Obama To Venture Into The Private Sector In Unprecedented Fashion

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Nikko said:
Forcing? Really? I don't recall the government forcing Wall Street to do anything....
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That's exactly what the '95 revisions to the Community Reinvestment Act did. They forced banks to lower their lending standards and offer home loans to bums.

Then the government told Fannie & Freddie to buy those shitty mortgages, securitize them, and sell them, all with the backing of the federal government.

That little 'boring' action cost people trillions in savings, in their pensions, in their 401Ks.

That's what kickstarted this crisis. That's what's tearing these banks down. Financial institutions leveraged themselves to the hilt, against these shitty loans, and now the entire house of cards is crashing down. Why? Because the federal government got involved.
 


Technically, hellblazer and Nikko are both right. The government did coerce banks into making riskier loans with no upside (hellblazer position) and the market created it's own fantastic derivative products to hide the high risk loans (Nikko position) to secure their profitability.

In intervention speak, this is known as an "unintended consequence". von Mises said (paraphrased), "every intervention leads to a crisis" and it is true that every new law or regulation or tax, just necessitates more intervention, laws and taxes. Eventually the system collapses from the weight of it's own cumulative mistakes (Warsaw Pact countries, Roman Empire etc.etc.)

Complex systems eventually succumb to death by a thousand cuts.

Simple, transparent, decentralized systems (like the internet) are very resilient. They do not have a single point of failure, and the healthy portions of the network can re-route or isolate themselves from failed or poisoned nodes.
 
hellblazer said:
That's exactly what the '95 revisions to the Community Reinvestment Act did. They forced banks to lower their lending standards and offer home loans to bums.

Then the government told Fannie & Freddie to buy those shitty mortgages, securitize them, and sell them, all with the backing of the federal government.

That little 'boring' action cost people trillions in savings, in their pensions, in their 401Ks.

That's what kickstarted this crisis. That's what's tearing these banks down. Financial institutions leveraged themselves to the hilt, against these shitty loans, and now the entire house of cards is crashing down. Why? Because the federal government got involved.
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So are you saying that the banking lobby, with it's millions of dollars, was unable to peddle it's influence to politicians willing to be bought out, and forced into unprofitable business and just took it in the ass for 13 years, waiting for the day when the shit was going to hit the fan, throwing up their hands, and saying "we told you it was those shitty mortgages"?

Further,for this argument to hold up, where did the trillions of dollars in debt come from? That's a lot of houses with subprime. Some quick math shows that for a trillion dollars, buying a 200k house, there are 5 million "bums" out there. Reduce that house down to an average of 100k over the last 13 years, and now you have 10 million bums.

Really? The banks were "forced" to take risk on 10 MM mortgages and didn't bitch about it once in 13 years . .

RRRRiiggghhhtt.
 
guerilla said:
Technically, hellblazer and Nikko are both right. The government did coerce banks into making riskier loans with no upside (hellblazer position) and the market created it's own fantastic derivative products to hide the high risk loans (Nikko position) to secure their profitability.

In intervention speak, this is known as an "unintended consequence". von Mises said (paraphrased), "every intervention leads to a crisis" and it is true that every new law or regulation or tax, just necessitates more intervention, laws and taxes. Eventually the system collapses from the weight of it's own cumulative mistakes (Warsaw Pact countries, Roman Empire etc.etc.)

Complex systems eventually succumb to death by a thousand cuts.

Simple, transparent, decentralized systems (like the internet) are very resilient. They do not have a single point of failure, and the healthy portions of the network can re-route or isolate themselves from failed or poisoned nodes.
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And there's the rest of the story . . . . bankers bitched, got some derivative instruments pushed through, sold air to each other, and here we are.
 
hellblazer said:
And by the way, whoever loftily said they want to discard ideological discussions, what do you think Obama and his ilk are? Ideologues - we all are. You're one. I'm one. And I've got decades of economic innovation and progress on my side. You people have got double digit unemployment and pathetic economic growth on yours.
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Number one I was not arguing for the economic model of france, I was stating the FACT that we are one of the least socialist nations on earth (along, amazingly, with China) and that people from other countries would agree with this point.

Number two, what position do you claim that I have that has double digit unemployment on my side? If you are paying attention I have been rallying against the corrupt principle actors which I believe led to this current situation. And it has less to do with Government than greed.

It takes some balls to say that the current economic problems are the result of government interference instead of lack of regulations.
 
ck256 said:
So are you saying that the banking lobby, with it's millions of dollars, was unable to peddle it's influence to politicians willing to be bought out, and forced into unprofitable business and just took it in the ass for 13 years, waiting for the day when the shit was going to hit the fan, throwing up their hands, and saying "we told you it was those shitty mortgages"?

Further,for this argument to hold up, where did the trillions of dollars in debt come from? That's a lot of houses with subprime. Some quick math shows that for a trillion dollars, buying a 200k house, there are 5 million "bums" out there. Reduce that house down to an average of 100k over the last 13 years, and now you have 10 million bums.

Really? The banks were "forced" to take risk on 10 MM mortgages and didn't bitch about it once in 13 years . .

RRRRiiggghhhtt.
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stop, you're using facts to argue, that's unacceptable. Clearly the problems are from a law from 14 years ago and the forced hands of banks during the decade and a half that followed.
 
Nikko said:
If you're not with us, you're against us.

If you dissent, you're unAmerican.

If you don't like it, leave.

WHERE THE FUCK HAVE WE HEARD ALL THAT SHIT BEFORE EH.
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Are you a terrorist? Why do you hate freedom?




/sarcasm
 
ck256 said:
Really? The banks were "forced" to take risk on 10 MM mortgages and didn't bitch about it once in 13 years . .
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The banks didn't bitch because the government bought their shitty loans. What do you think Freddie and Fannie are? They devoted a trillion dollars of their budget to buying these shitty loans.

Then Fannie and Freddie securitized those shitty mortgages and sold them. That's why the banks didn't care - it was the taxpayers problem. And now we're footing the bill. And none of this would have happened if the government didn't stay out of the private sector.
 
guerilla said:
....the market created it's own fantastic derivative products to hide the high risk loans (Nikko position) to secure their profitability.
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WHAT IN THE WORLD ARE YOU TALKING ABOUT??

The "market created it's own fantastic derivative products to hide the high risks...."

etc

Guerilla, you are a smart fellow but you have to let go of your unbridled genuflection to the capitalism Jesus-god.

You have obviously not sat in a room with a group of structured finance "professionals" who created these products. If you had you would know that the "perfect market" didn't just create some infallible mechanism that didn't require any oversight and that they could afford to be "risk loving" vs. "risk adverse" and take unneeded risks because they could get away with it....

Since you are such a fan of wild, wild west capitalism with no rational oversight, I would encourage you to read Ray Dalio's letter to his investors - one of the greatest fixed income investors to currently walk the face of the earth.

Incidentally he was a McCain supporter. Even with his brilliant capitalist mind and outstanding fixed income derivative products that could mitigate risk by separating and hedging the alpha from the beta in a portfolio, even he points to the fact that greed plus some imperfections in the market got us to where we are. So you go right ahead and continue thinking the "too big to fail" doctrine and the half witted, deerfield cum dartmough jocks who were gambling with retired teachers's money so that they could buy a second home in the south of france are "perfect" and should be left to do what they will since the "market is perfect...."
 
riddarhusetgal said:
WHAT IN THE WORLD ARE YOU TALKING ABOUT??
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You admitted your ignorance of what I am talking about at the beginning of the post, but didn't have the good sense to wait for an answer.

When you're ready to write to me rationally, and calmly, I would be happy to explain life, the universe and everything to you. But that post had at least 5 strawmen, and 2 appeals to authority in it. I can't fight positions you attribute to me incorrectly, or experts who have been wrong leading up to the crisis.

Signed,

Your pal Guerilla

PS, you also could have stopped posting after this part
riddarhusetgal said:
Guerilla, you are a smart fellow
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Next time though, include something about how I am so hot and smart :music06:, and how it makes you smolder with liberal rage :angryfire:.

PPS, you still do not understand where I am coming from on economics. I'm here when you are ready to challenge what you think you know.
 
As I think about it, you're right on all accounts as usual. The sooner we surrender ourselves to your infinite wisdom and unmatched sagacity, the better off we'll all be.
 
aim said:
We need to just let the dissatisfaction with the general public grow and sizzle for a while and then march to the white house and demand impeachment. A middle class revolution, if you will, with a demand to sound monetary policy and responsible government.
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They're already building FEMA detention camps in every state for your ass. Check HR 645 and buy some guns while your at it.

They already know people are going to be pissed off for getting taxed for every mile driven, and farmers in redneck country are going to go broke and flip their lid having to pay carbon taxes on their cattles FARTS. Can you fucking believe it, A TAX ON FARTS! I kid you not.

Shits going to hit the fan in a few years. Just be ready.
 
Shit is indeed going to hit the fan. Based on the trillions we're being forced to spend to buy up insolvent companies in an attempt to parlay it like a bad gambler - we're fucked.

It's a completely fucked up world where nobody has to take responsibility for their financial actions. Example - I know a couple who filed for bankruptcy 60 days ago and purchased a PS3 with their income tax refund last week. They are already on wic, welfare, stamps, you name it. They don't even both work full time. They are ages 24 and 25...

Makes me sick to think that there are literally millions of people just like them - and that Obama thinks that I should just be willing to let him spread the money I make working my 12 hour days around to all the undeserving do-nothing mother fuckers that spend their money on a PS3 instead of going to the grocery store and putting some money in savings.

I'm sorry - but I believe that if you work hard in this country you can at least "make it" - you might not get rich, but you'll make it. Every time I go through a fast food drive up there are at least 2 middle aged people working in there. If you are over the age of 30 and you are working at McDonalds, you are not trying hard enough - and if you can only afford to live in a slum trailer park as a result, that's your fucking problem not mine - I shouldn't be expected to put you up.

The Robin hood approach to economics is fucked, and so is Obama's assault on the free market system.
 
hellblazer said:
I swear it's like you guys are brainwashed sometimes...
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Tell this to the people who are dying because they can't afford healthcare in your country. Go to them and sit with their families as they die and then explain to the family that it's right that this happened, because the government interfering in private businesses such as healthcare is wrong and is in fact socialist (not your words, but a common enough refrain among Americans who oppose government spending).

I personally think the bailout was stupid, mostly because it didn't fix shit, just delayed it so the rich guys could cash out. Now when stuff fails and thousands of people go on welfare, instead of having cash to put towards public works and other programs to aid those who have been screwed by the rich guys who got their money out, it will affect everyone as tax rates go up to support the unemployed. It's genius. And the problems here aren't the fault of the jobless. It's not because they are bad at what they do.

hellblazer said:
...level fucking playing field...
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Level playing fields are systems where your parents success has ZERO effect on you personal success, and where your previous success has ZERO effect on your continued success. Mainly the rich get richer, and the poor get poorer. America may be the land of opportunity, but you are blind if you think the playing field is level.

hellblazer said:
...There's a reason we drive SUV's while Italians are squashed into matchboxes...
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Honestly from my own opinion, and from the opinion of many people I know. SUV's are big wasteful cars that nine times out of ten are uglier than sin, crappily built and never used for their intended purpose of going off road or carrying large amounts of shit... Why is having SUV's a sign of America being a good place? Especially when your car manufacturers are about to go out of business without significant government input, which you claim to hate.

hellblazer said:
...There's a reason 'poor' people here have cell phones, flat-screens, and can afford copious amounts of weed. It's called government staying the FUCK out of our business. And its gonna stay that way.
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No it's called cheap debt. Where customers spend beyond their ability to earn because debt is freely available. Mainly caused in America by a profligacy of cheap mortgage debt that bouy's consumer spending, which, as I discuss above, has ended in large government buyouts that further screw your poor, and inflate the wealth of your rich, skewing that "level playing field" even further.

hellblazer said:
...
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And this post about... well about how other countries suck. America has alot going for it, but one of the most powerful forces in your economic engine is the efficient allocation of capital by the private sector. Usually this system works fairly well, it picks the best place for the money to go. However what mainly happened with your recent crashes was that some smart rich fucker pulled the wool over the eyes of most of the investing community by making bad credit mortgages look like legitimate investments. They were fucking cheap too, everyone bought them because they looked like a good deal, but they weren't. The reason is relatively well explained elsewhere, but what it comes down to is that they lied when they sold the debt. And it was a fucking house of cards, so when some fell, it all fell. Due to lying and greed on the behalf of a few, everyone was screwed.

You may say deregulation is not to blame, that's fine, I can live with your opinion on that being different to mine.
 
Metcalfe said:
Tell this to the people who are dying because they can't afford healthcare in your country.
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What about the people who die on waiting lists? What about the people who die because there is only one service level?

Metcalfe said:
Go to them and sit with their families as they die and then explain to the family that it's right that this happened, because the government interfering in private businesses such as healthcare is wrong and is in fact socialist (not your words, but a common enough refrain among Americans who oppose government spending).
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What the government is doing, is taking from someone else by threat of force to save that persons life. Don't make ends justify the means arguments, and then try to claim the moral high ground. No one is buying it.

Metcalfe said:
You may say deregulation is not to blame, that's fine, I can live with your opinion on that being different to mine.
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Deregulation is not to blame. Madoff was best friends with everyone in the SEC as he ran the largest private ponzi scheme in the history of mankind.

What is to blame, is a system where people know they can get away with things, because the only people watching are the regulators, not all of their customers. When people can see clearly what they are buying, instead of relying on regulators and ratings agencies that have been bought off, they will at least be going in to a transaction aware of the risks.

You can regulate until you are blue in the face. You can't control crooks. All you can do is make it harder for private citizens to make informed, intelligent and rational decisions in the marketplace. As it is, banks already write the legislation and then Chris Dodd puts his name on it. Then later tells the media he didn't read the bill, so he doesn't know what he put his name on, meanwhile Countrywide bank is giving him sweetheart mortgage deals.

Regulation is a con game, always has been, always will be.

More laws have never made a people better. Being educated and informed has always raised the moral standard in a society. If rules and control were the key, the Soviets would still be kicking ass. The authoritarian Chinese governments would have perfect societies.

Think about that.
 
Metcalfe said:
Tell this to the people who are dying because they can't afford healthcare in your country. Go to them and sit with their families as they die and then explain to the family that it's right that this happened, because the government interfering in private businesses such as healthcare is wrong and is in fact socialist (not your words, but a common enough refrain among Americans who oppose government spending).

And the problems here aren't the fault of the jobless. It's not because they are bad at what they do.
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There are people who are dying because they can't afford healthcare, and that's sad. Some people have genetic diseases, or other health problems that they can't help but having.

Then there are people who have medical problems because of lifestyle choices that they made. There are people who are unable to pay their medical bills because of choices that they made and an overall lack of planning. There are very few people dying because they can't afford healthcare. Charity and pro-bono work go very far in the United States. People step up and help other people out quite a bit here. We just like to know where our money is going, and a lot of us are very tired of paying for someone's baby's momma to pop out another paycheck, or paying for their diabetes medication because their entire diet for the last 20 years has consisted of McDonald's apple pies.

And many of the problems ARE the fault of the jobless. There are easy, free ways to improve your skills enough that you can get a job in America. Job training is easily available - and if you don't like that route, there's always ditches to be dug. There is work, if you want it, and if you want to eat.

Level playing fields are systems where your parents success has ZERO effect on you personal success, and where your previous success has ZERO effect on your continued success. Mainly the rich get richer, and the poor get poorer. America may be the land of opportunity, but you are blind if you think the playing field is level.
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FUCK level playing fields. The only level playing field is on a foosball table without any humans controlling the little kicky guys. And what fun is that? The only people whining about level playing fields are pussies and losers. Rich get richer because they've found their niche and are able to exploit it. The poor get poorer because they're whining about level playing fields and are waiting for a messiah to come save them from their own laziness and stupidity.

Honestly from my own opinion, and from the opinion of many people I know. SUV's are big wasteful cars that nine times out of ten are uglier than sin, crappily built and never used for their intended purpose of going off road or carrying large amounts of shit... Why is having SUV's a sign of America being a good place? Especially when your car manufacturers are about to go out of business without significant government input, which you claim to hate.
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SUV's rock when you have 7 people in a family that all need to go somewhere.

SUV's rock when you need to go pick something up, or when you're doing your grocery shopping.

Why am I justifying SUV's to you? Either you like them or you don't. It's nice to have the freedom to choose, however.

No it's called cheap debt. Where customers spend beyond their ability to earn because debt is freely available. Mainly caused in America by a profligacy of cheap mortgage debt that bouy's consumer spending, which, as I discuss above, has ended in large government buyouts that further screw your poor, and inflate the wealth of your rich, skewing that "level playing field" even further.
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Spending too much leads to bankruptcy. Our government isn't letting business fail and that's going to bite us in the ass. But we get the government we deserve.

And this post about... well about how other countries suck. America has alot going for it, but one of the most powerful forces in your economic engine is the efficient allocation of capital by the private sector. Usually this system works fairly well, it picks the best place for the money to go. However what mainly happened with your recent crashes was that some smart rich fucker pulled the wool over the eyes of most of the investing community by making bad credit mortgages look like legitimate investments. They were fucking cheap too, everyone bought them because they looked like a good deal, but they weren't. The reason is relatively well explained elsewhere, but what it comes down to is that they lied when they sold the debt. And it was a fucking house of cards, so when some fell, it all fell. Due to lying and greed on the behalf of a few, everyone was screwed.
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Everyone wasn't screwed until we started bailing people out. Now everyone's screwed. Everyone was stupid, and we should have allowed them to FAIL: The people buying houses they can't afford, people getting them approved without verification, people buying the mortgages and so on. Let it FAIL.

You may say deregulation is not to blame, that's fine, I can live with your opinion on that being different to mine.
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Good. For now, anyways. I'm sure freedom of speech will be on it's way out when it's determined we can't afford it anymore here.
 
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