“I say, when life gives you a lemon, wing it right back and add some lemons of your own!”
Which is probably precisely why Nancy Pfotenhauer keep insisting on Hardball the other the other night that McCain and the Republicans will lead us out of the current crisis. However, when asked by Chris Matthews if, in the eight years they’ve been in the White House and the six of those eight years they controlled Congress, they had anything to do with the deregulation and the current mess, keep insisting that the Democrats caused it.
Number of brain cells: one.
Number of talking: innumerable.
Amount of embarassment: priceless.
See here: http://www.truveo.com/Whos-to-blame-for-economy/id/3354111519
smiling bandit, if I recall correctly, you’re a healthy single dude without a family to support, right? I agree with you that this won’t be the end of the world, but can you see how the situation might be more alarming to someone in their 40s or 50s with kids to support, worries about affordable health care and a 401(k) or other retirement fund that’s losing money?
But it does. It’s more than just “my” situation. People are scared because the lapse in the economy is finally starting to affect those who are fairly high in the food chain. If they’re finally starting to feel the pain, imagine how it is for those of us much closer to the bottom of the foodchain (and I’m not even that close to the bottom). Shit rolls downhill, but if the shit gets backed up far enough, it starts seeping uphill, too.
The upper middle class is finally starting to realize that we’re in some trouble here, but the hardships that much of the upper middle class is facing (oh noes! I can’t afford starbucks!) are paltry in comparison to what people are already facing, a little further down the chain. There is a reason to be less-than-chill: people are going into financial ruin. Poverty is a hell of a thing to try to drag yourself out of. I’ve always been in the working-poor class, even in a healthy economy. There’s a lot of misery out there because of what’s going on, and it’s not going to be fixed by taking deep, relaxing breaths or whatever you do to chill out.
What I am talking about is this, because prior to the repeal of the Glass-Steagall Act commercial banks where not allowed to speculate on Wall Street with your savings.
And before everyone gets all friendly with bashing Republicans both parties have some blame. Clinton signed it, former Treasury Secretary Robert Rubin (now Obama’s advisor) championed the repealing of Glass Steagall, and McCains main economical aide Gramm pushed it through.
ALL parties are guilty for this transgression, and it is only recently news talking heads are starting to realize this.
The Commodity Futures Modernization Act led to deregulated credit default swaps. That basically made debt caused by bad loans too “disappear” HAHAHA
These companies basically swapped debt to make books look good, so the CEO’s could keep the multimillion dollar jobs and when the chicken came home, they laid the egg. Well no, we did I guess since the government is now in the business of buying businesses. In Soviet Russia the business buys you! Or something…
Or the thousands who work for companies that are teetering as we speak. This is the beginning of a collapse, and Uncle Sam trying to plug the levee is just going to make it more painful.
The bottom needs to hit, then we can start rebuilding. All this trying to delay it, with stimulus checks, mortgage bailouts, company bailouts is not going to stop it. Over valued stocks, over extended credit, inflated home values, all have to come back down before we can start the recovery.
Hey, if we’re going down, we’re taking the rest of you fuckers with us!
(and which two countries are you referring to? Is Mexico one of them, 'cause I believe we DO have a third of their population here…)
Like I said before, I will chill when I am certain that I can keep my cushy finance job.
More generally, even “value” companies have to manage their capital structures. When banks are illiquid, debt is costly and hard to come by. When the stock market is depressed, equity offerings are less than exciting. When the financial sector suffers, everyone suffers.
Didn’t you hear? It’s clearly all Clinton’s fault:
Look, people keep trying to blame somone - inevitably the political party they don’t like. The fact is that you’ve got foolish people, or even very smart people who thought the risks were good, on both sides. McCain has Phil Gramm, Obama has his Fannie and Freddie boys, everybody’s connected to this. They dind’t think it was going to crash, at least not now in this way. And in fact, AIG and Lehman Bros. might not have died had their management been on the ball. But the relevant deregulation has gone back at least to the Reagan era, and arguably even farther, and none of it somehow “made” the crash happen. It happened because people made bad judgements. Heck, even the deregulation of the line betwen commercial and consumer banks would have probably been fine if Congress not pressured them to lend to everyone even when it was stupid.
You can rationally either blame everyone, or decide that such blame is pointless. Ain’t no other option without just shoving the blame onto someone, because it’s not just one man, or one party’s fault.
Maeglin, sorry about your possible job loss. It sucks. Been there. But, cold as it may sound, it ain’t the end of the world.
DiscordiaAh, you do know that population size is virtually uncorrelated to global wealth/influence/power/culture, right? Plus, America is actually growing in relative population size to almost every nation on earth, and has actually never held a better relative population position vis-a-vis the most populous nations.
burundi, yes, I am lucky in that I don’t ahave a lot of obligations. That helps me see the issue more clearly, because I am not stuck worrying for myself (although I may not be able to get the loans I need to finish my second degree). Fact is, few people are going to lose their jobs over this. We may have a temporary position of slower growth, and then, as it always does, the market will pick right back up and go along. Again, we’ve had vastly worse troubles many, many times.
DianaG: Actually, if you’re so obsessed over spelling that the odd typo causes you freak out and lose and sense, then please do cease commenting. Your useful contribution is less than zero at this point. And this may be the Pit, but I still try to make useful posts.
Bugger that.
My state was facing a projected $25 Billion shortfall in revenues over the next three years. Before the events of Monday.
Now we’re facing an even larger, and worse, funding crisis. And I do not trust my state government to act decisively to cut spending.
Don’t tell me that my frustration, disgust, anger, and even a little fear, are based on ignorance. I’m not calling what is happening this week a Depression. I am going to continue to call it a crisis for my state. If you can point out one episode of unrealistic hyperbole from me in this thread, I’ll be happy to eat my words. But I remain convinced my concerns are completely legitimate and based on an accurate (If not as thorough as it might be) understanding of events, and their effects.
AIG is getting screwed because they made poor decisions regarding extending credit. One of the many names that they go by to the general public is American General Finance. They’re the ones who’ve always done the riskier loans at insane interest prices, because that’s what a finance company does. They’re the Rent-A-Center of the financial market. They’ll hook up anyone who’s willing to pay through the nose for the ability to borrow money. They were also subprime lending like nuts, it’s an effective marketing strategy for a company that lends money at up to multiple times the prime rate.
They took the money that they had sitting in reserves for insurance payouts and lent it out to make more money. When the big Wall Street investment banks took it in the pooper from buying loans that were being written by hack mortgage brokers it was just a matter of seeing if AIG’s reserve was large enough to absorb their losses from the same types of deals. It wasn’t.
Long story short, if you want to know who to blame the hardest for the mortgage collapse it’s 50% lenders allowing non-standard loans to become available to people who never should have been offered those products combined with shady, shyster mortgage brokers who would gladly beat people out of their livelyhoods for their $4000 check for referring the borrower to the lender in the first place. Mortgage brokers are the most rotten lying cheating fabricating asshelmets in American business today.
Strong words there. If lift your head out your little sandbox for a moment, you might notice that this problem is actually not confined to the world of America. Central banks all around the world (i.e. that place outside the U.S.A) are pumping cash into markets to stop them collapsing. http://www.iht.com/articles/2008/09/18/business/markets.php
Almost a quarter of a trillion dollars in about a day, and you think this is just another bump in the stock market? You’re a fucking moron.
Life will go on, DUH, obviously this isn’t the fucking apocalypse, but there is going to be a lot of lemon-sucking.
How is this a fact? And what constitutes “few” to you? Under a million worldwide?
Take your own advice and STFU.
No, it is neither the end of the world nor the end of me. But seriously, there are very, very, very few things that can cause the end of the world. Are these the only problems people have a right to be viscerally upset about?
There’s upset and then there’s OHMYGAWD WEER DOMEDD!!111one
I see a lot more of the latter than the former. And given that this kind of even or worse happens regularly every 5-10 years, obsessing over it, or even being terribly upset, is pretty darn sad. It’s like being upset that a tornado (or maybe hurricane given the news?) knocked your house down… when you live in Tornado Alley. Yeah, it sucks, but you can’t honestly say you weren’t warned of the risk. preparations are mental and emotional as well as phsyical. And I have little sympathy to spare for people who don’t do it - there’s too much suckage around the world in the best of times.
Oh, it’ll probably be far under a million. The real cost will be in opportunity not taken. But c’est la vie.
With respect, maybe what you see in Knoxburg or wherever is just a bunch of morons. But over here on Predatory Lending Lane, we are quite used to the ups and downs. You are not considered a veteran unless you’ve survived a nice bear cycle.
The difference, as has been pointed out, is that this is not just a crappy bear market or a run of the mill asset valuation bubble correction. 2001 sucked, sure, but it was pretty ordinary. The financial system was quite healthy, but some folks who were long on bullshit ventures ended up holding the bag. Yes, people lost their jobs, yes it was hard, but no, it was not the end of the world. Survivors survived.
Where I am, people aren’t going crazy. Many are quite used to losing millions of dollars with aplomb. But the sheer scale of this problem and its implications for global capital markets in general are pretty fucking serious. To trivialize that because a few people are running around like morons is, well, moronic.
I am not a trader: I am a statistician in a consumer lending business. But events like this, oddly enough, make me wish I were trading.
The two analysts they talked to on NPR Marketplace this morning both said that WaMu remains a strong financial company. It’s their mortgage division that is in trouble due to … well … bad lending practices. They doubted it was dire enough to bring the whole company down though. FWIW
Problem with bailing out the companies is that they still have a lot of bad mortgages on their books. A cash infusion just delays the inevitable. You have to deal with the homeowners. If they are coming up for an interest rate increase ,stop it. Give a rate that you both can live with. Keeping them in the home and making payments is the key.
BINGO!!! WE HAVE A WINNER!!!
This is going to be the worst meltdown since the great depression. However, the great depression featured deflation because one of its contributing causes was shrinking the money supply, which is not happening now and is not going to happen. FRB: Speech, Bernanke--Money, Gold, and the Great Depression --March 2, 2004 Without deflation, this isn’t going to be as bad as 29. However, it will be bad enough that few alive will remember anything worse, and nothing in the future is likely to be as bad if we learn from it.
The temptation for money managers to pressure the government to remove safeguards which prevent them from earning fast profits for the companies and bonuses for themselves now, while putting off high risk further down the road is simply too great. Long term risk by human beings is under appreciated even without the intoxication of short term gain. When the money managers are legally allowed to donate to the campaigns of politicians who would otherwise prevent long term risks, we are doomed. Money managers take risks in competition with other money managers. Without government imposed limits to risks that different kinds of legal investment opportunities, enough of them will take these kinds of risks that it will endanger our entire financial system.
To lessen the fallout I recommend:
- The various separations of banking, insurance and trading should be reinstated.
- Don’t ever vote for a fucking Republican with the belief that you are helping the country financially. The Republicans were complete idiots when the caused the great depression, and they were complete idiots when they allowed S & Ls to act like banks in the 80s and they were complete idiots allowing finance, insurance and trading to merge, all for the same reasons and with the same rationale. Corollary: any Republican who denies these things should be ignored as a complete idiot. Yes, that is poisoning the well, but this isn’t just a logical argument, national economic survival is at stake. Republicans are economically incompetent. Duh. Voting for Republicans for other than financial reasons is another topic, but Republicans will turn any financially stable government into a shit storm and then expect everyone else to bail them out.
- Hi Opal.
- Don’t vote for McCain. His chief economic adviser, retired Sen. Phil Gramm is the author of the legislation that destroyed our protections. Do not be fooled by his PhD in economics, he is an idiot who never worked in the private sector a single day in his life before retiring from Congress. Neither has McCain.
As for the idiocy about a fall in confidence caused all of this, I must point out that economic confidence is not the same thing as the kind of confidence that makes you feel good about yourself. Economic confidence includes the likelihood of all debtors paying their creditors in full and on time. That cannot be fixed by putting a dildo up your butt and grinning. Ignore people who tell you that economic confidence will improve as long as you don’t personally think anything bad will happen. Bad things have happened, are happening and will continue to happen and your personal pollyana outlook will not help. Move your investments into the safest investments you can. Invest like a careful person on a pension. If you haven’t, do so now!!! Do not wait until your idiot friends tell you to take action, they will not until after they have done so.
Lastly, I want to take a shot at Alan Greenspan. He was a complete fucking tool and idiot moron throughout his duration at the fed where he consistently eased up on credit restraints and reserve requirements. And it should have been obvious at the time he was first appointed. The clue: Anyone over the age of 30 who admires the “thinking” of Ayn Rand is a dipshit who knows only enough to be dangerous about philosophy, economics and writing. People who admire Rand up to the age of 30 are quaint and sexually loose, and therefore quite tolerable.
The government doesn’t have the authority to change private contracts, the constitution specifically prohibits it. The government could, and should, refuse to help or bail out any lender that doesn’t agree to drop the interest rates to what they were 18 months ago.