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09-17-2008, 05:08 AM | #1 |
Entmoot Minister of Foreign Affairs
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The Credit Crunch
The Credit Crunch
----------------- http://money.cnn.com/2008/09/16/news.../AIG/index.htm I did not expect that! But again, that's the kind of Russian Roulette outcome that happens when the markets are left to themselves. Now AIG, who only a few days ago seemed unlikely to suffer a faith such as the Lehman Brothers, are toast. It's probable now that the company will end up being taken apart after the U.S. Gov't has sorted out its financial standing. It will get a 79.9% stake int the company, effectively nationalization. That's one of the largest insurance company in the world we're talking about. Here's a political thought: Who's the 'maverick' that stands for 'change' in Washington (after spending a quarter of a century there), John McCain! He is one of the most pro-market Senators in Congress, heavily in favour of the market getting it on at its own crazy, headless pace. Thought it a good thing that the Bush Adm. lowered the interest rate to a ridiculous low a few years back, which has led to a flow of 'bad' loans, i.e. subprime mortgages. Has done nothing to impose legislation that would buffer the wild, irresponsible 'bad' loans to everyday people that the mortage giants have been having a fieldday with the past few years. Handing out loans to people who so definitely not should receive more loans (and at skyrocket interest rates) And now he states that the economy's 'fundamentals are strong' when that's miles from the truth. It's shaky at best. A vote for McCain then, dear Americans, is a vote for a guy who simply doesn't understand the crises. It's a vote for a person who sees gov't intervention as a no-no. It's a vote for a man that has actively worked against the kind of activity, the red, hot latest news: the bail-out of AIG by the Federal Reserve. And if the FR didn't do this now who knows what the monkeys in Wall Street and other financial hubs around the world would do. The U.S. needs some serious, serious legislation introduced to teach a lesson once and for all so that the Circus in Wall Street starts wearing safety belts.
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"Well, thief! I smell you and I feel your air. I hear your breath. Come along! Help yourself again, there is plenty and to spare." |
09-17-2008, 10:47 AM | #2 |
Elf Lord
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Actually, Coffeehouse, although the mortgage and credit crisis is clearly an emergency, it dates back, in most family budgets, to the problems with healthcare and benefits. You can work 20 years and see your pension disappear overnight when the company "reorganizes'. The companies can hire everyone as 'contractors' and give them no benefits. Ordinary working folks are 2 paychecks, (or one illness) from losing their houses.
Joe Biden talked about all this yesterday. I wish more people were seeing that than the scurrilous and completely untrue attacks they're seeing on TV.
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That would be the swirling vortex to another world. Cool. I want one. TMNT No, I'm not emo. I just have a really poor sense of direction. (Thanks to katya for this quote) This is the best news story EVER! http://www.msnbc.msn.com/id/26087293/ “Often my haste is a mistake, but I live with the consequences without complaint.”...John McCain "I shall go back. And I shall find that therapist. And I shall whack her upside her head with my blanket full of rocks." ...Louisa May |
09-17-2008, 11:21 AM | #3 |
Entmoot Minister of Foreign Affairs
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I think that's a good point Sis. Couple that with many folks willingness to take up a second, even third loan based on the value of their house (or what used to be their house), and then see the real estate market plummet. What you get is predatory behaviour by the mortgage brokers and lenders, wherein they actively promote 'bad loans', at a high interest rate, but at an initial offer-you-simply-can't-refuse rate. It's not illegal, but it creates debt slavery and so we see the millions that are now standing there, on the brink of foreclosure.
There needs to be massive reform, in some cases overhauls of parts of the system, based on the the flawed logic that is being promoted by the (Republican) Gov't and federal authorities. Simply put, you guys need universal healthcare! And really tough legislation on the mortgage business.
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"Well, thief! I smell you and I feel your air. I hear your breath. Come along! Help yourself again, there is plenty and to spare." Last edited by Coffeehouse : 09-17-2008 at 11:22 AM. |
09-17-2008, 11:34 AM | #4 |
Elf Lord
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Yeah. For starters, I'd settle for the protections of the Progressive Era, as far as labor laws.
Here's one of the reports on yesterday's speech. http://www.delcotimes.com/site/news....id=18171&rfi=6
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That would be the swirling vortex to another world. Cool. I want one. TMNT No, I'm not emo. I just have a really poor sense of direction. (Thanks to katya for this quote) This is the best news story EVER! http://www.msnbc.msn.com/id/26087293/ “Often my haste is a mistake, but I live with the consequences without complaint.”...John McCain "I shall go back. And I shall find that therapist. And I shall whack her upside her head with my blanket full of rocks." ...Louisa May |
09-17-2008, 11:40 AM | #5 |
Elf Lord
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Greed multiplied by stupidity = train crash.
It's precisely this sort of thing that's going to kill off unfettered capitalism. |
09-17-2008, 11:51 AM | #6 |
Entmoot Minister of Foreign Affairs
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Joe is right (He's always right!). And if there's one thing that should be on line in the debates it should be the weakening middle class in America. I hope to see Obama and Biden swinging that against the Republicans so that it hurts. Enough playing games with people's economies and lives.
What does McCain know of foreclosure? He has 7 houses! That said, there should be tax cuts for the middle class, and especially now that so many working families are in trouble with the subprime mortgage crisis raging. I'm generally against tax cuts, but these are extraordinary circumstances and some millions of people falling off the cliff into life-long debt and bankruptcy, that's just not feasible. That shouldn't be happening in a 1st world country such as America.
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"Well, thief! I smell you and I feel your air. I hear your breath. Come along! Help yourself again, there is plenty and to spare." |
09-30-2008, 06:37 AM | #7 |
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*Bump!*
Black Monday yesterday, okay, so all you Americans in here, what do you say? - Should your government and Congress go good for a bail-out package amounting to more than 700 billion dollars? (Taxpayer money) - Or should Wall Street suffer and let the dice be rolled, since after all, they created this mess?
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"Well, thief! I smell you and I feel your air. I hear your breath. Come along! Help yourself again, there is plenty and to spare." |
09-30-2008, 10:34 AM | #8 |
Elf Lord
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Wall street didn't (and doesn't) pay for the dice. That's what I said above about pensions. A number of years ago, socially conscious investment funds were 90% FannieMae. So. People who choose to put their retirement funds in making houses available to poor people, instead of in Nestle and Oil companies, lost everything.
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That would be the swirling vortex to another world. Cool. I want one. TMNT No, I'm not emo. I just have a really poor sense of direction. (Thanks to katya for this quote) This is the best news story EVER! http://www.msnbc.msn.com/id/26087293/ “Often my haste is a mistake, but I live with the consequences without complaint.”...John McCain "I shall go back. And I shall find that therapist. And I shall whack her upside her head with my blanket full of rocks." ...Louisa May |
09-30-2008, 01:33 PM | #9 |
Quasi Evil
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We have no choice but to do something because in the end its the common american citizen who will be hurt the most EVEN IF they made wise choices about purchasing a home and they pay their bills on time and have limited debt. They will suffer because banks will stop lending money to even reasonable candidates because they have been so burned by their over indulgent greed in this unregulated money orgy “free market” that weve had in place for too many years. They will suffer because the impact this will have on the economy will leave some without jobs at all and many more with no hope of a raise for years to come or dealing with the possibility of a sudden major downward shift in benefits (see sisters post). And the slime balls who sold these bad loan packages to the investment banks will win because they already have millions of dollars from those sales and are long gone. And the fat cats will win because despite any red faced talk about “punishing” the CEO’s by “limiting” their golden parachutes or whatever, you can bet in the end they’ll see very little in terms of consequences from their behavior. Hey its what everyone else was doing! It’s the American way! Capitalist greed even if it means ripping off stupid poor people and the middle class. That’s where the money is! And because of this fact many Americans had serious issues with the bail out plan which is why it failed yesterday when nervous representatives facing close races in November balked for fear of pissing off the lower and middle class folks who called en mass and said don’t use my tax dollars to bail out the fat cats. Understandable of course but unfortunately we have no choice now. We have to make the scum bags even richer so we can limit the damage to ourselves… Now excuse me I have to go sell all my wordly possession… *walks out wearing barrel*
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"People's political beliefs don't stem from the factual information they've acquired. Far more the facts people choose to believe are the product of their political beliefs." "Injustice anywhere is a threat to justice everywhere." |
10-01-2008, 04:22 AM | #10 |
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They didn't publish that number here. I think they thought we (the Dutchies) might get even more riled up about it. The financial world is already quite upset by our minister of Finances' move to help out Fortis, because they feel that the government bought worthless shares: all the profit-giving parts of Fortis are to be sold. Or so they say.
That and the fact that the government used borrowed money to pay for it and not tax-money. (well, either would have led to protests, but to borrow money in order to bail out a bank in the current economic environment really might not have been the best move ever...)
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Love always, deeply and true ★ Friends are those rare people who ask how we are and then wait to hear the answer. ★ Friendship is sharing openly, laughing often, trusting always, caring deeply.
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10-01-2008, 04:28 AM | #11 | |
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Quote:
The relative quickness of France, Belgium and Luxemburg rescuing of Dexia and Fortis, is largely due to the close economic connections between the three countries. In this case things went smoothly but there has been concerns about who will come to the rescue of other European banks once they start collapsing. Whereas America's 50 states have a federal government that can take swift action, the EU lacks that. It is also important to remember money poured into dying banks to revive them, is not "goodbye money". It's money that the investing countries might get back once the crisis is over and the banks start living up again.
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10-01-2008, 04:52 AM | #12 | |||||
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10-01-2008, 06:32 AM | #13 |
Elf Lord
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For me, that "golden handshake" culture is part of the problem. These people need to be held personally responsible, then you would see pretty quick changes in practice. If they were doctors or engineers, they would be struck off or in jail.
I disagree that it's inherent to globalisation. It IS inherent to globalisation without governments talking to each other about regulation though. Places like London and Tokyo are "client states" of these massive organisations, whose turnover is more than many countries. They have had governments in the palm of their hand, competing with each other to provide the most favourable regulatory environment in which to run their operations. What needs to happen is for politicians to finally realise that the only way you are going to regulate something like this is by co-operating internationally. I think there is an opportunity here for government (and therefore, sovereignty and democracy) to reassert itself. I just hope they don't wimp out (which they probably will). |
10-01-2008, 06:37 AM | #14 | |
Entmoot Minister of Foreign Affairs
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How can you say that? It's the rootcause of this entire crisis. The subprime mortgage lending created the credit crunch that we're now seeing spread across the international financial system. The effect has been devastating, with the usual availability of loans evaporating, making every bank stand on its own feet, exposing the weakest.
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"Well, thief! I smell you and I feel your air. I hear your breath. Come along! Help yourself again, there is plenty and to spare." |
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10-01-2008, 08:39 AM | #15 | |
Elf Lord
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I try not to do that, but it's so obvious, I must speak. The problem is not sub-prime mortgage lending. The problem is the outrageous idea that people can individually own land. Land belongs to the community, and is needed for everything...the improvement in its value also belongs to the community. People took reDICulous profits from the housing bubble. The same thing happened in Japan's bubbles, with the same result. When the bubble collapsed, the community bore the burden, but when the bubble goes well, the individual takes the goodies. You can't blame people with less opportunity for credit for trying to get in on the handout of community wealth. The answer is not to restrict credit for the poor. The answer is to collect the true value of community improvements to land and use that money for the entire community that produces it. Stop the speculators.
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That would be the swirling vortex to another world. Cool. I want one. TMNT No, I'm not emo. I just have a really poor sense of direction. (Thanks to katya for this quote) This is the best news story EVER! http://www.msnbc.msn.com/id/26087293/ “Often my haste is a mistake, but I live with the consequences without complaint.”...John McCain "I shall go back. And I shall find that therapist. And I shall whack her upside her head with my blanket full of rocks." ...Louisa May |
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10-01-2008, 01:40 PM | #16 |
Quasi Evil
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I cant imagine that kind of thinking would ever fly in this country outside of revolution though. Ever since we stole the very first parcel of land from native Americans and declared it OURS, the mentality of land ownership has been sacrosanct in this country. And today we hold an almost religious zeal in our devotion to land ownership for profit. Capitalist manifest destiny! Its right up there with free speech, the right to bare arms and the right to use up a disproportionally large percentage of the worlds resources to live the American dream!
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"People's political beliefs don't stem from the factual information they've acquired. Far more the facts people choose to believe are the product of their political beliefs." "Injustice anywhere is a threat to justice everywhere." |
10-01-2008, 08:39 AM | #17 |
Elf Lady
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No, in the case of Fortis they bought ABN Amro (my bank ) while their own finances were a bit shaky. Now that it has become difficult to borrow money and because it is unclear how much money that was invested in the now collapsing American market is lost, now they get in trouble.
For these banks it wasn't the subprime lending that was the problem per se. It is simply a small part of it.
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Love always, deeply and true ★ Friends are those rare people who ask how we are and then wait to hear the answer. ★ Friendship is sharing openly, laughing often, trusting always, caring deeply.
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10-01-2008, 12:31 PM | #18 | |
Entmoot Minister of Foreign Affairs
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"AMSTERDAM: Fortis became the latest European casualty of the U.S. subprime mortgage crisis on Friday, saying it booked €2.7 billion in impairments on mortgage-related investments in the fourth quarter." http://www.iht.com/articles/2008/03/.../7fortisFW.php
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"Well, thief! I smell you and I feel your air. I hear your breath. Come along! Help yourself again, there is plenty and to spare." |
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10-04-2008, 06:47 PM | #19 |
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No, IR, I just put it in to make the beer reference look better!
Seriously, merely to get on 'Moot record that it is not a sole consequence of Bush or the Republicans, but rather that there is a genuine responsibility to all sides of the political spectrum in this Warned Of and Long Threatening event. Some folks have a hard time understanding that all events are not immediately traceable to the current President or Congress. Though one may well argue that Congress has the greater responsibility since it had the greater oversight. That and I should have saved beer cans! Coffeehouse, we had bottle deposits back in the 1960s when I was a child not yet teen. We collected bottles from the roadsides to get the 3 cents deposit for each - and like good investors - promptly bought more Coke and candy so we could grow up big and strong. It was one way to get around parental restrictions on Coke and candy. Why did the Norwegians take so long to pick up on the idea?
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Inked "Aslan is not a tame lion." CSL/LWW "The new school [acts] as if it required...courage to say a blasphemy. There is only one thing that requires real courage to say, and that is a truism." GK Chesterton "And there is always the danger of allowing people to suppose that our modern times are so wholly unlike any other times that the fundamental facts about man's nature have wholly changed with changing circumstances." Dorothy L. Sayers, 1 Sept. 1941 |
10-06-2008, 09:29 PM | #20 |
Elf Lord
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Inked "Aslan is not a tame lion." CSL/LWW "The new school [acts] as if it required...courage to say a blasphemy. There is only one thing that requires real courage to say, and that is a truism." GK Chesterton "And there is always the danger of allowing people to suppose that our modern times are so wholly unlike any other times that the fundamental facts about man's nature have wholly changed with changing circumstances." Dorothy L. Sayers, 1 Sept. 1941 |
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