Crash 2015? (foreclosure, mortgage, buying, company)

[oaktonite]

Originally Posted by JohnPaul

Who forced banks to make those loans?

Nobody forced banks to make any loans at all. There was never any law, rule, policy, or court order requiring any lender to extend any credit to anyone who was not qualified for it. Wall Street and their shyster broker pals (Countrywide, Ameriquest, New Century Finanncial, etc.) were meanwhile making money hand-over-fist by pushing mortgage paper onto whoever they could get to sign on the dotted line, then slicing and dicing all that into MBS's and derivatives thereon, selling it all off into high levels of demand in secondary markets churned up by the Fed's having frozen interest rates at low levels after the Bush Tax Cuts for the Rich failed to generate any improvement in economic activity.

Originally Posted by JohnPaul

Who warned about letting banks make those loans? Democrats and Republicans and Wall street all have blood on there hands. So stop this bushs fault crapola...I didnt like him either but jeez, try putting down the huffington post and think for yourself.

The credit crisis was born, grew up, and became toxic between 2002 and 2006. All Republicans, all the time. If you want to do a by-party analysis, all of this came from just one side of the aisle. After the fact efforts at blame-shifting (such as Thomas Di Lorenzo's absurd theses concerning CRA or the manufactured legend of S.190) are nothing more than deliberate propaganda intending to divert blame away from those who were actually involved and responsible at the time, laying it off instead on the usual partisan targets even though they had nothing to do with it.

Originally Posted by JohnPaul

The American tax payer got screwed, and with much predictable outcome we are still getting screwed...and you know why?????????

If by that you mean understanding the actual step-by-step fall of the dominos leading up to the Great Recession, then yes, I would guess that I am more familiar than most with all of that by quite a bit. As for the Sacred Taxpayer whom so many like to fawn over, he did not much participate in these affairs. In fact, by early 2009, he had been treated to the largest 2-year tax cut in US history. Tax burdens fell to and are still near historical lows five years down the road. Money used to free up and restore the global financial system -- an essential to the conduct of all economic activity -- was not taken from the Sacred Taxpayer.

[oaktonite]

Originally Posted by stoutboy

You've got the basic gist, but it goes back farther than 'Romney's people' or the Bush administration. It all has its genesis in the first S&L crisis under Reagan. Add to that extensive deregulation of the financial industry, compounded with the effects of how the US implemented its 'free trade' and globalization policies. Clinton hammered home the final nail in our financial coffin when he went along with the repeal of Glass-Steagall. And of course all our wars and tax cuts to the uberwealthy certainly hasn't helped. One fine mess, as Oliver Hardy would say.

Right, "Romney's people" is just a current and convenient way of pointing to the financial-economy folks. These are the Bain Capital types who like to blow up jobs (a real-economy variable) as a means of pumping up profitability (a financial-economy varable).

Meanwhile, none of the strings supposed to be leading from the S&L crisis forward into the credit crisis is immediately apparent. You'll have to spell those out. That earlier fiasco (also on a Republican watch for those keeping track) was brought on by a rate trap. S&L's had to offer higher short-term rates to attract and retain depositors than what they were earning on their long-term portfolios of loans outstanding. Obviously, that sort of thing cannot go on for very long. and it didn't. There was no such vise exerting its inexorable grip on the financial wizards of 2002-06. They chose and built the path they followed, just not very wisely in what turned out to be a much shorter time frame than what they had envisioned. "I'll be gone, you'll be gone" was supposed to afford a better opportunity for profitable escape.

Blaming financial deregulation here is meanwhile a little like blaming the paving of downtown streets for a wave a bank robberies in that it created a smoother and easier path for potential get-away vehicles. Regulatory background is just that -- background. It didn't cause anyone to do anything. And all that the much maligned Gramm-Leach-Bliley did was legitimize the operation of banks, brokerages, and insurance companies under a single roof and with common officers. In the real world, banks and brokerages had been operating under the same roof since the mid-1980's with nobody saying boo, and when Cititcorp and Travelers merged in blatant violation of the law, the Fed promptly gave them an exemption for the deal. Basically, GLB merely brought the law into conformance with an already-existing reality.

Tax Cuts for the Rich were of course always a bad idea. They were just a way to waste the surplus. Afghanistan after 9/11 was certainly justified. You don't allow people to blow up downtown Manhattan and then just walk away. This is why Bush suddenly had 90% approval ratings in late 2001. Leaving Afghanistan when he did was a horrible mistake -- one that turned a hard-won victory into an ultimate defeat -- but leaving for the purpose of undertaking the totally unjustified fiasco of Iraq was unforgiveable. That ranks high on the list of all-time Presidential boneheaded blunders.

[Mircea]

Originally Posted by jimhcom

It is dishonest because producers as a rule, do everything possible to hide the fact that they are cutting quantity in order to keep from raising prices. The psychological effect on the customer is that they do not realize they are getting less for their money and as a result do not adjust their spending habits to accommodate for the inflation they do not know is happening.

There's nothing dishonest about it. They aren't obligated to provide you with a specific amount, or charge you a specific price.

What you have here is a fantastic example of Price Elasticity.

Increasing the price of the product would be harmful to business and consumers, but decreasing the quantity would not.

You seem to think this was done arbitrarily by producers --- it wasn't.

Price Elasticity is determined by conducting surveys of consumers. Consumers were not always willing to pay an higher price for some products, but they were willing to pay the same price for less quantity.

Originally Posted by jimhcom

The assumption here is that cheap credit is available for the average person.

I neither implied nor assumed that. I merely stated that the government interferes in the Housing Market by making too much credit available --- artificially inflating the value of housing to everyone's detriment, and then the government artificially depresses interest rates --- artificially inflating the value of housing to everyone's detriment, and then the government is backing mortgages in the most illogical and harmful manner.

Although I didn't specifically mention it, I just assumed that people here could connect the dots and see the inherent problems of artificially inflating the value of housing.....

.....and then allowing people to borrow against the artificially inflated values....while simultaneously guaranteeing the mortgages.

An house is worth $125,000 but thanks to government policies that flood the Market with available credit, the value of the house is artificially inflated to $200,000 and then thanks to artificially depressed interest rates, the value of the house is artificially pumped up another $25,000 to $225,000 and then you are allowing people to borrow against the artificially created $100,000 using HELOCs and 2nd/3rd mortgages, and the government is saying, "We don't care...we'll back the mortgage anyway."

And then the Housing Market collapses and the home is worth $125,000.....ooops.

More stringent government policies, especially refusing to back mortgages with HELOCs/2nd/3rd Mortgages and no one would be playing fast and loose with credit.

Originally Posted by jimhcom

There is no large market for mortgages out there, people for the most part do not have the credit rating or the income to qualify for mortgages.

Then that is a personal choice those people made.

If people choose to be Financial Retards and be totally ignorant about personal finances, that is not my problem and tax-payers shouldn't be on the hook for it. Those idiots can clean up their credit and act responsibly, and they'll have good solid credit ratings.

Originally Posted by jimhcom

Only people with very strong credit ratings and financial backing are benefiting from today's low interest rates.

As it should be.

Originally Posted by jimhcom

Tariffs have been used successfully to protect domestic markets for thousands of years.

That isn't even remotely relevant, not to mention inapplicable.

Like it or not, you are part of a Global Economy, and you are powerless to alter that fact.

As part of a Global Economy, you must be able to compete globally, and you cannot, due almost entirely to the tremendous difference in wages ---- a situation you created by allowing your government to run amok with its foreign policy, while you buried your head in the sand, but then it's understandable that would bury your head in the sand, since you benefited handsomely by murdering heads-of-State to steal resources for your own benefit, so that you could prosper and have a standard of living unmatched in the World.

Suppose you had used protectionist tariffs in an attempt to help the Zenith Corporation?

How does the story end? It ends the same......absolutely nothing changes......South Korean LG Corporation can sell to the 6 Billion people of Earth...Zenith cannot.....LG Corporation amasses massive amounts of cash from its profits in Global Sales....and it buys out Zenith Corporation, and that's the end of that.

American Corporation....a

Cost = $25
Price = $30
Profit = $5

A Corporation in a developing-State

Cost = $1
Price = $6
Profit = $5

Does $5 in Profit equal $5 in Profit? But, of course! So, what's the problem?

The problem is that a Romanian earning a premium wage of $2.50/hour or a Filipino earning top-dollar wage of $1.65/hour can afford to pay $6 for a product from another State...

...but they cannot afford to buy the very expensive American product.

What protectionist policies could the US possibly adopt that would alter that Realityâ„¢?

None.....there is nothing you can do that would force a Filipino or a Romanian or anyone else in the
World to buy Zenith products, or to consume any other US made products. They are going to do exactly the very same thing you are doing now....consuming the best quality product at the lowest price, regardless of where the product is made.

And if you want the business of the rest of the World, then you have to sell at prices other people in other States can afford....because you ain't the only game in town...you were in the 1950s and 1960s and 1970s....but not any more you ain't --- so get over it already.

As I also have repeatedly pointed out, you made choices based on Opportunity Costs.

You can have workers in the US making cell-phones and TVs, or you can have workers in the US serving you lattes at Starsux or staffing the supermarkets 24 hours a day, but you cannot have both.

You as a country made a choice....you chose to have all manner of ridiculous outrageous services -- like colonic irrigation and massage therapy and pet hotels and pet grooming things -- instead of manufacturing things.

The world you want for America would result in the loss of millions of jobs, and a standard of living equating to the 1920s-1930s.

Originally Posted by jimhcom

Current trade policy is detrimental to the people of the US and only benefit corporate and banking interests.

And your foreign policy wasn't?

You raped Mexico of oil. You took 92% of the oil profits. You were supposed to pay Mexico 8% in royalties on oil profits. Instead, US oil companies fraudulently devalued their assets to avoid paying the paltry 8% royalties, and also to avoid paying any corporate income taxes to Mexico.

The Mexican government calls you on that, suing US oil companies for fraud, in a case that goes all the way to the Mexican Supreme Court --- you lost.

All you had to do is pay the back royalties, back taxes and pay White Mexicans descended of Europeans who were educated at US and European universities and worked for the US oil companies back wages, and all would have been forgiven.

But that didn't happen...US oil companies snubbed their noses at the Mexican government, and in spite of repeated warnings by President Cardenas, the Mexican government expropriated all US oil company assets for non-payment of taxes.

That's not the end of the story....President Cardenas offered FDR $24 Million in compensation --- the exact value of all US oil company assets as stated by the oil companies themselves --- and FDR runs around like a raped ape as though the dignity of the US has been soiled or something, and then half of Congress is screaming to invade Mexico and seize the oil (and natural gas fields).

What you should have done is paid the White Mexican engineers and geologists educated at your universities and universities in Europe fair wages relative to the cost-of-living in Mexico, and split the oil profits 50-50 and paid corporate taxes.

That would have been the Christian thing to do....the benevolent thing to do.....the nation-building freedom loving espousing of democracy thing to do....but it would not have been the Machiavellian thing to do.

And of course, the down side is that it would have taken another 20-30 years to string up your fantastic telephone system, but then look at the bright side.....Mexico would be a prosperous State and Mexicans wouldn't be coming to the US illegally to take your jobs, and the jobs they didn't take wouldn't be outsourced to Mexico.

So how's the Machiavellian thing working out for everyone?

Originally Posted by jimhcom

This is not entirely accurate, in fact the majority of "globalization" is being driven by former US based corporations. Proof of this is evident to anyone who travels globally. You have a hard time telling exactly where you are in any major urban center today because where ever you go you are looking at the same major retailers. Wallmarts, Starbucks, McDonalds, KFC, Hilton, Macys, Microsoft, Pizza Hut, Costco, and many other home grown companies are there to welcome you sucking up consumers spending in almost city worldwide.

And why are they there?

They are there because BRIC developed those countries to an extent that would allow US corporations to come in.

US foreign policy since 1898 has been to suppress the development of other States.......it is still foreign policy, noting that Obama illegally overthrew the Honduran government in July 2009, and in other actions undertaken by the US (like Libya and Syria).

The existence of AFRICOM is not to benevolently benefit those in sub-Saharan Africa, rather its intent is to thwart BRIC's attempt to develop sub-Saharan Africa.

Originally Posted by jimhcom

The corporations who consider themselves "world citizens" now have no allegiance to the US or to the people of the US.

And what is a corporation?

It is an entity that operates under Communist Property Theory, is it not?

And under Communist Property Theory, who owns or controls Capital -- the means of production?

The People.

And who owns the Capital in a corporation?

Um, that would be the People.

Granted, "the People" are a special class or group of people called "shareholders" but then anyone can choose to be a shareholder by merely purchasing stock issued by the corporation.

So anyone -- tall or small, fat or thin, rich or not, male or female, young or old, retired or not, Black or White or Hispanic or Asian/Pacific Islander, or catholic or Protestant or Jew or Muslim or Conservative or Liberal or Democrat or Republican --- can purchase a share of stock.....they just have to want to buy one.

I cannot make them purchase stocks....they have to want to do that of their own free will....and when they do, they will get to cast a number of votes equal to the amount of stock they own in the corporation, to decide the corporation's future.

A CEO does not own a corporation (generally speaking although some do/have in the past), rather he is a servant of the People.....and he does the will of the People.

How bizarre is it that people who own stocks in corporations via their 401(k) or personal retirement plan rely so heavily on stock prices rising to ensure they have money for retirement, whilst simultaneously taking action to harm corporations and lower the value of their stocks, effectively ruining their retirement?

Originally Posted by jimhcom

The US could adopt a trade policy much like Germany's which looks out for it's own citizens, but the corporations are in charge of the government and their interest is the only one being looked after in Washington.

Uh-huh.....and Germany's economic policies have resulted in an E-Pop Ratio of 53.5%

So...you're perfectly okay with another 12,556,000 Americans permanently losing their jobs....forever....got it.

Because that is what would happen.....there's a trade-off....social welfare programs, especially cradle-to-grave programs are not free.....they cost.....and they cost a lot....and the cost is a permanently higher number of people who never get to work which is reflected through a lower Employment-to-Population Ratio.

When the bill for Social Security and Medicare comes due...and it will here within the next 10 years, you will experience the costs up close and personal....and the costs will be higher numbers of people who permanently lose their jobs.

Effectively....

Mircea

[jimhcom]

Originally Posted by oaktonite

There is exactly one CPI-U. It includes food and energy and always has. The fact that BLS also produces and publishes a series of several dozen special aggregate indexes that are of use and interest to researchers and scholars is completely irrelevant. Your claims were and are pure and utter falsehood.


Without the slightest question, the price index most used by actual economists is the CPI-U itself.

Sir you are an out an out liar and I will waste no more time on you.

[Mircea]

Originally Posted by oaktonite

HI benefits (Medicare Part-A) are not taxed at all.

I neither stated, nor implied nor suggest that they were.

Originally Posted by Mircea

Having said that, I do actually pay attention to the stock markets, since one of my criticisms of the Trustees for the OASDI and HI (Medicare) Trust Funds is that they rely heavily on the Taxation of Benefits as a source of revenues for those Trust Funds, and the amounts are unrealistic.

Your lack of reading comprehension skills is not impressive.

As the informed people know, Social Security benefits are taxed and the revenues generated from those taxes are apportioned to both Social Security and Medicare Trust Funds.

Originally Posted by oaktonite

SS benefits are partially taxed above certain limits depending on levels of other income received. Revenue from such taxation in 2012 was $27.3 billion, or about 3.2 % of all SS receipts during the year which amounted to $840.2 billion. Maybe the meaning of "heavily rely" can be distorted enough to cover that, but certainly not in my book.

The Social Security Trustees believe it will nearly triple within 10 years to $63 Billion in 2021.

See Table IV.A1.—Operations of the OASI Trust Fund, Calendar Years 2007-21

At present, $63 Billion will fund about 28 days of Social Security; about 12 days 15 years from now.

The point being, that money is coming out of your economy, one way or another.

Originally Posted by oaktonite

The SS Trustees do a lot of odd math alright, but theirs is much better than yours in this case.

Funny, but the Trustees had no idea the unemployment rate would remain this high....I did.

The Trustees are always a day late and a dollar short.

Like I had been saying for 6 years, the OASDI Trust Fund will collapse in 2028. After seeing how bad your economy really was, in 2011 I started pegging the exhaustion of the Trust Fund 2023-2025.

It was a year later in 2012 that the Trustees finally figured out it was 2027 under the High Cost Assumptions.

Bet on the Trustees at your own peril, but smart people are moving to protect themselves.

I'm guessing you didn't read the CBO's February 2013 report on the OASDI Trust Fund.

They put the Trust Fund running dry a year earlier...2031, but that would be under the Intermediate Assumptions....under the High Cost Assumptions, it'll be 2025-2026.

Originally Posted by oaktonite

Arguments that are patently false do not magically gain validity through being repeated.

Then surely you can prove it to be false.

Originally Posted by oaktonite

Concepts of work/leisure preferences have of course been here disregarded completely, as has the fact that the objective behind every "labor-saving device" ever invented has been to allow either more output with the same level of input, or the same output with a lower level of input. This is how economic growth and progress occur. We have washer-driers today so that women can escape the drudgery of such prison-work activities as washing, wringing, and hanging clothes out to dry on a line, and devote their time to other things. Did this create armies of idle women? Don't make me laugh!

You have misrepresented the concept with the skill of a NAZI-style propaganda artist.

Work/leisure preferences were intentionally ignored, because they have no bearing on employment.

There is no relationship between "economic growth" and employment.

An increase in GDP of X% does not automatically create N-number of jobs. Likewise, a decrease in GDP of X% does not automatically result in the loss of N-number of jobs

The process of Electromechanical Industrialization, in conjunction with changes in manufacturing methods -- such as use of the assembly line.....such as increasing the number of foot-candles in production facilities to increase worker productivity, enhance worker safety and so on --- resulted in job losses....the creation of surplus labor --- high unemployment --- and no place for it to go.

If you had a clue about Economics, then you would understand that there is a tremendous difference between introducing technology into a Zero-Level Economy (a subsistence living Agrarian Society), and introducing technology into a 4th Level Economy --- one with that is already filled with technology.

Originally Posted by oaktonite

E-Pop Ratio, huh? Is that sort of fabricated term supposed to make you sound like a suave and in-the-know insider-type? It doesn't. It makes you sound like a tongue-tied rube.

I'm guessing you didn't get the memo that this is the Economics sub-Forum, where people well-versed in Economics discuss Economics, intelligent people with a basic understanding of Economics participate, and smart people who aren't knowledgeable about Economics ask questions about Economics to improve their understanding.

Obviously, you fall into none of those categories of persons.

People with Bachelor's degrees in Economics -- like me -- really do sit around discussing Economics using terms like "E-Pop Ratio" as do persons with PhDs in International Relations who focus on issues such as Security & Economics -- like me.

Data extracted on: May 27, 2013 (6:01:54 PM)
Labor Force Statistics from the Current Population Survey

Series Id: LNU02300000
Not Seasonally Adjusted
Series title: (Unadj) Employment-Population Ratio
Labor force status: Employment-population ratio
Type of data: Percent or rate
Age: 16 years and overSource: Notice: Data not available: U.S. Bureau of Labor Statistics

You should pay attention to the E-Pop Ratio, not merely because your government has maintained statistics on it since 1947, but rather because it is necessary to understand and characterize an economy.

Originally Posted by oaktonite

But since you're in over your head already, how about explaining all the terrible things that happened to SS as the worker-per-retiree ratio (that's an actual term, you know) fell from 16.5-to-1 in 1950 to 5.1-to-1 in 1960. It was then 3.2-to-1 in the 1970's, and even with the Great Recession's recent erasure of ten million jobs, it's fallen only to 2.8-to-1 here lately. Doesn't comport well with your claims and analysis, does it.

You have --- yet again-- misrepresented the concept with the skill of a NAZI-style propaganda artist.

With respect to the "...terrible things that happened to SS as the worker-per-retiree ratio...fell..." I would direct you to the Rockefeller Commission appointed by President Ford to study issues related to Social Security.

I would also direct you to the Volker Commission appointed by President Reagan, and additionally, to

Table VI.A1.— Operations of the OASI Trust Fund, Calendar Years 1937-2011

Year . . OASI Trust Fund (in $Billions) and Trust Fund Ratio ()
1975 . . $37.0 (63)
1976 . . $35.4 (54)
1977 . . $32.5 (47)
1978 . . $27.5 (39)
1979 . . $24.7 (30)
1980 . . $22.8 (23)
1981 . . $21.5 (18)
1982 . . $22.1 (15)
1983 . . $19.7 (14)
1984 . . $27.1 (20)

Since you've proven that your reading comprehension is poor, and that you have a propensity to obfuscate and mislead others, I'll point out that the OASI Trust Fund was on the verge of collapse, and as a point of fact, did collapse....since Congress had to step in and authorize emergency spending bills to keep it solvent.

The result was legislation that step increased the FICA payroll tax rate from 5.7% for employer and employee (11.4% total) to the present 6.2% (12.4% total). It also resulted in an increase in the Medicare payroll tax rate.

Despite the risk that you might not be able to understand 5th Grade Mathematics, this very simple formula...

#Workers * Wage Rates * Payroll Tax Rate = Social Security Revenues

...is what funds Social Security (and part of Medicare).

Based on mathematical theorems and proofs, we know that decreasing the number of workers results in a corresponding decrease in Social Security Revenues. Likewise, flat or declining wage rates can result in flat or declining Social Security Revenues.

The US is presently experiencing a lack of workers, plus declining/stagnant wages, which -- of course -- results in decreased Social Security Revenues. Such decreases require Social Security to redeem the special treasury securities in the Trust Fund in order to pay Social Security beneficiaries.

Excluding the first 12 years of its existence, the FICA payroll tax has repeated required tax increases to maintain its solvency, since cutting benefits and other novelty gimmickry always failed.

It has now been 23 years since the last FICA payroll tax increase.

In order to maintain solvency for Social Security without increasing the FICA payroll tax rate, you need to increase the number of workers in this equation....

#Workers * Wage Rates * Payroll Tax Rate = Social Security Revenues

...by 13+Million......like yesterday.

Originally Posted by oaktonite

Do you favor pollution controls at a source point, or would you rather see this junk just spread all over the place and then trying to clean it all up with paper towels?

What I favor or disfavor matters not. All that matters is there should not be a federal EPA operating at the whims of Special Interest Groups....like the American Federation of Dairy Farmers.

Originally Posted by oaktonite

And whose estimates of the health care cost savings are you eventually going to introduce here?

Mine.

Originally Posted by oaktonite

Nobody forced banks to make any loans at all. There was never any law, rule, policy, or court order requiring any lender to extend any credit to anyone who was not qualified for it.

I'll be your mama was still wiping snot from your nose when this press conference was held....for those who didn't get the memo...

Originally Posted by White House Press Briefing, Office of the Press Secretary (Dec. 8, 1993)

MR. RUBIN: Hi. I'm Bob Rubin, the Assistant to the President for Economic Policy, and I'm going to introduce today's topic.

The President, as you know, has a broad, comprehensive strategy for dealing with the economic problems of the country for putting the country back on the right track for the long-term. A lot of the legislative and executive actions that have taken place in 1993 have been pursuant to that long-term economic strategy of the President's.

An important component of that strategy is to deal with the problems of the inner city and distressed rural communities -- pursuant to his belief that we must make real progress in those areas if this country is going to be successful in the future for all of us. The reform of the Community Reinvestment Act is an essential building block in the efforts I've just mentioned. In July the President asked the four banking regulators to reform CRA, to reduce paperwork in process and reward performance, and to get that done by January 1, 1994

SECRETARY BENTSEN: In a nutshell, what we're proposing to do is to make it easier for lenders to show how they're complying with the Community Reinvestment Act. For those who aren't familiar with the area of banking law, the changes we're proposing are important because banks now have a very clear, quantitative standard by which their compliance can be judged.

MR. LUDWIG: Ken, you know that it's hard to give a hard and fast rule, particularly on a system where we want to be flexible, we don't want to have credit allocation or quotas.

At the same time, the CRA, for all its flaws, since 1977 it is generally agreed has increased lending in low and moderate income areas by tens of billions of dollars. We're all convinced that this is a material step forward. So it's very safe to say billions of dollars.

The entire CRA reform is very much built on rebuttable presumptions, so that you don't have odd anomalous cases which we found around the country, where a bank had done a good job but somehow got rated poorly, or vice versa.

Q Will you be gathering information just on loans, or on applications, as well, for small business?

MR. LUDWIG: We will be gathering data as proposed on the basis of applications, denials and actual loans.

Q Does this mean that if I am a banker with branches in the inner city, I no longer have to have an employee keeping pins on the map of town to show where the loans are, that it's now going to be judged on dollars and cents and how much money goes where?

MR. LUDWIG: Dollars and cents, and we'll keep the pins. The data will be publicly available and the banker will not have to have a crazy map with pins all over it, which has just characterized this whole process, and spending huge amounts of time documenting every time it meets with a community group and being judged on how many documents it has. It will be judged on where the loans are.

[Emphasis Mine -- and that's just one part of one press conference -- I can play this game all the live long day.]

Anyway, it would seem they lightened the paper-work burden just a wee bit too much.

Collaterialized debt obligations and structured investment vehicles were created in response to Clinton's demand to issue more mortgages or be financially penalized and suffer legal action and scrutiny at the federal and State level, and also in the Media.

Originally Posted by oaktonite

Well, you aren't going to see hyper-inflation in an economy that produces 21-22% of world GDP, so there you go. A confusion of apples and oranges has happened again.

Are you suggesting that Americans are the only people on Earth who use/consume US Dollars?

I sure hope not, because that would be silly.....in fact it would be the silliest novice comment you've made so far.

HINT: US Dollars are not restricted to use solely in the US....foreign governments hold US Dollars; foreign banks hold US Dollars; States conduct global commerce using US Dollars....people in other States use US Dollars...it was quite common for Romanians, Serbs, Magyars et al to pay their rent in US Dollars...or German Marks.....and not in local currencies....and then it was common-place to pay rent in US Dollars or Euros, but since the Euro is stronger than the US Dollar, everyone wants Euros now.

The point being you cannot base the US Dollar only on GDP....as so many idiots do.

Originally Posted by oaktonite

Hahahaha! What are you, some sort of noise-abatement specialist?

That would be yet another glaring admission that you are unschooled in Economics.

So far, you've...

1] claimed there is a relationship between economic growth and employment;
2] didn't understand how certain social welfare programs like Social Security and Medicare are funded;
3] prove you had no understanding of the Employment-to-Population Ratio;
4] confused the Employment-to-Population Ratio with the Worker-to-Beneficiary Ratio...seriously...a novice wouldn't even make that mistake;
5] had no knowledge of the insolvency of the OASDI Trust Fund in the early 1980s;
6] proved to be incapable of making the distinction between different Economic Levels;
7] equated the US to Zimbabwe.

Originally Posted by oaktonite

In other words, Romney's people.

There's nothing political about Economics...it is what it is...too bad you don't understand that.

Originally Posted by oaktonite

It was kind of you to travel all those light-years to come and inform us. Unfortunately, the informing part is not going so well, as for one thing, your free-floating lexicon is not known to us here. We do recognize belief that markets are wise enough to regulate themselves as being evidence of abject laissez-fairianism though.

No, you made the silly claim that ....

Originally Posted by oaktonite

The collapse in household and business demand that proceeded from all those chickens coming home to roost in the face of years worth of miserable laissez-faire economic policy caused capacity utilization to decline.

You can add that to #8 on the list.

I'll be you think laissez-faire is a Russian word meaning "little fairy."

Originally Posted by oaktonite

US exports are at record levels. We are the world's most significant nation in terms of international trade. This news has seemingly been slow to reach you.

Record levels dollar-wise.

Prove that the volume of units exported has increased relative to the price of exports.

That would be another mistake you've made --- we can make that #9 on The List -- hell, a 4th Grader wouldn't even make that mistake.

Plumbing service company.....

2011 Revenues $1.2 Million
2012 Revenues $1.9 Million

According to you, things are peachy....but then because you don't understand Economics, you over-looked this....

2011 Billable Hours: 16,000
2012 Billable Hours: 12,000

So....Revenues increased....but 4,000 hours lost....that's two employees who lost their jobs.

I'm guessing you're not swift enough to understand, so I'll show how irrelevant your claim is....

2011 Exports $100 Billion
2012 Exports $112 Billion

2011 Export units: 100 Million
2012 Export units: 90 Million

So....do you think that company went on a friggin' hiring spree in 2012?

Not.

Originally Posted by oaktonite

Plainly, you've neither studied nor practiced much labor economics. It is corporations in their condolidation of market power that tilt the playing field for wages.

And yet fast-food workers in the Cincinnati Metropolitan Statistical Area start at $8.00 to $10.00/hour....and White Castle here in this region is starting people at $11.00/hour...with a $0.50 raise after 9 months.

Data entry clerks start in the $7.25 to $9.00/hour range.

Why? Because the Laws of Economics, operating via the Law of Supply & Demand in that particular economy...one of 1,539 functioning economies in the US...says are the wages that must be paid.

A fast-food franchisee is certainly free to violate the inviolable Laws of Economics in that Market and pay only $7.25/hour, but then with high turn-over rate, poor attendance, higher advertising costs for employment, lost time spent recruiting and interviewing, high training costs, and poor customer service, the franchisee will lose money and either go out of business, or end up paying the rates the Laws of Economics have determined.

Originally Posted by oaktonite

Got math?

Absolutely...

Originally Posted by oaktonite

Down payment is one loan term among many. This statement is evidence only of more rookie cluelessness.

A $250,000 McMansion with 0% down at 6.5 % for 30 years is $318,000 in interest.

Since you've repeatedly demonstrated difficulty with mathematics...

$250,000 principle
$318,000 interest
------------------
$568,000 total cost.....sans costs for maintenance, property taxes, insurance etc etc etc.

You basically paid for the McMansion twice....I'll leave it to you to demonstrate how that is a display of Financial Common Sense.


An intelligent person would put 35% to 45% down on their $250,000 McMansion and pay only $79,956 in interest.

Since you're not very good at mathematics, the difference in interest paid is...

$318,000 interest
-$79,956
------------------
$238,905

And it doesn't end there.

Take the $238,905 in interest not paid and put that money in something like a pass-book savings account and after 30 years, you have

...$762,505

That's three-quarters of a million dollars.

And then people like you will sit around complaining about how you have no wealth, and how there is such a great wealth disparity, blah, blah, blah, blah.

Apparently it never donned on you that you can throw away $238,905 on interest payments, or use the $238,905 to build wealth, buy you cannot do both simultaneously.

Originally Posted by oaktonite

Meanwhile, the people doing the low-doc, no-doc, teaser-rate-with-the exploding-trigger mortgages were the unconstrained cowboy capitalists of Wall Street. Sensible oversight would have seen them reined in.

"Sensible oversight" went out the window with this....

Originally Posted by White House Press Briefing, Office of the Press Secretary (Dec. 8, 1993)

MR. RUBIN: Hi. I'm Bob Rubin, the Assistant to the President for Economic Policy, and I'm going to introduce today's topic.

The President, as you know, has a broad, comprehensive strategy for dealing with the economic problems of the country for putting the country back on the right track for the long-term. A lot of the legislative and executive actions that have taken place in 1993 have been pursuant to that long-term economic strategy of the President's.

An important component of that strategy is to deal with the problems of the inner city and distressed rural communities -- pursuant to his belief that we must make real progress in those areas if this country is going to be successful in the future for all of us. The reform of the Community Reinvestment Act is an essential building block in the efforts I've just mentioned. In July the President asked the four banking regulators to reform CRA, to reduce paperwork in process and reward performance, and to get that done by January 1, 1994

SECRETARY BENTSEN: In a nutshell, what we're proposing to do is to make it easier for lenders to show how they're complying with the Community Reinvestment Act. For those who aren't familiar with the area of banking law, the changes we're proposing are important because banks now have a very clear, quantitative standard by which their compliance can be judged.

MR. LUDWIG: Ken, you know that it's hard to give a hard and fast rule, particularly on a system where we want to be flexible, we don't want to have credit allocation or quotas.

At the same time, the CRA, for all its flaws, since 1977 it is generally agreed has increased lending in low and moderate income areas by tens of billions of dollars. We're all convinced that this is a material step forward. So it's very safe to say billions of dollars.

The entire CRA reform is very much built on rebuttable presumptions, so that you don't have odd anomalous cases which we found around the country, where a bank had done a good job but somehow got rated poorly, or vice versa.

Q Will you be gathering information just on loans, or on applications, as well, for small business?

MR. LUDWIG: We will be gathering data as proposed on the basis of applications, denials and actual loans.

Q Does this mean that if I am a banker with branches in the inner city, I no longer have to have an employee keeping pins on the map of town to show where the loans are, that it's now going to be judged on dollars and cents and how much money goes where?

MR. LUDWIG: Dollars and cents, and we'll keep the pins. The data will be publicly available and the banker will not have to have a crazy map with pins all over it, which has just characterized this whole process, and spending huge amounts of time documenting every time it meets with a community group and being judged on how many documents it has. It will be judged on where the loans are.

[Emphasis Mine -- and that's just one part of one press conference -- I can play this game all the live long day.]

Anyway, it would seem they lightened the paper-work burden just a wee bit too much.

Collaterialized debt obligations and structured investment vehicles were created in response to Clinton's demand to issue more mortgages or be financially penalized and suffer legal action and scrutiny at the federal and State level, and also in the Media.

Originally Posted by oaktonite

Your phony "dot-com bubble" is just another failed attempt at a propaganda cover-up.

And yet you failed to address even one thing I said, running off instead on a rant about Bush and Enron and cable companies.

It seems you are ignorant of the fact that the dot.com bubble revolved around a concept known as "e-commerce"....you know, like "garden.com" (an actual e-company that went bust).

What I said is what actually happened.....investors over-valued the earnings potential of e-commerce companies, and once it was realized that e-commerce companies were nothing more than 5-guys from Generation Y-Work in a plush office with $Billions in outstanding stocks, no cash assets, no assets of any kind, except for a server and a few computers, and potential to make money, investors pulled the plug.

I'm sure you can explain why two-hundred and ten (210) dot.com companies failed in 2000.

See: "Over 210 Internet Companies Folded Last Year," Reuters, January 4, 2001.

If nothing else, your explanation will be amusing to people, and you can add as #10 on your list of silly stupid inane false beliefs.

Schooling...

Mircea

[oaktonite]

Originally Posted by jimhcom

Sir you are an out an out liar and I will waste no more time on you.

I'm sorry you find reality so distasteful. CPI-U includes food and energy. End of story. Stop spreading disinformation on the matter.

[oaktonite]

Originally Posted by Mircea

I neither stated, nor implied nor suggest that they were.

That's a laugh...

"...one of my criticisms of the Trustees for the OASDI and HI (Medicare) Trust Funds is that they rely heavily on the Taxation of Benefits as a source of revenues for those Trust Funds..."

Can you construe the words "and" and "those" so as not to refer to the HI trust funds? I didn't think so.

Originally Posted by Mircea

As the informed people know, Social Security benefits are taxed and the revenues generated from those taxes are apportioned to both Social Security and Medicare Trust Funds.

LOL! Income taxes on SS benefits are returned to the trust fund from which the taxed benefits were originally paid. That includes the OASI and DI trust funds. Nothing goes back to the HI trust fund since Medicare Part-A benefits are not taxed. What we have here is further example of an ignoramus attempting to pass himself off as an expert. It isn't working.

Originally Posted by Mircea

The Social Security Trustees believe it will nearly triple within 10 years to $63 Billion in 2021.

So what? $27 billion out of $840 billion is not relying heavily on. You lose. Again. All part of a grand pattern of losing that will continue in the morning to the extent that I can continue to justify wasting time on your frivolous and impostorous posts.

[oaktonite]

Let the beatings continue...

Originally Posted by Mircea

The Trustees are always a day late and a dollar short.

The Trustees are always hyper-pessimistic. As dart-throwing, tin-foil hat, mothershippers so frequently fail to understand, projections are deliberately done to the pessimistic side. But the SS Trustees have taken things to illogical extremes in that direction for decades. In 1997, they projected trust fund exhaustion in 2029. In 2007, they projected it in 2041. So ten years went by -- some good and some bad in economic terms -- but instead of getting ten years closer, the date got two years FURTHER AWAY. That's the sort of reality standard that the Trustees have set for themselves.

Originally Posted by Mircea

Like I had been saying for 6 years, the OASDI Trust Fund will collapse in 2028.

Collapse? LOL! Do you not understand that it CAN'T collapse? It can only be spent down as outlays for baby-boomer retirement benefits exceed the levels of income being collected. This of course is exactly what is SUPPOSED to happen. Read up on it sometime.

Originally Posted by Mircea

After seeing how bad your economy really was, in 2011 I started pegging the exhaustion of the Trust Fund 2023-2025.

That's hilarious! Did you assume any comet impacts in your "work", or did you simply forecast the in-migration of extra millions of baby boomers from another planet? Apparently, you see the SS Trust Funds as some sort of vulnerable, over-leveraged investment scheme. That of course would be a complete farce.

Originally Posted by Mircea

It was a year later in 2012 that the Trustees finally figured out it was 2027 under the High Cost Assumptions.

Really? What had it been in the equally unrealistic 2011 Report? There were no material changes introduced between the two years. No sudden surprises revealed when the later report came out. It appears that you hadn't realized that.

Originally Posted by Mircea

Bet on the Trustees at your own peril, but smart people are moving to protect themselves.

That's rich! Are these smart people pulling all their money out of SS now? If so, what sort of protection is it that they are all "moving to".

Originally Posted by Mircea

I'm guessing you didn't read the CBO's February 2013 report on the OASDI Trust Fund.

The most recent of CBO's long-term projections of the SS trust funds was in October of last year. The report of February 2013 issued in conjunction with updated budget projections is for ten years only, i.e., through 2023. Of course, if one were depending on moron-sites such as DailyFinance for all one's information, one could easily have become so thoroughly disinformed about things.

Originally Posted by Mircea

They put the Trust Fund running dry a year earlier...2031, but that would be under the Intermediate Assumptions....under the High Cost Assumptions, it'll be 2025-2026.

CBO does not use such cost-assumptions. That's the SS Trustees. CBO runs its 75-year model 500 times with randomly revised values for constrained relevant variables and then analyses the central 80% of outcomes. On that basis, they presently foresee trust fund exhaustion in 2034.

[oaktonite]

Originally Posted by Mircea

You have misrepresented the concept with the skill of a NAZI-style propaganda artist. Work/leisure preferences were intentionally ignored, because they have no bearing on employment.

I have no trouble believing that you failed to recognize the self-contradictory nature of that statement. Work-leisure preferences were ignored due to thorough lack of understanding on your part of their nature and relevance. You are simply in very far over your head.

Originally Posted by Mircea

There is no relationship between "economic growth" and employment.
An increase in GDP of X% does not automatically create N-number of jobs. Likewise, a decrease in GDP of X% does not automatically result in the loss of N-number of jobs

LOL! Does this bit of fluff represent the limits of your understanding of the word "relationship"? If so, it needs quite a lot of work.

Originally Posted by Mircea

Obviously, you fall into none of those categories of persons.

So it took only a mere handful of horrific embarrassments to drive you to attempts at personal insults. To put your mind at ease, I can assure you that my actual credentials in economics will stand me in far better stead than those you feebly imagine in yourself.

Originally Posted by Mircea

People with Bachelor's degrees in Economics -- like me -- really do sit around discussing Economics using terms like "E-Pop Ratio".

No, "E-Pop Ratio" is a childish affectation used in a transparent attempt to pump up a false aura of subject matter competence. And of course the employment-to-population ratio is not central to SS analyses and discussions whereas worker-to-retiree and worker-to-beneficiary ratios are. You didn't realize that and so turned to stylized over-hyping of the wrong ratio. Your bad once again on that score.

Originally Posted by Mircea

You have --- yet again-- misrepresented the concept with the skill of a NAZI-style propaganda artist.

No, I have merely suggested (and you have now confirmed in spades) that you have no explanation at all for the lack of monstrously adverse effects on SS as the worker-to-retiree ratio declined from 16.5-to-1 in 1950 to 5.1-to-1 in 1960, and hence no way to back up a notion that the much more modest declines currently forecast will have any such effects either. Just another case of in-way-over-your-head here.

As an FYI, SS was a pay-as-you-go system prior to the 1983 revisions. Over that era, periodic adjustments to keep the levels of taxes and benefits in general balance were enacted. One of those was due again by the late 1970's, but that was contemporaneous with recognition of the end of the post-war baby-boom and the implications of that for Social Security some 30-35 years down the road. Hence, the pay-as-you-go model was scrapped and taxes were raised to levels far above those necessary to fund then-current benefits. The surplus was to be deposited in the SS Trust Funds and then invested with an objective of conservation of principal but still to earn a competitive rate of return until the time when those funds were needed. At that point, the surpluses are to be drawn down until exhausted in helping to fund boomer retirement benefits. At that point, the SS Trust Funds will return to their pre-1983 state of holding no significant balances at all.

----------

So that's your various notions about Social Security laid to the waste that they always were. Perhaps later on I'll have the few more moments it would take to debunk and dismember some of your other inane misrepresentations.

[tfbns]

here the definition of CPI-U: What is CPI-U?