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No I wasn't, but I know many who were. They were the screw-ups in high school and became high fliers earning extremely high salaries.
I'm not supporting the housing bubble. I'm simply refuting your claim that "a handful of dirtbags" walked away with all of the money. Everyone benefited from the bubble (some more than others) and now everyone is paying (some more than others).
I know people who benefited from it too. Most were from the "boiler room chop-shop stock broker" set. Far from "everyone". Frankly I think that most of the guys who were making those loans should be having their assets seized, but that's just my opinion.
I know people who benefited from it too. Most were from the "boiler room chop-shop stock broker" set. Far from "everyone".
Everyone benefited, directly or indirectly from this bubble. Even if you didn't take out a loan or work in the industry, you benefited from higher stock market returns, more job opportunities, etc.
Quote:
Originally Posted by dman72
Frankly I think that most of the guys who were making those loans should be having their assets seized, but that's just my opinion.
I totally agree.
Last edited by smarter_than_U; 08-20-2009 at 09:27 AM..
Reason: sp
[quote=smarter_than_U;10366425]Everyone benefited, directly or indirectly from this bubble. Even if you didn't take out a loan or work in the industry, you benefited from higher stock market returns, more job opportunities, etc.
quote]
Everyone benefitting is inaccurate unless you sold stock within these particular time frames amidst high profit margins. If you had made a 10 year investment in the markets you would be down. If you are holding your 401k at present the recession has put you arguably into negative territory and if you are looking out to retirement in the next 3-5 years you are likely screwed.
And if somebody was not active or work in the industtry, or a job related to the housing market, but has since seen wage reductions or foreclosures next door to their house they are not beneficiaries either. The effect of a bubble can not be regarded as positive even at the time that it occurred for "everyone" unless you were one of the few who reaped direct rewards and essentially stuffed it under your mattress.
Everyone benefited, directly or indirectly from this bubble. Even if you didn't take out a loan or work in the industry, you benefited from higher stock market returns, more job opportunities, etc.
quote]
Everyone benefitting is inaccurate unless you sold stock within these particular time frames amidst high profit margins. If you had made a 10 year investment in the markets you would be down. If you are holding your 401k at present the recession has put you arguably into negative territory and if you are looking out to retirement in the next 3-5 years you are likely screwed.
And if somebody was not active or work in the industtry, or a job related to the housing market, but has since seen wage reductions or foreclosures next door to their house they are not beneficiaries either. The effect of a bubble can not be regarded as positive even at the time that it occurred for "everyone" unless you were one of the few who reaped direct rewards and essentially stuffed it under your mattress.
Good point about selling stock, but to further the argument - what about dividends paid? What about loans taken against 401ks? What about all other positive economic activity that indirectly affects all of us in one way or the other?
The bubble had significantly deeper roots than just the housing industry. As I said, everyone was affected and everyone pays, some more than others on both ends.
Good point about selling stock, but to further the argument - what about dividends paid? What about loans taken against 401ks? What about all other positive economic activity that indirectly affects all of us in one way or the other?
The bubble had significantly deeper roots than just the housing industry. As I said, everyone was affected and everyone pays, some more than others on both ends.
My point is/was: it is a far stretch to say "everyone benefitted". Absolutes are rarely good arguments. And if the lasting impact of a bubble is the prevailing negative impact on the majority of households, companies and the job market, I am not sure how doing things like taking loans out against a 401k (which is a terrible thing to do in any market) is a benefit. Especially when that loan to value is subsequently plummeting and the bank makes the call to shut off the credit line/loan and ask for repayment.
My point is/was: it is a far stretch to say "everyone benefitted". Absolutes are rarely good arguments. And if the lasting impact of a bubble is the prevailing negative impact on the majority of households, companies and the job market, I am not sure how doing things like taking loans out against a 401k (which is a terrible thing to do in any market) is a benefit. Especially when that loan to value is subsequently plummeting and the bank makes the call to shut off the credit line/loan and ask for repayment.
When the economy grows, in theory everyone benefits. Now if you want to delve into the minutia you can probably say that those who live in a cabin out in the woods and don't purchase anything and are completely self-sufficient didn't benefit and I'll give you that. But anyone who participated in the economy benefited from the increase in economic activity in one way or another.
Also, your point regarding 401k loans is simply wrong. There are instances in which the ability to take out a loan against your 401k was a benefit. Illiquidity to liquidity is certainly a benefit, even if the NPV is negative.
Either way, you missed the point. Back to the orginal point from that statement: it wasn't just a handful of rich guys who benefited from this bubble.
For the common man (who has no idea about wall street) I do not see a major impact that gives him an outstanding result on the value of his assets (which is mainly the house). Average 401(k) saving of americans are under $50k.
So ok.... economy grows.... his income grows.... his house value grows.... and everyone is happy.
Meanwhile, the wall street guys are minting money by way of bonuses and what not at a scale that is in no means comparable to the pay scales of the average guy.
Ok.... so there is a bust now.... the guys on wall street are sacked.... the economy shrinks.... the payscales shrink, house values go down.... Hmmm the average guy is right back he was, you can adjust for inflation if you want but you know what I'm talking about.
The guys who made away with bonuses during the "good times" are not giving it back (sometimes it more than the average guys yearly earnings !!).... if every average guy can get such temporary bursts in their income, they will be okay too.... but unfortunately they don't.
We can argue that the guys on wall st deserve the money for the work they do.... well maybe.... but just like the licensed electrician who charges more, can be sued if he messes up, we need to go aggressively after the guys who screwed up on wall street, whose actions are accountable for the whole nation and not on a minuscule level. And we have clearly seen that those are the guys who have the best protection should such a situation arise.
Think of it this way.... 25 million Americans are still where they were 10 years ago.... Some guys came in and made millions using the money of the 25 million Americans during the period and vanished.
Unless we change *NOW* - LI will be inhabited by seniors with paid off houses and healthcare workers/teachers/cops. People know this is true and that's why every third house is for sale!
That's providing the seniors can afford (or want to pay) the ever-increasing property taxes on LI. I'm betting not. Then what?
To me the question is why would anyone manufacture on the Island?
It's hard to ship materials onto the Island and harder to ship them off. Floor space for a plant is incredibly expensive, taxes high and competition for talent with other less costly areas a losing proposition.
I thought back in the 80's and 90's that the Island would be a major tech and software center but that didn't happen. Then it was biotech which now looks like won't be taking hold.
I used to think that the Island was like a cockroach that would just keep on ticking, now I'm not so sure.
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