My view on why our economy is pure shit.

[Uncensored2008]

File this one under "An MBA ain't worth shit".

It has a hell of a lot more value in the real world than your BA in the emotional impact of Bison migration on marmot studies....

I'm just sayin...

Subprime loans and mortgage defaults may have been a symptom of the Housing Bubble, but it's pretty clear that the housing bubble affects pretty much all of us, including those of us who bought houses we could afford and those of us (not me) who would like to buy a house now if only we could find a band to loan us the money.

Better to stick with the theological debates.

Why?

He makes far more sense than you do.

Standard Disclaimer: My Dingo makes more sense on economic issues than you do.

 

[samjones]

He makes far more sense than you do.

Standard Disclaimer: My Dingo makes more sense on economic issues than you do.

As I suspected - there are even Ron Paul whackjobs in the Outback.

 

[editec]

If this is not true, why don't you explain YOURSELF on what you really want proven, and quit making men of straw.

for the 5th time I'm asking you for your best example of a 19th century recession/depression during which there was no government intervention!! Simply enough???

Move the goal post much, Ed?

What the hell does NO GOVERNMENT INTERVENTION mean?

It means that unless there was no government you will blame every economic downturn on government that's what it means.

You're not really discussing this issue honestly, ya know.

The 19th century small government, no taxes, no unions that you modern conservatives want existed int he 19th century.

STILL we had recessions, panics depressions and so forth.

Blaming all those on the fact that there was a government is an example of just how foking dishonest you neocons really are.

 

[TakeAStepBack]

I have not done a lot of debating in the areas of politics/economics. I prefer to debate such subjects as religion and the Bible. However, I do have an MBA and I agree with everything you've said.

I believe the only regulations a business needs are the normal criminal statutes and a free market. Consumers are the ultimate and most powerful policing agent around. When left to make free choices, they will weed out the incompetent and the greedy. They will get the products they need at the best prices possible. Government regulations that attempt to control choices or which favor one business over another do not help the consumer.

Let me give some free market critics an example. Liberals say that bankers are greedy, so let's assume this is true. Since bankers are greedy and they make money by making mortgage loans, they will of course make loans to everyone they believe will repay them. Since bankers are really, really greedy they will even make loans to some people who might not be able to repay them. Bankers will access the total risk of making mortgage loans to certain groups of individuals and if the the overall repayment probability will result in a profit they will make the loans. This is exactly the way it should be. Government does not have to mandate bankers to do what they would naturally do becomes of their enormous greed.

What bankers will not do is lend money to someone they are reasonably certain will not repay the loan. The problem comes when the government requires banks to lend money to such high risk individuals. The mortgage crisis did not occur because of the free market. It happened because of government regulation and manipulation of the free market. I have never heard of a financial crisis being caused by people buying houses they could afford.

What bankers did is loan money to high risk borrowers, bundle the loans and sell them to others, who sold them to others. It's the money game, none dare call it 'investing', in truth it is white collar crime. Who benefits? See the link below.

Romney reports tax bill of $6.2 million for 2010-11 - Yahoo! News

Now tell the class WHY bankers loaned money to high risk borrowers.

Because when the loans were made, the federal reserve had artificially low interest rates starting in 2001 coming out of the NASDAQ bubble burst. This led to a fever of borrowing and lending which had to (banks are there to make money too..whether i agree with that or not) be extended to those who shouldn't have had the borrowing capability to begin with. Once the interest rates went up, the variable rate mortgages lent out did so as well. That is when bet hedging began through financial tools like derivitives. People began to see, what some people saw in 2003 like peter schiff and ron paul, in 2006-08 that the mortgage lending environment was toxic.

Was there malinvestment on the lenders part? Definitely. But that moral hazard began where it always begins; the central bank. Should they be held responsible? Yes. And so should those that fucked up and thought they could play "economic god".

 

[TakeAStepBack]

Everything that the current laisse faire cons want today was in place in the 19th century.

There were no taxes, no captial gain taxes, no intrusive environmental laws, no fair labor laws, no unions and an EXTRMELY small government.

Nevertheless. there were financial setbacks including: the Panic 1819, Panic 1837, Panic 1873 and the Panic of 1901.

Now clearly no creeping SOCIALISM caused the panics, folks.

What cause these financial downturns were the changing conditions of their day.

Each panic has its own explanation,

And that is the nature of economies, folks.

As the world changes, so too do the economic conditions change.

Sometimes those changing conditions lead to golden ages, sometimes they lead to financial downturns.

There are no always right answers to their causes , there is not hard and fast solutions to that unique economy.

Each economic situation is different because each economic event is different.

Economics is NOT chemistry, or physics, kids.

There are no formulas that will keep an economy from vasilating as conditions in the world change.

I'm impressed. I agree with most of this, with the exception of:

Economics is NOT chemistry, or physics, kids.

Economics is a hard science. Maybe not diamond hard because it deals with more mushy things than the immutable laws of physics and subject to more variation at times based on the erratic behavior of man. But it is a science none the less.

No, it is not. Economics is deeply rooted in praxeology. The same rules in physics, or any other natural science can not, and never will be able to explain human behavior.

 

[Uncensored2008]

Now tell the class WHY bankers loaned money to high risk borrowers.

Did you know that when the Janet Reno justice department filed suit against Glendale Federal for failing to make sufficient CRA/LMI loans in 1993, that was the first time an AG had used civil law to effect executive policy? This set a precedent, altering the role of Justice from one of law enforcement to one of a social activist group.

If I recall, Glendale Federal was the first of the banks to fall in 2008.

 

[samjones]

Was there malinvestment on the lenders part? Definitely. But that moral hazard began where it always begins; the central bank. Should they be held responsible? Yes. And so should those that fucked up and thought they could play "economic god".

Why should the fed be held responsible for banks making loans to unqualified lenders? Why should those who "thought they could play economic god" be held responsible for the systematic overvaluation of real estate?

Are these not private matters between the lender and the borrower?

 

[TakeAStepBack]

I suggest some economics books. In particular, read the ones from the guys in profession that have been getting it right for the last 100 years predicting these things instead of the ones getting it wrong and setting the policies.

 

[manifold]

My view on why our economy is pure shit.

You'll need to convince me that your premise is indeed correct before I'll bother to consider your reasons as to 'why'.

I'm better off today than I was the day Obama took office, and the same goes for most people I know personally. Don't believe everything you're told. Propaganda spoils the objective mind.

 

[Liberty]

My view on why our economy is pure shit.

You'll need to convince me that your premise is indeed correct before I'll bother to consider your reasons as to 'why'.

I'm better off today than I was the day Obama took office, and the same goes for most people I know personally. Don't believe everything you're told. Propaganda spoils the objective mind.

11% (if you include those that basically just gave up looking for a job) unemployment is ok? you sir, need to get off the heroin.

 

[Uncensored2008]

As I suspected - there are even Ron Paul whackjobs in the Outback.

There might be, but she's a Southern California, pampered pooch.

Seriously though, you are a bit lacking in knowledge on economic subjects. The Professor made perfect sense. Perhaps you would be wise to heed his words, rather than attempting to mold reality to fit your partisan goals.

 

[manifold]

My view on why our economy is pure shit.

You'll need to convince me that your premise is indeed correct before I'll bother to consider your reasons as to 'why'.

I'm better off today than I was the day Obama took office, and the same goes for most people I know personally. Don't believe everything you're told. Propaganda spoils the objective mind.

11% (if you include those that basically just gave up looking for a job) unemployment is ok? you sir, need to get off the heroin.

But Herman Cain told us that people who are unemployed only have themselves to blame.

Are you calling him a liar?

 

[kwc57]

What bankers did is loan money to high risk borrowers, bundle the loans and sell them to others, who sold them to others. It's the money game, none dare call it 'investing', in truth it is white collar crime. Who benefits? See the link below.

Romney reports tax bill of $6.2 million for 2010-11 - Yahoo! News

Now tell the class WHY bankers loaned money to high risk borrowers.

Because when the loans were made, the federal reserve had artificially low interest rates starting in 2001 coming out of the NASDAQ bubble burst. This led to a fever of borrowing and lending which had to (banks are there to make money too..whether i agree with that or not) be extended to those who shouldn't have had the borrowing capability to begin with. Once the interest rates went up, the variable rate mortgages lent out did so as well. That is when bet hedging began through financial tools like derivitives. People began to see, what some people saw in 2003 like peter schiff and ron paul, in 2006-08 that the mortgage lending environment was toxic.

Was there malinvestment on the lenders part? Definitely. But that moral hazard began where it always begins; the central bank. Should they be held responsible? Yes. And so should those that fucked up and thought they could play "economic god".

So you agree that the gubmint played a major role? Most of this started with the Community Reinvestment Act back in the late 70's, social engineering at it's finest. #0 years down the road, we are feeling the effects.

Here's How The Community Reinvestment Act Led To The Housing Bubble's Lax Lending - Business Insider

 

[samjones]

As I suspected - there are even Ron Paul whackjobs in the Outback.

There might be, but she's a Southern California, pampered pooch.

Seriously though, you are a bit lacking in knowledge on economic subjects. The Professor made perfect sense. Perhaps you would be wise to heed his words, rather than attempting to mold reality to fit your partisan goals.

He made about as much sense as your goddammed yapping hound.

I see no way that individual investors, even those who were duly diligent, could have predicted and avoided the problems surrounding the financial crisis of 2008. The fundamental collapse of the investment banking sector and the good hard tug it gave on the leg of the traditional banking sector when it went under was beyond the ability of the Motleyfool reader to predict. You just didn't have the visibility. By the time you realized there was a problem the DJIA was in four-figure range and you were wondering whether it was time to get back in.

More regulation? Maybe. Different regulation, more stringent enforcement of existing regulaton? Maybe.

No regulation? Effing nuts, that is.

It's like the commercial says - "When an investment lacks discipline its rarely this obvious" - and that's true...

What continues to annoy me is how many people still consider the crisis of '08 to be a "subprime mortgage crisis caused by CRA". That's obviously not an accurate picture. The Oliver-Stone-notion that people who were personally irresponsible are to blame for this and they're the ones who are suffering is equally ludicrous. The collapse of the housing market in '08 affected all of us.

Put that in your MBA and smoke it.

 

[TakeAStepBack]

So you agree that the gubmint played a major role?

Yes.

Which is why everyone got to walk away and we, the taxpayers and consumers ate the shit sandwich.

 

[Liberty]

You'll need to convince me that your premise is indeed correct before I'll bother to consider your reasons as to 'why'.

I'm better off today than I was the day Obama took office, and the same goes for most people I know personally. Don't believe everything you're told. Propaganda spoils the objective mind.

11% (if you include those that basically just gave up looking for a job) unemployment is ok? you sir, need to get off the heroin.

But Herman Cain told us that people who are unemployed only have themselves to blame.

Are you calling him a liar?

you truly are a shitty debater. 1. herman cain has sway? Ok. 2. Government is to blame. and 3. you brought up the topic of unemployment.

Christ.

 

[Uncensored2008]

Move the goal post much, Ed?

What the hell does NO GOVERNMENT INTERVENTION mean?

It means that unless there was no government you will blame every economic downturn on government that's what it means.

You're not really discussing this issue honestly, ya know.

The 19th century small government, no taxes, no unions that you modern conservatives want existed int he 19th century.

STILL we had recessions, panics depressions and so forth.

Blaming all those on the fact that there was a government is an example of just how foking dishonest you neocons really are.

I wish that leftists weren't programmed by ThinkProgress and HuffingGlue. The crap they feed you is so absurd, yet you absorb it uncritically and regurgitate it here as if it were god's revealed truth.

To claim that the economy of the 19th century was some pristine, Laissez Faire free market is laughable. If we move you onto pontificating the ways the evil whites fucked the noble and perfect in every way Indians, you'll argue the exact opposite and never grasp the contradiction nor irony of it. Sure, you'll point out how the Railroads were backed by the US Government and how Standard Oil used US Army troops to drive Indians from oil fields - never grasping that this is an intermingling of corporate and government structures in complete contradiction to market economics.

Because it are depends on what meme you are reciting. (Dawkins is a fucking moron - but that is a different subject.) The point is, you recite your scripts and never consider the impact they would have if they were actually true.

19th century was Laissez Faire? Utter bullshit, absurdity propagated by partisan liars to the chronically ignorant, that lack the wits to investigate what their party bosses tell them. The latter part of the 19th teetered precariously close to corporatism, in an outright Obama fashion.

 

[manifold]

11% (if you include those that basically just gave up looking for a job) unemployment is ok? you sir, need to get off the heroin.

But Herman Cain told us that people who are unemployed only have themselves to blame.

Are you calling him a liar?

you truly are a shitty debater. 1. herman cain has sway? Ok. 2. Government is to blame. and 3. you brought up the topic of unemployment.

Christ.

Fail. I didn't bring up unemployment. You did.

And you call me the shitty debater.

 

[samjones]

I wish that leftists weren't programmed by ThinkProgress and HuffingGlue. The crap they feed you is so absurd, yet you absorb it uncritically and regurgitate it here as if it were god's revealed truth.

To claim that the economy of the 19th century was some pristine, Laissez Faire free market is laughable.

The rightists are 10 times worse with some off-the-wall conspiracy theory for virtually every newsworthy event. Fortunately for all of us, none of these right-wing nut jobs will ever hold elected office with any real influence... there might be a congressman here or there, but the rest of congress will quickly recognize him as bizarro and treat the situation accordingly.

These comparisons to the 1800's are really unsatisfying. They are simply fundamentally different times than what we live in today. Alot has happened since then. Really.

 

[Uncensored2008]

He made about as much sense as your goddammed yapping hound.

I'm sure a 6th grader who sat in on a Physics 408 lecture would feel the same way.

I see no way that individual investors, even those who were duly diligent, could have predicted and avoided the problems surrounding the financial crisis of 2008.

You're kidding, right?

{Neither wealth nor the burden of debt is distributed evenly across households. Hence, the spending effects of changes in these influences also will not be evenly distributed. For example, increased debt burdens appear disproportionately attributable to higher-income households. Calculations by staff at the Federal Reserve suggest that the ratio of household liabilities to annual after-tax income for the top fifth of all households ranked by income rose from about 1.1 at the end of 1998 to 1.3 at the end of 2001. The increase for the lower four-fifths was not quite half as large.

Although high-income households should not experience much strain in meeting their debt-service obligations, others might. Indeed, repayment difficulties have already increased, particularly in the subprime markets for consumer loans and mortgages. }

Alan Greenspan - 2002

FRB: Testimony, Greenspan -- Monetary policy and the economic outlook -- April 17, 2002


{House prices are of interest to you and me as
home owners/buyers, but what matters for the
economy is residential investment: new homes and
improvements to existing homes. A collapse of this
component of GDP has always led the way into
recessions, has contributed directly about half of the
GDP reduction, and more indirectly. This sector is
absolutely critical in the next several years. Can it
keep percolating along, or will we have a long overdue
“consumer cycle” led by a collapse in residential
investment?}

http://iona.ghandchi.com/UCLA/Bubble.pdf

The fundamental collapse of the investment banking sector and the good hard tug it gave on the leg of the traditional banking sector when it went under was beyond the ability of the Motleyfool reader to predict. You just didn't have the visibility. By the time you realized there was a problem the DJIA was in four-figure range and you were wondering whether it was time to get back in.

Utter bullshit, as the cites above and thousands more demonstrate. You are engaging in historical revision, flat out rewriting of history.

More regulation? Maybe. Different regulation, more stringent enforcement of existing regulaton? Maybe.

Maybe.

No regulation? Effing nuts, that is.

Who suggested no regulation? Laissez Faire does not mean that prohibitions against fraud and coercion are ignored.

The primary institutions who perpetrated fraud were the FRB, Fannie, and Freddie. The only difference between Franklin Raines and Bernie Madoff is that Raines had political protection from Dodd and Frank, the two crooks whom your party now touts as protectors.

Oh, and this isn't partisan blather;

{"OFHEO's mission is to ensure that (Fannie and Freddie) operate in a safe and sound manner," the agency's director, James Lockhart, said in a statement. "That cannot occur without corporate management providing prudent and responsible leadership and setting the appropriate ethical and overall 'tone at the top'."

Fannie and Freddie both had multibillion-dollar accounting scandals that stunned Wall Street and brought record civil fines against them in settlements with the government.

The amounts that Raines, Howard and Spencer are paying under the settlement are far less than what the government was seeking when it sued them in December 2006. OFHEO sought fines of around $100 million against the three and restitution totaling more than $115 million in bonus money tied to an improper accounting scheme.}

Business & Technology | Franklin Raines to pay $24.7 million to settle Fannie Mae lawsuit | Seattle Times Newspaper

Raines is a proven crook, as are Dodd and Frank.

This wasn't "the market" or "speculation," this was flat out fraud, starting with the FRB. More regulation? Hardly helps when the "regulators" are the main crooks.

This is what I love about you of the left; your guys steal us blind under the color of authority, then you demand that if we "only had more regulation" they wouldn't steal so much.

It's like the commercial says - "When an investment lacks discipline its rarely this obvious" - and that's true...

What continues to annoy me is how many people still consider the crisis of '08 to be a "subprime mortgage crisis caused by CRA". That's obviously not an accurate picture. The Oliver-Stone-notion that people who were personally irresponsible are to blame for this and they're the ones who are suffering is equally ludicrous. The collapse of the housing market in '08 affected all of us.

Put that in your MBA and smoke it.

Many people consider the Malibu fires to be a crises of matches caused by lighting brush on fire, but a little match won't destroy hundreds of homes and millions of acres, right?

CRA was the match.