When things fall apart on an administration's watch. Like it or not, they own the issue.
In the case of the Bush administration this is especially true as they've been sitting there 8 years. Attempting to to squirm out of responsibility is frankly ... irresponsible. While I'm not whining, I am playing pin the responsibility on the correct donkey.
The housing bubble masked the underlying problems in our economy. As we exported high paying jobs offshore, the contruction / housing industry grew at an unprecedented pace and basically provided jobs for the displaced workers. The bubble ended. So did these newly created jobs. Our "new economy" is exposed. What amazes me is that it took so long for the so called experts to figure it all out and then there are people like you who still don't get it.
Taken from Nouriel Roubini's Global EconoMonitor this morning.
"..........a severe liquidity and credit crunch in financial markets that is getting worse than when it started last summer; high oil and gasoline prices; falling capital spending by the corporate sector; a slackening labor market where few jobs are being created and the unemployment rate is sharply up; and shopped-out, savings-less and debt-burdened American consumers who thanks to falling home prices can no longer use their homes as ATM machines to allow them to spend more than their income. Indeed holiday sales in the US were much lower in real terms than in 2006. As private consumption in the US is over 70% of GDP the US consumer now retrenching and cutting spending ensures that a recession is now underway.
On top of this recession there are now serious risks of a systemic financial crisis in the US as the financial losses are spreading from subprime to near prime and prime mortgages, consumer debt (credit cards, auto loans, student loans), commercial real estate loans, leveraged loans and postponed/restructured/cancelled LBO and, soon enough, sharply rising default rates on corporate bonds that will lead to a second round of large losses in credit default swaps. The total of all of these financial losses could be above $1 trillion thus triggering a massive credit crunch and a systemic financial sector crisis..............."
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This isn't a simple "correction". What the average 'Joe' doesn't realize is that our entire....I say again....the ENTIRE financial sector is now collapsing. It has the potential to be worse than the Great Depression. What's different this time is a smart guy running the Fed.
GWB made all those people buy way too much house and go into too much debt. I know GWB hid all the info on adjustable loan rate increases over in Iraq so the average person wouldn't know what hits them.
And of course, the slimeball realtors and greasy loan officers had nothing at all to do with this. Didn't GWB sign into law the requirement that the no-doc loan be manditory? He's soooo evil.
Rick, if you feel so bad for the people that are getting screwed, how about rebating your customers a portion of your obscene profits. Oh wait, only republican businessmen make obscene profits.
I thought we were supposed to feed you to the neighbor's pit bull.
Quote:
Originally Posted by cardiacpaul
Bury me when I'm gone in Forest Lawn
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Sailingdog Telstar 28
New England
You know what the first rule of sailing is? ...Love. You can learn all the math in the 'verse, but you take
a boat to the sea you don't love, she'll shake you off just as sure as the turning of the worlds. Love keeps
her going when she oughta fall down, tells you she's hurting 'fore she keens. Makes her a home.
—Cpt. Mal Reynolds, Serenity (edited)
If you're new to the Sailnet Forums... please read this POST.
GWB made all those people buy way too much house and go into too much debt.
The answer to your unasked question, has already been posted in this thread. But I forget that republicans prefer not to read. If they did, we wouldn't be in this mess.
Once again. My bank did in fact close mortgages through mortgage brokers which are today called subprime loans. Why did we use these programs? Because we could sell the paper on the secondary market. Who made the programs available and then bought these loans? Fannie Mae? Nope... Freddie Mac? Nope.... but Wall Street did.
Every large Wall Street brokerage house was specifying these loan programs and then buying the mortgages like crazy. Why? Because they were able to securitize the loans and offer Mortgage backed Securities to their investors. In short, they created the subprime MBS market and then bought and sold them. They made the fortunes, not us in the small banks.
Why were they able to do this? Where was the banking oversight? Good question, as there wasn't any. Courtesy of the Bush administration. Where was the SEC? Another good question that's being asked right now. They in fact had no oversite at all. Again, Courtesy of the Bush administation.
I would suggest that before you blame the banking system, you find out what really happened. In point of fact, if no one offered subprime loans, no one would be stuck with a subprime mortgage today. Once again, No bank in the country offered these on their own. This was always a Wall Street invention. They created them, they marketed them to the banks (retail), they bought them (wholesale) and today, they are stuck with the forclosures.
The country's two largest mortgage banking lenders are both in deep Kimchi only because their monthly volume was so large. In August of last year Wall Street woke up and realized the underlying loans were bad. They immediately pulled the programs. Stopped them cold. Unfortunately for Washington Mutual and Countrywide, they each had 2 billion dollars or more of loans closed and ready to be delivered to Wall Street. Needless to say, they were never bought. These banks were stuck with the loans, with little reserves to cover them. We also were stuck. All of us were forced to grab financing where ever we could to cover the value of the outstanding paper.
People don't realize that banks don't have that cash laying around. Just like the consumer, we borrow.
Has the law figured out what happened and who was responsible? You bet they have. Google the New York Attorney General's office and the charges they are now leveling. Wall Street is in their jurisdiction.
shopped-out, savings-less and debt-burdened American consumers who thanks to falling home prices can no longer use their homes as ATM machines to allow them to spend more than their income.
I feel this phenomenon carries more weight and consequences than it is given credit for. Oversight or not, there was a market for sub-prime loans and the people jumped at the chance to spend like crazy. I've often thought there is a stronger connection between human psychology and the economy than in direct study of the market itself.
I think a lot of analysis of regulations and oversights is important and our financial markets need stronger governing; however, I feel these are more symptoms of the disease and one of the root causes is the American consumer mentality of keeping up with the Jones's. Nothing is ever enough.
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who is staring at the sea is already sailing a little
Rick-
"This is the reason Washington Mutual (a S/L) is about ready to bite the big one." Surely you can't say that about WaMu. On the span of what, five years? They went from being nowhere to a major national presence, opening offices like madmen all over the country, offering free accounts with no minimums and fees (which most banks say will bankrupt them) and, quite literally, bragging about their great money-saving policies like using only three PCs to run the entire bank instead of wasting (their word) lots of money on internal computers and terminals and programs.
WaMu may be having problems with grade A paper, but they have been a most unique and agressive player in recent years, and I would be surprised if their unconventional habits haven't had something to do with both their boom and any bust.
What's wrong with deep Kimchi??? Hmm... As a Korean, I find that a very offensive racist comment.... It wasn't the Koreans that caused this mess, since last I checked, the most of the top of the bank administrations were all the good old white boy network... BTW, there are only about a hundred different types of kimchi, so please be more specific.
Quote:
Originally Posted by Rickm505
....The country's two largest mortgage banking lenders are both in deep Kimchi only because their monthly volume was so large....
__________________
Sailingdog Telstar 28
New England
You know what the first rule of sailing is? ...Love. You can learn all the math in the 'verse, but you take
a boat to the sea you don't love, she'll shake you off just as sure as the turning of the worlds. Love keeps
her going when she oughta fall down, tells you she's hurting 'fore she keens. Makes her a home.
—Cpt. Mal Reynolds, Serenity (edited)
If you're new to the Sailnet Forums... please read this POST.
rick
where in your long spew did you verify that gwb did hold a gun to these peoples heads and ask them buy the overpriced houses?
Lets not forget that the democrats have had control of the house for all but 2 of the last 20+ years. They have plenty of oversight on sundry committees. Even during the 2 years they didn'tcontrol the house, they were still on every committee. Their voice has been very very faint. Some would call it neglegent. Perhaps too busy calling Bush evil to be actually doing their job. Oh, I forgot, that is the only job they are any good at.
"Every large Wall Street brokerage house was "
Ah, Rick. So we come to the real economics problem:
PTBarnum and the Rubes.
Everyone knows that Wall Street is just a con game, last time I heard 94% of the players had to lose in order for the remaining 6% to make a fortune. Or maybe that was 96% and 4%, all the same to me. And, everyone involved also knows that the only folks who make money EVERY time, are the brokers. Stock brokers, gold brokers, commodity brokers...taking their percents on every deal, they are the only sure winners.
So essentially we have government sanctioned gambling, versus mob bookmaking, as the driving force behind the economy. And then we wonder why the economy is driving off the road?
Come on, if the government wanted a solid economy, the first thing they would have to do is legalize drugs--which even Norman Friedman said every economist knows is the only logical answer, and would restore billions of money out of crime into legitimate channels. The second thing the Fed would have to do, is make "financial gambling" aka the stock and commodity markets, illegal. Or so severely restricted, that the only way you could buy or sell stock was straight out, buying an investment in a company's future based on strict accountings of a real worth--not speculations.
Look at the peaks in oil prices: They weren't caused by OPEC price rises, they were boosted sky high time and again by speculation on the futures markets.
Ain't gonna happen. The mob won't allow drugs to be legalized, even if Congress gets attacked by common sense. And The Money in this country won't allow Wall Street to be shut down, because they ARE the brokerage houses and brokers, and they don't give a damn if they can only get rich by sucking the blood out of the other 95%. That's the way life is played, by and large.
Hurt by the market crash? Don't be angry, it just means we were too stupid to play on the winning side, with the scoundrels and thieves.
It wasn't the Koreans that caused this mess, since last I checked, the most of the top of the bank administrations were all the good old white boy network... BTW, there are only about a hundred different types of kimchi, so please be more specific. 
