 1980s, early 1990s - US "Savings & Loan Industry Crisis"


Following government deregulation of Savings & Loan industry, plus
unwise speculation in real estate, more than 700 savings and loan
associations fail financially around the US; government bailout of
the
industry costs US taxpayers an estimated $120 billion.


http://en.wikipedia.org/wiki/Savings_and_Loan_crisis


H. US Recession of 1990 - 1991. Partly because of Savings & Loan
crisis, US economy goes into mild recession in 1990 and 1991.
Economic damage also occurs in Canada, UK, and Japan, although to a
lesser degree.


http://en.wikipedia.org/wiki/Late_1980s_recession


I. 1994 "peso crisis" in Mexico. US government under Bill Clinton
rushes through emergency $50 billion loan to keep Mexican economy
afloat, keep crisis from spreading to other Latin American countries.


http://en.wikipedia.org/wiki/1994_economic_crisis_in_Mexico


J. Asian Economic Crisis of 1997 -- aka "IMF Economic Crisis of
1997"


http://en.wikipedia.org/wiki/Asian_financial_crisis


K. 1998 -- spectacular failure of Long Term Capital Management, a
big US hedge fund, and "massive" emergency bailout of the company by
other

Wall Street investment houses. There are fears expressed during the
crisis that a possible failure of LTCM could bring the world
financial system down, although the crisis is fixed without that
occurring.


http://en.wikipedia.org/wiki/Long-Term_Capital_Management


L. American "Dot Com" Investment Bubble of 1995-2000, followed by
2000 recession


http://en.wikipedia.org/wiki/Dot-com_bubble


M. Late 2001 - Enron scandal, financial collapse of Enron, Worldcom
and many other big corporations due to fraudulent accounting
practices, etc.


http://en.wikipedia.org/wiki/Enron_scandal


N. Subprime mortgage crisis, 2007 - present


http://en.wikipedia.org/wiki/Savings_and_Loan_crisis
.

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