How the media “buried” the global financial system after the 2008 crisis
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15 years ago, one of the systemically important US banks, Lehman Brothers, went bankrupt with debts of $619 billion, which became the largest bankruptcy in the history of the country and the starting point of the global financial crisis. What the media of different countries wrote about the causes and consequences of the Great Recession – in the Kommersant article.
“Too Big to Fail”
The precursor to the global financial crisis was the mortgage crisis in the United States: banks provided loans to people with low incomes and a bad credit history, and due to non-payments, the real estate market collapsed. After bankruptcy Lehman Brothers, stock indices on world exchanges and world oil prices fell from $133/barrel in July 2008 to $43/barrel in December.
“Wall Street woke up to a weekend that will go down in history: nothing will be the same after the bankruptcy of one of its pillars, Lehman Brothers. This is the end of the “too big to fail” philosophy (too big to fail), which has always prevailed on Wall Street: if a financial institution is large enough, it is unthinkable to allow it to fail due to risks to the international financial system.” (Spanish El Economista dated September 15, 2008).
“What really happened with Bear and Lehman is that An economic drought temporarily left hyenas without middle-class victims – and so they began to eat each other, using the same schemes they have been using for years to rob the rest of the country.” (American Rolling Stone dated April 5, 2010).
“Lehman Brothers filed for bankruptcy, Merrill Lynch was acquired, Half of the major Wall Street investment banks no longer exist. This is a real blow to the already weak US labor market.” (Chinese CCTV dated September 26, 2008).
“These seismic events have implications far beyond the world of banking. Capitalism as an ideology is seriously wounded, and his opponents have everything they need to challenge him.” (English The Banker dated October 6, 2008).
“These are hectic days. Excited days. Strange days. Since early last week, governments across Europe have nationalized banks, propped them up with share purchases or bailed them out with guarantees. Are such actions inevitable or are they sins that should have been avoided? either on principle or for reasons of preserving the state treasury? (German Die Zeit dated October 9, 2008).
“Experts warn that the worst is yet to come “In the near future, a collapse in the market will cause serious problems with lending for Russian companies, and many of them may become bankrupt.” (“Kommersant” dated September 17, 2008).
“Highly qualified American economists with whom I spoke told me that the world is coming to an end. It was a complete disaster, and even by early September 2008 the MPC (Monetary Policy Committee of the Bank of England.— “Kommersant”) had no idea what was going to happen” (English The Guardian dated September 13, 2013).
“The financial crisis in the United States has led to almost unimaginable consequences for this country: so-called tent cities were located near large settlements. It’s home to those who lost their jobs and couldn’t find money to pay their mortgage.” (“Moscow’s comsomolets” dated March 16, 2009).
“We have nothing left to trust”
The crisis quickly spread to all markets of the world, primarily affecting the financial system of Europe. There was a loss of liquidity of the leading financial institutions in the EU zone, Great Britain, Switzerland, Japan, BRIC by an average of 10–30%. According to the IMF, the total banking losses alone in the first stage of the crisis amounted to at least $945 billion.
“All the leading central banks of the world made an unprecedented decision to simultaneously reduce interest rates – the only exception was the Central Bank of Japan. Russia did not join the action. Consistency means that The world’s central banks will no longer maneuver between the decisions of their colleagues and have recognized the crisis as a global one “The last time coordinated decisions were made was after September 11, 2001.” (“Kommersant” dated October 9, 2008).
“According to some experts, what stock markets experienced after the collapse of Lehman Brothers was just a mosquito bite compared to what was to come. A slight rumble before a volcanic eruption… Stock markets are crashing, the eurozone is falling apart, and rampant inflation is plunging the world into chaos. At the end of the day, your money isn’t worth anything anymore—it’s just a bunch of paper. At least that’s what self-proclaimed stock market experts say… 2010 is going to be a terrible year, that’s for sure.” (German Handelsblatt dated December 22, 2009).
“The global credit crisis has wiped out Japan’s first financial institution… Tokyo shares suffered their biggest drop since the 1987 crash… frightened investors scrambled for cash ahead of the weekend, freezing one of the last working markets in the industrialized world. “This is panic. New York, currencies – we have nothing to trust anymore,”– says Takashi Ushio, head of investment strategy at Marusan Securities.” (Japanese Reuters dated October 10, 2008).
“The collapse of the crown and the nationalization of the country’s three largest banks, which forced us to turn to the IMF for help, The Icelandic economic miracle was torn to shreds. For weeks, protesters gathered in Reykjavik’s main square every Saturday… the economic crisis has exposed deep cracks in the country of 300,000 people.” (The EconomistDecember 13, 2008).
“The first year of the Great Recession dispelled the illusion of financial liberalism that the United States embodied.giving impetus to the shift of the poles of influence from the West to the East. The collapse plunged the entire American society into social shock, calling into question the system when everyone, from the ordinary borrower to the state, increases debt without caring about the long-term consequences.” (RIA News” dated September 15, 2009).
“Will this crisis be the last for capitalism?”
The recession in the United States officially lasted until June 2009, and the global recession around the world lasted in some countries until 2011. According to the IMF, global GDP fell by 0.1% in 2009. — at that time, this was the only episode of decline in the planet’s real GDP for the entire year compared to the previous year after World War II.
“The greatest capitalist country in history is now dependent on foreign capital to survive. In such circumstances, Western democracy begins to feel like a luxury under threat. We may wave banners about ‘life, liberty and the pursuit of happiness,’ but they tend to say ‘Made in China’ in fine print.” (British The Daily Telegraph dated July 22, 2011).
“The crisis has exposed the shortcomings of the capitalist moral system. In a sense, finance is a credit relationship, and it is conditioned by the moral foundations of society. Some people are dishonest and harm the public interest…. Since the 1980s, capitalist society has undergone a number of changes, but its main contradictions have not changed, the system itself is a problem. This is in accordance with the old Chinese saying: “Nothing changes without departing from its origins,” which confirms the correctness of Marx’s reasoning and strengthens our confidence and determination to follow the path of socialism with Chinese characteristics.” (Chinese Economic Daily dated August 27, 2009).
“People in general have lost faith in the free market, the Western democratic order. Thank God they have not yet converted their faith, as it did in the 1930s, to the path of totalitarianism. They just became gloomy and suspicious. And they ask a simple question: “What good does this do me?” without hearing a good answer.” (British The Daily Telegraph dated July 22, 2011).
“Capitalism is in a structural crisis, which it experiences every 70-80 years. It is difficult to answer the question: “Will this crisis be the last for capitalism?” However, he put an end to the thesis expressed in the 90s that “the system best suited to human nature is capitalism”… The global capitalist system no longer seems possible to evolve into a welfare state.” (Turkish Aksam dated August 9, 2011 of the year).
“Neoliberal theory no longer has any basis. Its weaknesses and gaps in logic are too great and obvious… She did not foresee that the passions of individual people would lead the entire system to the brink of collapse. But the world has been in just such a crisis for three years now: it has cost millions of people their jobs, brought countries to the brink of bankruptcy and caused serious social costs. Since the collapse of Lehman, the world has become less social… Now even the UN believes that human rights are under threat.” (German Der Spiegel dated September 19, 2011).
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