The subprime market existed for one simple reason, politicians wanted more people owning homes. There were many different reasons for this, depending on the politician. As is usual though, when government tries to influence behavior, the law of unintended consequences kicks in. So now there's a big mess. But in the final analysis, there is really only one culprit, and that is the lending institutions that made unsound lending decisions.
You can talk about regulation, oversight, or whatever, but nobody, that I'm aware of, was forcing anybody to make bad loans.
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John
Ontario 32 - Aria
Free, is the heart, that lives not, in fear.
Full, is the spirit, that thinks not, of falling.
True, is the soul, that hesitates not, to give.
Alive, is the one, that believes, in love. JCP
The subprime market existed for one simple reason, politicians wanted more people owning homes. .
You're certainly entiltled to your opinion, no matter how simplistic your view of things. I know what caused this mess. I've done my best in this thread to convey the root of the problem, the motivations, participants and the solution. The other posters in this thread have come a long way since their original denial of any problem at all.
I think that fella is right. The time for this thread has passed.
Thanks for the explanation.
What's the difference between fraud and dishonesty?
I read today in the London Telegraph that the ghouls at Lehman Brothers are going to get this year's bonuses. Last year they totalled 5 billion dollars.
I warn you guys in the States. I have watched for abouit 30 years as that great nation is buried ever deeper into debt by a parcel of xxxxxxxx... first it was Savings and Loan, and now it is this utter catastrophe, with a bunch of ghouls that have enriched themselves beyond their wildest dreams (still are) and have passed the collosal bill to the American taxpayer.
You cannot go on like this. You are just about owned by foreigners and you are going to have to pay them for the rent of the place.
This is not a free market. This is utter rape of the nation and her people. There is no concept of balancing books with this government, or the one before, or the one before that. They know full well that it is not sustainable, yet they are going to get very rich while it's still functioning.
It's no different here in the UK either. The only difference is that we have no foreign debt here, it is all domestic debt. The effect is similar. Today, interest payment on debt is more than we spend on defence and it's ever-rising... the debt, that is.
Whatever happened to living within our means?
The UK is the most indebted nation in the industrialised world. Between formal national Debt and the hidden state (unfunded) pension commitments, it is likely to be about 1,000 billion £. That is close to 100% of GDP.
The people are wakening up to it. Gordon Brown.... now known as the "sub-prime minister" is going to get trounced at the next election, assuming he survives that long.
Rockter, you are correct. However as long as the republican party (or Labour Party) can keep the failthful in line this will never change. John makes a case there was no intent to defraud. In the technical sense he is of course correct. As I pointed out eariler that in the course of making these loans and then securitizing them, and selling the bonds, in fact was to mislead the people who bought them. In my opinion, if there was no expectation, as John seems to think, that these bad loans would be repaid. This, by John's own word constitutes fraud. In other words I agree with Cam.
The Republican party (or maybe all of them) should be banned as their party faithful protect their own at the expense of all Americans.
"This is "redistribution of wealth" and "government takeover of industry" on the grandest scale imaginable -- the buzzphrases that have been thrown around for decades to represent all that is evil and bad in the world. That's all this is; it's not an "investment" by the Government in any real sense but just a magical transfer of losses away from those who are responsible for these losses to those who aren't."
Most people who visit this thread probably don't realize that it was actually started BEFORE the top in the market, approximately three weeks before the top in fact, and that the market essentially crashed from the time this thread was started until now.
This thread is worth reading all the way through from beginning to end for a lot of different reasons. The thread has some interesting information, and even some technical advice about trading, lots of economic data, etc. Most importantly though I think the thread is worth reading through from the beginning because it is a history of how people felt from the top of the bull market through the beginning of the bear market. I remember when I was young and we studied bear markets the professor would try to explain how it is that so many people get caught at the top and don't get out in time, and this thread is a perfect study of that process, you can really see what goes through people's minds as they go along. It might be boring for some, but I found it all incredibly interesting.
At this point in the bear people are still in a bit of shock, I think. Some have given up and are wandering around with wide eyes in a bit of a daze, some have sold out and don't care what happens from now on, and many are still long hopeful that the market will someday recover.
I look forward to watching this process play itself out (and trading it) as the bear moves through the economy and I also look forward to the day when it is over and it is okay to go long stocks for a long term again, when we start a meaningful recovery. I don't think we are there yet, we could have years to go to get to that point, there are a lot of imbalances that have to work themselves out, a lot of credit that still has to be destroyed. It will no doubt happen in stages, as it always has during busts, and will be punctuated by a series of short lived recoveries along the way.
I hope this thread doesn't die over the long term, I think it is valuable. I suspect fewer people will post to it as it looks like a recovery is in the works, but then people will come back to it as the market makes new legs down, that seems to be the pattern that the thread is taking. I hope the thread lasts through the bear market, personally. Whenever the market makes new lows everyone seems to come back to the thread to discuss what is happening, which I think is terrific.
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What are you pretending not to know ?
Rick...that summary would suggest that some individuals in the banks and the bond rating houses KNOWINGLY rated the bonds at higher confidence levels than justified and committed criminal fraud. So...perhaps the missing piece of this bailout is that some people need to go to jail and have their assets seized. Is there anything going on on that front?
Yes, you're right and no, there isn't. The attorney General of New York is trying really hard, but I think what it comes down to is exactly how you unwind this so that a jury understands it. Hell Cam, almost no one understands this mess.
Wind,
This is the best non-sailing thread on the forum. It ain't going away.
Rockter,
That's a fine post.
It might not go away, but at this point there's darn little to add. The market will come back...it always does. The perpetrators get their bonuses and retire. We, the American public get stuck with the bill.
The real problem is that Republicans aren't done until the "New Deal" is undone. Yes, that includes erasing "entitlements" like Social Security and Medicare. Republicans want to bring back the sweat shops of the 1900's, along with Barons of industry and their accompanying serfs. In fact undo what has made America the envy of the world.
They use code words like "Free Trade" (erase the middle class) and Deregulation (let me steal 'em blind) as their banners The uninformed and unsuspecting American public goes right along with them until they wake up one morning and find that Wall Street is collapsing. Suddenly there's a ray of sunshine entering the dark side of politics. Yet we find these Republicans crying out not to pay any attention to the man behind the curtain. They are going to fix things.... yeah right... they'll hide for a few years and then try to do this all over again.
And they will.
Even today as they are crying bailout, who in Washington is looking for the culprits? I give a lot of credit to the Attorney General of New York State, as he is fighting politicians instead of 'crooks'. These days there seems to be a rather hazy distinction.
In any case the party faithful try and change the subject and are very good at it. Time will go on and nothing will change except that America will have a few more millionaires and low and behold their ranking of education will fall among nations, and the position of average wealth will decline even further.
The Country loses because the one thing a Republican can't do, is clean his own house.
Rick,
I've been pretty impressed with your economic forecasts and general expertise on this thread. You called it.
However, the idea that "Republicans want to bring back the sweat shops of the 1900s" is... frankly... bizarre coming from someone who otherwise is so attuned to what's going on. We all know Republicans. They don't want that, and you know it.
Having said that, I think it's becoming increasingly clear to conservatives that their current Republican leadership is shockingly hypocritical. You can't be for bank deregulation and for this bailout and be a normal human being. Sarah Palin is for federal assistance to "special needs" families, but is against "big government." What if my father has Parkinsons? Where's my federal assistance? Republicans will be pondering these questions in the coming months. They aren't evil. They're just at the end of an intellectual cycle.
I just got out a calculator and figured out that every single man, woman and child owes approximately $2,300 for this $700 billion portion of the bailout. My family are in debt $9,200 as of Friday. Now that's some fine redistribution of the wealth!
To American financiers and the politicians of this great country, I want to say: You guys really suck at your job.
Rick,
I've been pretty impressed with your economic forecasts and general expertise on this thread. You called it.
However, the idea that "Republicans want to bring back the sweat shops of the 1900s" is... frankly... bizarre coming from someone who otherwise is so attuned to what's going on. We all know Republicans. They don't want that, and you know it. .
Quote:
Originally Posted by PBzeer
I've made the point about the effects of the New Deal before, but Ms Shales does it much better.
First, look back at your history to see what conditions were actually like back then. and the reasons for the New Deal. Then read comments like the one posted above by John. What else could this mean? Republicans actually want to do this. I'm not only not exagerating, I very well may be understating the case.
Quote:
Originally Posted by sailhog
Having said that, I think it's becoming increasingly clear to conservatives that their current Republican leadership is shockingly hypocritical. You can't be for bank deregulation and for this bailout and be a normal human being. Sarah Palin is for federal assistance to "special needs" families, but is against "big government." What if my father has Parkinsons? Where's my federal assistance? Republicans will be pondering these questions in the coming months. They aren't evil. They're just at the end of an intellectual cycle..
I had to laugh when I read this. You have a point and it's well said. Unfortunately, when backed into a corner they invoke Ronald Reagan's name and invade somebody. They have no solutions and are now the major part of the problem. This is no longer the party Ronald Reagan made, or Lincoln for that matter.
Quote:
Originally Posted by sailhog
I just got out a calculator and figured out that every single man, woman and child owes approximately $2,300 for this $700 billion portion of the bailout. My family are in debt $9,200 as of Friday. Now that's some fine redistribution of the wealth!.
You will find that they have no problem with this. They cry for "Free Markets" until the day they need to scream for a bailout.
Quote:
Originally Posted by sailhog
To American financiers and the politicians of this great country, I want to say: You guys really suck at your job.
