United States Heading towards a Depression?

I'm lucky. My rock gets cable TV!

Sometimes I wonder if people living under a rock are smarter. I actually have to stop myself from watching the news sometimes because I get myself so worked up over watching these idiots run the country.

 

Oh, I see.

Banks are NOT private companies with a board of directors, stockholders, and a profit motive. They really are public companies who hire government bureaucrats to run them. And, those multi-million dollar salaries and bonuses banks pay to their employees are all mandated by law and Congress.

I didn't know that.

So, you're telling me the Federal Reserve (which sets interest rates, reserve requirements, and banking regulation) had nothing to do with banks creating all this credit and loaning it into the economy.

In fact, you are telling me Congress controls the Federal Reserve. Congress dictates monetary policy in this country. Congress dictates bank regulation and supervision.

I didn't know that.

So, you're basically saying the financial system collapse was a sub-prime problem, not a credit bubble?

I didn't know that either.

 

Fannie and Freddie are NOT banks.. They are quasi governmental agencies set up to act as lenders for banks...

So in essence, while many banks are private companies, they are ultimately directed by the government when it comes to the setting of interest rates, insuring of funds and lending of money.

What you are finally beginning to understand and see clearly is that a banking industry controlled by Congress tends to fail. A banking industry run by investors and a board without government control tends to make intelligent decisions.

No, what I am telling you is that it did. Encouraging people to make bad loans to flood the economy with money in order to stimulate it is part and parcel to the mission of that of Fannie, Freddie and the CRA.

The ultimate goal here was not to bankrupt the US, but rather for the people in power that created this mess to gain total and complete control over ever aspect of our lives.

Pelosi, Reid, Frank, and so many others mentioned time and time again here were all in this together. What you see before you is the work of people like this over the last 30 plus years. They've all worked very hard, starting with Carter, and the CRA. The idea being nothing more than the totalitarian control of the US and end to our free enterprise system of capitalism.

Ah, the Fed does... Not Congress. In fact, if I remember correctly Congress does not have that right. I think it was directly forbiden in the Constitution... Don't hold me to that one, It's just what I recall. If anything though, you are right, Congress does and has dictated monetary policy, and that is why we are in the position we are in now. Again, 30 years in the making.

As for regulation? Congress does no such thing. Their "regulation" if you can call it that, is more of a "dictation" of what will be done and how it will be done, and for whom it will be done.

I know. Most American's do not. That's why they keep voting for these idiots, singing their praises. All the while they are looking to take over their lives and everything they do.

CORRECT!!!! Sub-prime and credit bubble are the same thing. Think about that for a second. People took out credit by re-financing or taking out "home equity" SECOND MORTGAGES to pay down their higher interest credit debt. In reality they assumed more debt, at a higher rate over all, and extended themselves over and above what their assets were.

Why? Because the CRA said, give that poor hispanonegrohomolesbopoorwhitetrashdowntrodenillegalwhateverthehelltheyare person a loan for a home that's too big, more than they can afford, and more than they will ever be able to pay. JUST DO IT...

So other lenders follow suit. Giving people loans and credit based on horse shit or air for all we know... and all the while OVER VALUATING those assets... When was the last time you saw housing prices and inflation follow different paths on a graph?

Ahem... NEVER!!!!

I'd read up on the CRA... The key to the dibocle is there: http://en.wikipedia.org/wiki/Community_Reinvestment_Act

Obviously. Dude, you are not alone here.

 

The inmates are running the asylum.

 

And then... after colluding with the federal government to screw up the economy, they were rewarded with cushy federal jobs in the Obama administration:

• Robert Hormats, Vice Chairman of Goldman Sachs, is to be installed as Under Secretary of Economics, Business, and Agricultural Affairs.
• Jacob Lew, Chief Financial Officer of Citigroup Alternative Investments Group, as Deputy Secretary of State (Lew’s dept. lost $509 million in the Q1 2008)
• Michael Froman, Citigroup, Deputy National Security Adviser for International Economic Affairs. Froman was formerly Chief of Staff to Robert Rubin at Treasury, before following him to Citi.
• Froman’s deputy, David Lipton, ran Citi’s global country risk management effort.
• Lewis Alexander, Citigroup’s chief economist and now Counselor to Treasury Secretary Timothy Geithner
• Neal Wolin, President and COO, Hartford Insurance Company, Property and Casualty Group now Deputy Treasury Secretary (Hartford received $3.4 billion in TARP funds).
• Gary Gensler, Goldman Sachs partner, now Chairman of the Commodity Futures Trading Commission Note: It was Gensler who was a key proponent (as Clinton’s Assistant Secretary of Treasury) in pushing the Commodity Futures Modernization Act of 2000.
• Mark Patterson, Goldman Sach’s lobbyist, now Treasury Chief of Staff
• Linda Robertson, Enron lobbyist, Chief PR Federal Reserve

In a sane world, these people would be unemployed and unemployable. They would have to take jobs as clerks at Kwikee-Mart.

Instead, they are now running the country. This is the change we all voted for!

 

And how many on that list also neglected to pay income taxes as well... Unbelievable...

 

so much for sounding credible when we teach our kids that all they have to do is work hard and be honest to succeed in life.

The who administration reminds me of that 90s movie with Damon Wayans where his boss is looking for a crook to hire as a scape goat and picks the guy with the worst criminal record to become his new employee.

 

So you are saying that you like to see Obama and those other people as you and mia's co-workers.

 

Did you clean your room yet?

 

No, I am waiting for you to come back after collecting your welfare check and earn extra five dollar for cleaning it.

 

If that's in Canadian dollars you're going to have to make that $500.00.

Did you ever think about getting a job so you could get your own place?

 

Obama should Focus on firing his economic advisors instead of trying another "stimulus package".

 

I admire your pride in your trailer but trailer park living is not for everyone. Hopefully when the next Republican president increases your welfare check (as you were so happy with Bush), you can even buy a bigger trailer.

 

Yes, we get what we vote for. When your only options are a suspected murderer and a convicted thief, whom do you elect?

We have consistently been presented with suboptimal political candidates. I suppose the real question/dilemma is:

Where are the really good ones hiding?

 

You really do have an obsession with Trailers... Kinda goes with the territory I guess.

http://en.wikipedia.org/wiki/Trailer_Park_Boys



Gee look where they are located? http://www.trailerparkboys.com/

Your home town. Go figure.

 

We always make fun of your kind in Canada, it is our national past time to laugh at people like you.

 

I normally eschew conspiratorial theories, but Obama's handling of the economy thus far has been so terrible that I am having real difficulty believing he could be doing it purely out of ignorance and ineptitude.

The facts more closely fit a much darker theory -- that Obama is purposefully destroying the economy as part of an overall strategy to meet his political goals.

I am not yet ready to accept this conclusion, but the facts are impossible to disregard.

 

The audacity and pure political ranting of the tiny minority, extraordinarily loudmouthed, and politically inspired exremist radical far right in blaming the current financial conditions on Democrats and the Obama administration is simply stunning.

This overly loud mouthed tiny extremist bunch of radicals fails to remember that the largest financial disaster in modern times, stretching back 80 years occurred during the Bush administration which practised extremist radical stupid economics that emphasized an utterly absurd political premise that in political jargon states...."don't let government interfere with business"....but in practical terms led to.....


....the criminals ran wild.

What occurred? Starting in the mid 1990's, the real estate financing industry started to issue a greater amount of subprime mortgages. Subprime generally refers to mortgages that are more risky and given to people with lower credit ratings.

Growth of subprime mortgage lending was slow until 1999 when it started to pick up. It exploded in the 2000's while the Bush administration was in office. In fact the Republican administration supported this growth in endless ways including:

1. They eliminated state attorney generals offices from investigating predatory lending.

2. They independantly encouraged greater home ownership numbers thereby loosening credit standards.

3. They saw the increasing volume of both subprime lending, the overwhelming explosion of housing values against traditional standards of value, recognized it had gone out of whack signifying a coming crisis and did nothing.

Basically the Bush administration sat back, trusting in the radical minority extremist position of NO Government interference and once again allowed the markets at an extreme to blow up and cause a recession.

Its not the first time this has occurred, only the latest.

The same political extremists who endlessly scream about the problems of government interference are simply utilizing political rhetoric to help themselves get elected and encourage big business to send them monetary support, while allowing big business to explode at the extreme and damage the entire economy.

This time, not only did it cause the worst financial conditions in the US since the great depression, the economic crisis has spread world wide.

But for some reasons, the radical right, never able to take responsibility for any political problem, blames Dems, Fannie Mae, Freddie Mac, and CRA.

Lets be honest.

Fannie Mae and Freddie Mac don't issue loans. Not one. They didn't issue a single subprime loan.

Secondly, the rise in subprime mortgage loans...which after some increases in the 1990's, was about 6% of all loans in 2001 grew till it peaked at approximately 25% of all loans. The explosion in subprime lending started in 2003 and lasted through 2007 with the heart of the explosion occurring from 2005-2007. Not only did the percentage of subprimes grow..but the overall mortgage market exploded in those prime years, dramatically increasing the overall effect of subprimes to the entire US mortgage market.

The radical right blames Fannie and Freddie. Remember McCain from the election. He kept repeating...Fannie and Freddie, Fannie and Freddie. He didn't say much else. It sounded like a vaudeville comedy team.

Fannie and Freddie didn't make loans. Private industry made them.

Now how did they explode from late 2003-2007? Anybody recall securitized loans of private mortgages? This creation of wall street exploded during those years. It kept buying up mortgages and refinancing the mortgage lending industry to make still more loans.

So while the main scope of Fannie and Freddie was to purchase higher quality loans, by mandate, the private securitized loan business exploded providing enormous funds to continue to fuel the issuance of subprime mortgage loans.

Again it was essentially fueled by private industry. In 2005, towards the early years of the explosion in residential backed mortgage securities, the Mortgage Bankers Association issued this report to its membership....

Despite hard evidence to the contrary, the radical minority extremist right and their political supporters continue to scream their political rhetoric....Fannie and Freddie, Fannie and Freddie.

Those are code words for uninformed and politically charged misinformation.

aka.....LIES.

Then of course we hear the endless repetition from the wildest and most extreme of the extreme: something called CRA, started during the Carter administration is TOTALLY at fault.

Of course this comes most often from Mia....so take it with a grain of salt.


Here is the hard research on CRA impact on the financial crisis...from economists...not a radical extemist

http://www.minneapolisfed.org/publications_papers/pub_display.cfm?id=4136

The hard research:

1. CRA regulations hadn't esentially changed since 1995.

2. Approximately 1/2 of the problem loans were issued by institutions not subject to CRA regulations

3. More than 60% of all the high priced problem loans went to neighborhoods not targeted for CRA review.

The conclusion by these economists.....

You don't believe the economists from the Federal Reserve...okay...take a look at what was uncovered by research in Orange County, California....

Now the Far right extremist minority of is bawling about expenditures made by the Obama administration to try and deal with this horrendous crisis.

They bawl about debt. Its a reasonable thing to bawl and scream about....but I don't recall one of these people screaming about debt incurred by the Bush administration and the Republican majority congress through 2006, during which Bush never vetoed a spending bill.

Its seems debt didn't matter then.

I enjoy the term...."rabid partisan sniping". I think it refers to a bunch of people to don't have the faintest idea what they are speaking about...namely the extremist right wing minority of radicals...whose philosophies put us into the worst financial crisis in 80 years.

 

President Bush made a mistake on the rebates. The AIG bailout was a big mistake as well. But that's another story. Rebates aren't stimulus in that the money is borrowed and most of the spending goes to cheap imported goods.

The US needs stimulus but spending or creating jobs isn't stimulus. We need to serious infrastructure spending so that there are long term benefits reaching out to 50 years or more. The government should be upgrading water systems, building bridges, nuclear power plants, dams, and improving the waterways. The Missippi Waterway needs approx $25 billion in improvements to help expand exports.

I don't believe that we are learning any lessons form the current crisis. People like Barney Frank are incredulous. He and New York Representative Anthony Weiner have written a letter to the heads of Fannie and Freddie requesting them to lower lending standards for condo buyers.

http://online.wsj.com/article/SB124580784452945093.html

 

It's so easy to spend other people's money.

With financial skills like this, Barney Frank couldn't hold down a job at 7-11 and yet he is now one of the most powerful members of the United States congress. WTF?