On Apr 12, 4:44=A0pm, Karel Kriz <ka...@[EMAIL PROTECTED]
> wrote:
> In article
> <5b0b13fb-4967-4341-a405-e98876eff...@[EMAIL PROTECTED]
>,
>
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>
>
>
> =A0kujebak <kuje...@[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-inspire=
d
> > > credit bubble, caused by what can be termed a criminally loose
monetar=
y
> > > 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...
What happened in 2001? I was the beginning of the most
significant economic correction ending the most significant
period of economic growth we've had since the end of WW2,
if not the entire 20th century. Of course there have been
other factors that played into the epidemic of economic pes-
simism, from which we have yet to recover, like 9/11, but
there is no denying this pessimism was engendered by Green-
span and the Fed in the late 90's. How could you not be aware
of this "economic hiccup" in your line of business? I almost
lost my own job in 2002, not to mention my 6-digit losses
in the stock market in the two prior years. And this Roose-
velt-era economics you keep touting? Had it not been for
Pearl Harbor, and America's heavy deficit spending to finance
the war effort, which basically replaced the New Deal social
programs, it is difficult to imagine what this country would
be today. It wouldn't certainly be something that would inspire
me enough to leave my own homeland for. Which brings me
to the question that always comes to mind after reading
every one of your replies - why the hell didn't you stay in
Sweden?
>
>
>
>
>
> > > > 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
a=
nd
> > > 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
lar=
ge
> > > part of the current problem has been caused also by financial gurus
wi=
th
> > > 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
see=
n
> > > in the amount of leverage some of these "experts" have been using),
ha=
s
> > > 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.
Thi=
s
> > > 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
an=
d
> > > 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
braze=
n
> > > 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
hav=
e
> > > 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
t=
he
> > > loan balance, it would bankrupt them and take whatever else they had
o=
f
> > > any value.
>
> > > No wonder the concept of jingle mail is proving so popular even
amongs=
t
> > > those Americans who can very much afford to cover the mortgage
payment=
s.
> > > 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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