The bailout won't stop the credit crunch, it can't possibly address the problem. The underlying economic problem is the reliance on financials. Without production of tangeble goods there is no economy, there is only gambling.
America's bail out
- Thread starter B00Mer
- Start date
Without production of tangeble goods there is no economy --- darkbeaver.
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Wrong !
Production of Tangible goods is no safety valve under a credit crunch.
Even when manufacturing and farming comprised the dominant share of the market just before the DEPRESSION the economy still went bad when banks stopped lending, when credit terms tightened, when the money supply contracted.
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Wrong !
Production of Tangible goods is no safety valve under a credit crunch.
Even when manufacturing and farming comprised the dominant share of the market just before the DEPRESSION the economy still went bad when banks stopped lending, when credit terms tightened, when the money supply contracted.
I agree because the created liquidity will be sent off shore. That is the elephant in the room right now. It isn't the world pulling out of the US it's the Americans own elite pulling out and outsourcing. Until the US can get corporations once again investing in the US any liquidity is going to be used up as the elite flee to safer havens.
Without production of tangeble goods there is no economy --- darkbeaver.
------------------------------------------------------------------------------------------------
Wrong !
Production of Tangible goods is no safety valve under a credit crunch.
Even when manufacturing and farming comprised the dominant share of the market just before the DEPRESSION the economy still went bad when banks stopped lending, when credit terms tightened, when the money supply contracted.
Yes I know that Jim but without the industrial base there is no sound economy. Certainly your not suggesting that the production economy that was left functioning after 1929 did nothing to aliviate the pain. What I'm trying to emphasize is the overdependence on the unregulated financial sector that caused the depression both then and now and that is abundantly clear in both cases. What is also clear is that the destruction of the Western industrial base over the last thirty years has made sure that the recovery will not occur untill it is rebuilt and that my friend will take a long time and superhuman effort on the part of the citizens of the western democracys.This fact alone will compell us to the quick fix of global war. That is if we allow the ruling classes to remain in power.
Yes I know that Jim but without the industrial base there is no sound economy.
---------------------------------Darkbeaver------------------------------------------------------------
You ever hear of that book, "Who moved my cheese?"
It discusses a well-known human tendency to stay in a holding pattern, the repeating of same things everyday. The need for sameness is equated as comfort, as stability.
But doing the same thing results in atrophy, and so as 1st world economies we must reach for the vanguard moment of advancing technology.
The history of the Textile Industry is a great example of a manufacturing item that keeps going to the cheapest labor market. From England in the 1700s to the North America in the 1800s, to different countries in Asia, then Central America.
I'll grant you that as a national security concern a subsidized manufacturing base might be necessary.
---------------------------------Darkbeaver------------------------------------------------------------
You ever hear of that book, "Who moved my cheese?"
It discusses a well-known human tendency to stay in a holding pattern, the repeating of same things everyday. The need for sameness is equated as comfort, as stability.
But doing the same thing results in atrophy, and so as 1st world economies we must reach for the vanguard moment of advancing technology.
The history of the Textile Industry is a great example of a manufacturing item that keeps going to the cheapest labor market. From England in the 1700s to the North America in the 1800s, to different countries in Asia, then Central America.
I'll grant you that as a national security concern a subsidized manufacturing base might be necessary.
A: make the increased payments, which many can't regardless of keeping their jobs or not since their income hasn't increased enough to afford the payments at a higher interest rate.
OR
B: Sell the house before the interest rate adjusted. If you have a 7 year ARM, and you can sell in 6 years, there is no problem. You'll never have to make the higher payments that will come when the rate adjusts.... oh, unless you can't sell your place because housing values decrease.
-----------------------------------------------Tracy-------------------------------------------------
Regarding your choice A:
I recall a mortage officer explaining that as time goes by I will be earning more over the years and so being too afraid to take a tight budget now may hurt me down the road because I didn't take the chance, the leap of faith.
And since I can actually afford it despite a tight budget I should do this rather than incur the cost of doing nothing or renting.
As it turned out he was right on. That was the early 90s.
My income skyrocketed making my payments seem easier each year.
It all depends. Such advice was legitimate then.
Regarding your choice B:
How can anyone predict a lowering of house values?
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These decisions all come down to taking a chance. Life is a chance. We live in risk.
We have to decide the cost of doing nothing or doing something.
Not even the experts have a crystal ball.
I don't think it is as simple as pure greed or uncontrollable impulses.
OR
B: Sell the house before the interest rate adjusted. If you have a 7 year ARM, and you can sell in 6 years, there is no problem. You'll never have to make the higher payments that will come when the rate adjusts.... oh, unless you can't sell your place because housing values decrease.
-----------------------------------------------Tracy-------------------------------------------------
Regarding your choice A:
I recall a mortage officer explaining that as time goes by I will be earning more over the years and so being too afraid to take a tight budget now may hurt me down the road because I didn't take the chance, the leap of faith.
And since I can actually afford it despite a tight budget I should do this rather than incur the cost of doing nothing or renting.
As it turned out he was right on. That was the early 90s.
My income skyrocketed making my payments seem easier each year.
It all depends. Such advice was legitimate then.
Regarding your choice B:
How can anyone predict a lowering of house values?
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These decisions all come down to taking a chance. Life is a chance. We live in risk.
We have to decide the cost of doing nothing or doing something.
Not even the experts have a crystal ball.
I don't think it is as simple as pure greed or uncontrollable impulses.
"But doing the same thing results in atrophy, and so as 1st world economies we must reach for the vanguard moment of advancing technology."
As is the case of this present crisis precipatated by the ssame thing as the last crisis and every economic crisis of the past hundred plus years. Ist world economys are not necessarily thought of as the hopelessly bankrupt, that adjustment in thinking will be painful in of itself. This vangaurd moment of advancing technology will require and industrial base preferably in the northern and western hemisphere I assume.That national security industrial base is a vital necessity in maintenance of a nation and has been understood in those terms since Krupp. The rule is if you don't produce you don't eat. Nobody argues with that longer than it takes to get hungry even birds obey the tinyest mouse knows the laws, it's therefore interesting to learn why that infrastructure was allowed to deteriorate to an inoperable level. Bankers you got to watch them like hawks just turn your back for a few seconds and they're off with your wallet or the damn chickens.
A highly informative video that traced the cause of our current crisis that had its roots planted 12 years ago.
Great video Boomer.
It moves pretty fast and I'm sure misses a lot of details. For example how under a Republican controlled government such a bad policy could continue if they really didn't like it; still definite food for thought.
It moves pretty fast and I'm sure misses a lot of details. For example how under a Republican controlled government such a bad policy could continue if they really didn't like it; still definite food for thought.
There's risk and then there's RISK.
Did your payments actually change? That's the issue. It's one thing to have a steady payment so that when your income increases the payment stays the same. Like you say, it may be tight in the beginning, but it will get easier. But, that's only if the payment amount remains constant. Would you have taken a 30 year loan knowing your payment amount would change significantly in 5 years? For people who got ARMs, the payments were never guaranteed to stay the same. It's when the payments changed that people couldn't afford them anymore even if their income was the same. That's where I think greed comes in. They couldn't afford the homes at the interest rate offered on fixed 30 year loans, so they took the risk of getting an ARM. People aren't just being foreclosed on in record numbers because all of a sudden everyone lost their jobs. It's happening because their payments have adjusted and they can't afford the new payments. They can't refinance to another low rate ARM either because housing values have gone down. They can't sell for the same reason. I'm not saying they should be able to predict exactly when real estate values would decrease, but they should know it's a possibility at any time.
I enjoyed the music, I didn't know this old machine had good sound, I think I'll get a headset.
Very fast but informative partisan flick I thought. Obama's a monster, McCain's a monster the whole system is full of monsters.
I agree darkbeaver, both are to blame for this... but watch this video.
Democrats in their own words Covering up the Fannie Mae, Freddie Mac Scam that caused our Economic Crisis.
The video isn't completely accurate. I know, for example, that Clinton tried to real in the sub prime mess. Maybe he made it worse too, I don't know, but he did try and stop it.
It also doesn't mention that McCain's senior campaign manager made his fortune off of Fannie Mae and Freddie Mac. It fails to mention why, if the Republicans were so against it, they failed to do anything (except make a profit) about it while they had Congress and the Presidency.
Still, it isn't all bad.
It really demonstrates how corrupt the US system is; one of the worst in the world IMO.
The bail out only delays the inevitable economic outcome of an unregulated banking system. The solution was regulation. Now its too late and a price has to be paid, sooner or later. The bail out is just throwing good money after bad. A year from now the banks will be in the same situation and the US government will be bankrupt.
The Money Masters is a must see, long but most of you would realize there is really nothing new going on here after watching it.
The US of A lost control of its monetary system on December 23rd 1913 when most of congress was at home for the holidays, its not a conspiracy theory, just a fact.
Moderator's Edit: Link removed.
The US of A lost control of its monetary system on December 23rd 1913 when most of congress was at home for the holidays, its not a conspiracy theory, just a fact.
Moderator's Edit: Link removed.
Last edited by a moderator:
Middle and lower income folk go broke ... or go to jail. Why should rich rip-off artists be rewarded? Any bail-out has to come with consequences.
They couldn't afford the homes at the interest rate offered on fixed 30 year loans, so they took the risk of getting an ARM. People aren't just being foreclosed on in record numbers because all of a sudden everyone lost their jobs. It's happening because their payments have adjusted and they can't afford the new payments. They can't refinance to another low rate ARM either because housing values have gone down. They can't sell for the same reason. I'm not saying they should be able to predict exactly when real estate values would decrease, but they should know it's a possibility at any time.
-------------------------------------Tracy-------------------------------------------------------------
I'd like to know the percentage of why people defaulted:
1. Losing their jobs
2. An ARM that actually went up
I'd also like to know if ARMs actually went up, especially since interest rates have held steady or gone down.
And if ARMs went up, what percentage went up during the life of the loan ?
Anecdotal evidence locally? This really hit the Mexican families, who had pooled their resources sharing their home communal style to get ahead. I hated the prejudice against them. I applauded their will to try.
When the construction market tanked, there was quite a shakedown, quite a severe loss of jobs reverberating through all the industries related to construction.
-------------------------------------Tracy-------------------------------------------------------------
I'd like to know the percentage of why people defaulted:
1. Losing their jobs
2. An ARM that actually went up
I'd also like to know if ARMs actually went up, especially since interest rates have held steady or gone down.
And if ARMs went up, what percentage went up during the life of the loan ?
Anecdotal evidence locally? This really hit the Mexican families, who had pooled their resources sharing their home communal style to get ahead. I hated the prejudice against them. I applauded their will to try.
When the construction market tanked, there was quite a shakedown, quite a severe loss of jobs reverberating through all the industries related to construction.
I don't see why the average American tax payer should do anything to help the wall street brokers and big banks. They where all happy reaping the rewards of speculative trading and sub prime loans when it was going their way.
What it comes down to is they got themselves in this mess by using short term visions and strategies, bailing them out now wont change anything. Do you give a kid candy because he stole more candy? no... bailing them out will mean they will just continue on their set path, I for one couldn't care less if the world financial markets collapse. I have more important things to worry about.
What it comes down to is they got themselves in this mess by using short term visions and strategies, bailing them out now wont change anything. Do you give a kid candy because he stole more candy? no... bailing them out will mean they will just continue on their set path, I for one couldn't care less if the world financial markets collapse. I have more important things to worry about.
I don't see why the average American tax payer should do anything to help the wall street brokers and big banks.
----------------------------------------sensfan--------------------------------------------------------
Answer:
Any one of us who has worked in the last few years have 401k retirement funds and pension funds.
Half of working America and Canada has investments in these funds.
That's a lot of working people. In fact that's probably the entire middle class.
----------------------------------------sensfan--------------------------------------------------------
Answer:
Any one of us who has worked in the last few years have 401k retirement funds and pension funds.
Half of working America and Canada has investments in these funds.
That's a lot of working people. In fact that's probably the entire middle class.
Morning Jim. Is that really an answer, certainly you and the others have an interest in a stable market, however the speculators don't share that interest. I don't know how to protect your investment but I do know the US treasury commanded by Mr Paulson in concert with Mr Burnhackthee is certainly not going to do it. I think you need glasses again, the future is writ large on the wall. Why can't you see it, maybe the light is wrong? Stand farther back in front of the window. There now, can you see the words "conspiracy to commit fraud"?
Enough about ECONOGEDDON. How's fishing been or have you gotten any done? Today I'm planning to have Atlantic Stripped Wolffish for this evenings dinner, my chef tells me it's the best fish he's ever eaten and to make sure I use a very delicate neutral batter and the best dairy butter, five or six minutes maximum at medium to medium high frying pan temp. Have you had any yet?