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House Price Crash Forum

The Financial Crisis : Cause And Possible Cures

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The media, politicians, and even many businessmen have blamed today’s financial meltdown on capitalism. But in this talk, John Allison—the longest-tenured CEO of a top-25 financial services company—argues that this crisis is a legacy of the government’s anti-capitalist policies. Mr. Allison uses his unique inside view of the financial services industry to show how massive government intervention into the U.S. economy—from the creation of the Federal Reserve in 1913 to a reckless crusade to encourage home-ownership—laid the groundwork for an unsustainable real estate boom. And he shows how the government’s response to the inevitable bust—a frenzied series of bailouts, nationalizations, and “stimulus” efforts—is only making things worse.

Finally, Mr. Allison explains the underlying philosophical reasons for the crisis, and discusses the immediate and long-term solutions. He shows that capitalism, far from being the cause of today’s crisis, is its only cure.

John Allison is chairman of the board of BB&T Corporation. He began his service with BB&T in 1971, became president in 1987 and was elected chairman and CEO in 1989 (serving as CEO until the end of 2008). During Mr. Allison’s tenure, BB&T has grown from $4.5 billion to $137 billion in assets.

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Haven't seen the vid, but reading the comment I felt that there is certainly some truth in the point political engineering by Clinton (?) to encourage banks to lend to a greater number of prospective housholds (effectively riskier and riskier people) to encourage the growth in home ownership amongst the poor can be seen as the start to all this.... without this impetus then sub prime as we know it today may not have truly existed and even the CDO development had happened then the underlying credit risk of the asset would have been better than it clearly is..... I blame clinton... so does his wife, except for different reasons.

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Come worship at the altar of capitalism...


Excellent Lecture. Thanks for posting. It explains exactly why we're in this mess and covers the following....

1. FDIC Insurance

2. Leverage

3. Liquidity

4. Rating Agencies

5. Fair Value Accounting

6. New Credit Instruments

7. Misregulation

8. Mathematical Models

9. Bailouts

10. Moral Hazards

11. Trust Policy (too big to fail)

At the end some, solutions are offered too. Well worth an hour and a half of your time.

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