2nd Worst Financial Crisis In History: Who gets credit?

[KissMy]

Wow Dante watched & read some fictional stories & thinks he knows something.

boedicca is correct. There was no market for these worthless junk bond derivatives until the Full Faith & Credit of the US Government was backing them. This gave them a AAA credit rating, then Pension Funds, Banks, & Governments around the world wanted them. The GSE - Government Sponsored Enterprises is the root cause of all the evil.

 

[Procrustes Stretched]

I wonder who believes that Wikipedia is the source of all objective knowledge.

what do you disagree with that was posted and linked to?

 

[Procrustes Stretched]

Wow Dante watched & read some fictional stories & thinks he knows something.

boedicca is correct. There was no market for these worthless junk bond derivatives until the Full Faith & Credit of the US Government was backing them. This gave them a AAA credit rating, then Pension Funds, Banks, & Governments around the world wanted them. The GSE - Government Sponsored Enterprises is the root cause of all the evil.

only what I watched and read, not what I was force fed...by FOX or MSNBC.

 

[boedicca]

I wonder who believes that Wikipedia is the source of all objective knowledge.

what do you disagree with that was posted and linked to?

I've already posted that there were a multitude of contributors to this problem going back decades - and a link to an article regarding CRA as an impetus to the absolution of proper lending practices which fueled the housing bubble. That's enough pour moi. I don't need to read wiki to understand the causes.

 

[Procrustes Stretched]

I wonder who believes that Wikipedia is the source of all objective knowledge.

what do you disagree with that was posted and linked to?

I've already posted that there were a multitude of contributors to this problem going back decades - and a link to an article regarding CRA as an impetus to the absolution of proper lending practices which fueled the housing bubble. That's enough pour moi. I don't need to read wiki to understand the causes.

so you are on record as saying you understand all the causes.

note: this is a keeper

 

[Procrustes Stretched]

what do you disagree with that was posted and linked to?

I've already posted that there were a multitude of contributors to this problem going back decades - and a link to an article regarding CRA as an impetus to the absolution of proper lending practices which fueled the housing bubble. That's enough pour moi. I don't need to read wiki to understand the causes.

so you are on record as saying you understand all the causes.

note: this is a keeper

This will come back to bite the blowhard in his/her ass.

 

[boedicca]

No - but I do understand enough to not need to read Wikiganda.

And I'll note the irony of your insinuation that it represent All The Causes.

 

[Procrustes Stretched]

No - but I do understand enough to not need to read Wikiganda.

I always have a laugh at people who think wikipedia is useless. reminds me of the people who only a few short years ago said the same thing about the internet(s). misunderstanding the tool for the message, or the message for the tool. either way, funny.

small minds make for much fun.

 

[boedicca]

I don't think it's useless for all things - but there is often a definite political bias regarding more recent events.

 

[Procrustes Stretched]

I don't think it's useless for all things - but there is often a definite political bias regarding more recent events.

yeah? you mean like this?

Deregulation
Further information: Government policies and the subprime mortgage crisis

Critics have argued that the regulatory framework did not keep pace with financial innovation, such as the increasing importance of the shadow banking system, derivatives and off-balance sheet financing. In other cases, laws were changed or enforcement weakened in parts of the financial system. Key examples include:

* In October 1982, President Ronald Reagan signed into Law the Garn-St. Germain Depository Institutions Act, which began the process of Banking deregulation that helped contribute to the savings and loan crises of the late 80's/early 90's, and the financial crises of 2007-2010. President Reagan stated at the signing, "all in all, I think we hit the jackpot".[60]

* In November 1999, President Bill Clinton signed into Law the Gramm-Leach-Bliley Act, which repealed part of the Glass-Steagall Act of 1933. This repeal has been criticized for reducing the separation between commercial banks (which traditionally had a conservative culture) and investment banks (which had a more risk-taking culture).[61][62]

* In 2004, the Securities and Exchange Commission relaxed the net capital rule, which enabled investment banks to substantially increase the level of debt they were taking on, fueling the growth in mortgage-backed securities supporting subprime mortgages. The SEC has conceded that self-regulation of investment banks contributed to the crisis.[63][64]

* Financial institutions in the shadow banking system are not subject to the same regulation as depository banks, allowing them to assume additional debt obligations relative to their financial cushion or capital base.[65] This was the case despite the Long-Term Capital Management debacle in 1998, where a highly-leveraged shadow institution failed with systemic implications.

* Regulators and accounting standard-setters allowed depository banks such as Citigroup to move significant amounts of assets and liabilities off-balance sheet into complex legal entities called structured investment vehicles, masking the weakness of the capital base of the firm or degree of leverage or risk taken. One news agency estimated that the top four U.S. banks will have to return between $500 billion and $1 trillion to their balance sheets during 2009.[66] This increased uncertainty during the crisis regarding the financial position of the major banks.[67] Off-balance sheet entities were also used by Enron as part of the scandal that brought down that company in 2001.[68]

* As early as 1997, Fed Chairman Alan Greenspan fought to keep the derivatives market unregulated.[69] With the advice of the President's Working Group on Financial Markets,[70] the U.S. Congress and President allowed the self-regulation of the over-the-counter derivatives market when they enacted the Commodity Futures Modernization Act of 2000. Derivatives such as credit default swaps (CDS) can be used to hedge or speculate against particular credit risks. The volume of CDS outstanding increased 100-fold from 1998 to 2008, with estimates of the debt covered by CDS contracts, as of November 2008, ranging from US$33 to $47 trillion. Total over-the-counter (OTC) derivative notional value rose to $683 trillion by June 2008.[71] Warren Buffett famously referred to derivatives as "financial weapons of mass destruction" in early 2003.[72][73]

btw, bias is not always a bad thing. To some extent it exists everywhere. Computer models, stats...

IMNSHO, most people lack the critical thinking skill set to notice or challenge what may be bias. that is the problem, not the bias itself.

 

[Againsheila]

We’ve come through the second-worst financial crisis in the history of the world bruised and shocked, but on the road to recovery. Agree?

Who gets the credit for averting complete disaster, the invisible hand or Obama? If not Obama, who?

Unemployment is high, there is a sense of bewilderment clouding the minds of the public, but all signs say we are out of the wood and on the road to recovery. Are you better off now than where only a year ago, you thought you'd be?

Credit has to go to somebody. Why haven't Obama and the Democrats formulated a message around this?

Who says we're through it?

 

[Procrustes Stretched]

We’ve come through the second-worst financial crisis in the history of the world bruised and shocked, but on the road to recovery. Agree?

Who gets the credit for averting complete disaster, the invisible hand or Obama? If not Obama, who?

Unemployment is high, there is a sense of bewilderment clouding the minds of the public, but all signs say we are out of the wood and on the road to recovery. Are you better off now than where only a year ago, you thought you'd be?

Credit has to go to somebody. Why haven't Obama and the Democrats formulated a message around this?

Who says we're through it?

get a grip
Through, as in the sense that the immediate crisis is over. Recovery will take time.

 

[boedicca]

Actually, some of us think we will see a double dip recession when the Bush tax cuts expire next year. Anyone who can claw income into this year to avoid the tax hike is doing so (I include myself in this). 2010 tax receipts will be temporarily inflated, but then drop next year.

It's also likely that the Fed will increase interest rates, thus leading to increases in mortgage rates and dampening the anemic real estate and construction markets.

The real answer is to cut taxes and have government get out of the way of the private sector, but that isn't in Obama's DNA.

 

[Againsheila]

No - but I do understand enough to not need to read Wikiganda.

I always have a laugh at people who think wikipedia is useless. reminds me of the people who only a few short years ago said the same thing about the internet(s). misunderstanding the tool for the message, or the message for the tool. either way, funny.

small minds make for much fun.

anybody can put anything they want in wikipedia, therefore, using it as your only source of reference is stupid.

 

[Procrustes Stretched]

Actually, some of us think we will see a double dip recession when the Bush tax cuts expire next year. Anyone who can claw income into this year to avoid the tax hike is doing so (I include myself in this). 2010 tax receipts will be temporarily inflated, but then drop next year.

It's also likely that the Fed will increase interest rates, thus leading to increases in mortgage rates and dampening the anemic real estate and construction markets.

The real answer is to cut taxes and have government get out of the way of the private sector, but that isn't in Obama's DNA.

I thought we tried that already?

 

[Procrustes Stretched]

No - but I do understand enough to not need to read Wikiganda.

I always have a laugh at people who think wikipedia is useless. reminds me of the people who only a few short years ago said the same thing about the internet(s). misunderstanding the tool for the message, or the message for the tool. either way, funny.

small minds make for much fun.

anybody can put anything they want in wikipedia, therefore, using it as your only source of reference is stupid.

Who uses wikipedia as their only source? Sort of like using FOX or MSNBC as your only source, eh?

anyone can edit wikipedia, but it gets fixed and sourced and it is more useful for people with critical thinking tools than most site around. It forces one to do research. Only lazy people dislike it.

 

[boedicca]

Actually, some of us think we will see a double dip recession when the Bush tax cuts expire next year. Anyone who can claw income into this year to avoid the tax hike is doing so (I include myself in this). 2010 tax receipts will be temporarily inflated, but then drop next year.

It's also likely that the Fed will increase interest rates, thus leading to increases in mortgage rates and dampening the anemic real estate and construction markets.

The real answer is to cut taxes and have government get out of the way of the private sector, but that isn't in Obama's DNA.

I thought we tried that already?

No - we haven't. Tax cuts with spending cuts (i.e., the get out of the way part) are what we need. Government spending, deficits, and debt have grown enormously. The private sector has had to trim jobs and spending; government should go through a similar process at all levels.

 

[Procrustes Stretched]

Actually, some of us think we will see a double dip recession when the Bush tax cuts expire next year. Anyone who can claw income into this year to avoid the tax hike is doing so (I include myself in this). 2010 tax receipts will be temporarily inflated, but then drop next year.

It's also likely that the Fed will increase interest rates, thus leading to increases in mortgage rates and dampening the anemic real estate and construction markets.

The real answer is to cut taxes and have government get out of the way of the private sector, but that isn't in Obama's DNA.

I thought we tried that already?

No - we haven't. Tax cuts with spending cuts (i.e., the get out of the way part) are what we need. Government spending, deficits, and debt have grown enormously. The private sector has had to trim jobs and spending; government should go through a similar process at all levels.

are you sure?

I could swear we tried that before.

 

[boedicca]

I could swear we tried that before.

Yes. I am quite sure. Even under Reagan, Congress kept spending Mo Money.

That really is our problem.

Big Government.

Of course, I harbor no illusion that you will grok this.

 

[Procrustes Stretched]

I could swear we tried that before.

Yes. I am quite sure. Even under Reagan, Congress kept spending Mo Money.

That really is our problem.

Big Government.

Of course, I harbor no illusion that you will grok this.

Congress spent more money? Did Congress actually put forward a budget that was less than Reagan asked for?

btw, we did well under Clinton, though we're paying for some of it now.

there are no free rides. government is not a private business. deficits are not evil. taxes are not all bad. private enterprise is not concerned with the economy as much as by profit. markets are not self-regulating. there is NO invisible hand.

we will weather this storm as we have weathered others. the sky is NOT falling.