Does Anyone feel like Bailing

[TheMercenary]

Originally Posted by sugarpop

huh?

And ftr, I have stated many times that Clinton is the one who signed the repeal of Glass Steagal, and that many democrats also went along with the deregulation of the laws that allowed this to happen. They should ALL be held accountable for whatever their parts were in this faisco. I am sick of corruption and greed. I am sick of it in business, and I am sick of it in government, and I am sick to death of living in a society where people only care about themselves, damn the rest. THAT is the attitude that allows this kind of thing to grow. And I'm sorry Merc, I love you to pieces, but you have that attitude. That attitude is part of the problem.

That is a bit unfair because I care for people every day. I don't care for people coming into my life and telling me that I have to take my accomplishments and give them to others. I don't believe in wealth redistribution plans even though we already have that in the form of our tax system. It needs to be changed. I don't believe that we should make people who worked hard to get to a certain point and turn around and not give them an equal break to the asshole down the street who over mortgaged his life and bought into a home he never could have afforded. Nor do I think we should give people a break who sat on their ass screwing up their life while the rest of went to school and busted our assess. You make of life what it is and your failure to make the right choices are not my problem.

[TheMercenary]

The markets response to the first 30 days.

http://www.google.com/finance?chdnp=...JX:.DJI&ntsp=0

[tw]

Originally Posted by sugarpop

hey, I agree with you. But to answer your questions, did I see the crash in 2005? No, but I don't work in finance, banking or housing. IF I had known they were bundling mortgages and selling them over and over again, and they weren't checking people's income to see if they could even afford to buy a house, and mortgage lenders were creating loans where payments would balloon in a few years, and they were coercing some people into these loans who did not understand them, then I would have seen it, yes.

Posted in 7 Sept 2006 in
Which is your favorite paranoid fantasy?

Originally Posted by tw

Has good news in this economy been based in productive activities? Well, incomes have been dropping for the past five years. So why the strong housing market? Was that housing market due to productive and necessary products - or just wild speculation? ...

Those who otherwise could not afford the home and those who were only buying on speculation will suffer. Big part of the American economy that has been its 'engine' may collapse. That is the economic fear to a flurry of bankruptcies, a collapse of industries that kept the American economy looking good, and maybe a major recession. ...

Any one of three things may happen. Housing prices drop leaving massive debts for homeowners - maybe a house worth less than its mortgage. Rents skyrocket. Third is inflation resulting in much higher interest rates. We already see inflation jolting upward AND massive American dollars overseas waiting for what?

Nobody really knew how much worse the economy had been made because Enron accounting and other money games were openly encouraged even at highest levels in government. Meanwhile, notice how many even denied that mild warning in 2006.

We knew a downturn was coming. We just had no idea how severe it would be because fraud was almost everywhere in the finance industry. Obvious in facts and numbers posted in those 2006 responses: downturn was pending. After all, that is what even tax cuts create once we eliminate rhetoric from those inspired by politicians. Any yet in the face of such facts, many (and from my perspective - most) still remained in denial.

Even Greenspan, who did not believe outrageous fraud had been all but encouraged by government, said finance people in free markets can be trusted. Greenspan could not believe people would promote or sign into an ARM. It just made no sense - except where political spin had even promoted houses as an investment. (If not yet obvious - housing never was investment.) Obvious was a pending downturn. But those who should have known it would remain openly in denial. Those who knew the entire financial industry was mostly wealth created by toxic (fictional) assets (ie CDOs, SIVs) attached to nothing of physical value - they were most in denial.

The lesson is obvious - your stock broker, investment banker, or financial consultant is typically the worst person to consult for financial advice. These people are mostly either ignorant of basic economics or have interested contrary to yours.

View that discussion even in July 2006 where I knew something bad was pending - with reasons why. Obvious even to me without any finance training or industry experience. But then I do not entertain my emotions AND do not listen to political hype, conclusions without reasons and numbers, and other junk science myths. One need not be in the industry to know something bad was coming. (Even I did not realize in 2006 how much worse it would be.)

Without finance knowledge, I did something I never do. Early last year (2008), I sold all investments. Without any financial knowledge and a contempt for brokers who really have no economic knowledge (who are only salesmen), I did something completely contrary to my investment philosophies - that I never did in generations. I got out because this market was obviously in a dangerous and unstable state due to too much MBA thinking and too few productive companies. Because I have contempt for political spin, the economy was in trouble.

The point: yes most who ignored facts and numbers - who were the problem and preached the party line - could not see it coming even thought facts and numbers were screaming otherwise. No, I too had no reason to know it would be this bad. But remember, finance people (some of the least economically knowledgeable and trustworthy) are promoting another obvious myth about a recovery in 2009 or 2010. Economists are saying otherwise. But again, finance people are not driven by knowledge even when facts and numbers bluntly say otherwise.

With basic knowledge (in or out of the finance industry), obvious was a housing bubble that had to crash because housing prices were 40% too high. Obvious was that all housing prices had to fall at least 20%. Obvious. And then we learned finance people did only what finance people routinely do - outright fraud and corruption. Mortgage backed securities and other intentional lies intended first or only to enrich finance people (despite what finance people said or believed).

Predicting a pending housing crisis in 2005 did not require finance wizardry. It required one to think logically and to not believe the so called experts who really don't understand basic economics (ie what was posted in mid July 2006) and whose interests are too often contrary to others.

This completes a response to question one. What you saw in 2005 is typical because we tend to deny facts and even listen to people whose interests are often contrary to America. A long reply because this quite simple concept still remains too new or radical to some. But again, read that 2006 discussion to appreciate why housing problem should have been obvious to laymen even in 2005.

Originally Posted by tw

You are suppose to say that a so called 'booming' economy was partially due to people taking houses they could not afford. A later resulting recession created by an economy today inflated by wild and irresponsible government spending and other financial instruments that create only paper wealth.

Thread title was Paranoid Fantasy? Yes, to so many in 2006 who remained in denial of facts that everyone could /should have known.

[tw]

Originally Posted by sugarpop

My understanding of Fannie and Freddie is they were part private/part government mortgage companies. Fannie was created after the Great Depression to help lower income families own homes. It worked great for decades. From what I've read/heard, my understanding is the repeal of the Glass Steagall Act, and the separation of investment banks and regular banks, is partly what caused this.

Glass Stegall separated investment banks and commercial banks. But it was never completely repealed. For example, ask your commercial banker about your stock investments. He cannot access them. Investments are separted from commercial banking.

Fannie and Freddie were crated to help low income families more easily afford a home. Make homes affordable to the early comers and increase housing prices for everyone else. There is no free money. A lower interest rate for early applicants means homes now have more buyers: so home prices increase making homes just as less affordable. But now we have this massive government bureaucracy that also must be paid for. Worse, to put things back to normal - to eliminate Fannie and Freddie – home prices drop down to where they should have been. Home sellers take an unexpected price drop.

The intent (a popular belief) is not what Fannies and Freddie actually do. Did it worked great for decades? Or did people appreciate them while ignoring why Fannie and Freddie only caused higher housing prices and more government bureaucracy? Show me how Freddie and Fannie also capped housing prices?

Why would Fannie and Freddie be necessary? Because commercial banks would not make home loans? So we maintain massive government bureaucracies rather than fix the problem - bank loan officers? Yes, things like Freddie and Fannies had a purpose to fix a temporary problem during the Depression. However their continued existence does little productive. Their functions should have been passed back to commercial banks and other mortgage lenders long ago.

All that goodness by Fannie and Freddie ignores how both distort market prices – keep prices artificially higher – do not make houses any more affordable. IOW too many believe what they are told - ignore how the housing market compensates low interest Fannie and Freddie mortgages by raising prices.

[classicman]

Originally Posted by sugarpop

THAT is the attitude that allows this kind of thing to grow. And I'm sorry Merc, I love you to pieces, but you have that attitude. That attitude is part of the problem.

Blind loyalty in any form is bad and allows manipulation.

Originally Posted by TheMercenary

The markets response to the first 30 days.

http://www.google.com/finance?chdnp=...JX:.DJI&ntsp=0

It's still Bush's fault. The D's will ride that horse right through 2010 and 2012, bet on it.

[tw]

Originally Posted by sugarpop

IMO, the purpose of a company is to supply a need, and supply a living to people working there. Yes, it is also their business to make money, but not at the expense of the workers, the shareholders, or anyone else ...

I watched the movie Wall Street earlier, and it is even more relevent today than it was in the 80s. People on Wall Street have gotten greedier and greedier, and the job they do is crap.

Greed is good only when the greedy forget their purpose: forget to serve the economy. Your response to question three is the rare and accurate one. But Wall Street has not become greedier. We asked them to become greedier. Wall Street et al always needs heavy regulation because of the nature of a finance person is to enrich themselves first. To sell anybody anything as long as they reap a profit. All are greedy. Some less than others.

Derivatives and other such contracts have no business being traded outside of regulated markets. Worse, accounting has no right to consider them hard assets. 'Mark to market' being absolutely essential because finance people are forced to maintain a larger inventory of real collateral to back up those 'short' assets. 'Mark to market' also forces traders to have access to liquidity that day in case assets do what are normal in any market. In short, to have reserves so that today’s financial collapses could never happen.

The best part of 'mark to market' - the greedy finance man gets driven to bankruptcy now before he can cause even further and worse damage. Bankruptcy is especially essential to harm the greedy ones. But today, we even eliminated regulations and oversight. Some so love to destroy Wall Street responsibility as to even oppose 'mark to market' – which is especially brutal on the greediest.

Extremist Republicans got the economy they wanted - where the rich reap income increases sometimes by 60% and 100% annually. Where the middle class saw their incomes drop 2%. Where the most rewarded are finance people – not innovators who actually do productive work. How curious. This income redistribution only happened once previously in American history - just before the 1929 stock market crash.

They did not get greedier. Finance people - including those I went to school with - typically are not the bright ones. They are the greedy ( often conceited) ones who more often promoted themselves. Were chock full of vanity and self-promotion. In some cases, had no interest in knowing how anything worked.

People whose job is about promoting myth - whose wealth can increase if they can lie: over the past ten years we let them do that without oversight.

They did not get any greedier. When did everyone know the foxes controlled the hen house? When the Feds refused to investigate and prosecute Enron. When Harvey Pitts (George Jr's SEC commissioner) refused to take any additional money from Congress to do SEC investigations. They were as greedy as we wanted. Nobody could have ignored Harvey Pitts testimony (and his predecessors) unless they wanted foxes to control the hen house. Any additional greed is directly traceable to Cellar dwellers and other citizens who wanted greed to increase by staying silent and naive.

Why do venture capitalists create so many productive companies? And not Wall Street? The former invest by actually knowing how things work. The latter believe their personal wealth is more important and only know what any salesman would understand. Which ones reap profits by serving America? Which ones reap bonuses by inventing finanical instruments not even based in hard assets? George Jr encouraged the greed that we wanted.

[tw]

Originally Posted by TheMercenary

The markets response to the first 30 days.

As the president so accurately noted, we will be paying for wacko extremist economics for the next 10 years. But too many with MBA training were predicting a recovery in 2009 or 2010. Anyone with minimal economic knowledge knows that is impossible. Markets are slowly realizing how destructive wacko extremists have been to America AND how deep the damage is. Slowly, those who predicted recovery in 2009 are realizing a recovery cannot happen. George Jr’s legacy is alive and well.

Expect at least another four years of George Jr "Reagan proved that deficits don't matter" economics. Economic damage created by tax cuts, trickle down economics, destruction of science to make wackos happy, "Mission Accomplished" ... hell, he did not even bother to go after bin Laden. Just another bill we must pay for. We have yet to pay the bills just as Nixon's lies in 1969 & 70 caused economic damage in 1975 and 1979. We have yet to see how destructive George Jr has been to America. Slowly, even wacko extremist Republicans on Wall Street are coming to grips with the carnage. Who knows how much farther George Jr's intelligent will push down the Dow Jones. Pending are bills created by "Mission Accomplished". And then we must fight the Afghanistan war all over again.

[sugarpop]

Originally Posted by TheMercenary

That is a bit unfair because I care for people every day. I don't care for people coming into my life and telling me that I have to take my accomplishments and give them to others. I don't believe in wealth redistribution plans even though we already have that in the form of our tax system. It needs to be changed. I don't believe that we should make people who worked hard to get to a certain point and turn around and not give them an equal break to the asshole down the street who over mortgaged his life and bought into a home he never could have afforded. Nor do I think we should give people a break who sat on their ass screwing up their life while the rest of went to school and busted our assess. You make of life what it is and your failure to make the right choices are not my problem.

The world has changed significantly over the past few of decades, and it gets worse every year. It used to be perfectly acceptable to do something with your life other than spend years in school, and you could still make a decent living. People who worked in construction or factories, etc. made a decent wage, why is it their their fault that we have allowed corporations to go offshore in order to increase their profits by using cheap labor, or that corporations and rich people have chosen to hire illegals instead of giving jobs to Americans, so they can have cheap labor? Not everyone is cut out to be a doctor or a lawyer, and the fucking people going to business school getting MBAs are a bunch of greedy morons who have crashed the entire world economy. Why do THEY deserve so much money, when teachers and cops and soldiers get crap pay? Why is OK that CEO pay has risen to almost 500x the amount of average workers, while salaries have been stagnant for their workers, and even gone down? Why is OK for profit to outweigh everything else?

As far as taxes go, our taxes pay for WalMart's employees healthcare, one of the richest, most successful corporations of all time. Our taxes pay for new stadiums owned by rich pricks who own sports teams, but we get nothing back from them, no benefit (yes, it may benefit the people in the city where they build them, but why is the rest of the country paying for that?). Our taxes pay for the R&D of most drugs, but pharmaceutical companies jack the prices up in to the stratoshpere and many people (whose taxes helped develop those drugs) cannot afford to buy them. IF you're going to be all pissed off about wealth redistribution, please, be angry at the right people. The rich have been stealing from the poor and middle class for decades now. It's time we got some equilibrium back.

It's disturbing to me how indifferent you are sometimes to the plight of people who are less fortunate than you are. What if something catastrophic happened to you, or someone in your family, and you lost your income and benefits (unlikely I know because you work in healthcare) and you were unable to support them? What if you lost your job, and your income, and you couldn't find another job, and you couldn't sell your house (assuming it's not paid for, which I know it probably is)? What the hell would you do?

I know you probably don't care, but I have 3 family members who are afraid of losing their jobs right now (one works for Chatham Steel, one works for Toyota, and one is a fireman). Yes, they are all educated. They all went to college. They have all had these jobs for many years. If something happens, and they lose their jobs, they will be in danger of losing their homes as well. Whose fault is that?

After the last bubble crash (the .coms), my cousin, who worked in IT and made a ton of money, lost her job. It took her over a year to find another one. Is that her fault? And a LOT of white collar jobs that require degrees are now also going byebye. If someone buys a house they can actually afford because they have a good job, and then a few years later they lose that job and can't find another one, because the economy crashed, why is that their fault? While it is true that a lot of people were living beyond their means, there are also a lot being hurt now who were not. Whose fault is that?

[sugarpop]

Originally Posted by tw

Glass Stegall separated investment banks and commercial banks. But it was never completely repealed. For example, ask your commercial banker about your stock investments. He cannot access them. Investments are separted from commercial banking.

Fannie and Freddie were crated to help low income families more easily afford a home. Make homes affordable to the early comers and increase housing prices for everyone else. There is no free money. A lower interest rate for early applicants means homes now have more buyers: so home prices increase making homes just as less affordable. But now we have this massive government bureaucracy that also must be paid for. Worse, to put things back to normal - to eliminate Fannie and Freddie – home prices drop down to where they should have been. Home sellers take an unexpected price drop.

The intent (a popular belief) is not what Fannies and Freddie actually do. Did it worked great for decades? Or did people appreciate them while ignoring why Fannie and Freddie only caused higher housing prices and more government bureaucracy? Show me how Freddie and Fannie also capped housing prices?

Why would Fannie and Freddie be necessary? Because commercial banks would not make home loans? So we maintain massive government bureaucracies rather than fix the problem - bank loan officers? Yes, things like Freddie and Fannies had a purpose to fix a temporary problem during the Depression. However their continued existence does little productive. Their functions should have been passed back to commercial banks and other mortgage lenders long ago.

All that goodness by Fannie and Freddie ignores how both distort market prices – keep prices artificially higher – do not make houses any more affordable. IOW too many believe what they are told - ignore how the housing market compensates low interest Fannie and Freddie mortgages by raising prices.

If they are so bad, why then did they only now crash? Fannie has been around since the 30s or 40s. Seems to have worked pretty well up until recently.

[sugarpop]

Originally Posted by tw

...Why do venture capitalists create so many productive companies? And not Wall Street? The former invest by actually knowing how things work. The latter believe their personal wealth is more important and only know what any salesman would understand. Which ones reap profits by serving America? Which ones reap bonuses by inventing finanical instruments not even based in hard assets? George Jr encouraged the greed that we wanted.

We could all learn something by listening to, and living by, the words and ideals of Benjamin Franklin... "As we enjoy great advantages from the inventions of others, we should be glad of an opportunity to serve others by any invention of ours; and this we should do freely and generously." His inventions also included social innovations, such as "paying forward." Franklin's fascination with innovation could be viewed as altruistic; he wrote that his scientific works were to be used for increasing efficiency and human improvement.

[TheMercenary]

Originally Posted by sugarpop

The world has changed significantly over the past few of decades, and it gets worse every year. It used to be perfectly acceptable to do something with your life other than spend years in school, and you could still make a decent living.

That is the point exactly. It will never be the same. People need to get over it and move on, come up with new and innovative ways to make a living as well as come up with new plans, be willing to change jobs, relearn, etc. But most people are not willing to do that. Why? Now just wait for the government to bail them out. I will not defend the corps that go off shore, but I find it hard to condemn them as well. IMHO that all started with Clinton and NAFTA. It is only because of the current round of massive layoffs that people are now willing to do anything to get by. You want to blame all of this on Corps and that is a simplistic view.

People who worked in construction or factories, etc. made a decent wage, why is it their their fault that we have allowed corporations to go offshore in order to increase their profits by using cheap labor, or that corporations and rich people have chosen to hire illegals instead of giving jobs to Americans, so they can have cheap labor?

Who says it is their fault? Not me. Who says that corps and "rich people have chosen to hire illegal’s instead of giving jobs to Americans". That is a pretty damm broad sweeping list of allegations on which to blame all of the countries economic ills. I doubt you can back most of it up. How about Corps have gone where labor is cheap because it is a profit driven industry. You have this hard on for anyone who makes money. How about the companies have given jobs to people who are willing to work hard, not the slackers who would rather sit on their ass and complain about how the man is keeping them down and enslaving them while they spit out another baby from some baby daddy? How do you explain the Korean immigrants who moved to the most depressed parts of cities in America and opened hugely successful chains of grocery stores? How about the waves of immigrants from India or Pakistan and have opened huge successful chains of hotels and motels? Where is the American drive to do that among those who started with or had very little to do that? You can't blame Corps and "rich people" for all the ills of this Nation. That is a ridiculous notion. This country was founded on the tenacity, innovation, and investment of "rich people".

[quotoe]Not everyone is cut out to be a doctor or a lawyer, and the fucking people going to business school getting MBAs are a bunch of greedy morons who have crashed the entire world economy.[/quote]So people are greedy if they work hard to get an advanced education and take advantage of a system that rewards hard work? Wow. Envy much?

Why do THEY deserve so much money, when teachers and cops and soldiers get crap pay? Why is OK that CEO pay has risen to almost 500x the amount of average workers, while salaries have been stagnant for their workers, and even gone down? Why is OK for profit to outweigh everything else?

Who gets to say who deserves what in this life? I don't disgree that we have huge sectors of our society that is underpaid and under appreciated. You can't defend a socialist construct to me. I don't buy it.

As far as taxes go, our taxes pay for WalMart's employees healthcare, one of the richest, most successful corporations of all time.

And the millions of illegal aliens, and welfare mothers on the dole.

Our taxes pay for new stadiums owned by rich pricks who own sports teams, but we get nothing back from them, no benefit (yes, it may benefit the people in the city where they build them, but why is the rest of the country paying for that?).

Many people would disagree with that. You completely ignore the revenue that is gained from attracting millions of people to the events where they then spend money on the local economy.

Our taxes pay for the R&D of most drugs, but pharmaceutical companies jack the prices up in to the stratoshpere and many people (whose taxes helped develop those drugs) cannot afford to buy them.

Actually our high prices of medications pay for that, not our taxes. Get your facts straight.

IF you're going to be all pissed off about wealth redistribution, please, be angry at the right people. The rich have been stealing from the poor and middle class for decades now. It's time we got some equilibrium back.

I agree we need to get some equilibrium back and inact a flat tax so every single person pays the same rate, regardless of income. You make $1000, you pay $200 to tax. You make $100,000, you pay $20,000. No one gets a pass.

It's disturbing to me how indifferent you are sometimes to the plight of people who are less fortunate than you are.

It disturbs me that you judge me about what I do and how I feel. I take care of people everyday who are less fortunate than me.

What if something catastrophic happened to you, or someone in your family, and you lost your income and benefits (unlikely I know because you work in healthcare) and you were unable to support them? What if you lost your job, and your income, and you couldn't find another job, and you couldn't sell your house (assuming it's not paid for, which I know it probably is)? What the hell would you do?

What if I did? I would sell my assets and start over. And that is why I pay so much for insurance.

I know you probably don't care, but I have 3 family members who are afraid of losing their jobs right now (one works for Chatham Steel, one works for Toyota, and one is a fireman). Yes, they are all educated. They all went to college. They have all had these jobs for many years. If something happens, and they lose their jobs, they will be in danger of losing their homes as well. Whose fault is that?

Why are you judging my feelings again? There is much I could tell you about my family and their plights in life but it doesn't change the situation they find themselves in right now. And nothing I can say or do will change any of that. How for one fucking minute can you say that because of the plight of your family that I don't have my own issues to deal with concerning family members? What? Because I am not willing to put them on some public board? When times get tough we focus on our own families and issues, not yours. I have no responsibility for your problems or your families, my plate is full.

After the last bubble crash (the .coms), my cousin, who worked in IT and made a ton of money, lost her job. It took her over a year to find another one. Is that her fault?

Who said it was?

And a LOT of white collar jobs that require degrees are now also going byebye. If someone buys a house they can actually afford because they have a good job, and then a few years later they lose that job and can't find another one, because the economy crashed, why is that their fault? While it is true that a lot of people were living beyond their means, there are also a lot being hurt now who were not. Whose fault is that?

Well I know for one thing your simplistic view of who to blame is wrong.

[Undertoad]

They have all had these jobs for many years. If something happens, and they lose their jobs, they will be in danger of losing their homes as well. Whose fault is that?

You must acknowledge that the system that loses those jobs, created those jobs in the first place. It's the same system.

Look at me. I was laid off the week after the crunch and I have a shitty mortgage in a house I can't afford, living on UI and charity. Sorry, it's not a tragedy, that I go around looking to blame on something. Humbling maybe, but the worst that will happen is that I will have to sell the house and we'll move into an apartment or rent a townhouse. Sucks to be me? Hell no, I will remain awesome (in a humble sort of way ) no matter what.

[TheMercenary]

Originally Posted by Undertoad

You must acknowledge that the system that loses those jobs, created those jobs in the first place. It's the same system.

Look at me. I was laid off the week after the crunch and I have a shitty mortgage in a house I can't afford, living on UI and charity. Sorry, it's not a tragedy that I go around looking to blame on something. Humbling maybe, but the worst that will happen is that I will have to sell the house and we'll move into an apartment or rent a townhouse. Sucks to be me? Hell no, I will remain awesome (in a humble sort of way ) no matter what.

The tenacity of the Great Toad embodies the American spirit so many lack.

[xoxoxoBruce]

People need to get over it and move on, come up with new and innovative ways to make a living as well as come up with new plans, be willing to change jobs, relearn, etc. But most people are not willing to do that. Why?

Maybe because they are over 45 or 50 and nobody will hire them no matter what they do. How many hotdog carts can survive?

[TheMercenary]

Originally Posted by xoxoxoBruce

Maybe because they are over 45 or 50 and nobody will hire them no matter what they do. How many hotdog carts can survive?

I hate to laugh but it made me LOL.