CRA Did Not Cause Financial Crisis - Fed

[Missourian]

I reckon I should tie the above into the economy discussion.

And product manufacturer that makes a product that, if you had actual cash instead of buying on credit, would seem like you weren't getting your monies worth...is going to have big problems for the next three or four years.

 

[Missourian]

Uh, Pauli? DUH! Read my post again. The poor are the boogeymen to the Republicans. Have been for as long as I remember. Hence the large group of Republicans that pretend that CRAs are the cause of the current economic trouble.

Uh Ravi, hate to burst your bubble but the Dems have owned the power of the purse for the last two years.

 

[editec]

That`s right!
Morgans, Warburgs, Rothschilds, Schiffs, Rockefellers, Geithner, Greenspan, Bernanke, Soros, Emanuel, Madoff and on and on..........
An enquiring mind will notice that they all have a little something in common (besides being crooks).

A truly inquring mind would know that:

Rockefellow was a lifelong Baptist. He tithed religiously, incidently

Morgan was of the upper crust of the Connecticut aristocracy and a member of the Episcapol faith.

The financier Warburgs are of German heritage and (I'm guessing) likely either Lutherans or Catholics.

So what was your point?

To prove to us that you are not only a knownothing Nazi, but a ignorant one, too?

Point noted.

 

[Ravi]

Uh Ravi, hate to burst your bubble but the Dems have owned the power of the purse for the last two years.

Actually they haven't but they aren't the ones that are blaming poor people for the financial crisis.

Can anyone read around here, jeesh!

 

[Neubarth]

Actually they haven't but they aren't the ones that are blaming poor people for the financial crisis.

Can anyone read around here, jeesh!

I am a firm believer that "All faults in society are the fault of society." (That is another of my quotes that you may freely use.)

Both political parties have blame. There is always enough blame to go around.

 

[Paulie]

I see a pattern here. Everyone recognizes that inflation is what has killed us. We live lifestyles based on how many dollars are coming in. They've been flowing like wine for over 5 years, and now all the sudden deflation is sucking the life right out of everyone who's used to having those dollars.

The main culprit is the Fed. THEY'RE the ones who control the monetary policy. They giveth money, and they taketh it away.

 

[Neubarth]

I see a pattern here. Everyone recognizes that inflation is what has killed us. We live lifestyles based on how many dollars are coming in. They've been flowing like wine for over 5 years, and now all the sudden deflation is sucking the life right out of everyone who's used to having those dollars.

The main culprit is the Fed. THEY'RE the ones who control the monetary policy. They giveth money, and they taketh it away.

Can't blame teh Fed that much, though there is plenty of blame to go around.

Fact remains that prices went up but inflation did not get out of control with the exception of transportation costs. Now, now much greed went into the equation, I can not say, but I am certain that there was a hell of a lot of it.

So what is the process now? I'd prefer not to call it deflation. Instead, let's call it "Ungreeding."

That sound about right to me.

 

[Zoomie1980]

I am a firm believer that "All faults in society are the fault of society." (That is another of my quotes that you may freely use.)

Both political parties have blame. There is always enough blame to go around.

I've been saying that since I first started posting here. WE, the "people" did this to OURSELVES. We ran up the credit card debts, took out the 2nd mortages, got into house-flipping, and elected the Barney Frank's, Chris Dodd's and George Bush's who helped prime the pump. We had to have 500 channel cable, 62 inch 1080p plasma TV's, Cell Phones with Broadband, GPS systems to tell us how to get to the grociery store, BMW's, watches that predict the weather, blue tooth headsets, iPODs, iPhones, 20MB/s Internet connections, microwave ovens, quad core processors, botox injections, messages, pedicures, nail spas, bass boats with depth finders, gold inlaid "designer" shotguns, Nike's with Michael Jordan's to Tiger Woods name on them, refrigerators that dispensed water, ice or crushed ice with computer controlled interiors....

In 1975 we had a nice four bedroom, 1700 sq ft house, a single color TV that got six channels, one car (1971 Chevy Impala), and I had a $150 1962 Buick rusted out but it ran, a basketball hoop, a freezer with ice trays. That was IT. We were happy, too.

 

[Paulie]

Or vice-versa. Shouldn't the prices of products have their basis in what the consumer can afford?

The prices have divorced themselves from inflation. That's what happened to housing prices.

Now the auto makers are wondering why consumers are buy 40% less than they have been. It's because the consumer cannot afford a $30,000 car.

How many people, by percentage of the population, do you think could afford to purchase a vehicle with cash?

Now, how many average consumers, if you gave them $30,000 in cash would plop it all down on a new car?

The point being, if they had the loot in their hot little hand, they would never consider spending that kind of green on a new car.

That's a problem.

I missed this post. This is a good point. People will buy almost ANYTHING on credit, and be happy paying more than the original price by the time interest is paid, but most would never consider spending just the original price in cash all at once, even if they HAD it.

Why is this? You don't NEED a brand new car, you don't HAVE to own a home. Those kinds of things are supposed to be budgeted into your life. You just don't impluse buy on those kinds of items.

How about trimming the budget, putting away money over time, and buying a decent used car when you save up enough? If you ran into an emergency and needed a car now, why go get one for $25,000? Or even $15? Why not find a really good used one for $5,000 or less? Pay it off in two years and drive it until it falls apart.

Why not just keep renting, probably for less than your new mortgage payment would be, and keep saving?

I'm not saying EVERYONE would have the luxury of not needing to borrow SOMETHING, but I doubt there were really that many people who couldn't avoid it. And I bet a LOT didn't necessarily exhaust all their alternatives before jumping into debt and taking the "easy way" out.