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Comment by crabasa | Hacker News Reader

If markets are rigged, why do they crash?

Presuming the above is true, crashes serve to depreciate the prices assets. Those that cannot ride out the crash sell for pennies on the dollar.

In the city of Detroit, whole swaths of neighborhoods could be purchased for the price of a 2 bedroom SF condo

Look at who benefits (or at least comes out unscathed) from these crashes.

They crash at the convenience of banks.

Everyone except banks hurt in 2008. Banks then went in buying everything cheap. The people could not buy at all, since everyone was robbed. But banks were bailed out, so they had the money to buy cheap stocks around the world after the crisis they themselves created.

Is it not obvious? The crashes and the pumps are architected by banks. The people who lost homes got hurt, but banks didn't. Banks made trillions of $ from the 2008 crisis.

69% of Americans have less than $1,000 in savings. If you are in debt inflation is a benefit to you so long as your wages keep pace with inflation.

>so long as your wages keep pace with inflation.

That's a big if, though, depending on your (or "you" in aggregate) market power. And if you've got less than $1K in savings, you probably don't have a lot.

In 2009, I bought a house from a bank for $50k less than the balance they foreclosed on, and I expect they had no recourse against the borrower. In aggregate, there were a lot of bank losses. Banks didn't expect the downturn either, or they wouldn't have made so many loans with essentially no standards. (Admittedly, they also weren't expecting to keep loans on their own books for very long)

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