Can you explain that? Honestly, it’s not clear to me. How has the mortgage industry been “globalized”? And how are sub-prime mortgages linked to that?
From a wide enough macro-economic viewpoint, isn’t just about anything a blip on the radar? (No snark intended, in case it reads that way.) If the sub-prime issues have a ripple affect on other aspects of the U.S. economy, how is that a macro-economic blip? And, more confusingly (to me), if the sub-prime issue is an aspect of globalization of the mortgage industry, how can it possibly not be a macro-economic issue?
Of course, the Republican congress gave GW all he asked and the Democrats in Congress haven’t done much better. The courts? Time after time the courts have ducked the issue of whether or not national security is really at issue.
Governmental leaders seem paralyzed by their fear of the fear in the public that someone might just possibly be injured or killed in a terrorist attack.
Time after time windy orators speak of the sacrifices by “our veterans” in defending our freedoms and then proceed to defend infringing on those freedoms through fear and panic,.
Actually, they predict that the surplus would be smaller than the Bush tax cuts costs so the tax cuts would throw us in to deficit, albeit a small one. And, they also warn that things could turn out a lot worse if the rosy economic projections aren’t right.
Their crystal balls may not have been perfect…but they were a hell of a lot better than Greenspan’s.
It’s not clear to me that that is what they predicted. Their numbers, for instance, assume that the tax code would be modified (and revenues negatively impacted) to address the AMT creeping down into the middle class. This, AFAIK, has not happened.
That says a lot about “us”, but I don’t know what it says about how best to fix the budget problems.
Hah! By that logic, my taking a shit every day since Bush took office is the reason we don’t have half the schools in this country teaching creationism.
It’s clear that you are simply making assertions with no basis in fact.
Thanks, tomndebb, but that didn’t do it for me. Perhaps I misunderstood the original statement; upon re-reading my post, I realize I didn’t spell out my question very well. I certainly understand how the effects of the sub-prime mortgage market are global (decades ago, I worked for a company that did due diligence on mortgage portfolios for investment banks, e.g., those auctioned off by the RTC). But that’s not what John Mace (literally) said. At least the way I read it, the cause/effect was reversed. That is, I read it as: “the mortgage industry has been globalized. The problems with sub-prime mortgages resulted from that globalization.”
The way I see it, the mortgage industry itself – that is, the transactions made between lenders and borrowers – hasn’t been globalized; mortgages are always (relatively) local. That they then get put into portfolios for trading is unrelated to the root problems with sub-primes; those problems started with the originating lenders (overlooking loan to income ratios, incomplete disclosure, fraud, etc.).
Again, if I misunderstood the statement’s intent, I’m OK with that. Furthermore, I’m pretty sure I agree with (most of) John Mace’s defense of Greenspan. But is it clear why I asked for clarification?
For how screwed, Greenspan had some harsh words in his book. I can’t find the article on line. But it doesn’t take a rocket scientists to look at the level of individual and government debt and government deficit spending to realize the US is living beyond it’s means.
The sub-prime mortgage root issue is bankers not performing proper due diligence on home buyers, and not requiring a prudent mortgage (say 20% downpayment?). The globalization kicks in when such loans are sold on, bundled up, and then sold to investors around the world. All sub prime mortgage debt is just a new name for Junk Bonds. Sub Prime bonds can not exist without the underlying sub-prime mortgage loans. A chicken and egg thing. I will grant that the sub-prime loan issue would be a small fraction of the current size if those loans were still held by the banks/institutions/shysters that made the original loans to the buyers.
I’m surprised that this hasn’t come up here as well.
I’m a lifelong liberal Democrat, but I never bought the line that oil was a primary factor in Bush’s decision to invade Iraq, insofar as I’m “dead certain” that he would have done the same thing if there hadn’t been much oil there.
I mean, can’t you pretty much argue (sometimes more justifiably than others) that oil is a factor in every U.S. foreign policy decision, making the issue in this case more or less moot (again, insofar as I’m sure Bush would have done it anyway)? I mean, even with the particularly ugly recent revelations of Iraqi-unity-fucking sweetheart deals with Bush’s bud Hunt, does the “blood for oil” argument really stick? Or does my view that oil was just icing on the cake prevail?
But that doesn’t mean it still wasn’t about oil. Look, I don’t think he is saying we went into Iraq so the US could steal all their oil. But we all know that both Gulf wars (especially the first one) would not have happened if there wasn’t oil (or some other strategic resource) involved. Just look at Africa and the various humanitarian crises that have occurred there in the last 30 years to see what motivates the US, and the rest of the world for that matter, to take military action.
Saddam was going to sieze control of the Straits of Hiormuz? With what navy? With what air force? He couldn’t even seize control of his own territory, how in the name of Bleeding Og was he going to control the Straits of Hormuz?
The “I was misquoted” line is almost funny. How can you misquote a written down line in a book that says that it is too bad that it is politically inconvenient to say that the Iraq is mostly about oil?
When writing and during the editing process Greenspan had plenty of time to consider that statement and those accompanying it. How come he’s now trying to cover his ass with the “ins” by a verbal barrage of clarifications?
If you’re interested, he appeared on Fresh Airyesterday.
Terry Gross tried to take him to task and pretty much failed. You may not agree with his rationale on things, but bear in mind that he did work through several different administrations so he must have been doing something right.
For my part, I think he generally did pretty well, but everybody makes mistakes whether they want to or not, and Alan Greenspan is no less affected by the Law of Unintended Consequences as anyone else.