7 replies [Last post]
bitmasher's picture
Offline
Moderator
Location: Colorado
Joined: 02/27/2002
Posts: 2973
Why No Outrage

This is an informative read that discusses some of the background of our modern financial system and how it taps into the central bank and housing value/finance.

It also explains a bit about why this system (the system being the relationship between the government, the federal reserve, investment and traditional banks) has become out of balance particularly between 2002-2007. The correction has resulted in lost home value and steadily mounting pile of bad debt, of which uncle sam is increasingly stepping in to insure (in other words putting the taxpayer on the hook).

While the authors tone is somewhat flip, make no bones about it this is a serious topic that I don't see discussed in any detail in the main stream media.

http://online.wsj.com/public/article/SB121642367125066615-4K_l2jdjmxrSAZ...

cowgal's picture
Offline
Moderator
Location: Colorado
Joined: 03/10/2002
Posts: 1787
Why No Outrage

No outrage? I think people don't know who to be outraged with!

Should it be the banks? Surely they should have known better than to make questionable loans!

Should it be the speculators, who bought up homes at low interest rates & drove prices up? Surely there should have been a law against such a practice.

Or maybe the fault lies with the end consumer? You know the ones that bought more house than they could safely afford.

Or maybe its simply our government's fault. They should have seen this all coming, right? They did make it easy for banks to make those low downpayment/low interest loans and take on more risk.

The housing bubble had to burst and it did. Not sure who to be mad at. More importantly, how is this mess going to get fixed? And how long is it going to take? I'm afraid the dominoe affect will be significant and take down a lot more industries (vehicle manufacturers for one) before it starts getting better.

SoCoKHntr's picture
Offline
Location: Pueblo Colorado
Joined: 12/18/2006
Posts: 1787
Why No Outrage
cowgal wrote:
No outrage? I think people don't know who to be outraged with!

Should it be the banks? Surely they should have known better than to make questionable loans!

Should it be the speculators, who bought up homes at low interest rates & drove prices up? Surely there should have been a law against such a practice.

Or maybe the fault lies with the end consumer? You know the ones that bought more house than they could safely afford.

Or maybe its simply our government's fault. They should have seen this all coming, right? They did make it easy for banks to make those low downpayment/low interest loans and take on more risk.

The housing bubble had to burst and it did. Not sure who to be mad at. More importantly, how is this mess going to get fixed? And how long is it going to take? I'm afraid the dominoe affect will be significant and take down a lot more industries (vehicle manufacturers for one) before it starts getting better.

Great post.

CVC
CVC's picture
Offline
Grand Slam Challenge Winner!
Location: Kansas
Joined: 03/04/2006
Posts: 3586
Why No Outrage

Maybe it is easier to get angry than understand the complexities of the system and why it failed. Maybe it is too late in the day or maybe I am just not bright enough, but even after reading the article I don't really understand all this financial stuff.

Offline
Joined: 07/29/2008
Posts: 723
Why No Outrage

I read this article entirely when I first started reading the Politics part of this forum a couple weeks ago. I re read it today.

It is very important to understand the financial aspects of politics as they are much more important to the people funding the campaigns than gay marriage or environmental protections.As they say follow the money.

It is complicated and boring. Nowhere near as sexy as Paris. I'd suggest the huge deregulation of the early 80s set the stage, remember silverado and the savings and loan crisis. (and that famous member of the Keating 5 ;-)) This is more of the same.Don't forget the chairman of the fed for however many years (10 or 12?) was a libertarian.

Financial regulations have a purpose. By throwing them out we were able to take much larger risks and make much larger proffits. Now it's time to pay the piper.

Everyone always acts in their own best interests. That doesn't make them bad, just human. Mortgage lenders are paid by the number and amount of mortgages they sell, not wether anyone ever pays on the mortgages. You pay me 50 million to run some business into the ground I'll do it with a smile. Part of the role of govt is to watch out for our collective best interests.

I read an economic blog daily by a former official of the Ford administration called Krugman, beware liberal.

cowgal's picture
Offline
Moderator
Location: Colorado
Joined: 03/10/2002
Posts: 1787
Why No Outrage
CVC wrote:
... even after reading the article I don't really understand all this financial stuff.

And that's a big problem for most Americans. To me these financial dealings are akin to a shell game and its hard to follow.

Its important that we do get angry. It makes me angry that my grandchildren and even great grandchildren are going to be paying for this mess. We - all of us taxpayers are going to be footing the bill for the games Wall Street and the financial institutiions have played. The government is going to bail everyone out from Fannie to Freddie, and now I hear that the feds have allotted billions to help people that are facing foreclosure. Where is this money coming from?

CVC
CVC's picture
Offline
Grand Slam Challenge Winner!
Location: Kansas
Joined: 03/04/2006
Posts: 3586
Why No Outrage

Shell game....good way to describe it. Reminds me that they blame high gas prices on speculators. Now, I heard it explained and heard the same thing about grain prices and speculators and I just don't get it.

Maybe it is not that I am not smart enough, maybe it is like you said, a shell game Think

Offline
Location: Eatonville, Wa
Joined: 08/26/2007
Posts: 610
Why No Outrage
cowgal wrote:
The government is going to bail everyone out from Fannie to Freddie, and now I hear that the feds have allotted billions to help people that are facing foreclosure. Where is this money coming from?

supposedly the money for the bail out will be coming from the 'profits' from fannie mae and freddie mac. How I dont know especially when Im hearing about an impending bail out.

Related Forum Threads You Might Like

ThreadThread StarterRepliesLast Updated
Soros Making Billions Off of Crisisexpatriate1103/27/2009 14:17 pm
When Poaching an Elk Isn't Poaching?????Critter2904/25/2013 08:55 am
Canada becoming a dictatorship?jim muir2012/08/2008 00:06 am
Paintball, Women, and Videotapebitmasher607/27/2003 21:45 pm
Food plot vs. Bait pileManOfTheFall1708/01/2010 02:12 am