Fox Business: Gerald Celente Predicts Revolution 11/10/08

[Turboswede]

normal but highly regulated free markets should be restored.

I am a liberal, and even I am confused by this statement. markets can be free (which sucks) or regulated, the level of regulation is what is at issue. Unfortunatly we are not very good at regulating markets and it tends to be a lot of fumbling in the dark.

 

[Paulie]

I am a liberal, and even I am confused by this statement. markets can be free (which sucks) or regulated, the level of regulation is what is at issue. Unfortunatly we are not very good at regulating markets and it tends to be a lot of fumbling in the dark.

The problem is special interests and corporate lobbyists are the ones WRITING the regulatory legislation.

Regulation, in THEORY, might seem enticing. But in REALITY, the system is rigged against us.

 

[Hum Dinger]

Jesus H. Christ you're a moron.

Are you smart enough to protect yourself from thievery within the market?

If you knew a damn thing about the basics of economics or common law, you'd know that it's the government's jobs to protect people against thievery.

This is why we have police and courts and civil suits. You shouldn't have to be 'smart enough' to be protected.

Our whole finacial system just collapsed because of the sub-prime and credit default scams.

Let me guess, you must have been one of those that thought that Sarah Palin was qualified to be VP, weren't you?

Next to you, she's an intellectual giant.

 

[Paulie]

You shouldn't have to be 'smart enough' to be protected.

You're right. We should probably stop reading books, informing and educating ourselves, and being financially vigilant.

As far as Palin, I'm not quite sure what she's got to do with this discussion, other than you trying desperately to segue into partisan liberal bullshit.

Do us a favor. DON'T educate yourself. It would be an insult to the very IDEA of education. Instead, fall back on the bureacracy to save you from your own apathy.

Don't worry about the economy, either. There'll be another free check coming to you soon enough. That ought to take care of things for you, no?

 

[Hum Dinger]

I am a liberal, and even I am confused by this statement. markets can be free (which sucks) or regulated, the level of regulation is what is at issue. Unfortunatly we are not very good at regulating markets and it tends to be a lot of fumbling in the dark.

I'm sure that there have been many poorly written regualtions, but the general intent of regulations is to insure against various forms of fraud.

Think of it this way:

In a totally "free" society anyone can do whatever they like, including stealing and murder. But if anyone can steal from or kill anyone they want, is that a truly "free" society? Are the victims free?

I don't think so.

We have government enforcing the common law to insure that we are free from theivery and murder (as much as is possible). The only truly "free" society is one where the basic fundamental rights of the people are protected by the government. Yes, this does limit the "freedoms" of the theives and murderers. Too bad for them.

The same principle applies to economics. There is a huge difference between fair and honest business and fraud. It's the governments responsibility to stop the fraud and regulation is the instrument.

Unfortunately, the past 30 years has seen an every increasing negligence on the governments part which has allowed massive amounts of fraud and theivery in the name of the "free" market.

Incidently, I'd define a non-free market as a totally and centrally control market (whether by government or monopoly or gangsters etc...)

 

[Paulie]

I'm sure that there have been many poorly written regualtions, but the general intent of regulations is to insure against various forms of fraud.

Think of it this way:

In a totally "free" society anyone can do whatever they like, including stealing and murder. But if anyone can steal from or kill anyone they want, is that a truly "free" society? Are the victims free?

I don't think so.

We have government enforcing the common law to insure that we are free from theivery and murder (as much as is possible). The only truly "free" society is one where the basic fundamental rights of the people are protected by the government. Yes, this does limit the "freedoms" of the theives and murderers. Too bad for them.

The same principle applies to economics. There is a huge difference between fair and honest business and fraud. It's the governments responsibility to stop the fraud and regulation is the instrument.

Unfortunately, the past 30 years has seen an every increasing negligence on the governments part which has allowed massive amounts of fraud and theivery in the name of the "free" market.

Incidently, I'd define a non-free market as a totally and centrally control market (whether by government or monopoly or gangsters etc...)

Have you ever actually read the definition of free?

 

[Turboswede]

I'm sure that there have been many poorly written regualtions, but the general intent of regulations is to insure against various forms of fraud.

Think of it this way:

In a totally "free" society anyone can do whatever they like, including stealing and murder. But if anyone can steal from or kill anyone they want, is that a truly "free" society? Are the victims free?

I don't think so.

We have government enforcing the common law to insure that we are free from theivery and murder (as much as is possible). The only truly "free" society is one where the basic fundamental rights of the people are protected by the government. Yes, this does limit the "freedoms" of the theives and murderers. Too bad for them.

The same principle applies to economics. There is a huge difference between fair and honest business and fraud. It's the governments responsibility to stop the fraud and regulation is the instrument.

Unfortunately, the past 30 years has seen an every increasing negligence on the governments part which has allowed massive amounts of fraud and theivery in the name of the "free" market.

Incidently, I'd define a non-free market as a totally and centrally control market (whether by government or monopoly or gangsters etc...)

Sorry, just giving you a hard time.

The problem is up to this point the primary means of regulation has been to “eliminate asymmetries of information” with the understanding that a fully informed investor will make an informed decision based on the information available. Unfortunately in the housing market there was a complete absence of common sense on both the lending and borrowing sides.

While people were making money hand over fist this was a non issue but now it’s a serious problem. Real Estate Investment Trusts did us in and no one saw it coming as it allowed one sector of the economy to become intertwined with all sectors of the economy. It also blinded us to the poor state of other sectors of the economy because, regardless of business profits or losses, the asset values were always going up.

I have no Idea how regulation could have prevented this current crisis and I am sure whatever idea someone comes up with this time, someone smarter than him will figure out a way around it. Maybe we just need to have a set of financial instruments that can be issued, I am not sure.

With all the schoolin’ I have been through I am the first to admit, all folks are doing is fumbling in the dark, better than doing nothing, but we typically won’t see the final results for a generation at least.

 

[Hum Dinger]

You're right. We should probably stop reading books, informing and educating ourselves, and being financially vigilant.

As far as Palin, I'm not quite sure what she's got to do with this discussion, other than you trying desperately to segue into partisan liberal bullshit.

Do us a favor. DON'T educate yourself. It would be an insult to the very IDEA of education. Instead, fall back on the bureacracy to save you from your own apathy.

Don't worry about the economy, either. There'll be another free check coming to you soon enough. That ought to take care of things for you, no?

You really live in a fantasy world don't you? Every liberal doesn't work and just lives off of government handouts, right?

You're too fucking stupid for me to waste my time conversing with.

You couldn't hold my job for a minute.

 

[Paulie]

You really live in a fantasy world don't you? Every liberal doesn't work and just lives off of government handouts, right?

You couldn't hold my job for a minute.

You assume an awful lot.

You're right here in this thread advocating a government handout, i.e. regulation to save you from your own stupidity, laziness, and apathy.

If you supported the bailouts, you advocate government handouts of the worst kind.

I don't have to assume every liberal lives off the government to know that YOU are the quintessential socialist. You wear it all over your sleeve.

You're too fucking stupid for me to waste my time conversing with.

Yeah, it's much more enjoyable to converse with only those who AGREE with you.

I suppose the decision to quit conversing with me started AFTER you declared to me that it was in fact a waste to do so.

 

[Hum Dinger]

Sorry, just giving you a hard time.

The problem is up to this point the primary means of regulation has been to “eliminate asymmetries of information” with the understanding that a fully informed investor will make an informed decision based on the information available. Unfortunately in the housing market there was a complete absence of common sense on both the lending and borrowing sides.

While people were making money hand over fist this was a non issue but now it’s a serious problem. Real Estate Investment Trusts did us in and no one saw it coming as it allowed one sector of the economy to become intertwined with all sectors of the economy. It also blinded us to the poor state of other sectors of the economy because, regardless of business profits or losses, the asset values were always going up.

I have no Idea how regulation could have prevented this current crisis and I am sure whatever idea someone comes up with this time, someone smarter than him will figure out a way around it. Maybe we just need to have a set of financial instruments that can be issued, I am not sure.

With all the schoolin’ I have been through I am the first to admit, all folks are doing is fumbling in the dark, better than doing nothing, but we typically won’t see the final results for a generation at least.

I'm using the term 'regulation' in a more general sense. What I mean is any form of law that limits business activity. Including criminal charges.

The fact that the current forms of regulation are limited to "asymmetries of information” is in effect to say that there is no regulation.

The current problem with the markets was caused by the fact that as long as everyone seemed to be making money, nobody could care less if these financial instruments were fraudulent. Suddenly when these frauds backfired all hell broke loose.

This is why there needs to be an unbiased authority to determine what is fair business practices and what is not. Allowing unfair or fraudulent business practices, just because everyone is making money is no good at all.

The one underlying fact is that , despite the nonsensicle neo-con rhetoric, government wants business to succeed. They have no motive for undermining or stifling business.

Unfortunately, human beings will grab all the money can get regardless of right or wrong.

 

[Turboswede]

The current problem with the markets was caused by the fact that as long as everyone seemed to be making money, nobody could care less if these financial instruments were fraudulent. Suddenly when these frauds backfired all hell broke loose.

The financial instruments themselves were not fraudulent, the idea was that you could have an instrument that represented an interest in a bundle of mortgages (Debt), nothing wrong with that except the debt used to fund the instruments was far riskier than anyone imagined. As the debt was also backed by property that was constantly appreciating, no one seemed to worry.

After 20 years of uninterrupted growth in real estate values no one seemed to understand that the bubble would have to burst and I think the trigger were these interest only and 0% mortgages which would basically force the homeowners into foreclosure once the rate adjusted.

Home buyers were fine because they could always refinance and the real estate market was going up 5-10% per year, if they didn’t get in “now” they may never be able too.

Lenders were fine because home values were always going up so in the event of foreclosure their loans could be recovered.

Investors were fine because it allowed them to take advantage of property appreciation while not physically holding land, besides as the loans were collateralized there was nothing to fear…until

 

[Hum Dinger]

YOU are the quintessential socialist.

Well, Thank You!

How nice of you to say!

But in all modesty, the truth is that my political & economic beliefs would classify me as a liberal or a progressive, not a socialist. I haven't professed the forcible take over of ownership of industries as a permanent solution for running the economy, have I?

Of course explaining the difference to you would be like trying to explain to a anarchist that all governments are not fascist.

You are in neo-con lala land.

 

[Hum Dinger]

The financial instruments themselves were not fraudulent, the idea was that you could have an instrument that represented an interest in a bundle of mortgages (Debt), nothing wrong with that except the debt used to fund the instruments was far riskier than anyone imagined. As the debt was also backed by property that was constantly appreciating, no one seemed to worry.

After 20 years of uninterrupted growth in real estate values no one seemed to understand that the bubble would have to burst and I think the trigger were these interest only and 0% mortgages which would basically force the homeowners into foreclosure once the rate adjusted.

Home buyers were fine because they could always refinance and the real estate market was going up 5-10% per year, if they didn’t get in “now” they may never be able too.

Lenders were fine because home values were always going up so in the event of foreclosure their loans could be recovered.

Investors were fine because it allowed them to take advantage of property appreciation while not physically holding land, besides as the loans were collateralized there was nothing to fear…until

Man, I hate to explain this again...

The very intention of the sub-prime mortgages was for a certain percentage of the mortgagees to go into default. They way it was supposed to work was that the morgagees would pay off the mortgages for the first several years, almost none of which would be applied to the principle, and pay the maintenance costs and taxes on the properties. The when they defaulted, the bank would reclaim the property and sell it for a considerable profit based the accrued value.

These mortgages were rolled up into bundles, but the value of these bundles were based on the anticipated 2 to 3 year value assuming that there would be a certain number of defaults and that real estate values would always rise so for example:

a $100k mortgage would be valued at ~$120k, if the properties defaulted and the values went up. Loans were taken out against the anticipated ~120k value. When real estate value went down the mortgages true value was only ~90k. So the value of the package dropped by ~30k.

The banks could have negotiated to lower the interest rate so as to prevent the defaults, but that would be even worse for the banks: If a mortgaggee payment was $1k/month then the 3 year value would only be $3.6k.

The essential problem is tat this was a bait and switch scam. The banks and mortgage brokers knew very well that these people couldn't afford the payments. They intentionally led these people into purchasing loans they could not afford.

Laws against predatory lending practices would have prevented this whole thing.

 

[Paulie]

Well, Thank You!

How nice of you to say!

But in all modesty, the truth is that my political & economic beliefs would classify me as a liberal or a progressive, not a socialist. I haven't professed the forcible take over of ownership of industries as a permanent solution for running the economy, have I?

Of course explaining the difference to you would be like trying to explain to a anarchist that all governments are not fascist.

You are in neo-con lala land.

I thought I wasn't worth the time? Only worth just enough time for you to try and get the last word, of course.

If you supported the bailouts, or the buyouts, then you are indeed a socialist; Because there haven't been many other events in our history that have been more socialist in nature than these latest bailouts. I suppose you didn't support buying 80% of AIG?

I'm not a neo-con, either. I haven't supported any war this country has involved itself in since I've been alive, with the exception of Afghanistan in '01. Neocons are not conservatives, they are old school democrats and they have proven themselves to be quite liberal.

And for the record, I didn't support McCain/Palin. I wrote in Ron Paul.

 

[gonegolfin]

When we hit 12% unemployment and a growth of around -10% we will equal 1982. We are not yet close to that. We may be, but not yet. Add to that we had 10.5% inflation and 14.5% mortgage rates during that one.

You are not comparing apples to apples. Unemployment, CPI, and GDP are calculated quite differently than they were in 1982.

As an example, "official unemployment" in 1982 averaged 9.7%, ranged monthly from 8.6% to 10.8% (not 12% as you stated), and was 10.4% in October of 1982. The government now considers "official unemployment" to be U-3 (beginning in 1994). U-3 was 6.5% last month. However, U-6 was 11.8% last month.

Brian