An amazing quote.

[me&thegals]

Now I think you're putting words in my mouth. I'm simply saying when depressions hit, lots of people get run over. I do NOT see only victims and referenced in my original comment people who bought too much house and too much stuff.

I was raised by financially responsible folks, I've never paid interest on a credit card payment, all my bills get paid on time, I have savings, etc. I really DO understand financial responsibility. I've scrimped, worked hard and saved my whole life.

However, responsible AND irresponsible people are hurting right now. I'm just wondering how far you are willing to let their choices take them. Yes, it stinks. I would like to shake some sense into some of them. But, would I like to see the homeless population rise, children go hungry and families miss out on basic healthcare because their parents were dumb or unlucky with money? No way.

 

[DrakeMaiden]

I can see this situation in a lot of different lights. In general I agree that government should be minimal and people should be left to reap what they sow.

However, things can get ugly fast if people's basic needs are not met (regardless of any blame being laid). I think it is a good idea to make sure everyone's basic needs are met, but I'm thinking only very basic . . . not letting people stay in their homes if they can't pay for them . . . especially if they could rent a place for cheaper. Letting people fall through the cracks is bad for everyone. Letting people, who took too many risks, keep playing along at their game is bad for them in the long run, and causes resentment from those who played by the rules. Those who chose poorly need to make sacrifices, but there should also be a smidge of compassion to keep these people from hitting rock bottom.

Oh, and I never said that it was a good idea to opt out of paying one's income tax, I just thought I'd mention that civil disobedience IS always an option for those who choose to make a statement through their actions. Funny how most of us are not so impassioned about the use of our tax dollars as to resort to the measures our forefathers would have deemed honorable. No, I'm not pointing fingers, because I'm no bolder.

 

[me&thegals]

Hmmm... there's another option I remember hearing of people paying only half their taxes. They were upset about approximately half the tax money going to the Department of Defense for a war they didn't believe in and so simply didn't pay "that half" of their taxes. Yikes!

 

[On Our own]

check out this article in Backwoods Home by John Silveira. It's probably the most concise description I've seen yet. This a government mess - and you trust these bozos to get us out of it? I surely don't! That's why I don't want them to get their hands on one more thin dime of my money. I did want hope and change, but I knew it wasn't going to happen, not with the power grip that still holds us all.



I am sorry but I just went and read this and he is almost completely incorrect in his information and conclusions. Mostly what he has is half pieces of info and a lack of understanding of the entirety of the problem as soon as anyone starts with the "this is about subprime" I know they don't get it.

Subprime is a symptom. If every single mortgage that Fannie Mae and Freddie Mac wrote defaulted it would not come close to being able to cause this havoc. Every single one. And the percentages of people who got their loans through them who are NOT in default is significantly lower than many other private lenders. I could go on but the point is that saying the depression has been caused by subprime mortgages is like the cancer was caused by the lesion that clued you in to the fact you had cancer.

Again: www.chrismartenson.com look at his crash course!

 

[reinbeau]

check out this article in Backwoods Home by John Silveira. It's probably the most concise description I've seen yet. This a government mess - and you trust these bozos to get us out of it? I surely don't! That's why I don't want them to get their hands on one more thin dime of my money. I did want hope and change, but I knew it wasn't going to happen, not with the power grip that still holds us all.

I am sorry but I just went and read this and he is almost completely incorrect in his information and conclusions. Mostly what he has is half pieces of info and a lack of understanding of the entirety of the problem as soon as anyone starts with the "this is about subprime" I know they don't get it.

Subprime is a symptom. If every single mortgage that Fannie Mae and Freddie Mac wrote defaulted it would not come close to being able to cause this havoc. Every single one. And the percentages of people who got their loans through them who are NOT in default is significantly lower than many other private lenders. I could go on but the point is that saying the depression has been caused by subprime mortgages is like the cancer was caused by the lesion that clued you in to the fact you had cancer.

Again: www.chrismartenson.com look at his crash course!

Please make sure attributions are correct, I've fixed your quote.

I'm sorry, but from what I've heard from many, many sources other than John Silviera, he's dead on. But I guess you can believe whatever you want, the convoluted mess has many, many players.

 

[On Our own]

Certainly no insult intended. Mea Culpa. I was having trouble getting the quotes syntax to work when I ran out of time. I should have waited to post it .


And, I could have worded the information about CRA better. The governments own data (from during the Bush admin) showed that CRA mortgages were actually fairly solid. The law only covered a very small number of banks and credit unions truthfully. It is as much related to the repeal of the Glass-Stegal Act as the CRA because that repeal is what allowed the banks to create the CDOs that they made of bundled mortgages and sold as financial vehicles. Most of the bad mortgages were sold by private mortgage firms and then sold to banks - no CRA action involved except for CRA opening up the door and saying hey you can make money on mortgages to lower income people. The law neither said nor encouraged banks to oversell this market. It certainly did not condone things like NINJA loans. And, many housing advocates testified before congress in 2003 that private firms were overselling this market.

However, having said all of that again, even if ALL of the subprime loans defaulted and now I mean all of them not just those through the CRA or Fannie and Freddie - you still would not have the financial hit that is causing this depression.

In 1637 Holland suffered through a devastating tulip bubble. Are you familiar with this? Asset bubbles are a part of human nature. The bubble here wasn't housing it was the CDOs based on mortgages.

Have you ever heard of the VIX? It is an index - made up of course - of how "frightened people are of market volatility" . Just a made up number of guessing how people feel. YOU CAN TRADE THIS AS STOCK.

Now we are getting to the crux of the matter. Buying and selling stock on a fear index is no more than rank betting. And rigged betting at that since the numbers can be massaged. CDOs were bets. Many of those bets were based on mortgages which the banks should have been checking, but they weren't. But, not all of them were even mortgaged backed. Many of them were bets on one another's CDOs. Seriously. They were placing huge bets on one another's bets. Then the big five banks went to the Fed and requested a lift of the government regulated leverage limit. As in you cannot lend out more than 70% of your net worth so that if all of your loans go bad you can still survive. The Fed agreed and in 2003 the limits were removed and those big five leveraged themselves to 90%. Much of it on CDO bets.

This economy actually became a zombie economy by 2006. At that point it became a huge game of international hot potato as banks tried to offload these "assets" before their value became clear. The Fed and the Gov't juggled like mad to try to keep it aloft, but the jig was up.

Better still take a look at one of your dollar bills. What does it say your bill is actually worth? Once upon a time it was worth an amount of gold a solid asset. Now it is only worth what people are willing to believe it is worth. Inflation is not a necessary part of an economy. It is an inevitable part of an economy based on fiat money printed and distributed by the banks themselves. (The Federal Reserve is NOT a government agency)

People like the CRA explanation because it is neat and finds one root cause - those *** democrats and their insistence on helping low lifes. I wish it were that simple. If it was that simple what Obama is doing might actually work. But it is not that simple and what he is doing is not going to work. This whole puppy of our economy is based on Adam Smith and Milton Friedman and the conviction that people will do what is in the best interest of their firms instead of themselves.

If you came to work today and I said, "I have a perfectly legal way for you to make 12 million dollars today but the side effect is that most of your family would go bankrupt."

Most people would say no, but even then some would do it. So imagine I said "You can make 12 million today, legally. But a hundred people from across the world will lose their life savings." Many many people fell into this trap of take the money and run. This is a whole systemic failure that cannot be fixed now. What comes next is a matter of conjecture, but simply "fixing" some part of what we have will not work.

 

[sylvie]

Well we're just going to have to wait and see. I'm not an economist, not that it matters. You can ask 10 different economist's what the solution is and you'll get 10 different answers. It would be nice if all the nay sayers would get on board and try to help instead of helping the problem, along. You have people like Rush (who is currently considered to be the head of the Republican party) coming right out and saying he hopes Obama fails. Why does he hope that? If Obamas plan fails we're going to be a lot worse off. Rush doesn't care, he's just upset cause he has to pay more taxes. He has all he food and drugs he needs. He can hire his own army to keep him safe. Obama is trying to help people like you and me. I don't think there's any millionaires on this line. If his stimulus plan actually causes you to lose your job let us know. Be sure your info is valid though. Don't get it from a radio con man.

Listen to his speech before you decide to believe what you've been fed. The lamestream media totally misconstrued Rush's comments - I don't blame you if all you listened to was the nightly news. If you saw the whole speech and understood what he was saying you'd realize that he is totally against Obama's main premise, that of huge, nanny state government cradling you from birth to grave while eliminating the economic stimulus to actually succeed. It is just a continuation of the 'no one fails' policy the left has been pushing for years now. Well, they've worked their way up to the top, and I don't know about you, but I see all the 'self esteem' and no one losing creating a whole nation of crybabies feeling their entitled to this and their entitled to that. I'm in full agreement with Rush (for once, that doesn't happen all the time).

Apparently some did:
http://theusconstitution.org/blog.history/?p=516

 

[Big Daddy]

Thank you. Sylvie

 

[reinbeau]

Tulip fever. I am very familiar. I am also pretty confident in my understanding of business machinations. Personally I'm a great believer in Ocam's Razor - the simplest explanation is the correct one.

I also believe there is rot to the core of business in this country today, and therein lies the real problem. Fast Eddy accounting practices to get money from 'customers' to pass onto a few at the top. It's incestuous, and it's rampant. And it has brought this country to its knees.

I am also familiar with the people who wrote this site - and I know that they are hardly an unbiased source. So, I guess we'll all have to agree to disagree. I heard the speech. I watched the whole thing. I have no need for anyone to interpret what was said, because I heard it - and I don't think those people did much more than apple-pick what they wanted to discredit. That's the way things go, you read all the sources and make up your own mind. Listen with your own ears, read with your own eyes, interpret with your own brain. That's what I do continually.

 

[DrakeMaiden]

You know what amazes me? Some people give their lives for the benefit of the country, whether or not they agree with the missions they have been given. But when you ask those with the most means to sacrifice a little more of their money for the country's welfare you encounter some very nasty characters.

Now, that isn't to say I agree with the way government blows through money, or the deficits that BOTH PARTIES create while they are in power. It is just to say that money does quite a number on people's characters. JMO, and not directed at anyone here BTW.