Economic: THIS IS WORTH THE TIME

[Ghost]

I think everyone in this country should see this. I literally could not stop watching. I'm glad someone shook me and told me about it.

http://www.youtube.com/watch?v=CQ4JXW_ErXQ

There are 3 9-minute videos that outline what is really behind the financial system bailouts. I am not a big fan of Bill Moyers, but he has the right guy on his show here and lets him talk. There is so much useful information here relative to any political slant, I think it is worth ANYONE'S time to watch all 28 minutes of video.

I am extremely thankful someone turned me onto this information. This is the kinda thing that I think makes networks of good, honest people, regardless of political leanings, so valuable.

[txtaz]

How about a synopsis for the uninitiated...:yes::eek:

Are crib notes available?

[handfulz28]

How about a synopsis for the uninitiated...:yes::eek:

Are crib notes available?

30 minutes of my life I'll never get back.
Conspiracy, conspiracy, conspiracy
Fraud, fraud, fraud
Buy my book.

:rolleyes:

The guy makes some points regarding fraud which are nothing new, namely Alt-A and NINJA loans. Nobody denies there were lots of people scamming the lenders. And there's plenty of evidence that lenders were either lax, or totally abandoned risk-averse underwriting standards. I didn't hear anything new in what this guy said.

At the true core of this "crisis" was the prolonged trough of artificially low rates and the subsequent rapid rise thereafter. In one year, interest rates ie borrowing costs doubled for everyone, including businesses and households. The value of assets paying those low rates decline. The crunch starts there. Now turn the screws on everyone a little harder by increasing energy costs. As those costs filter through the system affecting nearly every item you purchase, the infection goes deeper. It doesn't take long for a consumption based economy to come to a screeching halt.

Instead of thinking that through and realizing it's not so much about assigning blame and more about an intricate economy, it's a heck of a lot easier and more media friendly to find a few rotten apples. It's always somebody elses fault...

[Ghost]

30 minutes of my life I'll never get back.
Conspiracy, conspiracy, conspiracy
Fraud, fraud, fraud
Buy my book.

:rolleyes:

The guy makes some points regarding fraud which are nothing new, namely Alt-A and NINJA loans. Nobody denies there were lots of people scamming the lenders. And there's plenty of evidence that lenders were either lax, or totally abandoned risk-averse underwriting standards. I didn't hear anything new in what this guy said.

At the true core of this "crisis" was the prolonged trough of artificially low rates and the subsequent rapid rise thereafter. In one year, interest rates ie borrowing costs doubled for everyone, including businesses and households. The value of assets paying those low rates decline. The crunch starts there. Now turn the screws on everyone a little harder by increasing energy costs. As those costs filter through the system affecting nearly every item you purchase, the infection goes deeper. It doesn't take long for a consumption based economy to come to a screeching halt.

Instead of thinking that through and realizing it's not so much about assigning blame and more about an intricate economy, it's a heck of a lot easier and more media friendly to find a few rotten apples. It's always somebody elses fault...

Do I understand correctly that you contend there was no fraud on a massive scale? No deliberate misrepresentations of the values of instruments from ratings agencies? No awareness on the part of both the buyers and sellers of the credit default swaps that real estate was radically overvalued, and that any insurance that was purchased could not possibly the inevitable claims? No willingness to look past that reality, on a massive scale, to rake in obscene profits based on insurance commissions for knowingly hopeless policies?

Or are you simply saying it is old news? I'm fine with that, except it is old news perhaps to a few, but the average voter should understand, and DOESN'T yet. Hence my post. A lot of good info about what actually took place here. If you haven't heard it, it is NEWS to you, and most people don't really understand this stuff yet.

Further, it is one thing to suggest the fraud is old news, but why do you poo-poo it? I gotta disagree with you there. It is huge, and important. And we should be going after the cheats. All due respect, but who are you to say "so what, all that fraud is SO last Tuesday," when the taxpayer is now on the hook to pay off the claims that AIG could not?

And mocking this by implying anyone who is pissed about the fraud is just a conspiracy theorist?! WTF? I don't get that. PEOPLE MISREPRESENTED WHAT THEY WERE SELLING ON A MASSIVE SCALE. AND REGULATORS TURNED A BLIND EYE. AND MILLIONS ARE SUFFERING AS A RESULT, AND FAR WORSE IS YET TO COME. Fraud is fraud. How do you take so lightly the transfer of liability from liars and cheats to the uninvolved, innocent taxpayer? Seems pretty damned flip. What am I missing in your position here?

And finally, if you think that somehow all the fraud you acknowledge but call old news is irrelevant, and all that happened was a function of a swing in interest rates, WHO HAS BEEN IRRESPONSIBLY SETTING INTEREST RATES AT ARTIFICIALLY LOW LEVELS FOR 15+ YEARS? AND WHY? AND WHY AREN'T YOU PISSED AT THEM, THEN, IF THE INTEREST RATE SHIFT IS THE CULPRIT?

Calling our current situation a "crisis" seems pretty flip as well, considering we'll be north of 10% unemployment in another couple of months.

Dude, I am nearly at a loss. So you think the guy wants to sell books. Of course he does, sure. But can you clarify what information in the videos was not true, and why no one should care about what is true?

Mike

Edit: for clarity, my contention is not that the banking debacle is the root of our economic woes. Massive increases in the public sector of the economy, which does not produce value that raises living standards, is at the root. Massive government and corporate and personal borrowing HID the pain for a long time. And now, the massive bank fraud discussed here, is akin to stealing the car keys and wallet of a collapsed heart-attack victim. The most important resolution is fixing his diet and exercise. But that does not excuse the theft, and we should nail the thief as well as fixing our cardiac health.

[handfulz28]

:chillpill: (just noticed that one :D)

I didn't say that anything he said was not true. But I do not believe there was fraud on a massive scale, such as to have the ability to bring us where we are today. There are way too many economic factors, not attributable to fraud, that combined to get us to this point.

I'm not going to go into a diatribe that might get personal. I chime in here because it is my opinion that most of the information provided to the public is rooted in directly finding malicious fault to make us feel better about there being a bad guy to pin all of this on. I've offered my thesis as to what truly brought us here. And no, I'm not looking to hang Alan Greenspan because he was the chairman of the Federal Reserve during the period of low rates and hasty rate increases. I'm paying 4.5% on my mortgage and now 2.74% on my equity line; my mortgage resets next month and the rate will stay the same, or go down. Should I feel bad about that?

I hope you're sitting down for this one....about those committments and guarantees that the Treasury is on the hook for....














$9.9 Trillion is the latest I read. Remain calm, all is well. :beer: :wavey:

[Ghost]

I presume you believe in markets. And that markets have natural corrective forces. And that interest rates are normally set by a natural market. But if this is not your belief, give me a shout on that and it will clear up a lot. On the one hand, you mention things that seem to show awareness of this. And on the other, you seem to forgive all who have used their positions of power to tamper with the market, for no reason I can see. Just because real market forces never stopped acting in the artificial marketplace does not excuse CREATION of the artificial marketplace.

Artificially low interest rates encouraged reckless borrowing and discouraged saving. Moreover, artificially low interest rates are like an Allstate charging half the right price for premiums and then ending up unable to pay claims. Interest rates need to vary. When there is more risk, rates should be higher. But they weren't. Why not? Because someone was tampering with the real market, setting rates artificially.

Also, real estate prices are based largely on rates, because most of what determines a monthly payment is interest. You have mentioned this yourself. So artificially low rates artificially inflate real estate values.

And the ratings folks and the banks and insurance people and the government regulators ALL knew the real estate market was grossly inflated. Instead of adjusting for the reality they knew to be the case, they charged ahead full tilt to cash in obscenely in the short term, with massive defaults KNOWN to be coming. They created and sold and got rich selling instruments that were supposed to be AAA rated but they KNEW were not. This was fraud on a massive scale. Just because this was not the sole cause of all our problems doesn't mean the guilty should not be found and punished, to stop it from happening again. But at a bare minimum they should be left to lie in the beds that they made in the market, without being saved by the rest of us.

I have said before I think the biggest problem with our economy is the bogus public sector, itself an artificial creation that will come crashing down. Sadly, government and personal borrowing has allowed this root problem to go a long way unchecked, accelerating today with the stimulus plan and most recent budget proposals.

I must admit I am fascinated by your apparent blase attitude toward the perpetrators of fraud. I would be more willing to be blase except that I am being forced, by threat of further confiscation or imprisonment or death, to surrender what I have earned, in order to pay for this fraud. Had the investors and companies been allowed to suffer the appropriate corrective forces in the market, as someone who made a point of not investing there, I could afford to be less concerned. Where do you stand on this? From my perspective, there is a two by two matrix of decisions about whether to regulate and whether to bail anyone out if they get in trouble:
1a: regulate a lot, no bailouts
1b: regulate a lot, bailouts
2a: no regulation, no bailouts
2b: no regulation, bailouts

One can make a case for any of these, EXCEPT 2b. But that is what we have done. We let the regulators take bribes to turn a blind eye, or cash in on the short term to turn a blind eye. And then we FORCED the taxpayer to pay for bailouts. This is UNCONSCIONABLE.


And if you don't think someone at the Fed or elsewhere is to blame for the consequnces of tampering with interest rates for 15+ years:
Do you think artificially setting low interest rates is something that anyone should be held accountable for?
If not, WHY NOT?
Why should anyone be allowed to set artificially low rates that guarantee there won't be enough interest collected on healthy investments to cover defaults on unhealthy ones?
Who has a moral justification to set interest rates ANYWHERE OTHER than where the naturally self-correcting market would set them?
I say nobody has a moral justification for that, since the result of artificial rates is default, mismanagement of personal and corporate and government finances, and a resulting decline of living standards. Worse yet is forcing taxpayers to mop up after the people who did it.

Back-room conspiracy of Dr. Evil and 3 others ruining the world in a smoky, dim-lit room? No. Absolutely predictable disastrous results from people deliberately disabling the natural corrective forces of the market, paying off Congress to get away with it, and swiping enormous short term profits? Yes. Then saddling us with paying for their crimes? Yes.

Mike

[handfulz28]

I would be more willing to be blase except that I am being forced, by threat of further confiscation or imprisonment or death, to surrender what I have earned, in order to pay for this fraud.

That sentence right there defines the fearmongering that I just don't subscribe to, and won't engage with.

Best of luck. :beer:

[Ghost]

That sentence right there defines the fearmongering that I just don't subscribe to, and won't engage with.

Best of luck. :beer:

Dude, don't get caught up on that. This is what you get when you don't pay your taxes. This is not fearmongering. This is the reality of taxes, under the happiest, most prosperous days, or the worst, darkest of days. If you doubt it, refuse to pay your taxes and try to resist when they lock you up.

The point is to never let people forget that taxes are collected under the threat of force. A necessary evil, of course, but one which by its very nature must be kept to an minimum for the most universally agreed upon government funding. So don't get caught up on that, it is simple reality. I'm very interested in your thoughts about what is right in the world of interest rates and the markets, natural and artificial. I even bolded stuff so it was easier to address.

Mike