Question about the Economy - Page 4

Question about the Economy

This is a discussion on Question about the Economy within the Off Topic & Humor Discussion forums, part of the The Back Porch category; Originally Posted by farronwolf It isn't the D's or the R's, it is both of them. Their inability to govern properly and when it catches ...

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  1. #46
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    Quote Originally Posted by farronwolf View Post

    It isn't the D's or the R's, it is both of them. Their inability to govern properly and when it catches up to them, their willingness to lay it on the American people to pay, while the responsible parties walk away scott free.
    Yep. They all be scoundrels!


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  2. #47
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    Yep, indeed, they all be scoundrels.

    Quote Originally Posted by Rock and Glock View Post
    Yep. They all be scoundrels!
    I think this is the one point in this long thread on which there is considerable agreement. None of this mess would have happened without a more than plentiful supply of scoundrels and scoundrel enablers.

  3. #48
    VIP Member Array Thanis's Avatar
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    Scoundrels all around. From the average U.S. consumer to the captains of industry. Forget greed, regulation, etc. Those are just symptoms of a problem we have seen before (1920s, 1931).

    After WW2 the U.S. was the only industrialized nation that had any industry left. Combine this with solid natural resources, production ramp up to wartime level, only major consumer of the world's resources, and our ability to import unlimited talent, the U.S. may have had the greatest national advantage ever seen not only in the last 200 years, but perhaps 2000 years.

    It is difficult to imagine in a "world econ" that a hand full of houses in CA can be equal in value as a car factory in Mexico. Something is off.

    After reading the posts and getting some ideas, I did a little research.

    It is not 100% debt. Thats like saying that credit cards are free money. It is tax payer money. So tax payer funds are going to financial institutions that are foreclosing on the tax payers. It is a messed up situation. However, it looks like there is really no option. Based on lessons from 1931, the government is doing the best it can.

    The reason what we see now is so like 1931, is that there have not been major wars destroying the industries of Asia and Europe. It is not realistic to believe we can ever reach the dominance we had in the 50s and 60s.

    Well, unless there is a war, or unless there is a tech advancement that changes everything (like a new energy resource).

  4. #49
    Senior Member Array Duisburg's Avatar
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    Ask yourself... why did they wait until the last week of this congressional session to decide we were in crisis?

    Ask yourself... why does the only plan they want to accept have as its basis the unconstitutional section that Paulson will have complete, unequivocal control of the money.

    Ask yourself... why does Paulson need this kind of control when he will be leaving office in less than 4 months and who will be in control of it after (if) he leaves?

    Ask yourself... how will this help any citizen who is drowning in debt?

    Now ask yourself... who benefits?

    Ask yourself... why will these banks who have shown such poor and irresponsible behaviour be the only ones who will profit from this without even a hint of accountability.

    Ask yourself... what's to stop these banks from buying up bad loans at 10 cents on the dollar and then selling them to Paulson for 20 or 30 cents? And how will you ever know or be able to hold them accountable.

    Ask yourself... at what point will the FDIC stop insuring my money and change the rules so that I become one of the long list of creditors to my failed institution.

    Ask yourself... what would happen if *you* did what they had done.

    And then call every congressman in the phone book. After you take your money out of your bank.


    RAIDS OF INDIVIDUAL ACCOUNTS (originally found here: "Panic, Consolidate, Game Over" by Jim Willie, CB, FSU Editorial 09/18/2008 and reposted)


    This is so important a topic, that it deserves top billing!!! Hidden inside the AIG bailout funding package, surely hastily cobbled together, but carefully enough to include a totally corrupt clause, was a handy dandy clause that permits raids. The conglomerate financial firms are permitted at this point to use private individual brokerage account funds to relieve their own liquidity pressures. This represents unauthorized loans of your stock account assets. So next, if the conglomerate fails, your stock account is part of the bankruptcy process. Finally the corrupt USGovt and corrupt Wall Street houses are desperate enough to put into policy, stated by the US Federal Reserve, outlining the authorized raid of your money. Beware. A good route would be to remove your money, start a subscription here, and open a GoldMoney account, then purchase physical gold or preferably silver with my offered discount. That cannot be taken from you, and will rise 5x for gold and 10x for silver in the next two to three years. The actual evidence for legalized stock account raids by the financial firms can be found in recent articles in Financial Times and Wall Street Journal. So this is not a wild claim. The September 14th article on the Wall Street Journal entitled "Wall Street Crisis Hits Stocks" was the first exposure.

    The runs on US banks are in progress. See Washington Mutual, where private email messages have been shared by WaMu bank officers. WaMu alone could deplete the entire Federal Deposit Insurance Corp fund for bank deposit coverage. Eventually the FDIC will compete for USGovt federal money for bailouts and nationalizations. Eventually, bank deposits will not receive 100 cents per dollar, in a compromise. Next the bank runs will push banks into failure, at a time when stock accounts are under raids, without broad public knowledge.

    Also, see this article: A $1.8 Trillion Bailout: Where the Money's Going - Financials * US * News * Story - CNBC.com
    I am sworn to protect the Constitution of the U.S.A. from all threats both foreign and domestic.

  5. #50
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    Quote Originally Posted by farronwolf View Post
    And sorry to say, this is political. You have one party that wants to regulate albeit probably too much who we call liberals, and another party that wants to deregulate until there is a crisis like the S&L and this latest crisis, then step in and bail them out with taxpayer money, and people call them conservatives. If you look at the facts and the consequences of their policies, then the reactions to those consequenses how in the world can anyone like any thing they see, and say hey I'm a whatever party affiliation.
    And then we have the people that want to deregulate and let the cards fall where they may-- Libertarians. I'm in this boat when it comes to economics. They may touch the hot stove once, and it'll hurt, but they won't do it again if momma government isn't there with a bucket of ice to make it all better.

    For those of you who obviously know more about this than me:
    1. Didn't the AAA rating come from the fact that these bonds were backed by the government (FHA/VA and the like)?
    2. What is the ratio of FHA defaults v. McMansion defaults in terms of $$$?


    Maybe this is finally the wake up call that a debt-based economy isn't the best idea.
    "Lord, help me to be the person my dog thinks I am."

  6. #51
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    No, these loans were not backed by the FHA/VA. They actually use ratios to calculate fixed debt to income ratios for borrowing limits.

    I don't think anyone knows what the ratio of small to big house loans are included in this, because the people buying up the loans didn't even know the type of risk they were taking. They were just buying what the banks were bundling and selling. No research was done on the risk or credit ratings for the borrowers.

    Many of the people buying the mortgages and selling the bonds were the same people that were responsible for the stock market inflation and crash in the late 90's and 2000. They simply found a new vehicle to get rich quick on.
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  7. #52
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    No, I don't think that is what gave the AAA ratings

    Quote Originally Posted by MnemonicMonkey View Post
    Didn't the AAA rating come from the fact that these bonds were backed by the government (FHA/VA and the like)?
    No, there were plenty of other factors; things like assumptions about mortgage insurance, size of the down payment/equity behind the mortgage, independent appraisals, and other stuff.

    When some of these weren't as represented, e.g., home owner income, presence of mortgage insurance, a false appraisal, the rating was inevitably wrong.

    From an investor's viewpoint, the brokerage houses bought up large blocks of these collateralized mortgage obligations and resold them to the public, representing them as the equivalent of a government bond in safety. After all, they claimed, even if the home owner defaulted, the house still had value. Worst case, you'd be out some principal and some interest. But, things got out of hand.

    Apparently, the game was so slick that the supposed best minds in finance didn't catch on until the bitter end--e.g., Bear Stearns and others left holding the crappy paper.

  8. #53
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    It really doesn't matter now about what went wrong and when. It was all our faults, as a nation.

    The fact of the matter is that credit of any kind is too easy to get, period. We voted to loosen the purse strings and we got taken for a ride. Now we just need to tighten them back up and set things right.

    the reason for the bailout is simple; most folks pension money is tied up in mortgage securities and property investment.........If we don't provide some kind of relief, then we will have a financial meltdown of the kind of proportions the press has been talking up.
    "Guard with jealous attention the public liberty. Suspect everyone who approaches that jewel. Unfortunately, nothing will preserve it but downright force. Whenever you give up that force, you are inevitably ruined". - Patrick Henry

  9. #54
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    Quote Originally Posted by edr9x23super View Post
    It really doesn't matter now about what went wrong and when. It was all our faults, as a nation.

    The fact of the matter is that credit of any kind is too easy to get, period. We voted to loosen the purse strings and we got taken for a ride. Now we just need to tighten them back up and set things right.

    the reason for the bailout is simple; most folks pension money is tied up in mortgage securities and property investment.........If we don't provide some kind of relief, then we will have a financial meltdown of the kind of proportions the press has been talking up.
    Actually, scary as it sounds, that's what I'm proposing. LET IT MELT DOWN. That's what it's supposed to do. Then let the economy heal on it's own from scratch.
    "My God David, We're a Civilized society."

    "Sure, As long as the machines are workin' and you can call 911. But you take those things away, you throw people in the dark, and you scare the crap out of them; no more rules...You'll see how primitive they can get."
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  10. #55
    VIP Member Array farronwolf's Avatar
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    Quote Originally Posted by edr9x23super View Post
    It really doesn't matter now about what went wrong and when. It was all our faults, as a nation.

    The fact of the matter is that credit of any kind is too easy to get, period. We voted to loosen the purse strings and we got taken for a ride. Now we just need to tighten them back up and set things right.

    the reason for the bailout is simple; most folks pension money is tied up in mortgage securities and property investment.........If we don't provide some kind of relief, then we will have a financial meltdown of the kind of proportions the press has been talking up.
    I do think it matters how or why it went south. People need to be held accountable especially if the taxpayer is going to be left with the bill. How much more is this going to devalue the dollar.

    None of my retirement or pension money is tied up in it, and it isn't my fault that someone choose to put theirs into it. Isn't that the risk one takes when choosing what type of growth they want with their pension? They could have simply choosen to invest in CD's or other stable investments.

    I do agree with you that credit is too easy to get, that is why I feel they shouldn't make this bailout and let the cards fall where they may. I haven't worked hard to get myself nearly out of debt and a credit score over 800 simply to cover others who weren't so careful about their own finances.
    Just remember that shot placement is much more important with what you carry than how big a bang you get with each trigger pull.
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  11. #56
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    What really troubles me in all this is the fact that I hear nothing being said about JAIL for the sharpies at whatever level; home buyer, appraiser, loan originator, bundler, broker, pension fund manager, mutual fund manager, and so on.

    Not to put China up as a great model, I do suspect that by now a Cox (head of SEC) or Paulson (Treasury Secretary) would have received their just reward--along with several hundred if not thousand others equally responsible.

    Guys, this isn't about free markets. It is about theft, and failure to police what should have been policed.

  12. #57
    Restricted Member Array SelfDefense's Avatar
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    Quote Originally Posted by Hopyard View Post
    What really troubles me in all this is the fact that I hear nothing being said about JAIL for the sharpies at whatever level; home buyer, appraiser, loan originator, bundler, broker, pension fund manager, mutual fund manager, and so on.
    Just curious, but exactly what law do you think was broken and by whom?

    Guys, this isn't about free markets. It is about theft, and failure to police what should have been policed.
    This has everything to do with free markets. If the government would not have forced (under a real law) lenders to give money to those unqualified this would never have happened. Since no one but the government did anything wrong there was nothing to police. I do know that if derivatives trading was made illegal or the margin requirements set to at least 50%, that would have mitigated the damage.

    Still, this is not the catastrophe that everyone thinks. We have gone through similar ups and downs for a long time. In the '80s, the market crashed and the doom and gloomers were out in force predicting financial collapse of the United States. They were wrong then. They are wrong now.

  13. #58
    VIP Member Array farronwolf's Avatar
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    Quote Originally Posted by SelfDefense View Post
    Still, this is not the catastrophe that everyone thinks. We have gone through similar ups and downs for a long time. In the '80s, the market crashed and the doom and gloomers were out in force predicting financial collapse of the United States. They were wrong then. They are wrong now.
    Good then we should agree that no bailout is warranted, and the thing will sort itself out. We don't need to socialize the investment banks with the treasury secretary in charge.
    Just remember that shot placement is much more important with what you carry than how big a bang you get with each trigger pull.
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  14. #59
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    Quote Originally Posted by packinnova View Post
    Actually, scary as it sounds, that's what I'm proposing. LET IT MELT DOWN. That's what it's supposed to do. Then let the economy heal on it's own from scratch.
    This is the same mindset that would state that social security is a socialistic pyramid scheme, it shouldn't exist and as of today it is over. No more payroll taxes, no more payouts and let the people harmed by the government hang out to dry. Unfortunately, that solution is a poor choice. The wrong cure can just as easily destroy the body as the parasite.

  15. #60
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    Don't be so sure

    Quote Originally Posted by farronwolf View Post
    None of my retirement or pension money is tied up in it
    Don't be so sure. If you have any pension plan (other than an entirely self directed one) it is likely the employer has these bonds in the portfolio--or, whoever manages the retirement fund for the employer has purchased them. If you own any mutual funds, it is likely they have CMOs in there somewhere/unless it is a very aggressive fund; these were supposed to be the safe investments.

    And if you parked your money in CDs, the bank no doubt owns CMOS, as well.

    Only if all your wealth is in commodities or real estate (owned directly) would you be likely to escape the whole mess. And even then, the crunch is going to make credit very hard to get, so your property would be illiquid ---(not necessarily a bad thing except it would slow the economy to a turtle crawl.)

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