Quote:
Originally Posted by sugarpop
I just don't understand how all these really, really (supposedly) smart people missed what was happening, or didn't know it WOULD HAPPEN when they started figuring out all these crazy, stupid ways to make money.
|
So in 2005 when I warned of an obvious and major impending disaster in housing prices, you immediately saw the wisdom and agreed? Naive is to blame Tim Geitner. In fact, when you posted this, instead, you should have been watching Frontline to first learn the story.
Well, what are you waiting for:
Inside the Meltdown
Obvious is the arrogance where brains were smaller, bonuses largest, egos inflated, and MBA training is everywhere. Blaming Tim Geitner is silly. This problem is directly traceable to what we did to make it possible. (see the word we - not they). We ignored Enron accounting. LTCM made obvious the lack of transparency to let finance people enrich themselves at the expense of America. What also resulted was the CA energy crisis and (it now appears) $4 per gallon gasoline.
Why does an executive deserve more than $1million annually. Why do people who were the less intelligent in school but are big image salesman type easily making $1million a year on Wall Street?
How much of the problem do you understand? Do you know that a stock broker underperforms the market. So he sells mutual funds rather than stocks - to increase your costs and his profits. Traditionally stock brokers are poor investors. They know almost nothing about economics or products, and everything about making the sale and enriching themselves. Is your stock broker informed, or only a salesman? Did you even ask yourself that question? If not, then you too are part of the problem. A finance person is paid for image; not for knowledge and intelligence. But because he moves large sums, he feels he must take a larger percentage and that only he best knows how to direct capital.
The people with knowledge and intelligence come from where the work gets done. So we let lower intelligence finance people hide their mismanagement in the name of deregulation? But again, watch the frustration of Bernanke and Paulson when these so called geniuses only played money games and chicken to enrich themselves and mortgage America.
When Greenspan was first told that 20% of the mortgages were sub prime, he denied it. No way would so many approve or apply for that kind of mortgage. But with extremists pushing deregulation, Greenspan had no way of knowing the content of mortgages. Today's finance industry turned into outright deception and shady backroom deals. We even let George Jr completely lie about Saddam's WMDs - and said that was good.
Long before looking at Geitner, instead, first look at yourself. Do you know that most every stock brokers is a poor investor; little more than a salesman? If you did not even know that, you set yourself up to be part of the problem. Geitner had nothing to do with, for example, so many people even foolishly taking out loans to buy disposable items such as cars.
Let's see how much your grasp. Fanny Mae and Freddie Mac were designed to make housing more affordable. That is the statement. Do you believe that? Yes? No?
Both make housing prices higher. Using basic economics, then you know that AND will then reply with the reason why. Long before you could blame Geitner, you must have the answer to that question AND know the why behind that answer. Otherwise, you are simply part of the problem.
In 2007, markets were crashing. Merrill Lynch's senior VP warned loudly of the problem in early 2008. So Merrill Lynch's president fired him. Is that an accident? Later that president was paid something around $200 milliion to leave. This is also acceptable?
With any grasp of these last six months, then you know widespread denial was routine even one year later at the CEO level in all 'now famous' finance companies. They were doing exactly what is taught in business schools.
If you blame Geitner for anything, he did not let Bear Stearns go bankrupt. IOW his bosses let the rest of Wall Street remain in denial. What is found everywhere in this crisis? Massive debts and risk were hidden in Enron accounting schemes. Long before blaming Geitner, explain why widespread accounting fraud is now legal in America.
Learn why every stock broker, investment banker, insurance broker, etc all must be highly regulated. Why so much corruption? Tell me. What is the purpose of a company? The third question.
Let's see how much you knew before you were blaming Geitner. Three questions that are easily answered. You saw the impending housing crash in 2005? What do Fanny Mae and Freddie Mac do and why? What is the purpose of a company?