Economics business.The Sub-prime Crisis. How bad is it?

[Cedars]

Here's a question. Since the $700B plan is receiving a lot of criticism here, what do you suggest instead?

Let the market do what the market does. If these fools have something of value they will have buyers. They are pushing paper around claiming its worth something but the fact is, if Americans cant afford the payments, the value of the product is reduced.

 

Theres much blame to be passed around and the least responsible is the poor sob who just wanted a home to LIVE in. Theres plenty of stories going around of the 2nd, 3rd, etc home that some speculator thought was a good investment and wanted to cash in when their 2 years/3 years/4 years of low interest ran out. Bummer for them.

 

And these jerks in suits who put the papers in front of them to sign on the dotted line? Why do I have to pay for their lousy business practices? There many more banks out there that are solvent and not facing crisis because they had BETTER Management.

 

And dont forget the local zoning people whether state, county or city level who issued these building permits as their eyes glazed over with potential property tax money all the while watching local manufacturing packing up and abandoning their industrial areas (never mind that none of the CEOs bothered to live in their city of operations) for the great frontiers of lower tax states, or off shore shelters from labor costs.

 

The answer? Let the market do what the market does. This is a Free Market and you, me and everyone else takes risk anytime they take a loan, puts their money into a bank that only guarentees $100 K if it fails, puts their money in the hands of some guy with a computer terminal and password access to [insert name of investment firm] or whips out that visa to buy a HD widescreen tv that picks up signals from pluto, without knowing if they are gonna have a job tomorrow.

 

Next round of washington antics, (read after Jan 20) focus should be on "Hey, do we got a few financial monopolies going on over on K street and should we kinda work on making sure this doesnt happen again? Boy we sure got took." And maybe each of them should spend some time reading the biography of P.T.Barnum and apply that famous line "theres a sucker born every minute" to anyone who mumbles "I work for [insert money changer monopoly here] while having their hand out for some kinda tax break or other hand out under the guise of "its gonna BOOST the economy!"

 

One of the first reads I did when getting my internet access in 1997 was OMNI magazine and the profile of sociopaths a researcher did. Opened my eyes to a new world of the mentally deranged. His research indicated sociopaths who kill are few and far between. Most sociopaths are attracted to money for their sense of power. Bankers, politicians, financial brokers all had a higher than normal percentage of sociopaths in their ranks according to his research. hmmmm....

[questor]

Some people suggest a summit meeing of the best financial minds in the country to propose a solution which is not just a short term bailout. Where were the Federal Bank auditors during this debacle? Was this an attempt at social remodeling to provide lower cost housing to those who could not really pay for it , or was it purely a matter of greed on the part of lenders and investors? Why didn't the congress or the administration tighten lending restrictions? It seems odd that lenders would make no-doc loans to unqualified buyers. In the past, the auditors would be all over this practice.

My solution to the problem is stop the wars. Drill here, Drill now, we need oil now. Encourage development of alternative fuels. Reduce government waste. Perform proper oversight on expenditures BEFORE the money is spent. Re-examine foreign aid, where does it go, who gets it, and what do they spend it on? As long as we have a spendthrift government which pays no attention to running huge deficits, we will continue to teeter on the brink of bankruptcy.

[freeztar]

Let the market do what the market does.

 

Isn't that what got us into this mess!

 

If these fools have something of value they will have buyers. They are pushing paper around claiming its worth something but the fact is, if Americans cant afford the payments, the value of the product is reduced.

They have value, the question is, how much?

Theres much blame to be passed around and the least responsible is the poor sob who just wanted a home to LIVE in.

 

Nonsense. If you can't afford a home you do what every other reasonable person does and rent. If you can't afford a lobster dinner every night, should you take out a loan to pay for lobster every night or instead settle for something like tilapia?

 

Theres plenty of stories going around of the 2nd, 3rd, etc home that some speculator thought was a good investment and wanted to cash in when their 2 years/3 years/4 years of low interest ran out. Bummer for them.

Yeah, bad timing.

 

And these jerks in suits who put the papers in front of them to sign on the dotted line? Why do I have to pay for their lousy business practices? There many more banks out there that are solvent and not facing crisis because they had BETTER Management.

 

I agree that those practices were outrageous, but don't forget that it takes two parties to make a contract. No one forced these people to sign them.

 

The answer? Let the market do what the market does. This is a Free Market and you, me and everyone else takes risk anytime they take a loan, puts their money into a bank that only guarentees $100 K if it fails, puts their money in the hands of some guy with a computer terminal and password access to [insert name of investment firm] or whips out that visa to buy a HD widescreen tv that picks up signals from pluto, without knowing if they are gonna have a job tomorrow.

 

I could care less about these companies really. What scares me is the effect they would have if they suddenly dissappeared. Critics of the bailout do not seem to have any clue as to how to avoid economic collapse. "Let Wall Street burn" is more of the same lack of regulation that got us into this mess to begin with. ;)

 

Next round of washington antics, (read after Jan 20) focus should be on "Hey, do we got a few financial monopolies going on over on K street and should we kinda work on making sure this doesnt happen again? Boy we sure got took." And maybe each of them should spend some time reading the biography of P.T.Barnum and apply that famous line "theres a sucker born every minute" to anyone who mumbles "I work for [insert money changer monopoly here] while having their hand out for some kinda tax break or other hand out under the guise of "its gonna BOOST the economy!"

It's not about boosting the economy, it's about preventing collapse and a new Great Depression.

One of the first reads I did when getting my internet access in 1997 was OMNI magazine and the profile of sociopaths a researcher did. Opened my eyes to a new world of the mentally deranged. His research indicated sociopaths who kill are few and far between. Most sociopaths are attracted to money for their sense of power. Bankers, politicians, financial brokers all had a higher than normal percentage of sociopaths in their ranks according to his research. hmmmm....

 

Interesting, but I fail to see the relevance.

[pgrmdave]

I agree that those practices were outrageous, but don't forget that it takes two parties to make a contract. No one forced these people to sign them.

 

I think that the problem is that the lenders sought out less educated people, who were less likely to understand their rights and less likely to understand a contract. The lenders appear to have often engaged in outright lying, both to the borrower and on their application for a loan, and they seem to have pushed hard for these people to take loans. While yes, it does take two people to sign, it doesn't mean that each party has equal responsibility for it, because there could easily be a disparity in the amount of information understood by each party (and the lenders would have had an interest in making sure that the borrowers did not fully understand the loan agreements).

[Cedars]

Nonsense. If you can't afford a home you do what every other reasonable person does and rent. If you can't afford a lobster dinner every night, should you take out a loan to pay for lobster every night or instead settle for something like tilapia?

This is exactly what the financial people did isnt it? You cant afford to loan these people money....blah blah blah.

 

 

I agree that those practices were outrageous, but don't forget that it takes two parties to make a contract. No one forced these people to sign them.

So, let the financial institutions use the EXISTING methods available to collect on their debt. Dont come crying to me (a taxpayer) to fund your mess. I DIDNT sign on the dotted line.

 

I could care less about these companies really. What scares me is the effect they would have if they suddenly dissappeared. Critics of the bailout do not seem to have any clue as to how to avoid economic collapse. "Let Wall Street burn" is more of the same lack of regulation that got us into this mess to begin with. :doh:

Note that my suggestion included lawmakers revamping the rules and regs over the places who would survive. The majority of places are not facing economic collapse. You want to burden them with the cost because they were not reckless with my/your/others money and investments? You want to burden me with the cost because I wasnt reckless with my money?

 

Interesting, but I fail to see the relevance.

 

Also, no one has convinced me giving them the money will avert economic collapse. There is much more to this issue than the band-aid approach of fixing a FEW failing companies, a FEW failing banks. I think we are going to see depression regardless of this bail out effort and I dont see why I should listen to sociopaths whining about losing their leverage.

 

And why would I support a congressman or Senator that signs on this dotted line (under an OMG we got 48 hours or its going to cause the sky to fall fear mongering that put us into several no win situations with the future not so long ago). This is the same marketing line that these sociopaths used to get the average joe to buy into something he couldnt afford. LOOK! Housing prices are going up Up UP! If you dont buy now, Whats this same house gonna cost you in two years (when congress runs for election) in Four years (next pres election).

 

Bah.

 

You gotta know when to hold them,

Know when to fold them,

Know when to walk away, know when to run.

You never count your money when your sitting at the table,

There'll be time enough for counting when the dealings done.

[freeztar]

I think that the problem is that the lenders sought out less educated people, who were less likely to understand their rights and less likely to understand a contract. The lenders appear to have often engaged in outright lying, both to the borrower and on their application for a loan, and they seem to have pushed hard for these people to take loans. While yes, it does take two people to sign, it doesn't mean that each party has equal responsibility for it, because there could easily be a disparity in the amount of information understood by each party (and the lenders would have had an interest in making sure that the borrowers did not fully understand the loan agreements).

 

Do you know of evidence to support this?

It certainly is slimey. I don't doubt it happened, but I question how rampant it was.

[freeztar]

So, let the financial institutions use the EXISTING methods available to collect on their debt. Dont come crying to me (a taxpayer) to fund your mess. I DIDNT sign on the dotted line.

 

I didn't either and I agree that it is unfair to us. Unfortunately, it seems we are faced trying to decide which is the lesser of 2 evils. Do we cough up some extra tax dollars, or do we enter another great depression? It sucks, it, unfair, and we are powerless to do anything about it really. :(

 

But America has to do something...

 

Note that my suggestion included lawmakers revamping the rules and regs over the places who would survive.

 

That's going to happen regardless.

 

The majority of places are not facing economic collapse. You want to burden them with the cost because they were not reckless with my/your/others money and investments?

 

Which companies are you speaking of specifically?

 

You want to burden me with the cost because I wasnt reckless with my money?

No, I don't want you to, I'm telling you that you have to, one way or another.

 

Also, no one has convinced me giving them the money will avert economic collapse.

 

Me neither. Honestly, I don't really understand the situation enough. None of us here are economic experts with a true grasp of what is going on.

 

I kind of look at the bailout as a hail-mary play in football. Nobody can prove that the play will work, but in times of desperation, it is often the only choice.

 

There is much more to this issue than the band-aid approach of fixing a FEW failing companies, a FEW failing banks.

 

A few? And what percentage of the market do you figure these few companies occupy?

 

I think we are going to see depression regardless of this bail out effort and I dont see why I should listen to sociopaths whining about losing their leverage.

 

Who exactly are these sociopaths? Is anyone that is the CEO of a large corporation/bank a sociopath?

 

And why would I support a congressman or Senator that signs on this dotted line (under an OMG we got 48 hours or its going to cause the sky to fall fear mongering that put us into several no win situations with the future not so long ago). This is the same marketing line that these sociopaths used to get the average joe to buy into something he couldnt afford. LOOK! Housing prices are going up Up UP! If you dont buy now, Whats this same house gonna cost you in two years (when congress runs for election) in Four years (next pres election).

My hopes are that Congress is putting the American people before the interests of these companies. People's life savings are at risk here. This is *serious* stuff!!! :doh:

 

You gotta know when to hold them,

Know when to fold them,

Know when to walk away, know when to run.

You never count your money when your sitting at the table,

There'll be time enough for counting when the dealings done.

 

Bail, baby, Bail! :hihi:

[DougF]

New homes sell at slowest pace in 17 years

Sales plunge 11.5 percent in August; prices fall by largest amount

 

WASHINGTON - New home sales in the U.S. tumbled in August to the slowest pace in 17 years' date=' while the average sales price fell by the largest amount on record, demonstrating the depth of the problem that Washington is trying to solve.

 

The Commerce Department said Thursday that new homes sales fell by 11.5 percent in August to a seasonally adjusted annual sales rate of 460,000 units, the slowest sales pace since January 1991.

 

It was a much bigger sales decline than the small 1 percent drop that economists had been expecting. The average price of a new home sold in August dropped by a record amount of 11.8 percent to $263,900, compared to the July average of $299,100. The median price was also down, falling 5.5 percent to $221,900. [/quote']

 

New homes sell at slowest pace in 17 years - Real estate - MSNBC.com

 

I want off this roller coaster. :doh:

[Cedars]

I didn't either and I agree that it is unfair to us. Unfortunately, it seems we are faced trying to decide which is the lesser of 2 evils. Do we cough up some extra tax dollars, or do we enter another great depression? It sucks, it, unfair, and we are powerless to do anything about it really. :hihi:

 

But America has to do something...

Why do I have to invest in others failures? My gawd the failure and resignation in your tone.. powerless to do anything?

 

Which companies are you speaking of specifically?

"The FDIC said 117 banks and thrifts were considered to be in trouble in the second quarter, up from 90 in the prior quarter and the biggest tally since mid-2003. (The agency doesn't disclose the names of institutions on its internal list of troubled banks; doing so would likely spark a run on deposits. On average, 13 percent of banks that make the list fail.)

 

While the vast majority of banks are in good shape... "

 

Mortgage mess puts more banks at risk - Eye on the Economy - MSNBC.com

 

Did you even have a clue that issues arose in 2003? Nope. Why wasnt anyone screaming about the potential economic collapse then?

 

The GLOBAL economy is and has been slowing. Every news report is saying even with the money infusion expect another 14 months of economic turmoil. And there is no guarentee it will work. No Guarentees!

 

Fed plows $30 billion in foreign money markets - World business - MSNBC.com

 

No, I don't want you to, I'm telling you that you have to, one way or another.

Your really not the one telling me I have too. People in suits with political agendas or financial agendas are touting this "We gotta" mantra.

 

Honestly, I don't really understand the situation enough. None of us here are economic experts with a true grasp of what is going on.

Isnt that even more reason to sit back and say No? Economic experts ? Define that exactly. and please tell me where they have been the last 4 years as this bubble expanded and burst before their very eyes (or portfolios).

I kind of look at the bailout as a hail-mary play in football. Nobody can prove that the play will work, but in times of desperation, it is often the only choice.

Whos desperation?

 

U.S. jobless claims rise to a 7-year high - Stocks & economy - MSNBC.com

 

Durable goods orders plunged in August - Stocks & economy - MSNBC.com

 

Lemme guess, once this infusion of my future tax dollars (which the US government will borrow from someone else until I finally pay enough taxes (plus interest) to pay off these other investors, the benefit will trickle down to me, the taxpayer. Ya think I will see a return on this investment of my tax money in 5 years? 10 years? Silly me thinking that what happened here was private enterprise. Who coulda guessed that the tax payer was gonna have to bail out the investors. How'd that work for the enron employees who were truely screwed? How'd that work out for the GM retirees who had their retirement guarentees washed out? And why oh why is it critical that I bail out these people now when the economy didnt collapse when all these other investments were wiped out via the same type of financial paper magic?

A few? And what percentage of the market do you figure these few companies occupy?

You tell me what % of the market these companies occupy. I am not touting a 700 Billion dollar handout to cover my bets.

 

My hopes are that Congress is putting the American people before the interests of these companies. People's life savings are at risk here. This is *serious* stuff!!! :doh:

Obviously this has nothing to do with putting the american people before the interests of these companies.

 

And to quote your earlier position. No one forced them to sign the contract! No one forced them to buy their c/ds, money market accounts, stocks, lottery tickets, airline tickets to vegas, visa applications, discover card applications, blah blah blah.

[pgrmdave]

Bailout Agreement Reached

[Michaelangelica]

cynical or correct?

 

http://www.nytimes.com/2008/09/25/business/25value.html?_r=1&oref=slogin

This article suggested the USA government could start to trade in securities itself ?!

 

My hopes are that Congress is putting the American people before the interests of these companies..

Well I really like my idea

1 Give the sub-prime mortgagees enough money to pay off their mortgages

2 This goes back to the Lender as is right and proper ( no money is deducted for "mental cruelty")

3. Everyone is happy, economy stimulated, financial companies solvent:)

4. Justice is served with less socialism than the government owing everybody body and soul.

5 You now have a market of people buying selling homes up sizing etc.

 

Unfortunately I fear this neat, just solution is a fantasy as I suspect that the sub-prime mortgages have themselves grown into a leveraged product that becomes worth $ a lot more when it is sold to an Australian Local council as a 'you-beaut investment opportunity'.

 

There will be court cases about this for aeons.

 

If Bush doesn't make Wall St happy the threat of world economic recession is real.

 

I agree about sociopathic tendencies in CEOs and close in many large companies. I have seen it.

BTW

In 2006 alone, Wall Street firms paid out $62 billion in bonuses.

http://egan.blogs.nytimes.com/2008/09/24/crash/

[Qfwfq]

While yes, it does take two people to sign, it doesn't mean that each party has equal responsibility for it, because there could easily be a disparity in the amount of information understood by each party (and the lenders would have had an interest in making sure that the borrowers did not fully understand the loan agreements).

From a purely legal/commercial point of view, caveat emptor.

 

From a practical point of view, the other things you say are true and also there is that old, old, traditional thing known as the small print.

 

Do we cough up some extra tax dollars, or do we enter another great depression?

Don't take election campaign tooooooo much at face value, especially when there's also another thing behind it!

 

None of us here are economic experts with a true grasp of what is going on.

Don't speak on behalf of the entire audience! :)

 

I kind of look at the bailout as a hail-mary play in football. Nobody can prove that the play will work, but in times of desperation, it is often the only choice.

Perhaps the team can afford to loose a game, their fans will at most be dissappointed but won't end up on the park benches for it and those who bet chose to do so and can't come crying to the team. You admit you're not an economic expert with a true grasp of what is going on, switching to sports for analogy might be inadequate. Even before the subprime news, I was following things, just watching economies head toward another Great Depression. Aside from whether the bailout will suffice, one thing's sure: there are folks who should pay the bill more justly than the average U. S. Tom or Joe.

 

My hopes are that Congress is putting the American people before the interests of these companies. People's life savings are at risk here. This is *serious* stuff!!! :)

Tust them! :)

 

One more thing's darn certain and true for the '30s too: rest assured there are those who filled their fat bellies on the whole thing and these include those who had the capacity of causing it all.

[freeztar]

Don't take election campaign tooooooo much at face value, especially when there's also another thing behind it!

Election campaign? The relevance escapes me.

Don't speak on behalf of the entire audience! :evil:

So are you claiming to be an economic expert, Q?

I should have clarified what I meant by economic expertise. I consider people like Warren Buffet to be economic experts.

 

If I'm wrong in my blanket statement, then I urge any member of these fine forums to step up and provide their credentials. I will happily concede my point if evidence is provided to the contrary. I invite it with my statement. :evil:

 

Perhaps the team can afford to loose a game, their fans will at most be dissappointed but won't end up on the park benches for it and those who bet chose to do so and can't come crying to the team.

 

I agree, except for the park bench part.

 

You admit you're not an economic expert with a true grasp of what is going on, switching to sports for analogy might be inadequate.

 

Perhaps, but I think it would be best to comment on the analogy itself, or more importantly the idea it relates, rather than simply dismissing it because of my self-proclaimed in-expertise.

 

Even before the subprime news, I was following things, just watching economies head toward another Great Depression.

 

Can you please give specific examples (and dates) of indicators that the economies were heading toward another great depression before the subprime news?

 

Aside from whether the bailout will suffice, one thing's sure: there are folks who should pay the bill more justly than the average U. S. Tom or Joe.

I agree. Unfortunately, justice is not always blind and in the end, Tom or Joe are likely going to pay regardless, imho.

Tust them! ;)

I see your point (politicians and their associates shouldn't be trusted), but I don't think you've seen mine.

When NASA launches a shuttle, I don't pretend to know how everything should be done and try to weigh in on how NASA should proceed. They are experts at getting shuttles into space. I am not. I can have opinions about it and try to educate myself to all the facets of shuttle flight, but in the end, I must trust that the experts at NASA know how to get a shuttle to space. On occasion, they've strained that trust, by I still feel that they know better than I, or most anyone else.

 

But perhaps this analogy is inadequate as well, so let me try a direct approach.

 

There's a wide range of expertise for nearly any field we can think of. Generally (no pun intended), experts are considered to be specialists in their field of study. I would not want Albert Einstein running our economy just as I would not want Brittany Spears running NASA. (that's just funny to think about :) )

 

One more thing's darn certain and true for the '30s too: rest assured there are those who filled their fat bellies on the whole thing and these include those who had the capacity of causing it all.

 

I agree. As I pointed out early in this thread, the parallels between now and the events leading up to the GD are astonishing.

 

How do you propose we help the average joe while punishing the fatcats?

[Michaelangelica]

Election campaign? The relevance escapes me.

 

So are you claiming to be an economic expert, Q?

I should have clarified what I meant by economic expertise. I consider people like Warren Buffet to be economic experts.

The words "economics expert" are mutually exclusive

How come the 'agro' all of a sudden/lately?

Hypography members don't need a Ph.D in everything to discuss it, or have an opinion. That is the point and definition of hypography. using the web links and personal discussion to reach a deeper understanding of something.

Your "put downs" of people seem out of character and are certainly not the way to argue your case (Whatever that is)

If I'm wrong in my blanket statement, then I urge any member of these fine forums to step up and provide their credentials. I will happily concede my point if evidence is provided to the contrary. I invite it with my statement. ;)

Well when I asked you to clarify your criticism of my opinions you ignored me.

Credentials don't prove anything -look to the mess people with "credentials"? have got the world in.

 

 

Can you please give specific examples (and dates) of indicators that the economies were heading toward another great depression before the subprime news?

Again if it is good for the goose it is also good for the gander.

Look at when this thread was started; look at the number of posts made that seemed to predict something 'not good' was happening. I don't think anyone could have predicted the extent or the depth of the sub-prime crisis.

one reason predictions could not be made was corporations had not declared their losses. We had to wait to the end of reporting season (and then some) to see what had happened. Even then many sub-prime "assets" were hidden in Mutual Funds or off-balance-sheets ( I'd love to know how you do that legally with a public company.)

IMO a world depression is unlikely as the USA no longer holds the central position in world economies that it did in 1929. Howsoever a recession is certainly on the cards.(Maybe the world, maybe just USA) It depends on what "rescue" package our so called "experts" come up with. Even that has a good chance of failing.

I am waiting for the lawyers to get involved. Maybe they are waiting to see which shell the money ends up under.

 

 

 

When NASA launches a shuttle, I don't pretend to know how everything should be done and try to weigh in on how NASA should proceed. They are experts at getting shuttles into space. I am not. I can have opinions about it and try to educate myself to all the facets of shuttle flight, but in the end, I must trust that the experts at NASA know how to get a shuttle to space. On occasion, they've strained that trust, by I still feel that they know better than I, or most anyone else.

The shuttle did not get into space because of lying, misrepresentation and cheating. you don't have to be an expert to spot that. "Buy my triple AAA rated securities"

 

But perhaps this analogy is inadequate as well, so let me try a direct approach.

 

There's a wide range of expertise for nearly any field we can think of. Generally (no pun intended), experts are considered to be specialists in their field of study. I would not want Albert Einstein running our economy just as I would not want Brittany Spears running NASA. (that's just funny to think about :) )

Economics is at best an imprecise science. IMO its models are poor and not good predictors, That's why I stopped studding it and took up psychology (Because the psychologists lied and said they did have good predictors/science)

So what are you saying? No one should have an opinion of this because they are not "experts"?

Yet when you are challenged to show where us "un-experts" are going wrong you refuse to respond

 

 

How do you propose we help the average joe while punishing the fatcats?

Norway did a passable job of this. Check out the recent article in the NYT.

Some decent financial-sector regulation (as in Australia) would be better than punishment.

[freeztar]

The words "economics expert" are mutually exclusive

How come the 'agro' all of a sudden/lately?

 

What agro? :hyper:

Hypography members don't need a Ph.D in everything to discuss it, or have an opinion. That is the point and definition of hypography. using the web links and personal discussion to reach a deeper understanding of something.

Your "put downs" of people seem out of character and are certainly not the way to argue your case (Whatever that is)

My "put downs" of people? I really am stumped by this one. The only statement I've made that can be construed as such is when I claimed that I didn't think you really understood the situation. I apologized for that as it was an unfair statement.

 

Or perhaps it's my tone? When I'm *debating* with people I certainly take a different tone. It's not meant as hostility.

 

Well when I asked you to clarify your criticism of my opinions you ignored me.

 

I responded to your post. Did you not see it? (perhaps you're talking about your last post?)

Credentials don't prove anything -look to the mess people with "credentials"? have got the world in.

I disagree. Credentials are very important. Should we rely on Paris Hilton to fix the economy? How about Brad Pitt?

 

Again if it is good for the goose it is also good for the gander.

Look at when this thread was started; look at the number of posts made that seemed to predict something 'not good' was happening. I don't think anyone could have predicted the extent or the depth of the sub-prime crisis.

one reason predictions could not be made was corporations had not declared their losses. We had to wait to the end of reporting season (and then some) to see what had happened. Even then many sub-prime "assets" were hidden in Mutual Funds or off-balance-sheets ( I'd love to know how you do that legally with a public company.)

 

Indeed.

IMO a world depression is unlikely as the USA no longer holds the central position in world economies that it did in 1929.

 

But what about that quote that you like saying? "When the US sneezes, the world catches a cold".

 

Howsoever a recession is certainly on the cards.(Maybe the world, maybe just USA) It depends on what "rescue" package our so called "experts" come up with. Even that has a good chance of failing.

 

"good chance of failing"? How so?

 

Btw, the US economy is already in a recession and it looks like it will be for quite a while regardless of what the "experts" do.

 

The shuttle did not get into space because of lying, misrepresentation and cheating. you don't have to be an expert to spot that. "Buy my triple AAA rated securities"

I wasn't trying to make a direct comparison, it was an analogy.

I'm upset aboutthe corruption as well, don't get me wrong. There will be plenty of time to deal with that *after* we try to correct our flight path enough to avoid collision with the ground.

 

Economics is at best an imprecise science. IMO its models are poor and not good predictors, That's why I stopped studding it and took up psychology (Because the psychologists lied and said they did have good predictors/science)

 

There are several economic models which work great! But, on the whole, I understand what you are saying. Economics is Chaos Theory at work. It's hard to make accurate predictions and verify these through repeated experiments. In this sense, it falls below the standards of "true" science. Nonetheless, I think there are several scientific qualities to economics that should not be dismissed.

 

So what are you saying? No one should have an opinion of this because they are not "experts"?

 

That's not what I'm saying.

I encourage everyone to have an opinion on this and other issues.

The point I'm trying to make is that I think the most qualified people should be helping to structure whatever economic "fix" is put in place. I'm declaring that I am not an expert in economics. I also stated that nobody else here is, for reasons given in my last post. I certainly think it is helpful for everybody to participate in the debate with their own informed opinion.

 

Yet when you are challenged to show where us "un-experts" are going wrong you refuse to respond

Huh? Point out where I haven't responded and I'll respond.

(I haven't responded to your last post so I'll do that right after this post. I also owe Cedars a response.)

 

Norway did a passable job of this. Check out the recent article in the NYT.

Some decent financial-sector regulation (as in Australia) would be better than punishment.

 

I'm unfamiliar with Norway economics, but I'll look into it.

 

I'm completely in favor of stricter regulations/oversight to prevent this sort of scandal from occurring again. Yet, I don't advocate government intervention beyond that.

[freeztar]

Why do I have to invest in others failures? My gawd the failure and resignation in your tone.. powerless to do anything?

 

 

Well, to be fair, we could all write our congresspeople to let them know our opinions. Beyond that, I'm not sure what else we can do. :hyper:

 

"The FDIC said 117 banks and thrifts were considered to be in trouble in the second quarter, up from 90 in the prior quarter and the biggest tally since mid-2003. (The agency doesn't disclose the names of institutions on its internal list of troubled banks; doing so would likely spark a run on deposits. On average, 13 percent of banks that make the list fail.)

 

While the vast majority of banks are in good shape... "

 

Mortgage mess puts more banks at risk - Eye on the Economy - MSNBC.com

 

This list is rather telling:

 

FDIC: Failed Bank List

 

Did you even have a clue that issues arose in 2003? Nope. Why wasnt anyone screaming about the potential economic collapse then?

No, I had no clue. I wasn't really watching the economy at that time. I'll look into it though. Thanks.

The GLOBAL economy is and has been slowing. Every news report is saying even with the money infusion expect another 14 months of economic turmoil. And there is no guarentee it will work. No Guarentees!

Yeah, I think we will see hard times regardless.

 

The guarantee part bothers me as well.

 

Your really not the one telling me I have too. People in suits with political agendas or financial agendas are touting this "We gotta" mantra.

Correct.

Isnt that even more reason to sit back and say No? Economic experts ? Define that exactly. and please tell me where they have been the last 4 years as this bubble expanded and burst before their very eyes (or portfolios).

 

Being an expert does not absolve someone of human tendencies like making a mistake, or greed.

 

Whos desperation?

Everyone's!

 

Lemme guess, once this infusion of my future tax dollars (which the US government will borrow from someone else until I finally pay enough taxes (plus interest) to pay off these other investors, the benefit will trickle down to me, the taxpayer. Ya think I will see a return on this investment of my tax money in 5 years? 10 years? Silly me thinking that what happened here was private enterprise. Who coulda guessed that the tax payer was gonna have to bail out the investors. How'd that work for the enron employees who were truely screwed? How'd that work out for the GM retirees who had their retirement guarentees washed out? And why oh why is it critical that I bail out these people now when the economy didnt collapse when all these other investments were wiped out via the same type of financial paper magic?

We have a different situation now. The $700 Bil is obviously a *ton* of money. Why do you think they came up with *that* number?

You tell me what % of the market these companies occupy. I am not touting a 700 Billion dollar handout to cover my bets.

Well, I don't know, that's why I was asking. But, I'll look it up as best I can.

 

Obviously this has nothing to do with putting the american people before the interests of these companies.

Obviously?

Am I missing something? What about the talk about "Main Street"?

 

And to quote your earlier position. No one forced them to sign the contract! No one forced them to buy their c/ds, money market accounts, stocks, lottery tickets, airline tickets to vegas, visa applications, discover card applications, blah blah blah.

 

Indeed.

[freeztar]

Well I really like my idea

1 Give the sub-prime mortgagees enough money to pay off their mortgages

Ok, so instead of giving money to the 'scandalous banking industry' (SBI), you suggest that we instead put that money towards the 'victims' of the SBI?

 

How does that help tax payers? How does that help people who actually own a legitimate mortgage and work hard to secure it?

 

If Bush doesn't make Wall St happy the threat of world economic recession is real.

Indeed, yet, the onus is not entirely Bush's.

 

As a closing, I'd like to state that it would be much more agreeable (and most of the time much more logical) to affirm the consensus in this case. Unfortunately, that really doesn't make for good debate. :hyper: