Fiscal Cliff: Avoid? Drive Right Over?

Off Topic Politics & World Issues
121

[quote]SexMachine wrote:

[quote]Zeppelin795 wrote:

In addition, why does healthcare costs in the private sector skyrocket while the government components in the public sector rise at a much slower rate?[/quote]

It doesn’t.

‘Jeff Anderson just published the results of a very interesting study he conducted for the Pacific Research Institute on public- vs. private-sector health spending. The study showed that Medicare spending grows much more quickly than private-sector health care spending…’

http://www.nationalreview.com/corner/183700/public-vs-private-sector-health-spending/tevi-troy#[/quote]
Wow a magazine owned by rich people expounding on issues that benefit rich people!

http://healthaffairs.org/blog/2011/09/20/medicare-is-more-efficient-than-private-insurance/

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The bottom line to all this is jobs.

http://therealnews.com/t2/index.php?option=com_content&task=view&id=31&Itemid=74&jumival=9053

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[quote]countingbeans wrote:

[quote]MaximusB wrote:

Clinton let Wall Street inflate home prices to obscene amount, then banks gave out loans to people who barely had a heartbeat, Dems told poor people that they deserved a home even if they could not afford it, and Bush took ALL the blame.

[/quote]

Roots of the melt down in 2008 can be traced back to FDR for Christ’s sake. People that blame this issue on “de-regulation” have their heads in the sand. A whole lot of private citizens that signed for mortgages they couldn’t afford have blood on their hands as well. The housing bubble and subsequent melt down would need a small text book to expalin the “perfect storm” that it was.

Lets not also mention that the banks were actually responsibile and insured their subordinated debt instruments. AGI on the other hand wasn’t, they wrote all the policies for all the banks. Whether or not the banks knew they were all insured by the same company is another conversation, but in the end the banks knew the risk, and hedged for it.

If not for AIG, the melt down would have been much less of an issue and TARP wouldn’t have happened.

Oh and, the “poor and middle class” didn’t bail out shit. We borrowed that money, and based on the current system and tax policy wishes of the “poor and middle” the rich will pay for all of this. [/quote]

Kudos on the bail out shit part. Though I’d argue EVERYONE will pay for that in some way or another. It wasn’t the poor or middle class bailing anyone out. No one paid for that…at least (as with all government debt) not yet. The storm’s coming though.

Still crazy as shit that we didn’t lynch some of those fuckers who got their hands in so deep with derivatives and other shit no one still remotely even understands. A LOT of people should have went to jail over this shit and we didn’t even get a financial reform worth dick over the measure. Lobbyists fought tooth and nail to make sure Democrats and Republicans gutted that thing to the gills so they could still afford to gamble obscene amounts knowing the government will save their asses if they get in too deep. We proved we will and changed nothing.

Absolutely infuriating.

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[quote]Zeppelin795 wrote:

[quote]SexMachine wrote:

[quote]Zeppelin795 wrote:

In addition, why does healthcare costs in the private sector skyrocket while the government components in the public sector rise at a much slower rate?[/quote]

It doesn’t.

‘Jeff Anderson just published the results of a very interesting study he conducted for the Pacific Research Institute on public- vs. private-sector health spending. The study showed that Medicare spending grows much more quickly than private-sector health care spending…’

http://www.nationalreview.com/corner/183700/public-vs-private-sector-health-spending/tevi-troy#[/quote]
Wow a magazine owned by rich people expounding on issues that benefit rich people!

http://healthaffairs.org/blog/2011/09/20/medicare-is-more-efficient-than-private-insurance/[/quote]

You mean the people who own leftist publications like The New York Times, Washington Post etc. aren’t rich? That’s about the stupidest response I’ve seen around here in a while.

Speaking of rich people, in my current job I actually earn less than welfare recipients.

The Welfare Spending Chart You Wont Want To See - TheBlaze - Hat tip to tirib for the link.

It makes me sick to my fucking stomach knowing that my tax dollars are going to fund people to sit on their arse and get paid more than me for doing it. No wonder people despise welfare scum. Utter dregs of society.

126

[quote]countingbeans wrote:
Lets not also mention that the banks were actually responsibile and insured their subordinated debt instruments.
[/quote]

The banks were not acting responsibly at all. They packaged up a bunch of shitty loans and then sold them off as top quality investments. They handwaved away the incredible risk, and purchased insurance in a further bid to dress up a turd.

If you think the insurance was meant to cover systemic issues in the housing market then I’ve got a bridge to sell you. It was to keep investors happy long enough to be taken for a ride. The banks no longer had to have the default risk on the books because they had “hedged” it away.

[quote]countingbeans wrote:
AGI on the other hand wasn’t, they wrote all the policies for all the banks. Whether or not the banks knew they were all insured by the same company is another conversation, but in the end the banks knew the risk, and hedged for it.
[/quote]

Why does it matter that they were all insured by the same company?

[quote]countingbeans wrote:
If not for AIG, the melt down would have been much less of an issue and TARP wouldn’t have happened.
[/quote]

No insurance company was charging premiums large enough to cover the widespread failure in the housing market.

127

[quote]Zeppelin795 wrote:

Did you drop acid before you wrote this drivel?[/quote]

Can you address a point or just insult?

Well, we could go back to Woddy Wilson and the Federal Reserve Act as well if you’d like. Like I said, to outline each policy that contributed to the crash would take a long, long time, and yes regulation (or lack there of to some) would have an effect. But to say that regulations, in place or not, was a sole or even a major factor is short sighted, and could be intellectually dishonest depending on the angle you take with your arguement.

While it may make you feel better to call policies put in place by FDR (or LBJ, Carter, Reagan, Clinton, and others) a joke as they effected the future, you are just keeping your head in the sand. Now to say these men didn’t intend to effect what they did is more than likely valid, but they had hands in the conditions that brough about the issue.

Who are you trying to convince here? Because you appear “blinded” by the Occupy propaganda.

Again, I’m speaking in much broader terms than you. I understand that social policy and monetary policy by the Fed had large roles in the 2008 melt down. You seem to want to put the blame solely on the regulation aspect. Truth of the matter is there is much, much, much more at play here than regulation.

The croynism in Washington goes well beyond bank regulation, and that didn’t magically start in 1980…

Funny, because I have clients in RE, and in RE Lending. I would venture to guess I know more than you ASSume here.

Yes, the public signing for loans they couldn’t pay back, or didn’t understand was part of the problem. I know it helps you sleep better at night to obsolve anyone of blame other than the “evil corporations” and the “evil free market”, but in the real world personal responsibility matters. These people had none.

[quote]Lenders are trained to look at potential clients and determine if they will get paid back. They didn’t do this. They acted as predators. Even the FBI recognized this.

[/quote]

I’ll say this: I bought my home in 2007, well before the bubble burst (it deflated a bit before it burst, I caught it on the deflate side). We bought a home valued 170k LESS than what we were approved for, because I can do basic math. We secured a HELOC in an 80/15/5, when they tried to sell me on a 7 year ballon for the 15 at first… I openly laughed at the bank when they presented the ARM options.

I didn’t need a bail out… Why do you think that is? Did the FBI save me before I signed the note?

128

[quote]H factor wrote:
The storm’s coming though.[/quote]

I think this all the time too. Then I read a history book, and see all this has happened before. lol…

I always crack up when I come across a letter from Jefferson talking about the evils of a Central Bank, and how a lot of the FF’s were anti the concept. Thanks Woody, at least you changed the name for us…

[quote]Still crazy as shit that we didn’t lynch some of those fuckers who got their hands in so deep with derivatives and other shit no one still remotely even understands. A LOT of people should have went to jail over this shit and we didn’t even get a financial reform worth dick over the measure. Lobbyists fought tooth and nail to make sure Democrats and Republicans gutted that thing to the gills so they could still afford to gamble obscene amounts knowing the government will save their asses if they get in too deep. We proved we will and changed nothing.

Absolutely infuriating. [/quote]

Agree in large part with everything you said. People should have gone to jail, and Paulson being one of them. (Although I think he is only 50% evil, 35% dick head and 15% panic stricken.)

But to ask Washington to send their buddies to jail, or themselves is a large order request, lol. Croynism is a major problem. Giving the government more power is not the solution to that problem. (I imagine we agree on that, lol)

129

[quote]phaethon wrote:

The banks were not acting responsibly at all.[/quote]

False. They were getting returns, and hedged their risk. That is responsible. Period.

This statement contradicts itself. Why would you insure a “top quality” investment to that degree?

Every investment has risk, and the banks were meeting demand. I’m not, at all, obsolving them of blame, they should have plenty, but they aren’t the only player here. People wanted the subordinated debt, because RE is a “safe” investment. They ignored trends in housing markets and long term monitary policy effects. The banks fluffed up supply, no doubt, but demand was there.

No, the insurance was to hedge agaisnt default, to hedge the risk involved with the subordinated debt packages. Period. How one would think that insurance on investment instruments was supposed to effect the underlying investments is beyond me. How you even assumed that is what I meant baffles me…

No, it was to insure against default.

This isn’t how accounting works. With FASB 157 changes and the like, the two instruments are treated differently. (157 added to the crash as well.)

[quote]
Why does it matter that they were all insured by the same company?[/quote]

Because of how insurance works.

Really?

[quote]
No insurance company was charging premiums large enough to cover the widespread failure in the housing market.[/quote]

Right. The thing is they weren’t insuring the hosing market. The banks were insuring subordinated debt packages. Because, and get this, they knew the market was shit, just like the investors should have.

130

[quote]countingbeans wrote:

No, the insurance was to hedge agaisnt default, to hedge the risk involved with the subordinated debt packages. Period. How one would think that insurance on investment instruments was supposed to effect the underlying investments is beyond me.
[/quote]

I think you have misunderstood me. The risk involved with the packaged debt is related to the underlying investment. No bank was purchasing insurance to cover them in the event of systemic failure of the underlying investments.

Banks are not stupid. They knew that the insurance only covered the instruments while the underlying market was in good shape. And then they happily made bad loans (because they had offloaded much of the risk) which helped destroy the underlying market.

[quote]countingbeans wrote:

Yes. Please explain. I’ll use an example to explain my simple understanding of insurance. Then hopefully you can help me understand a bit better.

Say an event happens to 1% of people and costs $100 for them to fix. So you get 100 people together to each contribute $1.10. When the event happens you pay out the $100 to fix it. Adjusting the premiums as required.

If the event starts happening 30% of the time, instead of 1% of the time, but they have been collecting premiums based on it happening 1% of the time, then the insurance company has no ability to pay. And it should not matter if there are 100 insurance companies each covering 1000 people, or if there is 1 insurance company covering 100000 people.

[quote]countingbeans wrote:
Right. The thing is they weren’t insuring the hosing market. The banks were insuring subordinated debt packages. Because, and get this, they knew the market was shit, just like the investors should have.[/quote]

And because they didn’t care so much about the underlying housing market they didn’t care about making crap loans. These bad loans were one of the main causes of the housing markets problems. They were happy to loan to people with little savings, no stable work, and with no money down on the house. I know people who borrowed 110% of the property value! And of course this inflates property values, etc.

131

http://therealnews.com/t2/index.php?option=com_content&task=view&id=31&Itemid=74&jumival=9241

132

beans: You should really read “The Big Takeover” by Matt Taibbi. Yes, he writes for Rolling Stone and yes that means most will simply call him a left wing hack and ignore anything said. It is an awesome article towards understanding the financial crisis and it’s a shame it got edited from 14,000 words.

I’ve read it more than once. And before everyone dismisses it here’s a quote from the author:

“The whole point of the story is that this disaster is not a partisan political issue. In fact this crisis has revealed the whole ?red-blue? argument to be a sort of grotesque media-created diversion. The reality of our political system is that we are divided into two classes, connected and not connected ? and what happened in this crisis is that those who were connected paid a fortune to change the rules to enrich themselves, then used that same influence to bail themselves out when they destroyed the economy.”

He uses connected instead of cronyism, but it’s the same idea. And both sides are on the take big time. Financial reform never had a chance even after we were pushed to the brink of disaster. Politicians and lobbyists and big money have no desire to fix the gravy train that feeds them. We are asking them to fix a problem they helped create. Laughable.

133

Fiscal cliff scam: healthcare

http://therealnews.com/t2/index.php?option=com_content&task=view&id=31&Itemid=74&jumival=9326

134

[quote]H factor wrote:
beans: You should really read “The Big Takeover” by Matt Taibbi. Yes, he writes for Rolling Stone and yes that means most will simply call him a left wing hack and ignore anything said. It is an awesome article towards understanding the financial crisis and it’s a shame it got edited from 14,000 words.

I’ve read it more than once. And before everyone dismisses it here’s a quote from the author:

“The whole point of the story is that this disaster is not a partisan political issue. In fact this crisis has revealed the whole ?red-blue? argument to be a sort of grotesque media-created diversion. The reality of our political system is that we are divided into two classes, connected and not connected ? and what happened in this crisis is that those who were connected paid a fortune to change the rules to enrich themselves, then used that same influence to bail themselves out when they destroyed the economy.”

He uses connected instead of cronyism, but it’s the same idea. And both sides are on the take big time. Financial reform never had a chance even after we were pushed to the brink of disaster. Politicians and lobbyists and big money have no desire to fix the gravy train that feeds them. We are asking them to fix a problem they helped create. Laughable. [/quote]

There is no need to understand the idea of connected vs not connected when one could get a home loan with no job. You do not need to have an Econ degree to understand that there is something extremely wrong with that idea.

I cannot prevent people selling snake oil to interact with me, but I can send them down the road with their tail between their legs.

135

full steam ahead.

136

[quote]phaethon wrote:
They knew that the insurance only covered the instruments while the underlying market was in good shape. And then they happily made bad loans (because they had offloaded much of the risk) which helped destroy the underlying market.[/quote]

Not really. The insurance covered the subordinated debt instruments, that is it. The insurance had nothing to do with the underlying investment from AIG’s point fo view (outside of exposure calc’s). The insurance covered the investments whether or not the housing market was good or bad.

One of the major gripes with AIG is the fact they ignored this. They willingly under wrote all this paper without looking at the market, which had been in decline for a year or two at that point. (I can’t really blame them because everyone ignored the warning signs for the most part.)

This is where you slip. Of course the number of companies insuring something will make a difference, even if 100% of the time default happens.

It all hinges on exposure. If one company is over exposed (more claims than expected, and not enough funds to cover the claims) that company will go under and default on their coverage (well in 2012 in America, get bailed out by our shitty government). If the exposure is spread over 10 companies, they all have a much higher chance of being able to absorb the loss coming from the systemic failure of the housing market, because the loss is chopped up and spread out among many companies not just one… So 10 people take moderate hits, one or two go under, and we recover. Instead you have one company taking the whole hit and needing a bailout.

[quote]
And because they didn’t care so much about the underlying housing market they didn’t care about making crap loans. These bad loans were one of the main causes of the housing markets problems. They were happy to loan to people with little savings, no stable work, and with no money down on the house. I know people who borrowed 110% of the property value! And of course this inflates property values, etc.[/quote]

The people who willingly signed for these loans are at fault here too. Lets not pretend that basic math isn’t taught in schools in America.

137

[quote]Zeppelin795 wrote:
http://therealnews.com/t2/index.php?option=com_content&task=view&id=31&Itemid=74&jumival=9241

[/quote]

LOL @ you ignoring many points made to you and questions asked.

[quote]H factor wrote:
then used that same influence to bail themselves out when they destroyed the economy."

[/quote]

This is why I won’t read that article.

  1. Nothing was destroyed, even if their was no bailout, nothing would have been destroyed. The word “destroyed” is to much here and he is using it to push an agenda. I would imagine I agree with his general sentiment based on the part you quoted, but I’m not about to read a propoganda piece.

  2. I openly laugh at people who refuse to put the portion of the blame that lies with those that signed the damn loans in the first place on them. Yes, “main street” is to blame here. One, because they signed the loans, two because they care more about Honey Boo-Boo than politics and history… So, I refuse to sit back and entertain the notion that the “big bad evil rich 1%” caused all this on their own.

I can take a dump and put it in a pretty box. Are you going to buy it? Why or why not?

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[quote]countingbeans wrote:

[quote]Zeppelin795 wrote:
http://therealnews.com/t2/index.php?option=com_content&task=view&id=31&Itemid=74&jumival=9241

[/quote]

LOL @ you ignoring many points made to you and questions asked.

[quote]H factor wrote:
then used that same influence to bail themselves out when they destroyed the economy."

[/quote]

This is why I won’t read that article.

  1. Nothing was destroyed, even if their was no bailout, nothing would have been destroyed. The word “destroyed” is to much here and he is using it to push an agenda. I would imagine I agree with his general sentiment based on the part you quoted, but I’m not about to read a propoganda piece.

  2. I openly laugh at people who refuse to put the portion of the blame that lies with those that signed the damn loans in the first place on them. Yes, “main street” is to blame here. One, because they signed the loans, two because they care more about Honey Boo-Boo than politics and history… So, I refuse to sit back and entertain the notion that the “big bad evil rich 1%” caused all this on their own.

I can take a dump and put it in a pretty box. Are you going to buy it? Why or why not?[/quote]

It’s pretty eye opening on the instruments of gambling and the reasons why big banks were so likely to package these loans to the average person. It’s a shame you dismiss something before even reading it, especially citing Occupy Wall Street craziness in an article written before that event even really took place.

I would never argue that main street wasn’t also to blame nor did I ever.

And yes the economy was destroyed in the sense of the crash it created. Obviously destroyed is too far kinda like saying Germany was destroyed during World War II, but the point remains the same. And let’s not act as if we know what would have happened without bailing out the banks. We have no idea. What would have happened if we DIDN’T drop the atomic bomb? We can speculate on stuff, but we can’t ignore the fact that we have no idea when we choose not to do something in history.

Again, I think you should read it, but if you don’t that’s fine. I already mentioned many would dismiss it before even reading it, but again that is a shame. I had no idea of any of these instruments or how they were used or had even heard of any of this crap before that article. In fact it was recommended to me as I asked questions on what exactly people meant with some of the terms they used.

Just don’t strawman here by acting as if I’m placing all the blame on the 1% or anything like that. Hell I HATE that term and think it’s absolutely absurd.

140

[quote]H factor wrote:

Just don’t strawman here by acting as if I’m placing all the blame on the 1% or anything like that. Hell I HATE that term and think it’s absolutely absurd.
[/quote]

I’m not trying to say you blame anyone. Just that dude seems more like part of the problem than the solution.

If I ever bring myself to read dribble out of contemporary rolling stone, that will be the one, I promise.