The real truth about the 2008 financial crisis | Brian S. Wesbury | TEDxCountyLineRoad

This talk was given at a local TEDx event, produced independently of the TED Conferences. The Great Economic Myth of 2008, challenging the accounting to accounting principal.

Brian Wesbury is Chief Economist at First Trust Advisors L.P., a financial services firm based in Wheaton, Illinois.
Mr. Wesbury has been a member of the Academic Advisory Council of the Federal Reserve Bank of Chicago since 1999. In 2012, he was named a Fellow of the George W. Bush Presidential Center in Dallas, TX where he works closely with its 4%-Growth Project. His writing appears in various magazines, newspapers and blogs, and he appears regularly on Fox, Bloomberg, CNBCand BNN Canada TV. In 1995 and 1996, he served as Chief Economist for the Joint Economic Committee of the U.S. Congress. The Wall Street Journal ranked Mr. Wesbury the nation’s #1 U.S. economic forecaster in 2001, and USA Today ranked him as one of the nation’s top 10
forecasters in 2004. Mr. Wesbury began his career in 1982 at the Harris Bank in Chicago. Former positions include Vice President and Economist for the Chicago Corporation and Senior Vice President and Chief Economist for Griffin, Kubik, Stephens, & Thompson. Mr. Wesbury received an M.B.A. from Northwestern University’s
Kellogg Graduate School of Management, and a B.A. in Economics from the University of Montana. McGraw-Hill published his first book, The New Era of Wealth, in October 1999. His most recent book, It’s Not As Bad As You Think, was published in November 2009 by John Wiley & Sons. In 2011, Mr. Wesbury received the University of Montana’s Distinguished Alumni Award. This award honors outstanding alumni who have “brought honor to the University, the state or the nation.” There have been 267 recipients of this award out of a potential pool of 91,000 graduates.

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[kortyEdna]

More and more people might face a tough time in retirement. Low-paying jobs, inflation, and high rents make it hard to save. Now, middle-class Americans find it tough to own a home too, leaving them without a place to retire.

[RossiPopa]

Recession, crash, inflation—it's depressing. I have $100K in an emergency fund and want to benefit from the stock market to avoid inflation eroding my savings. What stocks should a newbie invest in to safely grow their money?

[darnellcapriccioso]

The economic crisis and downturn are all the signs of 2008 market crash 2.0, so my question is do I still save in the US dollar or is it okay to move all emergency and savings to precious metals?

[BrewerVera]

Transfer of wealth usually occur during market crash, so the more stocks drop, the more I buy, in the meanwhile I'm just focused on making better investments and earning more as recession fear increases, apparently there are strategies to 3x gains in this present market cos I read of someone that pulled a profit of $350k within 6months, and it would really help if you could make a video covering these strategies.

[BrainKeener]

I wonder if people that experienced the 2008 crash had it easier because this market conditions are driving me to insanity, my portfolio has lost over $27000 this nov. alone my profits are tanking and I'm don't see my retirement turning out well when I can't even grow my stagnant reserve

[Redwood]

How can I safeguard my investment portfolio of around $100, 000 amidst the economic crisis?

[bobbymainz]

Things are strange right now. The US dollar is becoming less valuable because of inflation, but it's getting stronger compared to other currencies and things like gold and property. People are turning to the dollar because they think it's safer. I'm worried about my retirement savings of about $420, 000 losing value because of high inflation. Where else can we keep our money?

[Raymondjohn]

We read news in the media that doom and gloom is coming and we just accept it, doom and gloom doesn’t always have to be coming, I’ve read numerous success stories of people that are pulling off tremendous gains of up to $250K within weeks in this crazy market and I just want to learn how to achieve such figures.

[jenniferkyle]

There was a time when we " made it here", we had jobs for everyone and the products were of high quality, then the 1% wanted everything. Now Inflation drives prices up and if Inflation is high and jobs disappear by the millions we are in a recession and maybe headed for a Depression…So be careful with your money. It may take decades to get back on pay again. Luck to all.. I've seen folks make huge 7figure profit in a crashing market and pull it off much easily in a bull market Unequivocally the crash/recession is getting somebody somewhere rich...

[Iamsergiopagani]

After 19min of waiting, he gave a very short sighted answer to the banking crisis of 2008. The accounting rule "Mark-to-Market", which he blames for the crisis, is in fact highly useful and necessary to keep banking loans responsible. It forces banks and consumers to keep their feet on the ground as opposed to living in the clouds. By removing the rule in 2009, we re-introduce the dangers of over-stimulating an economic bubble that could kill our world economy. Money was only created to help the ebb and flow of goods and services. That is why regulation is necessary to prevent our economy being built on the sands of speculation and derivatives. Do not watch this video as it will waste your time.

[ProdigySim]

Yes, I've stopped at a green light before. When the road ahead is full and I would block the intersection if I went forward. Just because the light is green doesn't mean you're justified to ignore all circumstance.

[Jabranalibabry]

The comment section here deserves a prize for economics prowess. Awesome, guys! Faith in humanity restored!

[tonynelamichael]

I knew the end was near when I went into a bank in 2005 in anticipation of a purchase.  We pre-qualified for an amount that was 3x more than I could ever conceivably be able to pay.  I looked at my wife, then the loan officer and told him he is out of his mind to qualify us for that amount.  He just looked at me dumbfounded and didn't understand why we wouldn't borrow that much.

[friendlyone]

Skip the talk; read the comments. Lots of very smart, well-educated people watched, and then shared their insights and experiences.

[PeterSquitieri]

This is incredibly simplistic, I can't believe TED allowed this guy to speak

[alessandraaleE]

My mum and I consistently earn massively on our investment. Curtsy to Mrs Judith Ramsey, her set skills are amazing.

[francisgeck]

So the argument is... because interest rates were low, people took out loans they couldn't afford, because that's what you do. Well, the banks are supposed to perform a risk assessment on that individual to determine if the loan should be given in the first place. The bank employees involved in mortgages used to have Masters degrees in finance and statistics and accounting. The bank is the "check" on that. So if the loans defaulted, it's the banks fault. It's that simple. The reality is the banks were writing as many loans as possible. I applied for a mortgage during this period and the mortgage officer didn't want/need/ask for any W2's, income statements, anything to prove my income - even an attitude of "just put anything down". Never mind the repackaging and derivatives which amplified the solution. It's as if the bank has given up any moral/ethical/financial responsibility to do it's job. Your talk seems to prove that the banks are at fault.

[wulf]

Did low interest rates cause mortgage companies to write loans for 125% of the selling price of a home and not ask for any collateral, or in some cases even a verified source of income? Did low interest rates cause Wall Street investment bankers to take 70 to one leveraged positions in mortgage-backed securities? Did low interest rates force S&P and Moody's to rate junk securities as AAA rated?

[glenmellor]

The problem with blaming low interest rates as a major contributor to loan defaults is that the argument can easily be tested by comparing the US default rates to those of other Countries (eg Canada, UK, Australia) all of whom were operating under comparable interest rates at the time. Australia and Canada had essentially zero spike in defaults in the period leading up to the crisis in 2008 despite low interest rates.

[donluna]

SUMMARY: When investment bankers explain to you an investment product that doesn.t make sense, it's a scam.