The news out today, Lehman collapsed and Merrill sold to Bank of America. I understand the firm AIG is struggling, mostly due to bad investments (mostly with mortgages)... no Bear Stearns bailout!
Apparently those affected will be employees, not shareholders. Greed takes its toll...
I am going to check Bloomberg online. This is not good, not good at all. I don't think many Americans have grasped how serious this problem is. Much worse than the dot-com bubble bursting. Banks and investment banks are critical to an economy.
UPDATE
I just checked Bloomberg. The futures on the Dow Jones Industrials are down 339 points or 3.4%, the Brazil stock market futures are down over 6%. It could be a very, very bumpy day on the markets.
"The U.S. financial system this weekend faced its gravest crisis in modern times, as regulators resorted to triage on Wall Street to contain the spreading damage from a meltdown in the housing and mortgage market. "
"In a weekend of intensive and almost nonstop meetings behind the massive stone facade of the Federal Reserve Bank of New York, Treasury Secretary Henry M. Paulson Jr. and New York Fed President Timothy F. Geithner oversaw a series of meetings that essentially forced the chief executives of every major firm to grapple with a crisis of their own making.
As I was saying on a thread I started earlier....but doesnt matter this thread will do just as well....
Sorry, but I dont have much sympathy for these banks, businesses, and the wealthy that tell us how they should run the economy and let the wealth trickle down on to the rest of us. Give them tax breaks so they can grow and flourish and expand the economy. ...Oops....now bail us out cuz with a Republican gov't we've fucked up royally. ....Sure glad all you little tax payers can give us mo' money cuz we fucked away the money we got before.
...And then pay off the national debt we have created cuz we still wont pay taxes.
This reminds me. Osama's objective in strikng the US was not to defeat us militarily....he isnt that stupid....but to bankrupt us. That's why he keeps hitting financial districts....to disrupt our economies.
Sending billions upon billions of our dollars to Iraq has put a great strain on our economy. Bush played right into OBL's hands when he invaded Iraq.
Caslon7000 saidThis reminds me. Osama's objective in strikng the US was not to defend us militarily....he isnt that stupid....but to bankrupt us. That's why he keeps hitting financial districts....to disrupt our economies.
Sending billions upon billions of our dollars to Iraq has put a great strain on our economy. Bush played right into OBL's hands when he invaded Iraq.
I agree, he does not have to lift another finger to hurt the US. That is what my biggest fear after 9/11 was, that the current administration would go in guns ablazing and do something foolish. Iraq maybe settling down now, but Saddam Hussein was not a threat to the US so thousands died and billions (maybe a trillion) was spent to get rid of a dictator that might have been overthrown anyways.
The neo-cons had this grand vision of spreading democracy to the Middle East. Very ambitious is a kind way to describe that policy. Foolhardy will more likely be history's judgement. Ironically all this stemmed from a President who majored in History. I guess European and Middle Eastern history was not the focus of his studies.
I heard on NPR this morning that Ford, GM and Chrysler are asking for $25-50 billion dollars from the government to help save them from the SUV profits that have dried up. More ballouts!
But yet... the fundamentals of our economy are very strong, very strong.
Bigger worry according to pundits is AIG (American Insurance Group) which could also be in trouble. Also Washington Mutual (WaMu for short) is in deep trouble. It is a large savings and loan company.
Who ever invented these sub-prime mortgage instruments needs to have their heads examined. Never trust a banker that acts like a dot-com entreprenuer. Bankers should be boring, conservative, cautious, prudent, etc..
jaydub saidI heard on NPR this morning that Ford, GM and Chrysler are asking for $25-50 billion dollars from the government to help save them from the SUV profits that have dried up. More ballouts!
But yet... the fundamentals of our economy are very strong, very strong.
Actually, the fundamentals of our economy ARE very strong. We are still not "technically" in a recession which, if you ask me, is nothing short of a miracle. So it is not at all untrue when McCain makes such a statement. They are strong. That is not to say that certain pillars are not struggling...obviously, they are. It's also very important for the President, and yes, even those who may be President, to focus on the positive in terms of speeches because, with good reason, Americans are nervous. It makes no sense for our leaders to instill a panic, but rather just layout the facts and encourage Americans that the necessary steps are being taken to correct the problem.
CuriousJockAZ saidActually, the fundamentals of our economy ARE very strong. We are still not "technically" in a recession which, if you ask me, is nothing short of a miracle. So it is not at all untrue when McCain makes such a statement. They are strong. That is not to say that certain pillars are not struggling...obviously, they are. It's also very important for the President, and yes, even those who may be President, to focus on the positive in terms of speeches because, with good reason, Americans are nervous. It makes no sense for our leaders to instill a panic, but rather just layout the facts and encourage Americans that the necessary steps are being taken to correct the problem.
yeah...but we dont have to be fools about how Business got itself into this mess and the Republican government with its total reliance on free markets....until their businesses are going under....dogged-determinedly stood by and let it happen.
Maybe CuriousJockAZ is right about the pres' approach to addressing this crisis. Bush needs to take his head out of his ass long enough to stick it in the sand.
Actually, the fundamentals of our economy ARE very strong. We are still not "technically" in a recession which, if you ask me, is nothing short of a miracle. So it is not at all untrue when McCain makes such a statement. They are strong.
.
The "technical" description of a recession is 2 consecutive quarters of negative growth in the GNP.... sometimes we don't even know that we are in a recession until its over.
You tell someone who loses their house in Arizona (Todd) that there is no recession or someone out of work. We don't want to instill panic, but I don't want some rosey picture painted either. I want facts. Forget the technicals here... We are in a period of economic uncertainty and a great deal of volatility and stress in our economic infrastructure. "They are strong" to me is a stretch (at best).
I bet theres a giant bull on Wall street with it's tail between its legs..
Coroporate America is going to get a rude wake up call. I wonder how many mergers and full out flops of the fourtune 1000 we'll see in these tougher years coming
The US economy is better than what was expected, but as the slowdown spreads to Europe, Latin America and Asia demand for American products will slow which will make things worse. Also if any American companies go into bankruptcy in the near future they will find it very difficult to get "debtor-in-possession" financing and may liquidate. The credit markets are extremely tight because banks and investment banks balance sheets are a mess. I am thinking especially of one of the big airlines with the high fuel prices (going down now, but will undoubtedly go up in the winter).
Well bust my Britches .... ain't he the chief economic advisor for the Grampy McSame campaign?
Golly! Ain't that a hoot now...
And we got Sara Palin makin speeches now about how there ain't ENOUGH oversight
Somebody's lyin here somewhere Oh BTW..... Wasilla Alaska was in debt for the first time after she left office Sounds like a chip right off the old republican shoulder if ya ask me
End corporate welfare! Stop rewarding companies for their mistakes, inefficiencies, market myopia, and sheer sketchy greed. Close gaping corporate tax loopholes.
But no...the GOP thinks it would be better to fund these f*ckups and choke education and healthcare instead.
You tell someone who loses their house in Arizona (Todd) that there is no recession or someone out of work. We don't want to instill panic, but I don't want some rosey picture painted either. I want facts. Forget the technicals here... We are in a period of economic uncertainty and a great deal of volatility and stress in our economic infrastructure. "They are strong" to me is a stretch (at best).
If you know anything about the mortgage and/or real estate business, then you know that most people who own a home and have a mortgage pay that mortgage on time. It's a small percentage of homeowners holding mortgages (albeit a growing percentage) who are actually late or having their homes foreclosed on. 9 times of 10, these foreclosures are the result of a homeowner getting in over their head into a home they simply could not afford. Now, admittedly, part of the blame rests with greedy banks and mortgage companies who at one time would give a loan to anyone with a pulse, regardless of their credit history, and doing so allowing the borrower to "State" their income, not actually prove their income. Of course, this opened the door to all kinds of exaggeration of one's own income and assets, which in turn got people into homes and loans well beyond their means. Ultimately, the blame really rests on the borrowers themselves. If they got into a home loan that they couldn't afford, even if it was years down the line once that loan adjusted, then whose fault is that? The Banks? I think not. If someone buys or leases a new car and 2 years into it the car gets repo'd because the payments stopped getting made on time or at all, do we blame the car dealership?
Fact of the matter is, this economy overall is still thriving. Granted, at a slower pace, even a snail's pace, but it's not like it's all "doom & gloom" either. People are still buying houses. I went to a high-end restaurant to eat Saturday night, and there was still a waiting list to get seated. We had the biggest movie box-office take in history this summer. I look around everywhere and see people with iPods and iPhones...shopping malls are going up, airplanes are full. I'm not saying that things haven't gotten challenging, or that people are not hurting -- of course they are -- but there are positive things out there to see. It simply is not ALL doom & gloom.
If you know anything about the mortgage and/or real estate business, then you know that most people who own a home and have a mortgage pay that mortgage on time. It's a small percentage of homeowners holding mortgages (albeit a growing percentage) who are actually late or having their homes foreclosed on. 9 times of 10, these foreclosures are the result of a homeowner getting in over their head, etc....
Fact of the matter is, this economy overall is still thriving. Granted, at a slower pace, even a snail's pace, but it's not like it's all "doom & gloom" either. People are still buying houses. I went to a high-end restaurant to eat Saturday night, and there was still a waiting list to get seated. We had the biggest movie box-office take in history this summer. I look around everywhere and see people with iPods and iPhones...shopping malls are going up, airplanes are full. I'm not saying that things haven't gotten challenging, or that people are not hurting -- of course they are -- but there are positive things out there to see. It simply is not ALL doom & gloom.
Well I'm a financial planner, so I know a little about the markets and whats happening. We're talking about where we are at with the economy in this thread, not how we got here (albeit some of what you say is true in the above).
People are still buying houses and its much better in Kansas than in Arizona.. but as a real estate agent, you know the loan situation has "markedly changed" over the last several months with the shock of the economic infrastructure. I'm very aware in the change in the financial markets and what my clients accounts have done. We know the job situation, jobless benefits, addition (and in cases now.. subtraction of new jobs from the economy) our debt ridden carcass of an economy... I would NEVER refer to this economy as "thriving" (thats ridiculous). Just because we haven't had a quarter of negative GNP doesn't mean we are in for all practical purposes..... a recession. We have a mixed bag of results and there are still some positive signs, but again, not "thriving"....
CuriousJockAZ saidFact of the matter is, this economy overall is still thriving. Granted, at a slower pace, even a snail's pace, but it's not like it's all "doom & gloom" either.
The point is the Republicans and Business are always telling everybody not to regulate....not to oversee ....not to interfer....they know what they are doing....They will generate wealth and ecomomic prosperity for all and it wil rain down on the masses. ...It is better to leave the market to itself. ...Dont interfer ....But everytime we turn around Business is fucking up and the Republicans no longer believe in small government ...and support Business bailout. .....wealth doesnt trickle down....money flows up from the taxpayers to the the Business idiots
HndsmKansan said We know the job situation, jobless benefits, addition (and in cases now.. subtraction of new jobs from the economy) our debt ridden carcass of an economy... I would NEVER refer to this economy as "thriving" (thats ridiculous). Just because we haven't had a quarter of negative GNP doesn't mean we are in for all practical purposes..... a recession. We have a mixed bag of results and there are still some positive signs, but again, not "thriving"....
No offense, I am sure you are very good at what you do, but as long as the economic indicators, and the experts, are saying we are NOT in a recession, I think I'll go with that.
No offense, I am sure you are very good at what you do, but as long as the economic indicators, and the experts, are saying we are NOT in a recession, I think I'll go with that.
I'm going with the experts... your going with last quarters results which are usually behind the times.....um, yeah.
I have a feeling that we haven't heard the end yet - WaMu is still very shaky and it seems as if everytime the feds try to plug one leak several more open-up. I'm afraid of what may happen if the dam bursts... and also concerned about how much our already heavily indebited Fedreal Government can abosrb.
Right now, the Fed and China's holding are the few things holding back a Second Great Depression...the first Great Depression came as a result of decade-long speculation and investment (similar to what's occured in the 80's and 90's), following a rise in inflation and of course (relevant to today's news), the failure of banks. Of course, goods and services have been rising scandalously over the past two years which can only get worse if the dollar continues to/resumes a slide. There is some worth to history but unfortunately, the media is afraid to put these bank failings into some context.
1. Merrill did not fail - however given time, it possibly could have. Interestingly enough, BofA recently got out of (mostly) from the IB business as they did not feel it was bringing in the right kind of profits (ie they were not getting the business the big 5 were) Now, they are poised to be an incredibly powerful market shaper. Just think, Merrill alone at number 3 has over 1.3 trillion in assets under management. To put this in perspective, Canada's GDP in 2006 was 1.08 trillion.
2. Asian banks (think Mizuho, HSBC, and Aozara which is owed I believe $158B) have been helping to secure our destiny. They have indiscriminately invested in the US believing that the return on their investments would be inevitable - however now all of that comes into question with 2 Major bank failures and about 10-12 smaller ones.
3. Be happy that the FED did not step in. If they did, all of our tax dollars would be lost here. Granted my thoughts go out to those that lost their jobs, however these firms employed the some of the best and brightest. These people will find jobs in a heart beat at smaller firms, hedge funds, private equity firms, and other investment banks - you'd better believe JP and now BofA as well as HSBC, Barclays, Citi, etc are all looking at who is coming from Lehman and bringing their client list with them.
4. Who do you think is next? WAMU? AIG? UBS?
Let's be honest, they made the country a lot of money on a bet that above all else, people will pay their mortgage. If the pendulum would have swung the other way, we would be hearing how Goldman would have been number 4 or 5 vs Bear, Lehman, and Merrill.
NNJfitandbi saidHey, Maybe it's time to start taxing "capital gains" like all other income, eh?
Why encourage speculation? Why discriminate against the salaried guy?
My dream would be to have a tax return that was 1 page long. That would mean a flat tax on all income regardless of whether it was job related, dividends, interest on bank accounts, capital gains, gifts, or even inheritance.
Of course I am only dreaming, that will never happen, think of all the tax accountants that would starve!
Let's be honest, they made the country a lot of money on a bet that above all else, people will pay their mortgage. If the pendulum would have swung the other way, we would be hearing how Goldman would have been number 4 or 5 vs Bear, Lehman, and Merrill.
Yeah but it didn't. Considering expected income off risky loans to be collateral isn't exactly a sane business strategy.
After all of the events of the day and what could be coming down the road, how can McCain say we are better off now? If this does not tell us we need change what will?
Let's be honest, they made the country a lot of money on a bet that above all else, people will pay their mortgage. If the pendulum would have swung the other way, we would be hearing how Goldman would have been number 4 or 5 vs Bear, Lehman, and Merrill.
Yeah but it didn't. Considering expected income off risky loans to be collateral isn't exactly a sane business strategy.
It's a greedy business strategy.
you may slightly be missing the point of the strategy though...just slightly however.
yes it was greedy. and yes it was strategy. but exactly how "crazy" was it. I mean think about it, for the most part people may skip a cell payment or a car payment...but those that can make a mortgage payment will do that above all else because - well who wants to be homeless? so the strategy was not exactly bad - it was the way it was implemented.
subprime loans started with shady mortgage deals given to people that were in some cases less than credit worthy - in other cases they had slow or little credit. In most cases, they did not have to prove their income or they could make up a number that the loan officer knew would look good to a bank (say an individual with a 500 credit score that makes 100k a year and trust me you would be shocked how many people there are like that in this country). So the bank bet that because these people were making the money that they were "making" (without proper verification), they would easily be able to make their loan payments over time. Naturally having a loan payment is a way to improve your credit score quickly (especially having a mortgage) so these loans were given out freely because it was felt that the return would be greater than the loses. (Keep in mind, that within a 3-5 year period, these loans would reset - in most cases and if these people were making the money they were claiming, then they would easily be able to afford such adjustments and EVERYONE would be making cash hand over fist).
These loans were then bundled together and sold as debt instruments to financial institutions, hedge funds, etc and rated as AAA but the credit ratings agencies (ie safe and investment grade) when really they should not have been - banks bought and traded these by the load - especially bear, merrill, and lehman.
Mind you again the idea was that :
1. Home loans regardless of who they go to are safe because above all else (even food - the thought is that people would pay to keep their homes) 2. They were rated as safe by the agencies 3. Everyone is doing it...so "why shouldn't we"?
I realize I may be oversimplifying the situation - however the point is that there are a lot of people to blame - starting with the individual homeowner who did not read the fine print / was manipulated into a home loan that eventually they would not be able to afford by a loan broker/mortgage company who didnt give a shit because he/she was making 10-30k per deal, to the investment banks that bundled the deals, to the companies that insured and rated the deals to the banks which then sold and traded the deals to the investors/hedge funds/etc that bought the deals. EVERYONE is at fault here - you can't blame just one group for this. If you are intelligent enough to purchase a home, you are intelligent enough (in most cases) to read a document or have someone else read it for you...and so on.
Let's face it, these banks made a bet - they went to Vegas (not literally but figuratively) went against the odds and lost because they like everyone else did not read the fine print and went with what was making the most money at the time. Short term/minded strategy that has now blown up in everyone's face.
we are REAPING exactly what the republicans have sown over the last few decades It's called deregulation plain and simple But you guys wanna vote for McCain and Palin and do it all over again I know a lot of guys like to take it up the ass but I always thought it was literally rather than figuratively I guess I was wrong
GQjock saidwe are REAPING exactly what the republicans have sown over the last few decades It's called deregulation plain and simple But you guys wanna vote for McCain and Palin and do it all over again I know a lot of guys like to take it up the ass but I always thought it was literally rather than figuratively I guess I was wrong
coolarmydude saidHere's a challenge for you Republicans:
Put the country first and not vote for this douche. You don't have to vote for Obama. Just don't VOTE for this douche or don't vote at all.
Wow... it's funny you mentioned this. I spoke to two Reps yesterday who actually said they weren't going to vote this year because they didn't like McCain, but couldn't bring themselves to vote for Obama.
IF Obama got elected we can all brace fo another greater 911. When the terrorists want him as president we should all be concerned.
This morning I will focus my talk on the economy during the Bush presidency.
You may recall that when Governor Bush was President-elect Bush in December of 2000, he met with business leaders in America -- American business leaders in Austin. They told him, in effect, "Congratulations, you ran a fine campaign, and, oh, by the way, you'll be inheriting a hurting economy." Their prognosis in that day in Austin was grim, but they were right.
Order books were drying up, investment was falling, consumer confidence in purchases were dropping off sharply and markets were tanking.
The stock market began its decline in mid-January 2000, dropping from an all-time high of more than 11,700 in the Dow to below 9,800 in early March 2000, on its way to its first calendar year loss since 1994.
The dot.com bubble also burst in 2000. The Nasdaq, site of some of the largest IPOs in history, peaked on March 10th, 2000. And by December 2000, the time of our meeting in Austin, it had dropped by more than 50 percent.
The economy itself began slowing in the third quarter of 2000 as GDP declined by an annual rate of 0.5 percent. And all of this took place before George W. Bush set foot in the Oval Office.
The economy posted another decline in GDP growth in the first quarter of 2001: minus 0.5 percent. And March 2001 marked the recession's official start.
Sluggish growth of 1.2 percent followed in the second quarter of 2000. And GDP growth declined again in the third quarter, falling 1.4 percent.
As in past recessions, no one single factor caused the 2001 recession. It resulted from declining stock markets, a surge in energy prices, higher interest rates, and the collapse of the high- tech bubble.
Then, on a bright September morning, came the worst attack on the American homeland in our history. Al Qaida targeted our political and financial centers, and intended to bring our economy to its knees. That didn't happen, but serious damage was done. Airports were shut. Stock markets closed. The hospitality and the insurance industries hit especially hard.
The country suffered an estimated $100 billion in economic losses. And in the three months following 9/11, the American economy shed 1 million jobs.
That fall, a series of corporate scandals began to come to light. Among other things, these scandals led to the largest bankruptcy in U.S. history. Confidence in the markets was understandably shaken. And the Dow Jones dropped to below 7,300, a five-year low.
At the time, the Financial Times said, quote, "Forecasts of a Dow diving to 5,000, 3,000 and even below 1,000 have been receiving attention from investors who once could not believe the Dow would fall below 8,000."
A faltering economy, falling markets, shaken confidence, an economy reeling, that's what America's new president faced.
In times like these, the principles and values of a president come into play.
This president believes the government's role is to create an environment where the entrepreneurial spirit flourishes and where small businesses can grow, where people can dream about owning their own home and have it become a reality.
And he believes that economic growth is created largely on the economy's supply side. The best tax cuts create incentives for people to work and businesses to produce and companies to invest.
President Bush doesn't believe government creates wealth. He understands that's done by American workers, farmers and entrepreneurs.
His economic policies, then, are tied to a view of human beings that understands the role of incentives in shaping behavior. There are three important elements of these policies that I'd like to talk about today: the tax system, trade liberalization and budget discipline.
The president believes when the economy falters, tax cuts will lead to economic prosperity. This reflects a deep faith in individual citizens; in their energy and common sense and capacity to make wise decisions.
His view of free trade is grounded in the knowledge that American producers and workers can compete and win internationally as long as the rules are fair.
And an emphasis on a responsible federal budget reflects the president's belief that, while government should actively perform its core functions, it should not impede the efforts of individual citizens and enterprises to create jobs, wealth and economic opportunity.
Let me deal briefly with each one of these three: taxes, trade and spending.
In response to the economic challenges the country faced, President Bush provided Americans with the largest tax relief in a generation. With the help of the Republican Congress, he has secured the path to each of five major tax relief bills. He's led a successful effort to cut taxes every year he's been in offices. We've seen taxes cut on income, small businesses, dividends and capital gains. The child credit has been doubled, the marriage penalty has been reduced, and the death tax has been put on the road to extinction.
Taken together, these tax cuts have strengthened the economy, increased productivity and created new jobs. Just last week, in a major legislative achievement, Congress passed an extension of the capital gains and dividend tax cuts until the end of 2010, and a signing ceremony will take place on Wednesday.
An important point about the impact of the capital gains and dividend tax cuts: Between May 28th, 2003, when the president signed the legislation into law, and December 31st, 2005, the 500 leading U.S. companies on the S&P 500 have increased their dividend payments 725 times, and quarterly dividend payments averaged almost $47 billion a quarter. That is a 51 percent increase compared to the quarterly average for the 10 years previous to the tax cut.
That's money that is going into retirement funds and IRAs and people's pocketbooks.
President Bush's tax-cutting policies were not passed by unanimous consent. Some in Congress oppose any significant tax cut.
Indeed, some members of Congress predicted economic ruin if the president's tax relief was passed, any part of it. One critic called it, quote, "akin to arsenic poisoning for the economy."
Another said it was, quote, "nothing more than a sham wrapped in spin, shrouded with deception."
And a third said it, quote, "would bestow," quote, "no real benefits on most Americans."
Now, these aren't arguments. They're the political equivalent of schoolyard jeers. But more substantive points were raised in opposition.
One criticism was, quote, "the vast majority of its benefits were directed toward the wealthy," end quote.
If this were true, then logic tells you that the percentage of federal income taxes paid by the wealthy would be falling after the tax cuts. That is not the case.
The Bush tax cuts have shifted more of the burden onto the wealthy and those lower on the economic ladder have been relieved of a larger share of their tax burden.
The top 1 percent of the nation's earners, those making more than $317,000 a year, their share of income tax payments is up by 1.5 percent.
For the top 3 percent, those that have incomes are over $200,000, their share of the tax burden is up more than 5 percentage points, from 40.5 percent of the tax burden to 46.6 percent.
And the tax burden of the top 5 percent of those in America, those with incomes of lower than $141,000 a year, is up almost 3 percentage points.
According to the Wall Street Journal, for every 100 Americans today, the wealthiest three are paying taxes equivalent to the other 97 combined.
Another critic's claim is that, quote, "the tax cuts have played a major role in the return to deficits and debt."
The problem with this critique is it ignores that tax revenues are at an all-time high, in large measure because of the economic growth
Thank you for the economics lesson. It's become such a "sport" apparently to blame our President for every single thing gone wrong. It's as if so many of these people, like so many democrats in congress, have rewritten history in their own minds. President Bush gets little credit for anything good. History will be so much kinder to him, thankfully, than the present.
CuriousJockAZ saidThank you for the economics lesson. It's become such a "sport" apparently to blame our President for every single thing gone wrong. It's as if so many of these people, like so many democrats in congress, have rewritten history in their own minds. President Bush gets little credit for anything good. History will be so much kinder to him, thankfully, than the present.
Todd, calm down and be reasonable. I don't think most here blame Bush for everything. Assess your previous answer, why even include the line about democrats in congress... come on!
What most here would say is that Bush and his policies helped to create the atmosphere for much of what has happened. I got quizzed by 3 guys at the gym last night about it. One asked, "Did Bush do this"? The answer is no, but the atmosphere was created by Bush and his policies.
Greenspan keeping interest rates too low for too long, regulations that did not keep up with changing financial instruments, greedy (as opposed to ambitious) mortgage brokers and bankers who turned a blind eye to risk and kept lending out more and more money to people without doing there due diligence, rating agencies (Moody's, Standard & Poors) who rated debt instruments as high-quality when they were not (and did not bother to tell people that they were in uncharted territory), just some of the things that caused the crisis.
It's true that not all of the tax cuts went to the upper classes . . . some of it went to the lower classes. Virtually nothing, however, went to the shrinking middle class whose disappearance usually precedes a depression and typifies third-world economies.
Surrealife said; "Greenspan keeping interest rates too low for too long, regulations that did not keep up with changing financial instruments, greedy (as opposed to ambitious) mortgage brokers and bankers who turned a blind eye to risk and kept lending out more and more money to people without doing there due diligence, rating agencies (Moody's, Standard & Poors) who rated debt instruments as high-quality when they were not (and did not bother to tell people that they were in uncharted territory), just some of the things that caused the crisis."
I agree, the subprime loans ended up as a means of buying on margin. When the dollar devalued it became a tripwire, when confidence was lost it blewup.
So, my questions are; why did the mortgage companies make such untenable loans? Did the "Community Reinvestment Act of 1977 and subsequent changes affect it adversely? Was this crisis deliberately engineered or was it negligence?
John43620 said, "Was this crisis deliberately engineered or was it negligence?"
I think both. First, I would speculate that the secret energy meetings of February 2001 that Dick Cheney chaired was the deliberate engineering, including the war in Iraq, and as to the negligence part, yes because greed operates on ignoring accountability.
I really believe that now we are past the point of blaming one party or the other for the troubles in the financial sector and we need to focus our attention on solving the crisis. What is at stake is the financial solvency of the American citizen and the solvency of the Federal government - this is a problem that will take the support of BOTH parties to solve regardless of how or why it happened.
ORDude said, "I really believe that now we are past the point of blaming one party or the other for the troubles in the financial sector and we need to focus our attention on solving the crisis. What is at stake is the financial solvency of the American citizen and the solvency of the Federal government - this is a problem that will take the support of BOTH parties to solve regardless of how or why it happened."
Disallow Republicans the right to vote. Crisis solved.
Ragardless of which sharks were at fault, which took losses, and which, if any, made gains, there's something the rest of us should be concerned about:
Are we willing to tolerate a government that privatizes profits but socializes losses?
ORDude saidI really believe that now we are past the point of blaming one party or the other for the troubles in the financial sector and we need to focus our attention on solving the crisis. What is at stake is the financial solvency of the American citizen and the solvency of the Federal government - this is a problem that will take the support of BOTH parties to solve regardless of how or why it happened.
So true, and plenty of blame to go around. Let's not forget that there were also factors involved beyond our control (9/11, Katrina, other disasters, etc.) and, of course, The War on Terror all crashing down on our economy.
So true, and plenty of blame to go around. Let's not forget that there were also factors involved beyond our control (9/11, Katrina, other disasters, etc.) and, of course, The War on Terror all crashing down on our economy.
But then the fundamentals are strong and the economy is thriving (at least in part), eh Todd?
CuriousJockAZ said, "So true, and plenty of blame to go around. Let's not forget that there were also factors involved beyond our control (9/11, Katrina, other disasters, etc.) and, of course, The War on Terror all crashing down on our economy."
Oh how you conveniently ignore...
9/11 warning signs during Bush Administration were largely ignored within our control...
Katrina preparedness and a comprehensive response plan was well within our control...
The War on Terror has been poorly mis-managed and if done competently, would have been managed within our control. Even McCain, your hero, criticized Bush for the mismanagement practices.
At all levels of government, the exacerbation of damages "beyond our control" could be easily mitigated to minimal damages if our government would truly work for the people.
Your examples illustrate the unrevealing testament that the Republicans have a way with blaming other things when it's advantageous to them, but highlight the blame game when Democrats attempt to do the same.
Continuing from my previous post, Republicans are self-fulfilling prophets. They tell people that government doesn't work and that you shouldn't come to expect anything from it and then when they get into office, they run government amok and say, "See! That's what I was talking about."
ORDude saidI really believe that now we are past the point of blaming one party or the other for the troubles in the financial sector and we need to focus our attention on solving the crisis. What is at stake is the financial solvency of the American citizen and the solvency of the Federal government - this is a problem that will take the support of BOTH parties to solve regardless of how or why it happened.
Bullshit! ...If you ignore how we got into this mess, then we will have this mess again. ...We need to hold those responsible responsible. ...The dumb-as-a-box-of-rocks 50% of the people who vote Republican need to see that they made this mess.
coolarmydude saidContinuing from my previous post, Republicans are self-fulfilling prophets. They tell people that government doesn't work and that you shouldn't come to expect anything from it and then when they get into office, they run government amok and say, "See! That's what I was talking about."
The problem is Republicans cant run a government and the Democrats cant run a campaign.
ORDude saidI really believe that now we are past the point of blaming one party or the other for the troubles in the financial sector and we need to focus our attention on solving the crisis. What is at stake is the financial solvency of the American citizen and the solvency of the Federal government - this is a problem that will take the support of BOTH parties to solve regardless of how or why it happened.
Bullshit! ...If you ignore how we got into this mess, then we will have this mess again. ...We need to hold those responsible responsible. ...The dumb-as-a-box-of-rocks 50% of the people who vote Republican need to see that they made this mess.
Caslon - I totally agree with you - but first we need to solve the problem - then we can concentrate on how it happend, who is at fault and how to keep it from happening again.
ORDude saidCaslon - I totally agree with you - but first we need to solve the problem - then we can concentrate on how it happend, who is at fault and how to keep it from happening again.
Figuring out how you got in the problem usually gives you clues on how to solve it. And it's not like there is only one person working on this. We can tackle more than one aspect of this at one time. ... ... I have no patience for dithering on laying the blame. ... The sons o'bitches should be flayed alive.
