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Actually it does vanish. If I show a balance sheet with a $200,000 house and $100,000 mortgage then my net worth is 100k. I can borrow against that. I can sell the asset. If the value falls to 100k then I don't have that. This is the entire basis of this recession, a balance sheet meltdown.Wow.
Just wow.
ANd I thought I was the only one who saw it that way.
TARP...a Bush idea...well...enodrsed by Bush....and then doubled down by Obama saved the banks from themselves. At the cost of tax payer money and at the cost of honest bankers who could not compete with the unscrupulous during the re-fi boom.
Recall that the projected failure of the banking system (which was well underway, btw) would have caused the entire economy to seize up.
I was in favor of the initial TARP, aimed at backstopping the banks to restore confidence. I was opposed to the indiscriminate extensions of TARP (under Bush and Obama) to every sector of the economy.
There is a big differernce between the failure of some major banks and the failure of the banking system.
When a bank fails, the money does not vanish. I believe people actually think it does.
If I lend you 300K and you spend it and then you default on your debt to me.....I lose the 300k,...yes.....but that 300k is still in the economy as you spent it elsewhere.
If I lend you 300K and your house is worth 400K and it is collateral. And then your house goes down in value and worth only 200K and you default....yes, I lose 100K on paper...but that money is still in the economy as you spent it elsewhere.
There was no imminent failure of the banking system. There was the likely failure of the major banks.
There were plenty of smaller institutions ready willing and able to pick up the slack.
Actually it does vanish. If I show a balance sheet with a $200,000 house and $100,000 mortgage then my net worth is 100k. I can borrow against that. I can sell the asset. If the value falls to 100k then I don't have that. This is the entire basis of this recession, a balance sheet meltdown.Recall that the projected failure of the banking system (which was well underway, btw) would have caused the entire economy to seize up.
I was in favor of the initial TARP, aimed at backstopping the banks to restore confidence. I was opposed to the indiscriminate extensions of TARP (under Bush and Obama) to every sector of the economy.
There is a big differernce between the failure of some major banks and the failure of the banking system.
When a bank fails, the money does not vanish. I believe people actually think it does.
If I lend you 300K and you spend it and then you default on your debt to me.....I lose the 300k,...yes.....but that 300k is still in the economy as you spent it elsewhere.
If I lend you 300K and your house is worth 400K and it is collateral. And then your house goes down in value and worth only 200K and you default....yes, I lose 100K on paper...but that money is still in the economy as you spent it elsewhere.
There was no imminent failure of the banking system. There was the likely failure of the major banks.
There were plenty of smaller institutions ready willing and able to pick up the slack.
There was indeed an imminent failure. Banks were refusing to lend to each other overnight. That is a sign the system is seizing up.
Actually it does vanish. If I show a balance sheet with a $200,000 house and $100,000 mortgage then my net worth is 100k. I can borrow against that. I can sell the asset. If the value falls to 100k then I don't have that. This is the entire basis of this recession, a balance sheet meltdown.Recall that the projected failure of the banking system (which was well underway, btw) would have caused the entire economy to seize up.
I was in favor of the initial TARP, aimed at backstopping the banks to restore confidence. I was opposed to the indiscriminate extensions of TARP (under Bush and Obama) to every sector of the economy.
There is a big differernce between the failure of some major banks and the failure of the banking system.
When a bank fails, the money does not vanish. I believe people actually think it does.
If I lend you 300K and you spend it and then you default on your debt to me.....I lose the 300k,...yes.....but that 300k is still in the economy as you spent it elsewhere.
If I lend you 300K and your house is worth 400K and it is collateral. And then your house goes down in value and worth only 200K and you default....yes, I lose 100K on paper...but that money is still in the economy as you spent it elsewhere.
There was no imminent failure of the banking system. There was the likely failure of the major banks.
There were plenty of smaller institutions ready willing and able to pick up the slack.
There was indeed an imminent failure. Banks were refusing to lend to each other overnight. That is a sign the system is seizing up.
Actually it does vanish. If I show a balance sheet with a $200,000 house and $100,000 mortgage then my net worth is 100k. I can borrow against that. I can sell the asset. If the value falls to 100k then I don't have that. This is the entire basis of this recession, a balance sheet meltdown.There is a big differernce between the failure of some major banks and the failure of the banking system.
When a bank fails, the money does not vanish. I believe people actually think it does.
If I lend you 300K and you spend it and then you default on your debt to me.....I lose the 300k,...yes.....but that 300k is still in the economy as you spent it elsewhere.
If I lend you 300K and your house is worth 400K and it is collateral. And then your house goes down in value and worth only 200K and you default....yes, I lose 100K on paper...but that money is still in the economy as you spent it elsewhere.
There was no imminent failure of the banking system. There was the likely failure of the major banks.
There were plenty of smaller institutions ready willing and able to pick up the slack.
There was indeed an imminent failure. Banks were refusing to lend to each other overnight. That is a sign the system is seizing up.
Read what you wrote. That is my point. You are confused on this topic. Not your fault. Both parties confused the heck out of the people in an effort to make the other look foolish.
If the value falls, you can no longer borrow against it. You seemed to have skipped that part. If you borrowed against it when the value was higher, and then it falls, YES, the bank loses the money and it was a foolish loan to make. BUT....you spent the money elsewhere. IT IS STILL IN THE ECONOMY.
And as for the lending fallacy....
I have an 805 credit rating. My company had a nice line of credit with BoA. I used it primarily for bridge loans for payroll when cash flow was askew.
In December of 2008, BoA put a hold on my line. No explanation....just a "temporary hold".
SO I went to a small local institution and sure enough, no problem....100K credit line for starters and a review after 1 month...now I have 1/2 million line with them...and BoA lost my business. New bank has my operating account, payroll account and all of my personal accounts.
BoA can go out of business for all I care. They made some stupid decisions and try to make iut my problem. I wouldnt let them.
Actually it does vanish. If I show a balance sheet with a $200,000 house and $100,000 mortgage then my net worth is 100k. I can borrow against that. I can sell the asset. If the value falls to 100k then I don't have that. This is the entire basis of this recession, a balance sheet meltdown.
There was indeed an imminent failure. Banks were refusing to lend to each other overnight. That is a sign the system is seizing up.
Read what you wrote. That is my point. You are confused on this topic. Not your fault. Both parties confused the heck out of the people in an effort to make the other look foolish.
If the value falls, you can no longer borrow against it. You seemed to have skipped that part. If you borrowed against it when the value was higher, and then it falls, YES, the bank loses the money and it was a foolish loan to make. BUT....you spent the money elsewhere. IT IS STILL IN THE ECONOMY.
And as for the lending fallacy....
I have an 805 credit rating. My company had a nice line of credit with BoA. I used it primarily for bridge loans for payroll when cash flow was askew.
In December of 2008, BoA put a hold on my line. No explanation....just a "temporary hold".
SO I went to a small local institution and sure enough, no problem....100K credit line for starters and a review after 1 month...now I have 1/2 million line with them...and BoA lost my business. New bank has my operating account, payroll account and all of my personal accounts.
BoA can go out of business for all I care. They made some stupid decisions and try to make iut my problem. I wouldnt let them.
You still don't get it.
If your loan goes bad, the bank has to schedule that loan against reserves. That leaves less money available for lending, thus less for spending.
You ought to review the fractional reserve system concept for this to be clear.
Your personal story of experiences with BoA is irrelevant here.
You rightwing monkeys are retarded, after having 8 years of a incompetent president that you elected twice you expect Obama to have absolute 100% overnight success is less that two years on the job, pathetic. What you dumb monkeys fail to realize is that his stimulus package wasn't about just spending, it also included tax cuts.
Read what you wrote. That is my point. You are confused on this topic. Not your fault. Both parties confused the heck out of the people in an effort to make the other look foolish.
If the value falls, you can no longer borrow against it. You seemed to have skipped that part. If you borrowed against it when the value was higher, and then it falls, YES, the bank loses the money and it was a foolish loan to make. BUT....you spent the money elsewhere. IT IS STILL IN THE ECONOMY.
And as for the lending fallacy....
I have an 805 credit rating. My company had a nice line of credit with BoA. I used it primarily for bridge loans for payroll when cash flow was askew.
In December of 2008, BoA put a hold on my line. No explanation....just a "temporary hold".
SO I went to a small local institution and sure enough, no problem....100K credit line for starters and a review after 1 month...now I have 1/2 million line with them...and BoA lost my business. New bank has my operating account, payroll account and all of my personal accounts.
BoA can go out of business for all I care. They made some stupid decisions and try to make iut my problem. I wouldnt let them.
You still don't get it.
If your loan goes bad, the bank has to schedule that loan against reserves. That leaves less money available for lending, thus less for spending.
You ought to review the fractional reserve system concept for this to be clear.
Your personal story of experiences with BoA is irrelevant here.
As I see it, you are just repeating the rhetoric.
If my loan goes bad, that bank loses and yes, iut has less to lend.
But you already spent the money and that money is now with other banks and those banks have it to lend.
The money does not vanish. That was the fallacy. It simply hurts the lending integrity of that one institution. Thier balance sheet is now off as you pointed out in an earlier post. Their assets do not match up to their outlay. Such is the consequence of not thinking ahead and participating in bad lending practices.
But the money is still in the economy and it is available somewhere. And on the most poart, people still deposit...it is with another mledning institution.
My BoA experience is very relevant. I am one who was not hurt by the equivalent of BoA going out of business. If they did or did not, I was still able to borrow.
***NO JOBS HAVE BEEN ADDED***
Workforce Since Obama became President
Workforce Since Democrats took over Congress
Business & Financial News, Breaking US & International News | Reuters.com
Will the RW monkeys give the president some credit or will they deny it and give credit to some unnamed Republican?
Business & Financial News, Breaking US & International News | Reuters.com
Will the RW monkeys give the president some credit or will they deny it and give credit to some unnamed Republican?
You rightwing monkeys are retarded, after having 8 years of a incompetent president that you elected twice you expect Obama to have absolute 100% overnight success is less that two years on the job, pathetic. What you dumb monkeys fail to realize is that his stimulus package wasn't about just spending, it also included tax cuts.
Your flag says pretty much all we need to know about a piece of shit loser like you.
The ratio gives a better picture of overall employment.
As people drop out of the workforce they aren't necessarily counted.
Germany had a deeper recession than the US and is still well behind their peak GDP.Germany, by contrast, has largely grown back all the jobs it lost during the same period.
Business & Financial News, Breaking US & International News | Reuters.com
Will the RW monkeys give the president some credit or will they deny it and give credit to some unnamed Republican?
The very last line of your article states this:
The Democrats are patting themselves on the back,for what exactly?
The ratio gives a better picture of overall employment.
No it doesn't. the total number of people employed is the figure that matters.
As people drop out of the workforce they aren't necessarily counted.
Why should we "count" retirees, college students, stay at home moms and people who don't care to look for work?
Germany had a deeper recession than the US and is still well behind their peak GDP.Germany, by contrast, has largely grown back all the jobs it lost during the same period.
First off if it was true there would be credit to give. Second if you beleive the two idiots charge you must be an idiot also. I am tired of hearing the lies that the stimulus worked and added job, BULL!!!!Business & Financial News, Breaking US & International News | Reuters.com
Will the RW monkeys give the president some credit or will they deny it and give credit to some unnamed Republican?
