In article
<5b0b13fb-4967-4341-a405-e98876efff02@[EMAIL PROTECTED]
>,
kujebak <kujebak@[EMAIL PROTECTED]
> wrote:
> Stan R wrote:
> > kujebak contributed these words of wisdom on 11/04/08 07:33:
> > >
> > <...>
> > >
> > > The only two remarkable aspects of the current financial
> > > crisis are its root cause,
> >
> > You mean government-inspired political correctness? Or the
Fed-inspired
> > credit bubble, caused by what can be termed a criminally loose
monetary
> > policy under the Chairman****p of Mr Irrational Exuberance?
>
> Greenspan, and his monetary policy is what's responsible
> for this country's current economic woes. He killed the eco-
> nomic expansion (often credited to Clinton by left wing dema-
> gogues) brought about by demilitarization of the U.S. econo-
> my at end of the Cold War. For what he (Greenspan) did sub-
> sequent to that, in order to save the economy from complete
> collapse, he should be in jail today. Never mind his age.
> Where is the indignation over the Federal Reserve's handling
> of the economy in '99 - 2001? Why are we instead preoccupied
> with scapegoats, like Bears and Stern and Exxon Mobil?
> Because it's the election year. Economic misery always sells
> at the polls.
What happened to the economy in 1999-2001? I don't remember any major
issues then...except that we had a balanced budget and a surplus. It is
unrealistic to expect anyone to get upset over some economy hiccup that
happened 8 years ago, so this blatant attempt to hang something on
Clinton is destined to fail. Bear Stearns and Exxon Mobil are not
scapegoats. How can a company making obscene profits quarter after
quarter be a scapegoat for anything? Sounds like you want to turn clock
back to pre-Bush time...I'm with you on that one, but it ain't gonna
happen...
>
> >
> > > and the way it's being ****trayed
> > > in the media. It is quite astoni****ng to compare present
> > > day perception of how capitalism is supposed to work to
> > > the way Americans used to think 40 years ago.
> >
> > That does not apply just to America. All over the western world more
and
> > more people believe it is the government's job to look after them and
to
> > ensure they are happy and their needs are met. If they screw up, then
> > why - it's the government's job to bail them out!
> >
> > Painlessly, of course.
> >
> > > To most
> > > people today, when one makes a profit from an investment,
> > > that's capitalism, but when one loses money in a risky,
> > > or ill-conceived economic venture, that's not capitalism.
> >
> > The trouble is, George, that while you are correct in principle, a
large
> > part of the current problem has been caused also by financial gurus
with
> > black box modelling systems, who believed they were bullet proof and
> > that that the concept of black swans was no more than an academic
> > economists' fairy tale.
> >
> > The sheer complexity of many of the products that are now going bad,
> > coupled with what can only be termed greed and short-termism (best
seen
> > in the amount of leverage some of these "experts" have been using),
has
> > made sure that even the wonder boys now don't know what the extent of
> > their liabilities really is. Creative accounting can only help up to a
> > point in such cases. Ultimately insolvency cannot be avoided.
> >
> > This is the main reason for the credit crunch - counterparty risk.
This
> > is also why the CDS implosion, coupled with bankruptcy of one or more
> > major banks is rather likely.
>
> I must disagree with you there, Stan. I don't think it was
> what you say that *caused* the so-called credit crunch.
> All of what you mention were merely byproducts of the un-
> derlying financial disturbance in our economy - too much idle
> cash, and ridiculously low interest rates for too long a period
> of time, which drove the long term rates (and the cost of home
> owner****p) to unprecedented lows. The fixed mortgage rates
> bottomed out at well below 5% here on the West Coast. The
> creative mortgage products (like negative amort. loans) that
> eventually replaced conventional mortgages after initial re-
> financing frenzy (I personally refied my own house three times
> since the mid 90's) were merely a means to continue selling
> overinflated real estate to people who couldn't afford it, and
> shouldn't really have been in the market. Speculators, house
> flippers, and those like the immature couple in the article.
>
> >
> > > That is some sort of foul play, and a reason for government
> > > involvement (i.e. socialism). When people sign one of these
> > > newfangled mortgage contracts knowing full well they could
> > > not get into the housing market any other way,
> >
> > Many of them could, though. As I said in my reply to Karel, many of
> > those now defaulting are in fact quite well off in income terms.
> >
> > But they just had to have the extra 3 bedrooms and 2 bathrooms, in the
> > better suburb. They also had to have that pool and all new fittings
and
> > whitegoods.
> >
> > I am of course not excusing those people. To the contrary.
> >
> > > and that they
> > > quite likely are not going to be able to make payments
> > > two or three years down the road, they deserve what they
> > > get, which is not necessarily and immediate foreclosure
> > > followed by an eviction, as in the case of this young Stock-
> > > ton couple, which decided to squat in their own home,
> > > waiting for a government bailout:
> > >
> > > http://tinyurl.com/3vhw94
> >
> > <...>
> >
> > That is rather disgusting what these people are on about. And so
brazen
> > about it - they bought a house they knew they could barely afford; now
> > life got too hard, so they stopped paying the loan - even though they
> > still had the means to continue - and, oh, how wonderful; they now
have
> > spare cash to eat out and get a babysitter!
> >
> > They could not get away with this here in Australia. Their bank would
> > evict them within weeks and if they could not pay the loan out or did
> > not have insurance to cover the shortfall between the sale price and
the
> > loan balance, it would bankrupt them and take whatever else they had
of
> > any value.
> >
> > No wonder the concept of jingle mail is proving so popular even
amongst
> > those Americans who can very much afford to cover the mortgage
payments.
> > Why would you if you can live in the house for free, without any fear
of
> > repercussions?
> >
> > Sheer lunacy.
> >
> > S
>
> The current federal legislative proposal to spend $20 billion
> of taxpayers' money to bail out 2 million irresponsible home
> owners is wrong. Why? Because it ushers a mentality of
> of victimization, and entitlement into a segment of popula-
> tion heretofore unaffected by this disease - the young, married
> couples. Potential home owners. The next generation of up-
> standing Americans. This is just as immoral as the business
> schemes that prey on the financial deabeats:
>
> http://tinyurl.com/6rv4k8
>
> I am just sick of hearing it all. It's everywhere.
> Do you have ad(vert)s like these in Australia?
>
> http://www.nomoremortgage.com/
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