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You cannot lay all the blame on the banks. What you had was confluence of ideologies which if left to themselves may not have caused too much trouble. On one side you have the banks pushing for deregualtion and on the other side you have the liberals trying to put people into their own homes. This was the recipe for disaster.
Baloney ... home loan borrowers have NOTHING TO DO WITH IT. The alleged "money" that was "loaned" never existed .... just entries into a computer accounting system.
When you create a counterfeit dollar out of thin air and backed by nothing ... and allow banks to loan $10 for every 1 counterfeit $1 that they have, eventually such a scheme will fail. It has to, because it's a fraud.
The schemers call this "inflation" .... but it's really far more simple than that ... it's a con game, and you can't blame the results on those that were conned. They were just necessary and unwitting participants in the scheme ... because you need a borrower in order to perpetrate a lending fraud.
Those "home loans" were just the beginning of the fraud .... the real fraud occurred afterward, as the banks packaged those "loans" into bundles of "Mortgage Backed Securities" and sold them ... over and over again, sometimes to as many as 8 or more different investors. You see, this is against the law if you did that ... you aren't allowed to sell your house to 8 different people ... but you might be able to get away with selling your home to 8 different people if you knew none of them planned on living in the house. But the moment 2 of them decided to move in, you'd be in trouble, and your arse would go to jail.
The banks are different ... they can sell your house to 8 different investors, and when something goes wrong and they get caught ... they get "bailed out" with Billions of tax dollars, and then they turn around and blame the original borrower that was used to kick start the scheme.
You could do the same thing if you had your own congress writing laws that allowed you to break them ... but you don't, so you have to follow their laws or go to jail when you don't.
Last edited by GuyNTexas; 05-04-2012 at 09:03 AM..
Baloney ... home loan borrowers have NOTHING TO DO WITH IT.
If people weren't given the opportunity to borrow money they had no chance of ever paying back there is no toxic assets in the first place. To suggest ehy bare no responsibility in tsaking out these absurd loans is ridiculous. I know two people personally that were offered about $500K which they declined because they knew they would never be able to pay it back.
I don't know who Richard Wolff is but he's either an idiot or supremely disingenuous.
Both.
Quote:
Originally Posted by JimMe
The problem with our system is that it is no longer capitalism.
Of course it is Capitalism. Capitalism is merely a Property Theory, not an Economic System.
Quote:
Originally Posted by JimMe
The corrupt bargain between government and business has so warped the captialist system that it is no longer recognizable.
Oh, the irony. Prior to the Great Depression, Business and Government were sworn enemies. After the Great Depression Business and Government were in bed with each other.
Quote:
Originally Posted by JimMe
Case in point: Congress recently passed a law that limits the transaction fees that banks can charge on credit and debit card purchases. Who is advantaged by that? The consumer?
That is neither Capitalism, Socialism nor Communism. It is Command Economics.
However, they are elements of Socialism. Most people are under the mistaken impression that only Government can be the Agent of Socialism, but that is not so. Any entity, including non-government entities can be an Agent of Socialism.
You often see these entities, like the American Hospital Association, Big-Agro-business, etc etc engaging in actions that restrict access to Capital, place limitations on how Capital can be used, and other such actions, usually to bar new entrants and force competitors out in an attempt to monopolize an industry or sector of the economy.
Those are not true "Capitalists." I call them Feudal-Capitalists. What they want is Capitalism, except they get to dictate who gets access to, and can hold Capital, and all the other conditions associated with Capital, namely to give them a distinct advantage.
And yes, these Feudal-Capitalists have a great working relationship with the government. Too great, actually.
Quote:
Originally Posted by JimMe
You're right. We do have a responsibility to care for the aged and disabled. But who are the "We?" Where in the Constitution is the federal government empowered to do charity?
It doesn't say that, but it does say that the States or that "we the people" vis-a-vis the several States can decide which programs we want, how we want to pay for them, who is eligible, for how long and under what conditions.
To suggest that the geography, economic conditions, Markets (especially Housing and Labor Markets), etc etc etc are identical in each of the 50 States is totally absurd, yet that is what Liberals tell us when they insist upon things like a "federal minimum wage."
Quote:
Originally Posted by JimMe
But when you cede the argument that the federal government can do things like Social Security and Medicare then there is virtually no limit to what it can do in the name of "helping" us.
The strange thing is that as the governor of New York State, Governor Franklin Roosevelt implemented a social security system for citizens of New York State.
That was a good thing.
As president, President Franklin Roosevelt then tried to crow-bar the same system into all 48 States (Alaska and Hawaii were not States at that time).
That is where he erred (and you will all pay handsomely for that error).
Capitalistically...
Mircea
Quote:
Originally Posted by fibonacci
Our economic system has been corrupted with too much socialism
No, with too much Command Economics.
Quote:
Originally Posted by fibonacci
Funny, because it was the unregulated phony synthetic credit derivatives markets that tanked the whole economy and threatened to destroy the US in the first place. Banks invented credit default swaps in order to create a completely unregulated market with no transparency in order to reap in massive profits from transaction fees.
And what caused them to do that?
Command Economics -- the government forcing financial institutions to make loans to people who should have never been allowed to touch money in the first place, in order to avoid being prosecuted by the government as a "discriminatory lender."
It is Supply & Demand that determines what percent of Americans are homeowners, not the government. The government under Clinton attempted to artificially boost the percentage of homeowners and that is what set into motion a chain of events.
The Laws of Economics are Sacred and Inviolable. You can never violate them without suffering negative consequences for your insolence.
Quote:
Originally Posted by fibonacci
That's capitalism for you.
That has nothing to do with Capitalism. It would have happened in both a Socialist and Communist System as well.
Why? Because the government interfered with the Market.
The government interfered with the fuel market by dictating that fuel must contain a percentage of ethanol; which then interfered with the corn market; and then government interfered again by attempting to subsidize ethanol producers.
Where are you now? Higher food prices and higher fuel prices.
Looks like you're the winner, right?
Economically...
Mircea
Quote:
Originally Posted by stan4
How could everyone not understand that Captalism has become the refuge of corruption and greed.
You're so funny. What you don't get is that this is not a symptom of capitalism. This is how human beings are.
Well, that is the nature of *******s -- blame everyone but yourself for your own short-comings and in particular, cast blame on an inanimate object or an abstract idea/concept. If none are available, then blame corporations, the rich, conservatives and Society in that order.
Also amused...
Capitalism is a remarkably efficient economic system that efficiently distributes investment, risk and profit. Most businessmen are way too smart to attempt to let it work as it should. They always find ways to cripple the market even if it requires sharing instead of competing with each other. Assured profit is far more valuable than taking a risk in an open market.
FWIW - I was offered a huge mortgage but turned it down because I am an investor not a gambler. I am also a very hard sell. I know when I am being set up and do not play that game.
Actually, what is doing us in, is how far we have strayed from a Capitalist System.
There is a great book called, "The Right to Earn A Living," - can't recall the author's name at the moment; but it is eye opening with regard to the amount of rules and regulations that have gradually crept up on us and are strangling our country.
You cannot lay all the blame on the banks. What you had was confluence of ideologies which if left to themselves may not have caused too much trouble. On one side you have the banks pushing for deregualtion and on the other side you have the liberals trying to put people into their own homes. This was the recipe for disaster.
More BS. In fact democrats in Georgia passed a law just before the meltdown in 2008 to clamp down on predatory lending and free easy loans to people who didn't deserve loans because they saw the huge impending doom this would cause. What happened after that? Huge banks on wall st. came into GA with millions of dollars in lobbying money to get the governor outed and the law repealed. That happened, and subsequently GA was rocked after the meltdown. GA now has dozens and dozens if boarded up homes and shanty towns because no noone knows who owns those homes since the the mortgages have been bundled up with hundreds of others and were sold as derivatives without keeping track. Some guy in Kuala lampor could own that home in GA now, but no one knows. Banks were the ones who lobbied for deregulation and banks were the ones who.lobbied for easy flow of credit and wanted to perpetuate predatory lending because they stood to make huge amounts of profit by bundling and slinging around credit risk as much as they could.
If people weren't given the opportunity to borrow money they had no chance of ever paying back there is no toxic assets in the first place. To suggest ehy bare no responsibility in tsaking out these absurd loans is ridiculous. I know two people personally that were offered about $500K which they declined because they knew they would never be able to pay it back.
This is precisely the issue. The lender has always exercised their responsibility to qualify the borrower's ability to repay a loan before lending, just as you would do if you were lending someone money.
Now, if you were to go to a homeless shelter, and call out on your bull horn, "I've got money to lend ... who wants it?" and 20 unemployed homeless people came running up to you with their hands out ... and you just gave every one of them $10,000 each ..... who's fault would it be when they couldn't repay the loan? Theirs or yours?
This is what was done in the mortgage industry ...and it was done PURPOSELY. You see, the banks actually wanted the loans to go into default, which is why they relaxed the qualification criteria for people to qualify for loans that they would otherwise not have been approved for prior to the scheme. The lenders needed warm bodies to sign for these loans, so they could package these loans and sell them to investors as derivatives.
This is basically how the scheme worked .... first, the banks artificially inflated the value of residential property by agreeing to loan higher amounts for any given property AND by making it easier for more people to qualify for those larger loans, including adjustable rate mortgages that would make it possible for the borrower to afford that initial low rate. Once the ARM kicked in though ... the payments would increase beyond the ability of the borrower to pay (and the Banks were "banking" on that situation). Why? Because the banks took those initial loans and resold them to other investors ... often, MULTIPLE other investors, collecting several times the amount of the original loan ... while also rolling into the original contract with the borrower, mortgage insurance that would pay 80% of the original loan amount to the lender IF the borrower defaulted.
So the banks then received all of the upfront payments from the sale of those securities to the investors ... let's say the original loan was a $100,000, with an annuity value of $230,000 over 30 years. They sell that loan for $120,000 ... which would net them a $20,000 profit immediately. But that wasn't good enough for the greedy fraudsters ... so they sold that same mortgage to 5 different investors, collecting $600,000 upfront, on an original $100,000 loan!! But NOW, the bank owes ALL 5 investors a monthly payment for that mortgage each one thinks they have coming .... keep in mind, the bank is only receiving one monthly payment from the borrower, not 5, so what do they do? Simple ... they just take the extra $4,000 (4 x $1,000) out of that $600,000 collected upfront, plus the real monthly payment from the borrower, and pay them. That $600,000 will cover those payments owed for 12 FREAKING years before it runs out .... but the banker is "banking" on this borrower to default long before that 12 years is up .... likely within 3 years as the ARM rate kicks in. So, over that 3 years, they have deducted maybe $140,000 from that $600,000 pot .... the borrower defaults ... the banker collects an additional $80,000 on the mortgage insurance, and now has a total of $600,000 minus $140,000 plus $80,000, leaving them sitting on a grand total of $540,000 !!! Then, they auction off that $100,000 property for $60,000 on a short sale foreclosure liquidation ... pay off those 5 investors $60,000 each ($300,000 total) leaving them with a cool profit of $240,000, which is more than the total annuity value of the original 30 year loan, all inside 3 years. To make things even more obscene ... the original $100,000 dollars NEVER EXISTED in the first place, because due to fractional reserve banking, the Bank only needed $10,000 in order to loan $100,000. So, the original lender effectively made $240,000 on $10,000. Follow me? Now .... multiply that by MILLION'S of MORTGAGES !! And who gets screwed? The homeless former home owner ... the 5 investors ... the mortgage insurance companies .... and who makes a killing? The lenders who invented the scheme.
It gets better ... more often than not, those "investors" are connected to the original lender and know about the scheme ... they are active participants with the banks ... like Goldman Sachs ... who buy those phony derivatives and resell them to workers unions (pension plan investments) and cities and municipalities for their investments .... and when the whole scheme comes crashing down .... they go to your traitors and co-conspirators in congress and the federal reserve and receive BILLIONS of tax payer dollars as "Bail Outs" so the financial "system" (the fraud) doesn't collapse, and all those Unions don't lose everyone's pension savings.
So, the banks win Billions on the fraud upfront ... the money disappears ... and then at the end ... the tax payer get's bilked again for the cost of the bail out that was purposely created by the recipients of the bail out to begin with!!
Now, YOU blame the borrower, why? Because that's what television is there for ... to convince you that you, your neighbors or fellow Americans are to blame for being robbed blind by these criminals who own the banks, own the congress, own the courts and own the TELEVISION STATIONS.
Now, you have a choice ... take the red pill and you can wake up ... or take the blue one and remain in the illusion created by the gangsters.
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