What Caused the 2008 Market Collapse?

by Kevin D. Freeman on January 17, 2011

There are many theories regarding what happened in 2008. Perhaps the most to-the-point analysis comes from none other than George Soros. By any account, Soros should be viewed as someone who understands how markets can be used as weapons. The Chinese military experts, in their book Unrestricted Warfare first published in 1999, had this to say about Soros:

“We believe that before long, ‘Financial Warfare’ will undoubtedly be an entry in the various types of dictionaries of official military jargon. Moreover, when people revise the history books on twentieth-century warfare in the early 21st century, the section on Financial Warfare will command the reader’s utmost attention. The main protagonist in this section of the history book will not be a statesman or military strategist; rather it will be George Soros.”

So what does Soros think happened in 2008? The following is taken directly from the 2009 publication I authored that fully outlined the Economic Warfare Threat and analyzed the market collapse:

“George Soros provided perhaps the most concise commentary in an 30 April 2009 symposium sponsored by the New York Review of Books (www.nybooks.com/articles/22756) with his opening remarks:

‘…the financial system as we known it actually collapsed. After the bankruptcy of Lehman Brothers on September 15, the financial system really ceased to function. It had to be put on artificial life support. At the same time, the financial shock had a tremendous effect on the real economy, and the real economy went into a free fall, and that was global.’

It is necessary to recall that Soros authored a 23 March 2009 Op-Ed in the Wall Street Journal (http://online.wsj.com/article/SB123785310594719693.html, One Way to Stop Bear Raids). His bottom-line conclusion was:

‘…it’s clear that AIG, Bear Stearns, Lehman Brothers and others were destroyed by bear raids in which the shorting of stocks and buying CDS mutually amplified and reinforced each other. The unlimited shorting of stocks was made possible by the abolition of the uptick rule, which would have hindered bear raids by allowing short selling only when prices were rising. The unlimited shorting of bonds was facilitated by the CDS market. The two made a lethal combination.’”

When you connect these two dots, it appears that George Soros believes that the economic collapse was the result of Lehman’s failure and that Lehman’s failure was the result of a planned and perpetrated “bear raid.” There is a substantive body of evidence that supports Soros’ conclusions. Soros is considered by Chinese military strategists as the foremost expert on Financial Warfare. The next question is if this were Financial Warfare:  Who had motive, means and opportunity?

All posts Copyright (c) 2011 Kevin Freeman, All Rights Reserved

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