[quote]rainjack wrote:
katzenjammer wrote:
Too low interest rates for too long leached discipline out of the market - banks and consumers could now take any risk, make any stupid decision they wanted, because they could always count on borrowing more, no matter what the current state of their assets. This is where the problem lies.
Interest rated being low had little to do with this. People getting home loans who had absolutely no business doing so is the problem.
The government tried to make housing more affordable by backing these home loans with your tax dollars. There was a ton of money to be made by selling these loans, and nefarious lenders were more than willing to sign people up into homes they could not afford.
Now the tax payer has to bail out the companies who bought these loans, insured these loans, and sold them in their CDO’s.
[/quote]
Absolutely - but this whole meltdown goes well beyond the subprime problem. There has been a systematic blindness to risk throughout the financial/banking industry.
[quote]LIFTICVSMAXIMVS wrote:
Gambit_Lost wrote:
IMO this shows a distinct need for more market regulation. What do you all think?
Remove all regulation and let inefficient banks fail.
Think of the regulation that would be necessary to keep businesses from making bad investment decisions. Do you propose we regulate how much risk a company can take? Who gets to decide how much risk is acceptable…some bureaucrat?
Risk is a necessary function of the profit discovery process; giving loans to people with no job, income, or assets is a risk but when it pays off it pays off big. Why should the government regulate that if someone perceives it as a profitable decision?
Of course, when their customers default, oh well…don’t come crying to taxpayers to bail you out. Likewise, people who take loans they cannot afford cannot be bailed out either.[/quote]
I read that this resolution trust is actually a great idea because the government stands to make a handsome profit.
I also read an article in the paper, and it read that in a couple years we will all be reading about some guy who made a fortune buying up all these CDOs for pennies on the dollar.
I guess the point is that all this shitty debt is actually worth something after all.
Interest rated being low had little to do with this. People getting home loans who had absolutely no business doing so is the problem.
Now the tax payer has to bail out the companies who bought these loans, insured these loans, and sold them in their CDO’s.
[/quote]
THISx1000
What we are currently seeing is the direct result of government INTERVENTION, not a lack of regulation. The congress TOLD lenders that they HAD to lower their standards, in the name of achieving some form of equality in the home lending business. This is why the end does NOT justify the means when it comes to seeking equality.
One dangerous precedent set here is that of Privatized Profits and Socialized Risk. The taxpayers are now forced to pay CEO’s enormous salaries so they can run huge businesses into the ground.
What we are currently seeing is the direct result of government INTERVENTION, not a lack of regulation. The congress TOLD lenders that they HAD to lower their standards, in the name of achieving some form of equality in the home lending business. This is why the end does NOT justify the means when it comes to seeking equality.
One dangerous precedent set here is that of Privatized Profits and Socialized Risk. The taxpayers are now forced to pay CEO’s enormous salaries so they can run huge businesses into the ground.[/quote]
Indeed. However, the subprime problem - which, I agree, has been caused by government intervention in the first place - is a subset of a MUCH larger problem that we’re seeing playing itself out now: investment banks and other financial institutions are way, WAY over-leveraged.
Extraordinarily low interest rates allow financial institutions to borrow themselves out of problems, blind themselves to risk, and make stupid decisions without having (immediately) to pay a price, no matter what the current state of their assets. Think about what that means in the context of an investment bank. The fed’s to blame in this.
The government rather tounge in cheek is now claiming it will take over a half of one trillion (one million piles of one million) dollars before this fiasco (bailout) is done. But at least they are not wasting it on a pie in the sky health care system.
They are taking care of the mess the CEOs and everyone who walked away with hundreds of millions of dollars created, while leaving with exit bonuses in the high millions for failing miserably at their job.
One interesting thing though, wall street is no longer capitalistic. The government now owns most or close to all of wall street. Just like the Russian stock exchange.
[quote]Ruggerlife wrote:
This is one situation where I’m all for equality, everyone is fuckin’ responsible for this mess.
The two others I didn’t see listed (sorry if I missed them) are;
The monoline insurance companies. Most investors that purchased the securities also insured the investment. However, these companies only did 1 (or 2) thing(s). The one being insuring subprime mortgage securities and the second was insuring public debt issuances (such as cities).
The damn people that took out the mortgages. Somehow these “victims” always escape blame.[/quote]
Government inflating the money supply which leads to massive inflation.
It is just that nobody calls it that when the prices of shares and real estate rise.
Without it, those, bubbles could not have happened.
[quote]orion wrote:
Ruggerlife wrote:
This is one situation where I’m all for equality, everyone is fuckin’ responsible for this mess.
The two others I didn’t see listed (sorry if I missed them) are;
The monoline insurance companies. Most investors that purchased the securities also insured the investment. However, these companies only did 1 (or 2) thing(s). The one being insuring subprime mortgage securities and the second was insuring public debt issuances (such as cities).
The damn people that took out the mortgages. Somehow these “victims” always escape blame.
Government inflating the money supply which leads to massive inflation.
It is just that nobody calls it that when the prices of shares and real estate rise.
Without it, those, bubbles could not have happened.
[/quote]
Bullshit, sparky. Go do a little research on this. How about you start with the year 1637, and then try to defend your drivel here.
John McCain on 60minutes right now, just said he wants to fire the head of the SEC. When asked who would be the replacement, he answers, “Andrew Cuomo”
[quote]Gambit_Lost wrote:
John McCain on 60minutes right now, just said he wants to fire the head of the SEC. When asked who would be the replacement, he answers, “Andrew Cuomo”
Pelley: I’m curious. If you wanna fire Chris Cox, the chairman of the SEC, who would you replace him with?
McCain: This may sound a little unusual, but I’ve admired Andrew Cuomo. I think he is somebody who could restore some credibility, lend some bipartisanship to this effort.
Pelley: He’s a Democrat.
McCain: Oh, yes.
Pelley: He served in the cabinet of President Clinton.
McCain: Yes. And he did a good job. And he has respect. And he has prestige.
McCain said that he would be looking for the best people to do the job.
Maybe he feels he is the best for the job, despite their party affiliation.
It would be interesting to know who he would pick for Secretary of State and of Defense.
(That reminds me; when Rumsfeld said he was getting away and was going to play with his grandkids; he wasn’t kidding! Any one seen ANYTHING about him?)
[quote]Gambit_Lost wrote:
Pelley: I’m curious. If you wanna fire Chris Cox, the chairman of the SEC, who would you replace him with?
McCain: This may sound a little unusual, but I’ve admired Andrew Cuomo. I think he is somebody who could restore some credibility, lend some bipartisanship to this effort.
Pelley: He’s a Democrat.
McCain: Oh, yes.
Pelley: He served in the cabinet of President Clinton.
McCain: Yes. And he did a good job. And he has respect. And he has prestige.
I can only hope that he was just pandering to the conservative dems.
Andrew Cuomo is the architect of the subprime goat screw that bears the brunt of the responsibility for the current condition of the financial markets.
[quote]rainjack wrote:
Bullshit, sparky. Go do a little research on this. How about you start with the year 1637, and then try to defend your drivel here.
[/quote]
Ah yes, the “bullshit” argument followed by random dates and misinformation with no counter argument. A fine politician you would make.
To that I say BULLSHIT, remember 1555 and then try and defend your drivel.
[quote]LIFTICVSMAXIMVS wrote:
rainjack wrote:
Bullshit, sparky. Go do a little research on this. How about you start with the year 1637, and then try to defend your drivel here.
Ah yes, the “bullshit” argument followed by random dates and misinformation with no counter argument. A fine politician you would make.
To that I say BULLSHIT, remember 1555 and then try and defend your drivel.[/quote]
1637 is hardly a random date, if you know anything at all about market bubbles.
You evidently do not.
Thanks for playing. Come back when you actually know what the fuck you are talking about.
[quote]rainjack wrote:
orion wrote:
Ruggerlife wrote:
This is one situation where I’m all for equality, everyone is fuckin’ responsible for this mess.
The two others I didn’t see listed (sorry if I missed them) are;
The monoline insurance companies. Most investors that purchased the securities also insured the investment. However, these companies only did 1 (or 2) thing(s). The one being insuring subprime mortgage securities and the second was insuring public debt issuances (such as cities).
The damn people that took out the mortgages. Somehow these “victims” always escape blame.
Government inflating the money supply which leads to massive inflation.
It is just that nobody calls it that when the prices of shares and real estate rise.
Without it, those, bubbles could not have happened.
Bullshit, sparky. Go do a little research on this. How about you start with the year 1637, and then try to defend your drivel here.
[/quote]
Aw sweet.
You do not know anything about that “bubble”, not even that it was one.
We know however that the Fed has tripled the money supply in the last 30 years.
Where do you think that money went?
Not the part that was sucked of the market by Japan and China and that will drown you in inflation when it comes back to the US, oh no, just the rest of it that was lent to American institutional investors?
[quote]LIFTICVSMAXIMVS wrote:
rainjack wrote:
Bullshit, sparky. Go do a little research on this. How about you start with the year 1637, and then try to defend your drivel here.
Ah yes, the “bullshit” argument followed by random dates and misinformation with no counter argument. A fine politician you would make.
To that I say BULLSHIT, remember 1555 and then try and defend your drivel.[/quote]
That is the year the tulip “bubble” burst.
Apparently he does not know his history too well, otherwise he´d know about the Silver Train and how that inflation of the money supply led to massive inflation.