Timeline Shows Banks, Economy in Trouble Before Virus Hit

May 3, 2020 (EIRNS)—A May 1 “Wall Street on Parade” column showed that the pattern of Wall Street crisis and Federal Reserve rescue intervention in the last four months of 2019—before any sign of the novel coronavirus—was essentially identical to that of the 2007 and the first 10 months of 2008 leading to the Lehman Brothers collapse and global financial crisis. In both, the Federal Reserve began injecting liquidity loans, in larger and larger volumes and months went on, into the banking system, Treasury long-term interest rates fell more and more rapidly, until financial markets started collapsing. Then, in both periods, the Fed shifted into large-scale buying of securities from banks to give them capital and liquidity.

This indicates that the City of London and Wall Street banking systems were heading for another collapse later in 2020, when the pandemic crisis brought the Federal Reserve’s March intervention with massive quantitative easing and pumping up of all financial markets, bailing out the megabanks. Authors Pam and Russ Martens write: “The structure of Wall Street, with trading casinos allowed to own our largest commercial banks, is far more deadly to the future of America than COVID-19. This structure requires breakup by Glass-Steagall re-enactment.” [emphasis in original]

The U.S. physical economy was also sinking in later 2019. A press release from the U.S. Labor Department on “Business Employment Dynamics Summary” for the third quarter of 2019, shows that already then, there was no new employment at all in the reporting private sector. Thus, though the department doesn’t break out “informal” or “gig” jobs, those gigs had to have accounted for the entire jobs growth (supposed to be about 450,000) claimed in the private sector in its July-September 2019 monthly employment reports.

According to a Forbes article in August 2018, “More than one-third (36%) of U.S. workers are in the gig economy, which works out to a very large number of approximately 57 million people.”

The BLS “Business Employment Dynamics Summary” press release states: “The goods-producing industries experienced a net job decrease of 81,000 jobs in the third quarter of 2019. Of the goods-producing industries, manufacturing experienced a net decrease of 67,000 jobs, the natural resources and mining sector declined by 13,000 jobs, and the construction sector showed a net loss of 1,000 jobs. And in September, the interbank lending market went into crisis.