"One of History's Greatest Financial Crises"

bellman · Mar 15, 2008

A blimey long and ignorant paragraph you wrote there. Be wary of alliteration when used in politics and in rhetoric.

Quote from jwcapital:

I like the comment New Deal V.2. FDR broke it down into three actions: rescue, relief, and reform. Rescue efforts for the financial institutions are underway, but as the NYT article mentions, the effort is not working. What is the government doing to rescue the consumer/public? Well, the FED's efforts to lower short-term interest rates aren't working. The public is saving some money on their ARM's and home equity lines, but taht savings is being used to pay down other bills; hence, no new consumer spending. The stimulus package recently passed will not work either. People will use that money to pay down their bills; hence, no new consumer spending. Fortunately, the unemployment rate is still historically low; unfortuantely, unemployment is a lagging indicator. Dealings with primary homeowners are insufficient--delaying foreclosures and providing inadequate "new deals" to the borrowers. Freezes have never worked; they just delay the inevitable. Real rescue for primary homeowners with ARMS would be a "conversion" of these ARM's to 30-year fixed rate mortgages at the banks' expense. This type of rescue is cheaper than a foreclosure any day. Relief efforts are not working either. Unfortunately, the GOVT is so busy working on reform efforts that they needed to wait for rescue/relief efforts to work first. Reform is a effort to prevent crises in the future. Licensing of mortgage brokers is a must; crackdown on unfair and predatory lending practices is imperative. I remember when I went to the bank to refinance in 2004. Everyone pushed the option ARM here in Florida. they developed a chart showing the advantages of option ARMS in an exploding upward price environment. Of course, no one presented a chart showing what could happen if housing prices dropped and interest rates skyrocketed. Lastly, the FED foolishly handled the rise of rates in the late 90's, the reduction fo rates in the early 2000's, the maintenance of low rates for too long, and the silly small incremental increases since 2003. Even now, the FED seems to step in when the market is on the verge of crashing. The GOVT must remember that rescue and relief are first and foremost, then reform. Rescue and relief efforts must be fast and adequate. Then reform needs to follow and then interest rates can return to normal as the economy expands. We have these crises because very few economists can accurately forecast in today's global economy.
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bellman · Mar 15, 2008

Someone who gets it. Nicely put!

Quote from Arnie:

Well, I could argue that after what has been happening over the past few year, is anyone really surprised that a major bank is in serious trouble? Think about it. You think there are no consequences for making loans where the main criteria to make that loan was based on the "stated income" of someone with a FICO score of under 550? Or that they based the loan amount on a gassed appraisal made by the mortgage brokers golfing buddy? What goes around, comes around. I hope we see a few more go under. The only mistake the Fed is making is trying to stop it. I think the world will get along just fine without a BSC or a C. The sooner this shit plays itself out, the better. Right now, we seem to be making the same mistakes the Japanese made. And their economy is still in the gutter after umpteen years.

The only reason they are doing these bail-outs is to cover their own ass. Its ALL political.

Peace
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stock_trad3r · Mar 15, 2008

Bfft just sector rotation

Alex_in_Oz · Mar 15, 2008

Quote from daddyeaux:

I think it is finally sinking in that the 30 to 1 leverage that banks lent to hedge funds to go long Chinese bicycle tires and short Mexican coconuts is not going to pan out like the computer model predicted

I hate it when that happens....

so when the lines form outside your local "bank" to pull 1923 Reichsmarks out of your 0.24% savings account, no bitching.
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LOL Brilliant!

ByLoSellHi · Mar 15, 2008

Iraq War = 2 to 3 Trillion Dollars

Food/Energy/Medical Inflation = 18 Year High

9 Million Americans = w/Negative Equity in Homes (expected to rise to 15 million)

Average American About To Retire = 29k in Retirement Savings (subject to further declines if housing equity wanes further)

Foreclosure Rate = 2 Million A Year

U.S. Dollar = All Time Lows Against Most Currencies

National Debt = 9+ Trillion (officially; unofficially, estimates range as high as 36 Trillion using GAAP Standards)

Manufacturing Jobs Lost in 5 Years = 3 Million

42 Million Americans = No Health Insurance

Former Comptroller of United States = "U.S. Is Inevitably Bankrupt w/Boomers Retiring"

President Bush saying that the fundamentals of the U.S. economy remain strong in a rambling, incoherent speech on March 14th, 2008 =

PRICELESS

stock_trad3r · Mar 15, 2008

Quote from ByLoSellHi:

Iraq War = 2 to 3 Trillion Dollars

Food/Energy/Medical Inflation = 18 Year High

9 Million Americans = w/Negative Equity in Homes (expected to rise to 15 million)

Average American About To Retire = 29k in Retirement Savings (subject to further declines if housing equity wanes further)

Foreclosure Rate = 2 Million A Year

U.S. Dollar = All Time Lows Against Most Currencies

National Debt = 9+ Trillion (officially; unofficially, estimates range as high as 36 Trillion using GAAP Standards)

Manufacturing Jobs Lost in 5 Years = 3 Million

42 Million Americans = No Health Insurance

Former Comptroller of United States = "U.S. Is Inevitably Bankrupt w/Boomers Retiring"

President Bush saying that the fundamentals of the U.S. economy remain strong in a rambling, incoherent speech on March 14th, 2008 =

PRICELESS
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Do you want pillow?

iprph90 · Mar 15, 2008

Quote from ByLoSellHi:

Iraq War = 2 to 3 Trillion Dollars

Food/Energy/Medical Inflation = 18 Year High

9 Million Americans = w/Negative Equity in Homes (expected to rise to 15 million)

Average American About To Retire = 29k in Retirement Savings (subject to further declines if housing equity wanes further)

Foreclosure Rate = 2 Million A Year

U.S. Dollar = All Time Lows Against Most Currencies

National Debt = 9+ Trillion (officially; unofficially, estimates range as high as 36 Trillion using GAAP Standards)

Manufacturing Jobs Lost in 5 Years = 3 Million

42 Million Americans = No Health Insurance

Former Comptroller of United States = "U.S. Is Inevitably Bankrupt w/Boomers Retiring"

President Bush saying that the fundamentals of the U.S. economy remain strong in a rambling, incoherent speech on March 14th, 2008 =

PRICELESS
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good enuf for youtube video

syswizard · Mar 15, 2008

Exactly. This alone should reduce American's trust in US government to about ZERO.

IanMacQuaide · Mar 15, 2008

Quote from daddyeaux:

I think it is finally sinking in that the 30 to 1 leverage that banks lent to hedge funds to go long Chinese bicycle tires and short Mexican coconuts is not going to pan out like the computer model predicted

I hate it when that happens....

so when the lines form outside your local "bank" to pull 1923 Reichsmarks out of your 0.24% savings account, no bitching.
More...

My exact fears.

daddyeaux · Mar 15, 2008

watch out for "bank runs" at other wall street brokerages (that have been allowed to act like banks) and the Fed. may be forced to shut down the whole system

maybe gold can manage a $100 up day inspite of central banks

or maybe a $1000 up day due to them

an opinion of course, and I could be wrong