Hank Brock authored Dominoes of Destruction to help people understand what caused the 2008 financial crisis. Unfortunately, the very same problems continue to plague the economy here in St. George, across the United States, and throughout the world.
To help residents of Utah, as well as those in other states, prepare for economic chaos during retirement, the associates of the Consultus office in St. George make Hank's Domino Watch blog available to you. It is not our intent to scare you. Rather, we want to help you be prepared, come what may, so that all you've worked for does not get eroded by events like those of 2008.
Domino #1 – Real Estate Speculative Bubble
The Tax Reform Act set the stage for mortgage abuse and real estate speculation. The banking industry accepted the invitation by dressing up the second mortgage with a new name and identity—the HELOC, or home equity line of credit. (View blog posts)
Domino #2 – Subprime Borrowers
The disastrous subprime mortgage groundwork was laid in September 1999. The New York Times reported that mortgage securitizer, Fannie Mae Corporation would lessen the credit requirements on the mortgages it purchased from originating lenders. (View blog posts)
Domino #3 – Fallen Derivatives
Derivatives were at the heart of the 2008 financial crisis. In addition to being tools with which speculators can guess at future events, they are highly leveraged—magnifying their risk... (View blog posts)
Domino #4 – Prime Borrowers
Mortgage defaults are a typical outcome of a recession. Rising unemployment and flat-to-declining property values result in more homeowners failing to make their monthly payments. (View blog posts)
Domino #5 – Derivatives
Despite the role that derivatives played in the 2008 financial crisis (see #3), the size of the market continues to expand without regulation. A larger market is one that can cause greater havoc.
Domino #6 – Falling Dollar
Mortgage defaults, as well as the growing federal and private debt, are a drag on the U.S. economy. The eventual increase in interest rates will cause a spike in defaults and loss of confidence in the dollar. (View blog posts)
Domino #7 – Foreign Investors Pull Out
Foreign investors have been reducing their commitments to U.S. Treasury securities, even though the U.S. may temporarily look more safe than the European Union. As their confidence wains, global investors will move their money elsewhere. (View blog posts)
Domino #8 – New World Reserve Currency
Governments and private companies tend to use the U.S. dollar in international contracts because it has historically been the most stable currency. Should another currency replace the dollar, its value would decline further. (View blog posts)
We will periodically post news articles that relate to these individual dominoes. You'll find a listing of the articles below, starting with the most recent. Alternatively, you can click on any of the above domino buttons to navigate to the individual dominoes page. Each individual page has a list of the most recent news articles related to that particular topic.
Read the [Domino Watch] blog.