BS: Crash of U.S. Economy

Subject: RE: BS: Crash of U.S. Economy
From: KB in Iowa
Date: 17 Sep 08 - 09:42 PM

Could you be a little more specific Doug? Instead of just implying that we are wrong, please show us where. Seriously, why should we not be concerned?

Subject: RE: BS: Crash of U.S. Economy
From: Riginslinger
Date: 17 Sep 08 - 09:46 PM

"Capitalism isn't dead. But its limitations are becoming very apparent at this point in time."


                   Adam Smith pointed out the weaknesses of Laize Faire Capitalism back in the 1750's. Reagan was able to sell it to people addicted to Christianity and unable to think. We're still paying for that snow job.

Subject: RE: BS: Crash of U.S. Economy
From: GUEST,Sawzaw
Date: 17 Sep 08 - 10:02 PM

Can I see the Obamas math on his populist economic proposals or would that be considered lazy in you usual uncivil and insulting way?

Do you believe that they are feasible and that they will actualy turn into reality?

Subject: RE: BS: Crash of U.S. Economy
From: Peter K (Fionn)
Date: 17 Sep 08 - 10:16 PM

Well I'm glad that all is still well, DougR. And how encouraging it is that you, of all people, are so relaxed about the wholesale nationalisation that is now sweeping the US economy.

Subject: RE: BS: Crash of U.S. Economy
From: CarolC
Date: 17 Sep 08 - 10:20 PM

On laissez faire capitalism... it's an interesting concept, but it's never been tried.

Subject: RE: BS: Crash of U.S. Economy
From: CarolC
Date: 17 Sep 08 - 10:21 PM

LOL

It's times like this when we find out who the real socialists are.

Subject: RE: BS: Crash of U.S. Economy
From: Donuel
Date: 17 Sep 08 - 11:52 PM

The Obama plan would be good for folks like me but the DOD might think not so good for people entrenched in defense contracts.

Laissez faire on one hand and Nafta on the other. good opposites. I will have to ask someone who knows how that could apply today.

Subject: RE: BS: Crash of U.S. Economy
From: Amos
Date: 18 Sep 08 - 12:16 AM

WaMu is now shaking in its boots because it's whole cushion is under threat by overexposure in the ARM and subprime mortgage markets.

We're running out of banks, here, guys.

BofA and Wells Fargo have really dickhead reps to do business with.

The local credit union is beginning to sound attractive.


A

Subject: RE: BS: Crash of U.S. Economy
From: CarolC
Date: 18 Sep 08 - 12:27 AM

Our bank is a Canadian bank that has a US presence. Anyone got any speculation about whether or not banks like that would be affected?

Subject: RE: BS: Crash of U.S. Economy
From: pdq
Date: 18 Sep 08 - 02:37 AM

"On laissez faire capitalism... it's an interesting concept, but it's never been tried."

Wow! I actually agree with CarolC!.

I also agree with our small (but vocal) contingent of Brits who are card-carrying members of the Comunist Workers Party. Yes, true Marxism has never been achieved either.

The reason is human nature. Both laissez faire capitalism and true Marxism require "perfect" people who never lie, cheat, steal or act in greed. That means everybody must be "perfect".

It is truely hysterical to think all people will change to "perfect" overnight just because a few people want them to. Absolutely hysterical.

Subject: RE: BS: Crash of U.S. Economy
From: Riginslinger
Date: 18 Sep 08 - 07:29 AM

You've go to wonder if George Soros is behind all of this. Just when it was beginning to look like his plan for taking over the country through MoveOn.org was failing.

Subject: RE: BS: Crash of U.S. Economy
From: Stu
Date: 18 Sep 08 - 07:48 AM

"It is truely hysterical to think all people will change to "perfect" overnight just because a few people want them to"

I'm not sure about it being hysterical but I agree it's never going to happen, however many people want it to.

The problem is, this argument is used frequently against people who subscribe to an ideology, and this is slowly killing politics, where we need a wide representation of ideas in order to move on in the future in any meaningful way. I've said many times that 'democracy' really means capitalism in modern western political parlance. The evidence for this is easy to find: in the US and the UK virtually every politician in the mainstream has abandoned any solid ideological stance in case they alienate the business interests that bankroll them or their parties. This is an inevitable result of unregulated capitalism, and is as undesirable as a totalitarian Communist regime; the mind control techniques used to turn us all into unquestioning, wasteful consumers would have put the Soviet propaganda ministry to shame.

There must be regulation.

Subject: RE: BS: Crash of U.S. Economy
From: CarolC
Date: 18 Sep 08 - 08:14 AM

The reason laissez faire capitalism has never been tried isn't because people are imperfect, or because they lie, cheat, steal or act in greed. The reason laissez faire capitalism has never been tried is because the system isn't set up to be laissez faire capitalism. It's set up to be corporate socialism, and it always has been. Nobody (at least not any of the captains of industry and finance) really wants laissez faire capitalism. Heaven forbid, that wouldn't do at all. If that happened, big business would lose all of those lovely taxpayer funded subsidies and bailouts, and the funding for their endless resource wars.

Subject: RE: BS: Crash of U.S. Economy
From: Amos
Date: 18 Sep 08 - 09:30 AM

"Politicians Lie, Numbers Don't
And the numbers show that Democrats are better for the economy than Republicans.
By Michael Kinsley

Posted Tuesday, Sept. 16, 2008, at 1:49 PM ET

If you're wondering why a formerly honorable man like John McCain would build his presidential campaign around issues that are simultaneously beside-the-point, trivial, and dishonest (sex education for kindergartners, lipstick on pigs), the numbers presented here may help to solve that mystery. Since the conventions ended, McCain has mired the presidential race in dishonest trivia because he doesn't want it to focus on what voters say is the most important issue this year: the economy.

There is no secret about any of this. The figures below are all from the annual Economic Report of the President, and the analysis is primitive. Nevertheless, what these numbers show almost beyond doubt is that Democrats are better at virtually every economic task that is important to Republicans.

In other words, there are no figures here about income inequality, or percentage of the population with health insurance, or anything like that. This exercise implicitly assumes that lower taxes are always good and higher government spending is always bad. There is nothing here about how clean the air is or how many children are growing up in poverty. The only point is that if you find the Republican mantra of lower taxes and smaller government appealing, and if you care only about how fast the economy is growing, not how that growth is shared, you should vote Democratic. Of course, if you do care about things like economic inequality and children's health, you should vote Democratic as well.
..."

Complete article and supporting chart can be found here

Subject: RE: BS: Crash of U.S. Economy
From: Amos
Date: 18 Sep 08 - 09:41 AM

"...By the mid-20th century, the behemoths of American manufacturing reinvested their own resources to meet most of their capital needs, while New Deal-era and subsequent administrations (including that of Republican Dwight Eisenhower) invested heavily in the nation's infrastructure. Wall Street played a diminished role during the golden years of mass American prosperity but came roaring back beginning with the financial deregulation of the Reagan era.

Finance set the terms of corporate behavior over the past quarter-century, and not in ways that bolstered the economy. By its actions -- elevating shareholder value over the interests of other corporate stakeholders, focusing on short-term investments rather than patient capital, pressuring corporations to offshore jobs and cut wages and benefits -- Wall Street plainly preferred to fund production abroad and consumption at home. The internal investment strategy of 100 years ago was turned on its head. Where Morgan once funneled European capital into American production, for the past decade Morgan's successors have directed Asian capital into devices to enable Americans to take on more debt to buy Asian products.

Worse yet, as Wall Street turned its back on America, so did government. The Bush administration and congressional Republicans (John McCain among them) kept American incomes low by opposing hikes in the minimum wage; helping employers defeat unionization; and shunning policies to modernize infrastructure, make college more affordable, and boost spending on basic science and research.

Today, it's the Democrats who sound like Lincoln's Republicans. In recent months, the Obama campaign and liberal think tanks in particular have generated numerous proposals for heightened public commitment to infrastructure and education. Unlike tax cuts, which chiefly bolster our ability to consume imported goods and commodities, infrastructure investments make us more productive and have a multiplier effect that creates more jobs over and above those that the government funds directly. Congressional Democrats have included major infrastructure investments in their pending new stimulus bill, which Bush and GOP leaders oppose.

Someone needs to invest in the United States of America. For the past decade and, in a broader sense, for the entire duration of the Reagan era, both government and Wall Street have opted not to. Should Barack Obama win, the era of neglectful government will probably come to an end. No matter who wins, Wall Street is vanishing before our eyes. And by the measure of their contribution to America's economic strength and well being, both Reagan-age government and Wall Street's investment banks plainly deserve to die. "

Wa Po Op-Ed

Subject: RE: BS: Crash of U.S. Economy
From: Bee
Date: 18 Sep 08 - 12:26 PM

The Bank of Canada is joining the U.S. Federal Reserve and central banks in Europe and Japan to shovel up to a quarter of a trillion dollars into global money markets as they strive to restore confidence in the world's battered financial system.

In a statement issued at 3 a.m. ET, the Bank of Canada said it is acting with the Bank of England, the European Central Bank (ECB), the Federal Reserve, the Bank of Japan and the Swiss National Bank with "co-ordinated measures designed to address the continued elevated pressures in U.S.-dollar short-term funding markets."

In particular, the Bank of Canada and the Federal Reserve have established a $10-billion US reciprocal currency arrangement to provide U.S.-dollar liquidity in Canada.

More from CBC:


http://www.cbc.ca/money/story/2008/09/18/central-banks-markets.html

Subject: RE: BS: Crash of U.S. Economy
From: Bill D
Date: 18 Sep 08 - 01:15 PM

rescue problems

Subject: RE: BS: Crash of U.S. Economy
From: Amos
Date: 18 Sep 08 - 01:45 PM

AN interesting analysis of a basically obsolete business model called Wall Street:

"Wall Street's Unraveling
__
By Robert J. Samuelson
Wednesday, September 17, 2008; Page A19

Wall Street as we know it is kaput. It is not just that Merrill Lynch agreed to be purchased by Bank of America or that the legendary investment bank Lehman Brothers filed for bankruptcy or that the insurance giant AIG is floundering. It is not even that these events followed the failure of the investment bank Bear Stearns or the government's takeover of Fannie Mae and Freddie Mac, the largest mortgage lenders. What's really happened is that Wall Street's business model has collapsed.


Greed and fear, which routinely govern financial markets, have seeded this global crisis. Just when it will end isn't clear. What is clear is that its origins lie in the ways that Wall Street -- the giant investment houses, brokerage firms, hedge funds and "private equity" firms -- has changed since 1980. Its present business model has three basic components.


First, financial firms have moved beyond their traditional roles as advisers and intermediaries. Once, major investment banks such as Goldman Sachs and Lehman worked mainly for their clients. They traded stocks and bonds for major institutional investors (insurance companies, pension funds, mutual funds). They raised capital for companies by underwriting -- selling -- new stocks and bonds for the firms. They provided advice to corporate clients on mergers, acquisitions and spinoffs. All these services earned fees.

Now, most financial firms also invest for themselves. They use partners' or shareholders' money to place bets on stocks, bonds and other securities -- so-called "principal transactions." Merrill and other retail brokers, which once served individual clients, have ventured into investment banking. So have some commercial banks that were barred from doing so until the repeal in 1999 of the Glass-Steagall Act of 1933.

Second, Wall Street's compensation is heavily skewed toward annual bonuses, reflecting the profits traders and managers earned in the year. Despite lavish base salaries, bonuses dominate. Managing directors with 15 years' experience can receive bonuses five to 10 times their base salaries of $200,000 to $300,000.

Finally, investment banks rely heavily on borrowed money, called "leverage" in financial lingo. Lehman was typical. In late 2007, it held almost $700 billion in stocks, bonds and other securities. Meanwhile, its shareholders' investment (equity) was about $23 billion. All the rest was supported by borrowings. The "leverage ratio" was 30 to 1.

Leverage can create huge windfalls. Suppose you buy a stock for $100. It goes to $110. You made 10 percent, a decent return. Now suppose you borrowed $90 of the $100. If the price rises to $101, you've made 10 percent on your $10 investment. (Technically, the price has to exceed $101 slightly to cover interest payments.) If it goes to $110, you've doubled your money. Wow.

Once assembled, these components created a manic machine for gambling. Traders and money managers had huge incentives to do whatever would increase short-term profits. Dubious mortgages were packaged into bonds, sold and traded. Investment houses had huge incentives to increase leverage. While the boom continued, government remained aloof. Congress resisted tougher regulation for Fannie and Freddie and permitted them to run leverage ratios that, by plausible calculations, exceeded 60 to 1.

..." (Washington Post column)

Subject: RE: BS: Crash of U.S. Economy
From: Amos
Date: 18 Sep 08 - 02:02 PM

The view from Der Spiegel:

"...Many are drawing comparisons with the Great Depression, the national trauma that has been the benchmark for everything since. "I think it has the chance to be the worst period of time since 1929," financing legend Donald Trump told CNN. And the Wall Street Journal seconds that opinion, giving one story the title: "Worst Crisis Since '30s, With No End Yet in Sight."

But what's really happening? Experts have so far been unable to agree on any conclusions. Is this the beginning of the end? Or is it just a painful, but normal cycle correcting the excesses of recent years? Does responsibility lie with the ratings agencies, which have been overvaluing financial institutions for a long time? Or did dubious short sellers manipulate stock prices -- after all, they were suspected of having caused the last stock market crisis in July.

The only thing that is certain is that the era of the unbridled free-market economy in the US has passed -- at least for now. The near nationalization of AIG, America's largest insurance company, with an $85 billion cash infusion -- a bill footed by taxpayers -- was a staggering move. The sum is three times as high as the guarantee provided by the Federal Reserve when Bear Stearns was sold to JPMorgan Chase in March.

The most breathtaking aspect about this week's crisis, though, is that the life raft -- which Washington had only previously used to bail out the mortgage giants Fannie Mae and Freddie Mac -- is being handed out by a government whose party usually fights against any form of government intervention. The policy is anchored in its party platform.

"I fear the government has passed the point of no return," financial historian Ron Chernow told the New York Times. "We have the irony of a free-market administration doing things that the most liberal Democratic administration would never have been doing in its wildest dreams."

Bush Cancels Trip

The situation appears to be so serious that George W. Bush cancelled two domestic trips he had planned for Thursday on short notice. Instead, the president will remain in Washington to discuss the "serious challenges confronting US financial markets." He said the president remained focused on "taking action to stabilize and strengthen the markets." Bush had originally planned to travel to events in Florida and Alabama.


NEWSLETTER
Sign up for Spiegel Online's daily newsletter and get the best of Der Spiegel's and Spiegel Online's international coverage in your In- Box everyday.

So far, the US presidential candidates have made few helpful remarks about the crisis other than the usual slogans. Both are vaguely calling for "regulation" and "reform" -- bland catchphrases almost universally welcomed with applause.

Republican Party presidential candidate John McCain had the most to say. On Monday, he said "the foundation of our economy" was "strong," adding that he opposed a government-led bailout of US insurer AIG. But now he's promising further government steps "to prevent the kind of wild speculation that can put our markets at risk." McCain's explanation for the current crisis: "unbridled corruption and greed."

But Democratic presidential hopeful Barack Obama didn't move past superficialities, either. "We're Americans. We've met tough challenges before and we can again."

What else are they supposed to say? After all, US presidents have very little influence on stockmarkets. And Wall Street is expecting the status quo for the next president. On Wednesday an almost palpable mix of tension and melancholy filled the air above New York's Financial District. The beloved trader bar Bull Run was half empty, and many tables were free at fine-dining establishments like Cipriani, Mangia and Bobby Van's, which are normally booked days in advance.

At the side entrance to Goldman Sachs on Pearl Street, limo chauffeurs sat waiting for their customers, still above in their office towers cowering over the accounts. "If they go under," said Rashid Amal, who works as a chauffeur for a firm called Excelsior, "then I will soon be out of a job, too."

...:


I am not sure I understand the contradiction between various reports that Americans have been failing to save, and have been living on credit cards and recycled mortgages and other debt, and the panic of the banking industry. If there is so little savings in the nation, why is this such a profound high-RIchter shakedown?

A

Subject: RE: BS: Crash of U.S. Economy
From: TRUBRIT
Date: 18 Sep 08 - 07:13 PM

I work in the housing industry and I am afraid to read the thread.......it;s scarey out there.

Subject: RE: BS: Crash of U.S. Economy
From: Donuel
Date: 18 Sep 08 - 07:19 PM

my illustration of the Feds infusion of Liquidity


They did this intentionally . It has been set up for 8 years.
All the added spying on citizens and the executive branch homeland security troops that go where the FBI would not are designed to be first responders to any possible anger blowback by Americans.

Be that as it may I have always taken up the mantle of looking over the hill and reporting what I see. Other people here have different modes of chronicling what has already happened.


HERE IT IS....
They say all these bail outs are unprecedented...
They are only warming up for the biggest rip off of all history. It will be like firing a cannon in comparison to pulling the trigger on the Wall Street bailuouts you've seen so far.



Between the war and Wall Street, so far we have seen a minimum of 3 trillion dollars leave our country. ( gee we really coulda used some of that for natural disasters and infrastructure and free health care and that vacation you wished you could have before you died)

GET READY FOR DOUBLE THAT

The mother of all bail outs is coming......mark my words

They will claim it is less than a trillion dollar generic bailout but with interest ect. it will be an additional $3 TRILLION.

Thats a $6 Trillion dollar heist.

don't forget the $93 Trillion dollar fraud sale of worthless mortgage securities we sold the world as triple top shelf most secure investments on Earth.

and its all coming to you before Christmas.

PS

it will be called "the long term solution"


reminds me of the final solution

Subject: RE: BS: Crash of U.S. Economy
From: CarolC
Date: 18 Sep 08 - 07:32 PM

So what's the next bail out going to be then? The big one?

Subject: RE: BS: Crash of U.S. Economy
From: Donuel
Date: 18 Sep 08 - 07:34 PM

'They' have to 'get' while the gettings good and they know this will be their last chance for a long while. (without a magic bullet solution)


Some people don't believe in 'they'. They don't beleive people conspire to the ideal of the unseen hand.

they are bigger than US republicanism.

they = Military financial Corporate banking families who social engineer with their 100 trillion dollar holdings.
To them Hitler Stalin Mao are admirable pioneers but mere amateurs compared to the financial organizations they control today.

The world bank is but a committee to them, The Bilderbergs is just a picnic grounds. The Carlyle Group, tri lateral and foregn relations committee are merely a subsidiaries of subsidiaries of their stering committee. The critical solution committee are virtually someting out of a 007 novel and discuss polulation contro by various means that would make you blood run cold. They have also been called the octopus.

Subject: RE: BS: Crash of U.S. Economy
From: CarolC
Date: 18 Sep 08 - 07:38 PM

But what is the big bail out that's going to happen before December? The one after this one?

Subject: RE: BS: Crash of U.S. Economy
From: CarolC
Date: 18 Sep 08 - 07:40 PM

...the one that's going to be the "biggest rip off in all history"? What are we going to be bailing out when that happens?

Subject: RE: BS: Crash of U.S. Economy
From: Amos
Date: 18 Sep 08 - 08:03 PM

The Federal Gummint its own self? Saved by a herd of loosely associated billionaires? Oy, my poor Founding Fathers. Curses on you, Alexander Hamilton!! This is all your fault!!



A

Subject: RE: BS: Crash of U.S. Economy
From: GUEST,petr
Date: 18 Sep 08 - 08:51 PM

a couple of years ago I read a book called the 'empire of debt'

see the www.dailyreckoning.com
- although while it sounded over the top at times..
their prediction was bang on.

rake in the money while the sun shines but when it rains
expect the taxpayer to cover it.

bill bonners suggestion is to buy gold,

the irony here is that it is a conservative/republican govt that has actually stepped in and bailed out Aig and Frannie(s)
these are the people that have always said govt has no place in business..

Subject: RE: BS: Crash of U.S. Economy
From: CarolC
Date: 18 Sep 08 - 09:36 PM

Most of the big bail outs happen under Republican administrations. I wonder if this means that companies tend to need bailing out more when Republicans are in office, or if Republican administrations are just inherently more inclined towards corporate socialism than Democratic administrations.

Subject: RE: BS: Crash of U.S. Economy
From: Riginslinger
Date: 18 Sep 08 - 09:48 PM

"I wonder if this means that companies tend to need bailing out more when Republicans..."


                     Of course it does. Our only chance now is to elect John McCain and hope for a revolution.

Subject: RE: BS: Crash of U.S. Economy
From: CarolC
Date: 18 Sep 08 - 10:00 PM

LOL

Like hell it is.

Subject: RE: BS: Crash of U.S. Economy
From: GUEST,heric
Date: 19 Sep 08 - 12:22 AM

> am not sure I understand the contradiction between various reports that Americans have been failing to save, and have been living on credit cards and recycled mortgages and other debt, and the panic of the banking industry. If there is so little savings in the nation, why is this such a profound high-RIchter shakedown?<

As I understand it (and I'm no financial expert - as an understatement) the problem in a zygote is that millions of Americans promised to pay money in the future, believing they would get rich in the interim. Those promises were sold by the promisees to essentially inncocent others. Now millions of people have learned they will not get rich, and have decided that they can't or won't pay that money after all. To a huge extent, the "innocent" investors get burned.

It is for this reaon that I think the simple phrase "privatize the profit and socialize the losses" is confusingly vague, and makes "bailout" sound more perverse than it actually is. It's not that the feds want to protect the rich bankers receiving their promised but-not-materializing funds so much as they want to maintain confidence in the American financial strucure, ESPECIALLY as to investors from outside the country.

It is for this reason that e.g the Bear Stearns bailout was structured to inflect maximum pain on the Bear Stearns principal shareholders, while absorbing the costs of backing up the returns to the innocent buyers (or, for difficult jargon, also where BS was a "counterparty.") Same principal probably applies to an insurance company such as AIG - they will want to protect the insureds more than the shareholders, and also protect the foreign investors.

It is the opposite, I believe, to Mexico telling American real estate purchasers "oh, sorry, those people should never have sold you that land, so we are taking it back," and on an infinitely larger scale.

If you want to locate and punish the evildoers, you should include telling your friends who are walking away from mortgages that they are putting a huge burden on your back (and on your children, as well.)

Subject: RE: BS: Crash of U.S. Economy
From: CarolC
Date: 19 Sep 08 - 12:40 AM

I don't think anyone wants to walk away from their mortgage. I think the problem is that the way the payments are structured, people are simply not able to continue paying on them. The way I understand it is that they were allowed to make payments they could afford for a limited period of time, and then the size of the monthly payments they would have to make increased substantially. It is also my understanding that a lot of the people who signed on to these mortgages didn't fully understand what they were agreeing to, because there was a lot of verbal slight of hand involved in the way these mortgages were sold to people.

Subject: RE: BS: Crash of U.S. Economy
From: GUEST,heric
Date: 19 Sep 08 - 01:13 AM

I recently read somewhere of a study which audited no-doc ("liar") loans and concluded that 70% of the applicants inflated their true incomes on the application, and some huge percentage inflated income by more than 50%. I wish I could remember the actual stats.

I know of three people who walked away from mortgages because they were upside down, not because they couldn't pay.

Subject: RE: BS: Crash of U.S. Economy
From: pdq
Date: 19 Sep 08 - 02:42 AM

"It is the opposite, I believe, to Mexico telling American real estate purchasers "oh, sorry, those people should never have sold you that land, so we are taking it back," and on an infinitely larger scale."

Not to start an arguement (way too many of those on Mudcat) but that is one of the strangest statements I have seen recently (except from those who usually say nonsense).

First, US citizens, for the most part, are barred from buying Mexican real estate. In a free market we would have bought enormous amounts of the country and had too much influence, something the tiny number of elite fatbutts there can't allow.

Also, a large number of the sub-prime loan recipients were Mexican nationals, some legal and many not. Most falsified claims to get loans and often had "community organizers" and Mexican political activists helping fill out the papers. Dont't tell me otherwise, as I sat in an office behind such a loan canididate who spoke no English but had two activists helping him fill out forms and tell him what the approval committee would like to see.

Subject: RE: BS: Crash of U.S. Economy
From: CarolC
Date: 19 Sep 08 - 02:47 AM

What does that mean - they walked away from mortgages because they were "upside down"?

Subject: RE: BS: Crash of U.S. Economy
From: Riginslinger
Date: 19 Sep 08 - 07:06 AM

"Also, a large number of the sub-prime loan recipients were Mexican nationals, some legal and many not. Most falsified claims to get loans and often had "community organizers" and Mexican political activists helping fill out the papers. Dont't tell me otherwise, as I sat in an office behind such a loan canididate who spoke no English but had two activists helping him fill out forms and tell him what the approval committee would like to see."


                  Don't say that too loud, pdq, I tried to make that point a couple of months back and I'm still bleeding from the wounds.

Subject: RE: BS: Crash of U.S. Economy
From: GUEST,Jim Martin
Date: 19 Sep 08 - 07:12 AM

It's probably essential that the corrupt global financial systems needed a purge, it's just so ......... (I can't find a word for it at the moment!) that the people at the bottom of the ladder get dragged down with all the manipulators of this fiasco.

We need a new world order that can keep the human race going in a sustainable way (I wish!).

Subject: RE: BS: Crash of U.S. Economy
From: Riginslinger
Date: 19 Sep 08 - 07:19 AM

"'What does that mean - they walked away from mortgages because they were "upside down"?'"

                If you are "upside down" on a loan, it means you owe more on the collateral (house) than it's worth on the market.

                I saw a guy on C-SPAN who made the point that a lot of the trouble we're seeing in housing now can be traced back to the "Bankruptcy Law" that was passed a couple of years ago.
                It all came about because the banks thought they'd devised a perfect scheme to steal money from the public through credit cards, but people were simply running up debt on the credit card and then filing bankruptcy.
                The new law made that a lot harder to do. But before that law was passed, people could file bankruptcy and then save their home by restructuring the loan on the house.
                Now, because they can't get out from under all of their consumer debt, it wouldn't do any good to file bankruptcy, so they just walk away from the house.
                I suspect there are a lot of cases like this.

Subject: RE: BS: Crash of U.S. Economy
From: Amos
Date: 19 Sep 08 - 09:58 AM

Rig and PDQ:

Hey, I don't doubt you saw what you saw, but I seriously question your assertion abouot the ratio of bad loans that are made to "illegal" immigrants.

One rose does not a summer make, sorta thing, ya know.


A

Subject: RE: BS: Crash of U.S. Economy
From: Donuel
Date: 19 Sep 08 - 10:58 AM

synthetic foot
credit swaps
bundled securities

are terms of Orwellian invention to steal money by selling what you don;t have.

Subject: RE: BS: Crash of U.S. Economy
From: Riginslinger
Date: 19 Sep 08 - 12:02 PM

"Hey, I don't doubt you saw what you saw, but I seriously question your assertion abouot the ratio of bad loans that are made to "illegal" immigrants."


                The point is, a place like Stockton would probably have about the same failure rate as most other places, the failures of mortgages to illegals is what pushes it to stardom.

Subject: RE: BS: Crash of U.S. Economy
From: heric
Date: 19 Sep 08 - 12:03 PM

I agree with what Donuel just said but also add that a large part of what they didn't have was the future repayments on real estate loans because we the people weren't going to pay them unless there was a clear self-interest intact.

pdq: It is an aside and probably wasn't a useful analogy to begin with, but don't you recall the incident I am talking about? There was a small firestorm in the Cal. press at the time some years back (ten? Times flies), during a Baja boomlet. Several Americans had (not bought) acquired 100 year leases I think in a large development, then had the leases invalidated by the Mexican government.

Subject: RE: BS: Crash of U.S. Economy
From: KB in Iowa
Date: 19 Sep 08 - 12:07 PM

Why are these institutions making home loans to 'illegals' in the first place?

Subject: RE: BS: Crash of U.S. Economy
From: Stringsinger
Date: 19 Sep 08 - 12:27 PM

Don Firth,

Those with brains, education, intelligence and compassion are called "elitists" by the Right Wing. I think we need an "Elite" who have more sense then a redneck hillbilly to lead our
country out of the economic doldrums.

The Founding Fathers of the Constitution were a highly-educated, well-spoken, ideologically high-minded, compassionate "Elite" who had the chops to right one of the greatest documents the world has ever known. Many didn't have the money that the landed gentry or the King's minions had in England.

Rove's idea is that Obama is rich. He's not. Bush is rich. McCain is rich. Money doesn't mean intelligence, education, judgement based on experience, or compassion for working Americans.

I want an "elite" person in the White House who knows more than I do and can make
decisions without having to "buy" them through time on news broadcasts.

We've let stupid people dictate our political machinations for too long now.

Subject: RE: BS: Crash of U.S. Economy
From: GUEST,petr
Date: 19 Sep 08 - 01:16 PM

a lot of the blame should be placed at the feet of
the author of the 1999 repeal of the regulation of financial industry.
ie. deregulating the credit swap market.. Phil Gramm ..
who just happens to be McCains economic advisor..

Subject: RE: BS: Crash of U.S. Economy
From: GUEST,petr
Date: 19 Sep 08 - 01:23 PM

btw a similar kind of property boom & bust happened in Japan in 1990
at the time US economists said the Japanese are just prolonging the pain by propping those TBTF (too big to fail banks). The Japanese market still hasnt recovered 18 years later.. (its still less than 80% of the 1990 value)

Subject: RE: BS: Crash of U.S. Economy
From: Amos
Date: 19 Sep 08 - 01:30 PM

SO, lemme see...who is it gets the fees for psuhing complex debt structures down the throats of the semi-literate wage-eatrners who don't understand what they're signing? Who is it that makes a few points when they bundle a thousand such mortgages, sold on the basis of a rising market that could not last, sweetened with ARM into rates and dreams that would not materialize, and lubricated with unregulated free-market dynamics, and rolled them up to large investment houses by their tens of thousands?

This is sheer corruption, supported by a fee-based system and sheltered by an indifferent government who knows, and cares about, only the buck.

ANd the bang-bang-bang.


A

Subject: RE: BS: Crash of U.S. Economy
From: heric
Date: 19 Sep 08 - 01:38 PM

It is indeed. But I just don't feel as bad as you more compassionate people for the semi-literate who think they make $125,000 per year when they actually only make $55,000, or even those who claim they didn't understand that a huge rate hike in three years would result in a payment hike in three years. d-oh!

Subject: RE: BS: Crash of U.S. Economy
From: Amos
Date: 19 Sep 08 - 01:51 PM

We are talking about people who make less than that, I suspect. I am not saying people should be excused for being stupid about basic math, but when you ARE confused, it is criminal for a slick prick to round you up the chute with sweet talk and false assurances. And the numbe rof people who lack basic business survival skills is far greater than you might think, I suspect--a national embarassment. Hell, there are even people who listen raptly to Rush Limbaugh without a single critical thought emerging in their minds. OR so I am told. It could be this is just an urban legend, like the DOdo bird.


A

Subject: RE: BS: Crash of U.S. Economy
From: Riginslinger
Date: 19 Sep 08 - 02:59 PM

"Why are these institutions making home loans to 'illegals' in the first place?"


                   Some claim they are not allowed to inquire as to the immigration status of the applicants, others say that it's legal to sell real estate to foreigners in America, so they're happy to do it.