Honestly, who didn’t see the oncoming housing bubble bursting? It has been clear for the past 2 or 3 years that eventually the bubble would burst and lots of people would be left holding the bag. Just because it wasn’t clear exactly when the bubble would burst doesn’t mean that anyone with a lick of sense couldn’t see that it would burst, and sooner rather than later. It’s just that housing prices were still going up then, and there were still people who thought they could sell “at the top of the market”, and didn’t want to miss their chance to get in on it. But it’s impossible to hit the exact top of the market except by pure luck, because if it were possible to predict the exact top then those predictions would change when the top occured. So while no one could predict that the whole mess would come crumbling down on a particular day, everyone who wasn’t an idiot could see that it was heading for a crumbling.
The real dumbshits in the housing debacle are the firms that bought up all those bundled subprime loans. Whatta bunch of maroons. “I know! All these loans individually are worthless crap, but if we buy a whole bunch of them, we’ll be rich!”
Sure, buying a bunch of worthless loans means that you can average out the risk. But if the loans are all crap then you’ve just bought a lot of crap.
I can understand why homebuyers bought homes they couldn’t afford…they wanted to live in a fancy house and forgot that hope is not a plan. The people who issued loans to these homebuyers are the mysterious ones.
No, that’s fine. There are more explanations for the depression than I care to remember. That “a lotta guys” feel one way doesn’t really require much of a cite, providing that you aren’t passing it off as anything more than an opinion.
I just have a special loathing for non peer-reviewed economics cites about anything substantive, whether they come from right wing think tanks, left wing think tanks, or the scribblings of my cat in her litterbox.
I keep hearing how enormous and debilitating our trade deficit is. Pardon me? I don’t see any trade deficit at all.
Yes, we buy an immense amount of foreign goods we can’t afford, but this is nicely offset by exporting our standard of living. Seems like a pretty good deal to me.
And then there’s the soul lifting fact that the world’s shunning the US dollar just like the banana republic we’re striving to be.
If we’re really lucky that ace economist Bernanke will keep lowering interest rates and oil will reach $200 a barrel, inflation will hit 10% and the whole world can have a good old belly laugh. It’s absolutely amazing that some idiots still think there’s something called the business cycle. Thank God old Bernie knows it’s no more than an outmoded myth.
Amen to that Brother: case in point: a house in a slum neighborhood in Boston is now abandoned-it is worthless-yet, it sold in 2006 for $625,000! The thieves that arranged the mortgage walked off with their commission, the sellers rode off into the sunset, and WE (the taxpayers) are left holding the bag! So, the government will bail out the thieves, and all of us who paid our taxes, lived within our means, will get stuck paying for the crimes of these thieves. You think the senior executives will lose a penny in this?? dream on!
This is what worries me. The only way I can make sense of Bernanke’s aggressive rate-cutting in the face of potential stagflation is that he is trying desperately to fend off a much worse economic crisis.
Your link states that it is a minority view among economists (I’m guessing that they’re all in the Friedman mold). With that said, I’ll accept that there is a substantial minority of them that seem to think that, even though the GDP seems to show otherwise (I’ll happily acknowledge that even with the excellent GDP growth, there was high unemployment), but I’ll stand by my challenge to Plan B, who made the claim in a factual manner. So far, I’ve seen no evidence that it’s factual.
Since 2004 gas has doubled, my health insurance has doubled, my mortgage increased by 1/3 (I have fixed mortgage but the homeowners insurance has quadrupled).
Groceries have gone up probably 40%.
Utilities have risen about 15%.
My pay has not kept up and around here there have been lay-offs in almost every area except health care.
Or trying to delay a crisis until after the election when it won’t be so likely to hurt the Republicans.
I don’t know about a depression, and I’m no economist, but I think this financial crisis is a turning point in American history. We simply aren’t as wealthy as we once were, and we’re not going to be as big a player in the world economy as we’re accustomed to being. I doubt we’ll immediately sink to third world or banana republic status (although that’s coming eventually if we don’t change our ways). But in terms of the global economy, we’re definitely not going to be the big kid on the block any more, and American standards of living are going to decline substantially.
Were there any economists who said waging an expensive war while cutting taxes is a good idea.?One neocon belief has been stated over and over…deficits don’t matter. It seems it does matter. When Clinton made a huge movement to reduce the debt, world economists were pleased. The neocons were thinking ,I could have that money for myself. Even Greenspan warned them that the huge gap between the haves and have nots was dangerous to the country.
This reminds me of the Chrysler loan guarantee of 1979. Of course this time the deal’s been done on the double-quick through the central banks and the executive branch.
I hope they know what they’re doing.
This doesn’t seem to be a bailout - this seems to be Bear Stearns getting gobbled up at fire sale prices, so the company is destroyed while those with its paper not going under also. In the Times today it said Bear Stearns was one of the more aggressive players, so them dying is appropriate.
I’m more concerned about the Sunday interest rate cut myself. The Fed is getting desperate, and that’s not good.
With lousy credit it can be hard to find a place to rent or even a job.
You know how the Book of Revelations mentions a mark that everyone has to have in order to operate in the economy? I sometimes wonder if that isn’t all true after all–they were talking about your credit score.