Welcome to City-Data.com Forum!
U.S. CitiesCity-Data Forum Index
Go Back   City-Data Forum > General Forums > Politics and Other Controversies
 [Register]
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
View detailed profile (Advanced) or search
site with Google Custom Search

Search Forums  (Advanced)
Reply Start New Thread
 
Old 09-26-2009, 11:08 AM
 
7,512 posts, read 11,317,165 times
Reputation: 3637

Advertisements

Quote:

How Did the Bubble Get So Big?

“This thing would never have happened if the Federal Reserve…had done its job right,“ said Forbes, who blames the extent of the bubble on the Federal Reserve’s decision to print so much money in 2003-2004 and to keep interest rates at an artificially low level. While the rationale for creating this liquidity was to prevent a period Japanese-style stagnation and deflation; without the surplus of currency, the bubble would not have burst, because “the fuel just would not have been there for it.”

This excess liquidity initially went into the commodities market—sending the price for nearly all commodities up, creating “a classic commodities bubble,” which spread into the housing market—already booming after the 1998 legislation that exempted primary residences from capital gains taxes if reinvested within 2 years. “With this flood of money coming in, it [the housing market] went on steroids—it went berserk,” explained Forbes, “because everyone figured, housing prices always go up.”

Steve Forbes Explains the Downturn (And How We Get to the Recovery) | Loudoun Independent
Does this fit with your view of the financial collapse?
Reply With Quote Quick reply to this message

 
Old 09-26-2009, 12:10 PM
 
Location: Florida
77,015 posts, read 47,402,518 times
Reputation: 14806
Quote:
Originally Posted by Motion View Post
Does this fit with your view of the financial collapse?
Yes, I have been blaming Alan Greenspan and the fed all along. In 2003 and 2004 (presidential campaign time) he went on TV several times to urge people to "take advantage" of sub-prime mortgages. At that time the rates were all time low, so they had nowhere to go but up. So, HE KNEW the rates were going to go up, and the sub-prime mortgages were going to blow up on peoples faces, which is exactly what happened a few years later. But he urged people to take sub-prime mortgages anyway, and people listened, and everyone was taking loans and pulling money out of the equity of their homes.
Reply With Quote Quick reply to this message
 
Old 09-26-2009, 12:15 PM
 
Location: Northwest
2,027 posts, read 4,542,955 times
Reputation: 2590
:listens cause this is interesting to learn about:

How else could we create those crooked instruments and convince
the world to buy them if we didn't have mortgages to dice up and
sell?

I'm not judging right and wrong just that it seemed like a business
scheme to me to bring in a lot of money...

:listening to what others think:

RFSilver
Reply With Quote Quick reply to this message
 
Old 09-26-2009, 12:18 PM
 
Location: DFW
40,931 posts, read 48,959,201 times
Reputation: 54922
I believe it all goes back to Sept 11. The US Govt was afraid we would slip into a major recession that they kept things going artificially low and too long. Then they could not stop the momentum.
Reply With Quote Quick reply to this message
 
Old 09-26-2009, 12:26 PM
 
Location: Socialist Republik of Amerika
6,205 posts, read 12,835,781 times
Reputation: 1114
Forbes is only partially correct, which makes him completely wrong.

The Fed had nothing to do with it, they only operate within the bounds of their puppet masters.

The redistribution of wealth idealogues, have been working overtime for decades to bring about the collapse of capitalism.

It's about POWER, and how to control the working slaves.
Reply With Quote Quick reply to this message
 
Old 09-26-2009, 12:29 PM
 
26,148 posts, read 48,824,756 times
Reputation: 31608
I sat in an investment talk in Denver in the summer of 2007 and the speaker was telling us then that the world was awash in trillions of dollars in liquidity. Money was chasing anything that moved. My notes are here in this thread.

I sat in another investment talk in Denver in the fall of 2007 as a noted economist told us that we were probably already in a recession at that point, yet it took another year for the Bush administration to admit we were in a recession. My notes on that one are here.

Forbes' remarks are close to the truth, but for me, another key truth is that NO ONE should ever have issued any liar loans or NINJA mortgages in the first place. The SEC, FED, Fannie, Freddie, etc have proven to be our worst enemy, along with a Congress that will pass anything, no matter how destructive, so long as they get their own fat payoffs of various sorts. No one was really checking the viability of the CDO's and Credit Default Swaps that Wall Street was rolling around by the truckload. Hell, the clowns couldn't even catch Madoff's Ponzi Scheme despite people TELLING them about it. Capitalism may fail, and it won't be due to foreign enemies or commie assaults, no, if capitalism falls it will only be by virtue of it being an inside job, where the greed of OUR OWN people does us in.
__________________
- Please follow our TOS.
- Any Questions about City-Data? See the FAQ list.
- Want some detailed instructions on using the site? See The Guide for plain english explanation.
- Realtors are welcome here but do see our Realtor Advice to avoid infractions.
- Thank you and enjoy City-Data.
Reply With Quote Quick reply to this message
 
Old 09-26-2009, 12:43 PM
 
Location: Arizona
13,778 posts, read 9,626,026 times
Reputation: 7485
Quote:
Originally Posted by Mike from back east View Post
I sat in an investment talk in Denver in the summer of 2007 and the speaker was telling us then that the world was awash in trillions of dollars in liquidity. Money was chasing anything that moved. My notes are here in this thread.

I sat in another investment talk in Denver in the fall of 2007 as a noted economist told us that we were probably already in a recession at that point, yet it took another year for the Bush administration to admit we were in a recession. My notes on that one are here.

Forbes' remarks are close to the truth, but for me, another key truth is that NO ONE should ever have issued any liar loans or NINJA mortgages in the first place. The SEC, FED, Fannie, Freddie, etc have proven to be our worst enemy, along with a Congress that will pass anything, no matter how destructive, so long as they get their own fat payoffs of various sorts. No one was really checking the viability of the CDO's and Credit Default Swaps that Wall Street was rolling around by the truckload. Hell, the clowns couldn't even catch Madoff's Ponzi Scheme despite people TELLING them about it. Capitalism may fail, and it won't be due to foreign enemies or commie assaults, no, if capitalism falls it will only be by virtue of it being an inside job, where the greed of OUR OWN people does us in.
I can't rep you but your post pretty much nails it IMO
Reply With Quote Quick reply to this message
 
Old 09-26-2009, 12:48 PM
 
Location: Northwest
2,027 posts, read 4,542,955 times
Reputation: 2590
Quote:
Originally Posted by Mike from back east View Post

Forbes' remarks are close to the truth, but for me, another key truth is that NO ONE should ever have issued any liar loans or NINJA mortgages in the first place.

The SEC, FED, Fannie, Freddie, etc have proven to be our worst enemy, along with a Congress that will pass anything, no matter how destructive, so long as they get their own fat payoffs of various sorts. No one was really checking the viability of the CDO's and Credit Default Swaps that Wall Street was rolling around by the truckload.

Hell, the clowns couldn't even catch Madoff's Ponzi Scheme despite people TELLING them about it. Capitalism may fail, and it won't be due to foreign enemies or commie assaults, no, if capitalism falls it will only be by virtue of it being an inside job, where the greed of OUR OWN people does us in.
I'm taking notes on this one!!!


Mike from back east, a question please Sir...

Were the Chinese or their banks behind Fannie, Freddie...

Just trying to put some stuff together in my mind since
we seem to be getting owned by China to me...


RFSilver
Reply With Quote Quick reply to this message
 
Old 09-26-2009, 01:04 PM
 
Location: Michigan
5,376 posts, read 5,332,525 times
Reputation: 1633
Quote:
Originally Posted by Motion View Post
Does this fit with your view of the financial collapse?

So Wall Street got what they wanted (with the help of many of those in congress from both parties and fully supported by the previous administrations) and sailed the economy right into a reef.

And they are still in the drivers seat?
Reply With Quote Quick reply to this message
 
Old 09-26-2009, 01:06 PM
 
26,148 posts, read 48,824,756 times
Reputation: 31608
Quote:
Originally Posted by RFSilver View Post
I'm taking notes on this one!!!

Mike from back east, a question please Sir... Were the Chinese or their banks behind Fannie, Freddie...?

Just trying to put some stuff together in my mind since we seem to be getting owned by China to me... RFSilver
I've seen nothing anywhere that so much as whispers anything about China having any hand in the Fannie/Freddie mess. No, that mess is self-inflicted, like all the other mess on Wall Street. Still, I hate former Senator Phil Gramm (R, TX) for his actions that gutted some of our most basic regulations during the last insane months of Clinton's administration; when no one was looking he gutted the Glass-Steagall Act which allowed rampant speculation in commodities and was largely the reason crude oil hit $144/bbl the other year, among other financial atrocities.

Fear not China. They "only" have about $1T of our debt, not enough to be owned by them. There's an old saying about banks and lenders: "Borrow a thousand dollars and the bank owns you; borrow a million and you own the bank." China has serious demographic issues, far worse than ours, where, due to their "one-child" policy they now have relatively few younger people to support a larger aging population. I don't see China as all that big of a challenger; IMO, we'll all just keep on getting along with each other.

I fault G.W.Bush for his tax cuts in 2001 that put us back into a world of red ink after Gingrich and Clinton battled the Federal budget back to surplus after years of red ink. I don't think those cuts were needed, it was just a political payback to "the base" and to upstage his father who got clobbered for raising taxes in 1991(?) as Bush-41 tried to balance the budget like any good fiscal conservative GOP leader SHOULD do. The rest is history, like Bush-43's costly insane worthless ethanol subsidy, unneeded war in Iraq (again, the family loser was trying to upstage his father who'd left Saddam in power). The red ink of Bush-43 has put us in hock for trillions, a lot of which the Chinese own, since we buy tons of their junky goods.

We're in a mess, but we will come out of it wiser (for a while), surely older, and (sadly) poorer for many.
__________________
- Please follow our TOS.
- Any Questions about City-Data? See the FAQ list.
- Want some detailed instructions on using the site? See The Guide for plain english explanation.
- Realtors are welcome here but do see our Realtor Advice to avoid infractions.
- Thank you and enjoy City-Data.
Reply With Quote Quick reply to this message
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.

Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.


Reply
Please update this thread with any new information or opinions. This open thread is still read by thousands of people, so we encourage all additional points of view.

Quick Reply
Message:


Over $104,000 in prizes was already given out to active posters on our forum and additional giveaways are planned!

Go Back   City-Data Forum > General Forums > Politics and Other Controversies
Similar Threads

All times are GMT -6.

© 2005-2024, Advameg, Inc. · Please obey Forum Rules · Terms of Use and Privacy Policy · Bug Bounty

City-Data.com - Contact Us - Archive 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35, 36, 37 - Top