homeGeek CultureWebstoreeCards!Forums!Joy of Tech!AY2K!webcam

The Geek Culture Forums


Post New Topic  New Poll  Post A Reply
my profile | directory login | | search | faq | forum home
  next oldest topic   next newest topic
» The Geek Culture Forums   » News, Reviews, Views!   » Politics/Religion/Current Affairs   » How did we get here? (Page 1)

 - UBBFriend: Email this page to someone!  
This topic comprises 2 pages: 1  2 
 
Author Topic: How did we get here?
Callipygous
BlabberMouth, a Blabber Odyssey
Member # 2071

Member Rated:
4
Icon 1 posted October 08, 2008 04:04      Profile for Callipygous     Send New Private Message       Edit/Delete Post   Reply With Quote 
Now we have to try to keep the entire world financial system from collapsing by the application of huge amounts of government cash, and the entire global output of duct tape [Big Grin] . I don't know how much you are going to have to pay for this personally, but in the UK the average cost is estimated to be in the region of £1,700 per taxpayer. I understand that however unpleasant, it is necessary, but soon, and certainly by the time of the inauguration of the new President, as well as trying to dig ourselves out of recession, we will have to decide how it is we got here, in order to prevent it happening again. If McCain becomes president the answers to both these problems will most likely involve buckets of sand and putting our ideologically pure heads inside them, but if as seems more likely right now, Obama becomes president, the debate should be more open.

The conventional arguments are made by the eminent economist Joseph Stiglitz in this piece for Vanity Fair. The arguments on the right, first aired in these forums by Chesty, and initially dismissed by myself, are put quite compellingly, and in some detail in this Spectator article, and this Washington Post opinion piece. All these links were gleaned from Justin Webb's excellent BBC blog.

I would be interested to hear, (especially from Yayawoman, our resident economics geek), what you make of these different views.

--------------------
"Knowledge is Power. France is Bacon" - Milton

Posts: 2922 | From: Brighton - UK | Registered: Mar 2003  |  IP: Logged
spungo
BlabberMouth, a Blabber Odyssey
Member # 1089

Member Rated:
4
Icon 1 posted October 08, 2008 05:01      Profile for spungo     Send New Private Message       Edit/Delete Post   Reply With Quote 
Couldn't the problem be prevented by a federally-mandated full-traceability of debt? That is, any debt transactions that occur must be accompanied by a full account of its history, right from the initial credit outlay, so anyone down the line can trace it's origin right back to start -- right to the person(s) on whom the entire chain is (as it has been shown) somewhat critically dependent. This means that financial institutions know just what they're buying, and know what they hold at any point in time. I know this may require some paperwork, but that's a small price.

--------------------
Shameless plug. (Please forgive me.)

Posts: 6520 | From: Noba Scoba | Registered: Jan 2002  |  IP: Logged
TheMoMan
BlabberMouth, a Blabber Odyssey
Member # 1659

Member Rated:
4
Icon 1 posted October 08, 2008 05:08      Profile for TheMoMan         Edit/Delete Post   Reply With Quote 
________________ Callipygous __ The major problem was and still is greed.

The ink on the check to AIG was not even dry and they all go to a spa resort, on the American Taxpayer.

Is it time for a world wide revolution?

The posters on this forum played by the rules and these suits THE HIGH ROLLERS Cleaned out our accounts, I do not have five or ten years for my 401K to recover! I think that any person that got a golden parachute should have it recalled, or taxed until it is gone.

Leona Helmsley once said "little people pay taxes".

--------------------
If it don't glow it ain't Ham Radio

Posts: 5456 | From: Just South of the Huron National Forest, in the water shed of the Rifle River | Registered: Sep 2002  |  IP: Logged
Ashitaka

SuperFan!
Member # 4924

Member Rated:
4
Icon 1 posted October 08, 2008 08:44      Profile for Ashitaka     Send New Private Message       Edit/Delete Post   Reply With Quote 
Moman, I have heard an interesting article on this expensive vacation, that it will actually earn the company money. The people who went were from a different division then the one that bankrupt the company.

The argument is right now, all the talent at the company, who thought they were in secure jobs are now trying to decide if they should leave teh company. this vacation was to prevent this. NOw you are sying, who in thier right mind would quite a job to try to find a new one in the current economic crisis. The fact is, the people who went on this retreat, could probably find a job anywhere at anytime. These are workers are the companies best asset (now that they don't have much more money). If these people left, there would be no problem to refill the positions, but they would lose talent ans expirience from a division that can actually make money.

--------------------
"If they're not gonna make a distinction between Muslims and violent extremists, then why should I take the time to distinguish between decent, fearful white people and racists?"

-Assif Mandvi

Posts: 3080 | From: Switzerland | Registered: Feb 2006  |  IP: Logged
GrumpySteen

Solid Nitrozanium SuperFan
Member # 170

Icon 1 posted October 08, 2008 09:38      Profile for GrumpySteen     Send New Private Message       Edit/Delete Post   Reply With Quote 
I find myself in disagreement with some points in each of the articles and in agreement with others. This comes as no surprise because the mess is very complex and in any given set of talking points, there are likely to be ones that anyone will agree with.

Everyone agrees that greed is the root cause, but greed isn't something that can be regulated or banned, so everyone tries to find other causes which we can control.

The author of the first article offers the most balanced view, I think, but that's mostly because he's all over the place pointing fingers at deregulation, tax cuts for the rich, the stock market, economic ideology and ... well, everyone. It's hard to be unbalanced when you blame everyone.

The second article places the blame entirely on the "Clinton's Democrats" (never mind that there were also Republicans in office during Clinton's presidency) for policies that attempted to drive up home ownership among minorities. I agree that the policies that were put in place failed in many ways, but I believe that the idea that home ownership would improve the situation for minorities is valid. I just think that the policies should have encouraged better education and opportunities to minorities to improve their economic situation and they would buy homes on their own.

Maybe it's just the style that the article is written in or the attempts to blame everyone except the financial institutions and the free market, but I found the second article kind of offensive. It seemed at some points like the author was trying to blame minorities for the sub-prime lending mess in addition to the government.

The third article is a rehash of the rather pointless argument that deregulation can't possibly be the problem because some organizations that were regulated bought up the toxic mortgages and uses isolated cases to 'prove' the point. Never mind that unregulated organizations bought them as well and that many regulated ones did not.

One thing that stands out with these three articles and virtually every article I've seen, in fact, is that they don't look back far enough for the source of this particular crisis.

Let's have a short, and admittedly incomplete, history lesson.

On October 29, 1929, the stock market imploded and, along with many other contributing factors which I won't detail for the sake of brevity, began a really crappy period of time that we call The Great Depression.

In the wake of the stock market crash, many policies were put in place including the Glass-Stegall act (the second one, actually) in 1933. This particular act, among other things, forced banks to act as either investment or commercial banks, but not both.

For those who don't understand, securities are traded by investment banks and mortgages are provided by commercial banks.

In simple terms, with the Glass-Stegall act in place, banks could not package mortgages into mortgage-backed securities and sell them on the market. Mortgages could still be sold, but were sold individually and there wasn't a market for mortgages that had been given to people who couldn't pay for them.

Banks lobbied heavily throughout the 80s and 90s for the Glass-Stegall act to be repealed and, in 1999, they got their wish.

As an aside, let me point out that the repeal of Glass-Stegall wasn't the cause of the current mess, but it was a fundamental change that enabled what has happened. Without the repeal, sub-prime mortgages could not have been grouped together into huge investments that were, as Warren Buffet so eloquently put it, "financial weapons of mass destruction."

There would have still been defaults on mortgages, but they would have hurt the lender who made the bad loans and encouraged them to not make bad loans.

Instead, the Clinton administration repealed the Glass-Stegall act, lenders started packaging loans into securities and selling them. In and of itself, that was not a bad thing, but it opened an opportunity and where there is an opportunity, the greedy and opportunistic will follow.

With loans being packaged into securities and sold off, the risk of a bad loan to the lender became virtually non-existent. Banks began knowingly making bad loans, packaging them into securities along with 'good' loans and selling them off (it's quite a bit more complex than that, but I'm trying to avoid writing a novel here). Adding to the problem, the 'good' loans were considered good only because the cost of real estate was going up and the owner could sell the property for enough to pay off the loan at any time.

The problem with all that was that nobody had the money to pay for anything when the market ran out of buyers and prices began dropping as people tried to sell off property before they defaulted. Much like the stock market at the beginning of 1929, almost everything had been bought on borrowed money with the assumption that it would be sold and the profits would pay off the debit. Just like Black Tuesday, however, nobody had the money to pay when the time came to pay up and it was already too late to avoid a crash.

I blame the repeal of the Glass-Stegall act as the fundamental cause of the real estate bubble and subsequent crash. This should not be confused with blaming deregulation in general, but I don't support complete deregulation either.

There are good regulations (yay for murder being illegal) and bad (DMCA). We need regulations because the greedy and opportunistic among us will quite happily ruin the world if it makes their own life more luxurious, yet we have to avoid over-regulation because it does stifle business. Finding the balance is a damned hard thing to do, but it's the only way that we will ever create stability.

... and because this is entirely too rational a post for me...

Yo' ugly and yo momma dresses you funny! [Razz]

*edit*
also... I fail at avoiding writing a novel. Damn. [Eek!]

--------------------
Worst. Celibate. Ever.

Posts: 6362 | From: Tennessee | Registered: Jan 2000  |  IP: Logged
garlicguy

Member # 3166

Member Rated:
5
Icon 1 posted October 08, 2008 17:35      Profile for garlicguy   Author's Homepage     Send New Private Message       Edit/Delete Post   Reply With Quote 
quote:
Originally posted by TheMoMan:


Is it time for a world wide revolution?


Only if you find current government behavior to be revolting.

Let me know. I'm game.

Posts: 3752 | From: Pluto, no matter what you call it, is still my home. | Registered: Dec 2004  |  IP: Logged
Xanthine

Solid Nitrozanium SuperFan!
Member # 736

Member Rated:
5
Icon 1 posted October 08, 2008 18:39      Profile for Xanthine     Send New Private Message       Edit/Delete Post   Reply With Quote 
quote:
Originally posted by TheMoMan:

Is it time for a world wide revolution?

At your service comrade.

--------------------
And it's one, two, three / On the wrong side of the lee / What were you meant for? / What were you meant for?
- The Decemberists

Posts: 7667 | From: the lab | Registered: Mar 2001  |  IP: Logged
The Famous Druid

Gold Hearted SuperFan!
Member # 1769

Member Rated:
4
Icon 1 posted October 08, 2008 18:59      Profile for The Famous Druid     Send New Private Message       Edit/Delete Post   Reply With Quote 
<sings>
Shoot 'em all
shoot 'em all
the long and the short and the tall

Shoot all the tories
and shoot all the cops
shoot all the bosses and burn down their shops.

We'll be waving goodbye to them all
as we're lining them up at the wall
the only solution
is mass execution
so cheer up comrade shoot 'em all.
</sings>

Cue: ASM's "he finally admitted it" comment.

--------------------
If you watch 'The History Of NASA' backwards, it's about a space agency that has no manned spaceflight capability, then does low-orbit flights, then lands on the Moon.

Posts: 10448 | From: Melbourne, Australia | Registered: Oct 2002  |  IP: Logged
garlicguy

Member # 3166

Member Rated:
5
Icon 1 posted October 09, 2008 11:53      Profile for garlicguy   Author's Homepage     Send New Private Message       Edit/Delete Post   Reply With Quote 
quote:
Originally posted by The Famous Druid:
<sings>
Shoot 'em all
shoot 'em all
the long and the short and the tall

Shoot all the tories
and shoot all the cops
shoot all the bosses and burn down their shops.

We'll be waving goodbye to them all
as we're lining them up at the wall
the only solution
is mass execution
so cheer up comrade shoot 'em all.
</sings>


If you're not going to copyright this Druid, it's going to be all over the web by tomorrow night.

I'll see to that...

Posts: 3752 | From: Pluto, no matter what you call it, is still my home. | Registered: Dec 2004  |  IP: Logged
The Famous Druid

Gold Hearted SuperFan!
Member # 1769

Member Rated:
4
Icon 1 posted October 09, 2008 13:02      Profile for The Famous Druid     Send New Private Message       Edit/Delete Post   Reply With Quote 
quote:
Originally posted by garlicguy:
If you're not going to copyright this Druid, it's going to be all over the web by tomorrow night.

I'll see to that...

Can't claim the copyright I'm afraid, it's something I remember from my university days, some guys did a very amusing piss-take of the radical lefties on campus.

--------------------
If you watch 'The History Of NASA' backwards, it's about a space agency that has no manned spaceflight capability, then does low-orbit flights, then lands on the Moon.

Posts: 10448 | From: Melbourne, Australia | Registered: Oct 2002  |  IP: Logged
YaYawoman

Solid Nitrozanium SuperFan!
Member # 4505

Member Rated:
5
Icon 1 posted October 09, 2008 14:32      Profile for YaYawoman     Send New Private Message       Edit/Delete Post   Reply With Quote 
Hey there calli

I have not had access for a few days to a computer and i have a midterm today so at thsi time i have no time to read the articles, but I will later this evening and post my $.02 later, for whatever it is really worth. Grumpysteen made very good points about the glass-steagall act.

Posts: 765 | From: virginia | Registered: Oct 2005  |  IP: Logged
YaYawoman

Solid Nitrozanium SuperFan!
Member # 4505

Member Rated:
5
Icon 1 posted October 09, 2008 20:17      Profile for YaYawoman     Send New Private Message       Edit/Delete Post   Reply With Quote 
Ahh, here we go.(there will be many typos, sorry in advance) I am going to start off with a blog recommendation for anyone interested on further reading:

WWW.calculatedrisk.blogspot.com

I especially strong urge the Uber-nerd collection of posts by tanta, a co-blogger there. They are kind of like the primer for the financial instruments and actions discussed frequently relating to mortgages and the credit implosion.


I read two of the articles calli linked, the one by stiglitz in vanity fair and the article in the spectator.

The vanity fair article was more balanced, and tried to hit all the points of the liquidity and housing bubble, but it is hard to discuss everything that needs to be talked about in a magazine article, there is that much info out there. When this is done there will be many large books written about this fiasco.

The specator article did have a few good points to make, but alas I feel its topic is being used to stretch and cover the truth of what really happened. It sounds good, and I do admit that there were many excesses to the left, like the people trying to press charges about listings including the descriptor "master bedroom", but the ones responsible for this fiasco will whine and hide behind it.

hehehe, yaya's history of the implosion and the events leading to it would certainly take up more space than snaggy would prolly like, not to mention being very loooon for the ones reading it, so I will limit myself to two topics (with the understanding that if anyone asks my opinion on anything else to do with this topic ill be more than happy to spout on n on n on)

Topic 1: the issue raised in the spectator article regarding the cra and it's impact on lending

Topic 2: Who I consider the most responsible

Ok on to community reinvesting, subprime, and minorities. When I have popped up on previous threads bashing the whole subprime meme, in a way i was attacking this line of reasoning. Too many financial and news outlets have been using subprime very sloppily. some have been using it to redirect peoples attention from the larger lending and solvency issues by trying to re-label it in people's heads as something affecting only a portion of mortgages, you know,'them', not us, those subprimers over there. "contained to subprime" fell out of Bernankes lips how many times? It has also been twisted into a code, a shorthand regarding anyone black, brown, immigran and or poor and lower class. It has become a way to look down at financial losers, feel superior, and take comfort from the fact that it wil never ever happen to us, friends family or neighborhood cuz gosh n golly and praise be we are not subprime. The bankers, crooks and fraudsters encourage both to take root. It diverts attention from them.

Before CRA there WAS descrimination in lending, there WAS redlining, there WERE issues that needed to be fixed, terminated, cleaned up. It was much easier for a loan originator to allow personal bias and prejudice to influence lending decisions. CRA was a logical regulatory response to such issues. There were abuses, yes, and pushing the envelope with it but taken as a whole i think this is just another whine for the fraudsters to hide behind, another target to throw out and divert attention, divide the populace and hide the dirt.

Banks could have beefed up the back-room operations people in response to foolish and stupid accusations of non-compliance with the CRA. detailed and documented all reasoning for each choice made, they did not have to toss out "ability to repay" with the bathwater. That was just laziness and cheapness. many financial institutions laid off and downsized many of the most capable and highly trained back office personnel in order to make the balance sheet look better for wall st and also coinicidentally to fluff up profits, without the inner watch dogs easier to make stranger and stranger loans.
They tossed out prudent lending standards and used CRA as a snivelly cowardly cover.

I would like to emphasize right here right now that democrats, republicans, rotarians, pastafarians and alien anal-probers are ALL responsible. This was truly bipartisan. All this finger pointing between left and right, dem and repub is just a smokescreen, a dodge, a way to distract the public from the real questions, the real guilt, the real thiefs that profited and are still profiting.

Mortgage lending went from stodgy to dodgy in a blink of an eye.

My numero uno most responsible for the mess is Mr. bubbles himself Alan Greenspan. He lowered the interest rates and kept them very very low for too long in order to blow a real estate bubble, to reinflate and put off a recession from the tech burst. Well, he did, but remember this tidbit my fellow posters. When you delay a recession, a larger dislocation happens. welcome to the implosion.

Anyways, i really can go on and on and ther are many different threads to pull on to unravel this topic but i wont. if someone has a question about other parts of this ill answer, but time to cut this post off. hahahaha. They keep saying over and over it is a liquidity issue, but it is not. it is alllll about solvency now boys and girls.

Posts: 765 | From: virginia | Registered: Oct 2005  |  IP: Logged
TheMoMan
BlabberMouth, a Blabber Odyssey
Member # 1659

Member Rated:
4
Icon 1 posted October 10, 2008 04:06      Profile for TheMoMan         Edit/Delete Post   Reply With Quote 
__________________ I have to agree with YaYawoman

It appears that those clowns we send to Washington lined their pockets with money from the bankers so they could sell us all down the river. The second link shows how it became repealed, I know Wiki is not the final arbitrator but it does show that WJC was faced with a Veto proof bill to sign.

http://en.wikipedia.org/wiki/Glass-Steagall_Act

http://en.wikipedia.org/wiki/Gramm-Leach-Bliley_Act

We send them to Washington to become corrupt and line their own pockets.

--------------------
If it don't glow it ain't Ham Radio

Posts: 5456 | From: Just South of the Huron National Forest, in the water shed of the Rifle River | Registered: Sep 2002  |  IP: Logged
TheMoMan
BlabberMouth, a Blabber Odyssey
Member # 1659

Member Rated:
4
Icon 1 posted October 10, 2008 07:26      Profile for TheMoMan         Edit/Delete Post   Reply With Quote 
_________________ As a foot note to myself this came in an E-mail just after the previous post. I guess it applies to anyone with an elected government, but is aimed at Americans.

I am not sending this out to anyone to get an argument. These are plain facts, plainly stated. Please do not reply to me. If you are willing, send this message on to anyone in your address book with an open mind and a desire to do what's best for our country.

Worthy of your time and attention regardless of your Party Affiliation

545 PEOPLE
By Charlie Reese

Politicians are the only people in the world who create problems and then campaign against them.

Have you ever wondered why, if both the Democrats and the Republicans are against deficits, WHY do we have deficits?

Have you ever wondered why, if all the politicians are against inflation and high taxes, WHY do we have inflation and high taxes?

You and I don't propose a federal budget. The president does.

You and I don't have the Constitutional authority to vote on appropriations. The House of Representatives does.

You and I don't write the tax code, Congress does.

You and I don't set fiscal policy, Congress does.

You and I don't control monetary policy, the Federal Reserve Bank does.

One hundred senators, 435 congressmen, one president, and nine Supreme Court justices 545 human beings out of the 300 million are directly, legally, morally, and individually responsible for the domestic problems that plague this country.

I excluded the members of the Federal Reserve Board because that problem was created by the Congress. In 1913, Congress delegated its Constitutional duty to provide a sound currency to a federally chartered, but private, central bank.

I excluded all the special interests and lobbyists for a sound reason. They have no legal authority. They have no ability to coerce a senator, a congressman, or a president to do one cotton-picking thing. I don't care if they offer a politician $1 million dollars in cash. The politician has the power to accept or reject it. No matter what the lobbyist promises, it is the legislator's responsibility to determine how he votes.

Those 545 human beings spend much of their energy convincing you that what they did is not their fault. They cooperate in this common con regardless of party.

What separates a politician from a normal human being is an excessive amount of gall. No normal human being would have the gall of a Speaker, who stood up and criticized the President for creating deficits. The president can only propose a budget. He cannot force the Congress to accept it.

The Constitution, which is the supreme law of the land, gives sole responsibility to the House of Representatives for originating and approving appropriations and taxes. Who is the speaker of the House? She is the leader of the majority party. She and fellow House members, not the president, can approve any budget they want. If the president vetoes it, they can pass it over his veto if they agree to.

It seems inconceivable to me that a nation of 300 million can not replace 545 people who stand convicted -- by present facts -- of incompetence and irresponsibility. I can't think of a single domestic problem that is not traceable directly to those 545 people. When you fully grasp the plain truth that 545 people exercise the power of the federal government, then it must follow that what exists is what they want to exist.

If the tax code is unfair, it's because they want it unfair.

If the budget is in the red, it's because they want it in the red.

If the Army & Marines are in IRAQ, it's because they want them in IRAQ.

If they do not receive social security but are on an elite retirement plan not available to the people, it's because they want it that way.

There are no insoluble government problems.

Do not let these 545 people shift the blame to bureaucrats, whom they hire and whose jobs they can abolish; to lobbyists, whose gifts and advice they can reject; to regulators, to whom they give the power to regulate and from whom they can take this power. Above all, do not let them con you into the belief that there exists disembodied mystical forces like 'the economy,' 'inflation,' or 'politics' that prevent them from doing what they take an oath to do.

Those 545 people, and they alone, are responsible.

They, and they alone, have the power.

They, and they alone, should be held accountable by the people who are their bosses provided the voters have the gumption to manage their own employees.

We should vote all of them out of office and clean up their mess!

Charlie Reese is a former columnist of the Orlando Sentinel Newspaper.

What you do with this article now that you have read it is up to you, though you appear to have several choices.

1. You can send this to everyone in your address book, and hope they do something about it.

2. You can agree to vote against everyone that is currently in office, knowing that the process will take several years.

3. You can decide to run for office yourself and agree to do the job properly.

4. Lastly, you can sit back and do nothing, or re-elect the current bunch.

YOU DECIDE, BUT AT LEAST SEND IT TO EVERYONE IN YOUR ADDRESS BOOK, MAYBE SOMEONE IN THERE WILL DO SOMETHING ABOUT IT!

--------------------
If it don't glow it ain't Ham Radio

Posts: 5456 | From: Just South of the Huron National Forest, in the water shed of the Rifle River | Registered: Sep 2002  |  IP: Logged
PaidPhreak
Discontinued


Icon 1 posted October 10, 2008 13:30            Edit/Delete Post   Reply With Quote 
Yaya:

Speaking as someone who WAS employed at a large bank, and did see first hand what CRA compliance REAALY meant, it was much cheaper to toss out "ability to repay" than to face the harrasment that the local ganste^h^h^h^h^h^hminority group political bosses would bring.

Most of the bad loans made, while I worked at the bank, were in fact not mortgages but small business start up loans. For friends of "local community leaders". For some reason this bank did them all via their venture capital folks, not via the retail banking side (dunno why... that is a bit odd, no?)

Just looking at the legal bills invloved in fighting well organized yet unfounded non-compliance accusations could easily be a wash with writing off a quarter mil mortgage. Branches picketed, press conferences held accusing the bank of being racist, etc, etc, all factored in (saw it happen!) At least thats how things were in the mid to late 90's in one very large city in the north east, at one very large bank that I worked at.

It was little more than extortion. Plain and simple.

IP: Logged
Callipygous
BlabberMouth, a Blabber Odyssey
Member # 2071

Member Rated:
4
Icon 1 posted October 10, 2008 17:54      Profile for Callipygous     Send New Private Message       Edit/Delete Post   Reply With Quote 
Moman, I don't really like the self righteous tone of Mr Reese's remarks.

It's a truism that under a democracy you get the politicians you deserve.

Politicians would lie less if we didn't vote for the ones who promise solutions to intractable problems that none of us really understand.

Similarly the government would not run up a deficit if we didn't vote for politicians who promise the earth, while telling us we won't have to pay for it.

If we the electorate took more responsibility for trying to understand the difficulties, complexities and trade-offs in any political decision, we might be less inclined to vote for politicians telling us simple fairy stories, or confuse that with genuine leadership.

To say that the only thing that distinguishes politicians from the rest of us is gall is unfair. Certainly a successful politician needs a thick skin, and a certain amount of chutzpah, as itís a rough trade, but it is only that way because it's about stuff that matters, that people truly care about. Power does corrupt, and the compromises any politician must make to achieve anything useful, make it hard to keep the core of idealism that gives the job a meaning, but similarly there are very few people who would enter such a precarious profession, where most careers end in disappointment and relative failure, without a desire to make the world a better place, in addition to some personal ambition. In short I believe that those who dedicate a good portion of their lives to public service, in the main deserve, if not perhaps respect, at least some understanding, and that they have, on the whole, the same mixture of good and bad character traits as the rest of us.

I think that looking down on politicians is slightly childish. It's a necessary job that most of us would not want to do, but still we despise them for doing it.

--------------------
"Knowledge is Power. France is Bacon" - Milton

Posts: 2922 | From: Brighton - UK | Registered: Mar 2003  |  IP: Logged
TheMoMan
BlabberMouth, a Blabber Odyssey
Member # 1659

Member Rated:
4
Icon 1 posted October 10, 2008 18:34      Profile for TheMoMan         Edit/Delete Post   Reply With Quote 
__________________- Callipygous I would not want the politicians lot. That said I was put into a worse position, I was a Union Steward, the guy that the trouble makers called when they got caught doing bad things. Within the rules I always tried to make management and my represented workers stay within the rules. I sometimes felt like the madam at a house of ill repute. I once got a guy off not because he was not guilty (HE was) but because the Foreman did not follow the letter of the contract. So mister got off scott free thinks I am the best steward ever, only to be caught two weeks later for much the same offense. I helped the foreman this time make sure the charges stuck.

--------------------
If it don't glow it ain't Ham Radio

Posts: 5456 | From: Just South of the Huron National Forest, in the water shed of the Rifle River | Registered: Sep 2002  |  IP: Logged
ASM65816
SuperBlabberMouth!
Member # 712

Member Rated:
2
Icon 4 posted October 12, 2008 02:59      Profile for ASM65816   Author's Homepage     Send New Private Message       Edit/Delete Post   Reply With Quote 
quote:
October 08, 2008, 05:08
The major problem was and still is greed.

No, it was Socialist Agenda forced on an economy by the government. Banks were coerced into acting exactly opposite of fundamental "laws" of capitalism. "Subprime" is double-speak for "can't repay loan."

Let's imagine "the Greedy Subprime Banker"
quote:
Greedy Subprime Banker: We've only got a 50% chance that this person can repay a $200,000 loan. Let's make the loan!!!

Pencil Pusher: Shouldn't we loan the money to people with a 97% chance of repaying the loan? A 3% write-down for bad debt would leave us with some profits.

Greedy Subprime Banker: HELL NO. It's about VOLUME! You may lose money on ONE bad loan -- but when you make THOUSANDS OF BAD LOANS -- then it becomes REALLY profitable!

So in the interest of being "fair" -- GOVERNMENT REGULATIONS (see Community Reinvestment Act) "forced" banks to make loans that defied all reason.
 

quote:
October 08, 2008, 05:01
Couldn't the problem be prevented by a federally-mandated full-traceability of debt? That is, any debt transactions that occur must be accompanied by a full account of its history, right from the initial credit outlay, so anyone down the line can trace it's origin right back to start -- right to the person(s) on whom the entire chain is (as it has been shown) somewhat critically dependent.

ALL BAD DEBT _ORIGINATES_ FROM THE INDIVIDUALS (or companies) THAT FAILED TO REPAY LOANS.

Don't believe me? Run these numbers: 100% loans repaid on time; $0 write-downs (bad debt). Zero bad debt plus zero bad debt equals zero bad debt (even if the "liberals" and leftists disagree).

quote:
October 08, 2008, 09:38
In simple terms, with the Glass-Stegall act in place, banks could not package mortgages into mortgage-backed securities and sell them on the market.

Ok ... so what happens when good loans are "packaged" with good loans ... then packaged with other good loans?

Answer: The "package" (mortgage-backed security) is EQUAL TO THE SUM OF THE GOOD LOANS (and should "any" loan fail, title to the property goes to the holder of the security and money is "recovered").

The following probably gives one of the best explanations how there was "nothing" actually backing the "market" (except they left out the part about WHEN bad loans really started to grow - Clinton gets credit for that).

CSPAN Bailout Coverage (SNL)
http://www.nbc.com/Saturday_Night_Live/video/clips/c-span-bailout/727521/

(sorry ... you have to watch a commercial first)

Bottom line: Don't blame "Free Market."

--------------------
Once a proud programmer of Apple II's, he now spends his days and nights in cheap dives fraternizing with exotic dancers....

Posts: 1035 | From: Third rock from sun. | Registered: Mar 2001  |  IP: Logged
The Famous Druid

Gold Hearted SuperFan!
Member # 1769

Member Rated:
4
Icon 1 posted October 12, 2008 03:03      Profile for The Famous Druid     Send New Private Message       Edit/Delete Post   Reply With Quote 
DRINK!

--------------------
If you watch 'The History Of NASA' backwards, it's about a space agency that has no manned spaceflight capability, then does low-orbit flights, then lands on the Moon.

Posts: 10448 | From: Melbourne, Australia | Registered: Oct 2002  |  IP: Logged
TheMoMan
BlabberMouth, a Blabber Odyssey
Member # 1659

Member Rated:
4
Icon 1 posted October 12, 2008 09:14      Profile for TheMoMan         Edit/Delete Post   Reply With Quote 
____________________ I often wonder how people get to the assumptions they draw, and then I remembered they dream up their own circumstances. As we know these Fine "Gramm-Leach-Bliley Act" Liberals put this into law to enable the poor to buy over their heads.

--------------------
If it don't glow it ain't Ham Radio

Posts: 5456 | From: Just South of the Huron National Forest, in the water shed of the Rifle River | Registered: Sep 2002  |  IP: Logged
GrumpySteen

Solid Nitrozanium SuperFan
Member # 170

Icon 1 posted October 12, 2008 10:26      Profile for GrumpySteen     Send New Private Message       Edit/Delete Post   Reply With Quote 
ASM65816 blathered:
quote:
Greedy Subprime Banker: We've only got a 50% chance that this person can repay a $200,000 loan. Let's make the loan!!!

Pencil Pusher: Shouldn't we loan the money to people with a 97% chance of repaying the loan? A 3% write-down for bad debt would leave us with some profits.

Greedy Subprime Banker: Only if we keep loans, Pencil Pusher. What we're actually going to do is package the bad loans together with some good ones and sell them to a third party for 80% of the sum total payoff value. They'll buy because they won't be looking at the individual loans and 80% leaves room for some to default while the package remains profitable as a whole.

Greedy Subprime Banker: A $200k loan that is bound to default still has a repayment value of around $450k and can be sold for $360k, you see. We might not make as much profit off it it as a regular loan that we keep, but it's $160k of profit that's risk free for us and it pays off instantly instead of over a period of 30 years. Why would we turn that down? Now go approve those loans before I fire you, Pencil Pusher!

Pencil Pusher: Yessir Mr. Greedy Subprime Banker!

I like making up dialog. I think we should convert all of these discussions to play format. Next time I'll add directives like "Greedy Banker removes his hat and scratches his family jewels while looking thoughtful."

Anyway

ASM also wrote:
Ok ... so what happens when good loans are "packaged" with good loans ... then packaged with other good loans?

Read up on the economic collapse in the 30s and you'll understand why this sort of repackaging of investments was prohibited. It not only makes it profitable to make bad investments and then sell them off bundled with good investments, but the profit is instantaneous.

Capitalism is not moral and it will inevitably take the most profitable investment strategy. If a bad investment pays off, bad investments will be made.

What is happening now is EXACTLY what was observed in the 30s and nobody ever wanted it to happen again, so they prohibited it. Once that prohibition was repealed, it took all of nine years to create the suprime market bubble that burst and triggered the ongoing collapse of our economy.

Was the subprime market the only cause of our current mess? No. There are lots of other issues with our economy. It was, however, the proverbial straw that broke the camel's back. Except it was more like a three ton bale of hay that completely crushed the already shaky camel.

--------------------
Worst. Celibate. Ever.

Posts: 6362 | From: Tennessee | Registered: Jan 2000  |  IP: Logged
BooBooKitty

Solid Nitrozanium SuperFan!
Member # 5566

Member Rated:
5
Icon 1 posted October 12, 2008 10:33      Profile for BooBooKitty     Send New Private Message       Edit/Delete Post   Reply With Quote 
Just the title of this thread makes me think of that song by the Talking Heads and this trailer for W.

http://vids.myspace.com/index.cfm?fuseaction=vids.individual&VideoID=43468095

Posts: 796 | From: Montreal, Canada | Registered: Aug 2006  |  IP: Logged
PaidPhreak
Discontinued


Icon 1 posted October 13, 2008 07:01            Edit/Delete Post   Reply With Quote 
Ok, yes folks, the greedy bankers are responsible for writing the bad loans and repackaging them. However, it was, at least in part, the CRA that forced them to write bad loans (and I will repeat, it was not just mortgages!)

You cannot fault them for coming up with the idea to repackage these toxic notes and sell them off.

The banks never wanted to write these loans to start with. The CRA more or less forced them to. Or more accurately, "political activists" (read: extortionists) used the CRA to force banks to write bad loans. (Basically fraud run by organized crime, with the banks paying them off as the cost of doing business. I could write a lot more about that phenom, but i'll save that for another post)

The resulting lowered credit standards created a demand for goods (ie: housing) that were purchased with these newly available loans. Basic laws of supply and demand apply here: prices went up since there were more buyers.

(not just easy credit was responsible - HUD's shift from emphasis on LIPH to section 8 also contributed in a VERY VERY big way to driving real estate prices up - went rents are not driven by fair market but dictated by government in such a way that they only go up, and never down, driving up the market prices for investment rental properties while driving down the actual intrinsic value of the properties In non-urban areas this drove the housing bubble much more than the CRA and freddie and fannie by themselves would have -- enough on that -- that topic is big enough to warrant a seperate post)

Prices were up, but the banks STILL had to write a certain amount of notes for each community. So when all of a sudden property prices jump 100% in a poor neighboorhood, the bank simply has to write even worse loans.

In many cases, the banks could not find enough people willing to borrow to stay in compliance with the CRA! Banks had to hire a "community outreach" non-profit corps to hunt down borrowers for them!

IP: Logged
spungo
BlabberMouth, a Blabber Odyssey
Member # 1089

Member Rated:
4
Icon 1 posted October 13, 2008 07:36      Profile for spungo     Send New Private Message       Edit/Delete Post   Reply With Quote 
quote:
Originally posted by BooBooKitty:
Just the title of this thread makes me think of that song by the Talking Heads and this trailer for W.

http://vids.myspace.com/index.cfm?fuseaction=vids.individual&VideoID=43468095

Same as it ever was. [Wink]

There's a bit in the film "Secret Window" where Johnny Depp is in his old driveway watching his ex with her new man, and he says to himself "This is not my beautiful house. This is not my beautiful wife." Always makes me grin. [Smile]

--------------------
Shameless plug. (Please forgive me.)

Posts: 6520 | From: Noba Scoba | Registered: Jan 2002  |  IP: Logged
Callipygous
BlabberMouth, a Blabber Odyssey
Member # 2071

Member Rated:
4
Icon 1 posted October 13, 2008 07:57      Profile for Callipygous     Send New Private Message       Edit/Delete Post   Reply With Quote 
When I read BBK's post Spungo, the songs that I first thought of were "We're on the road to nowhere", and "Burning down the house".

Anyway nice to be reminded of a great band.

--------------------
"Knowledge is Power. France is Bacon" - Milton

Posts: 2922 | From: Brighton - UK | Registered: Mar 2003  |  IP: Logged


All times are Eastern Time
This topic comprises 2 pages: 1  2 
 
Post New Topic  New Poll  Post A Reply Close Topic    Move Topic    Delete Topic next oldest topic   next newest topic
 - Printer-friendly view of this topic
Hop To:

Contact Us | Geek Culture Home Page

© 2014 Geek Cultureģ All Rights Reserved.

Powered by Infopop Corporation
UBB.classicTM 6.4.0


homeGeek CultureWebstoreeCards!Forums!Joy of Tech!AY2K!webcam