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Furthermore I have to wonder if the Big Three are as bad off as they claim to be. Ford has already changed it's tune, saying that it can stay afloat, it would just like the government to provide it with a life jacket in case things go bad. Meanwhile Chrysler had announced that it hd to shut down for a month as a money saving maneuver, but the father of my student also clued me in to the fact that they always shut down for two or three weeks at Christmas anyway. That means that they are doing something that they always do and claiming that it's proof of this apocolypse they say is coming.
Sorry for coming in a bit late, but wanted to clear up a factual inaccuracy above. Nearly all of the big three are off for about 1 1/2 to 2 weeks at Christmas/New Years, not three (this year the holiday break for us was 12 days, but that includes two weekends). This year, Chrysler ADDED two or three weeks for all of their assembly plants; a few come back on Jan 19th, but most are off until at least the 26th. So this is NOT something that is always done anyway. And as an FYI, the workers of those plants are considered laid off for those 2 to 3 extra weeks; they do not get paid. The Big Three are as bad off money-wise as they claim to be; if anything, even worse. I could tell a million stories as to the extent they've gone to save money.
Notice that Toyota, Honda, and Mercades-Benz, which actually employ more workers in the U.S. then the "American" manufacturers do, are not asking for bailout money. Based on what I have been able to uncover the pay comparable wages and benefits, but without things like the job bank, they are able to stay econmically viable.
They do pay comparable wages and benefits. However, they have never given health care or pensions to their retirees, which all of the big three have to deal with (not saying that's right or wrong, just something you left out). Another factor missing is that nearly all of the foreign automakers have the healthcare costs they pay partially to fully subsidized by their home countries' governments. They receive additional subsidies for other costs, as well. So it's true they didn't ask for bailout money, but a case could be made that they have been getting it for decades from their own countries already.
Mediocre sale due to a lack of excitement about their product is in part what has gotten them here. They need to find ways to get people excited about their product again, and asking for billions in tax payer dollars is not the way to do it.
Taking quotes out of order; sorry. But this isn't the real reason for the trouble the companies are in. Sales for the foreign car companies are down about as much as for the Big Three. I have heard within our company (no proof) that only about a quarter of customers that come into our dealers can get financing to buy or lease a vehicle, when in the past it was more than 90%. That's pretty significant if it's true, and the blame for that needs to be laid at the feet of Wall Street and the bailout from Congress that was supposed to reopen the credit lines.
FYI, did you know that in 2005, Toyota recalled 2.68 million vehicles in the US; that's slightly more than it SOLD. And in 2007, it had 5 recalls just in Japan which totalled over 800,000? Consumer Reports lowered Toyota's rankings that same year, and stopped its practice of automatically recommending its vehicles. (The info on Toyota comes from a Wall Street Journal editorial from January 5th of this year, "Toyota Isn't Immune From the Recession".) I know I hadn't been aware of any of that until I saw the article this year; is it any wonder Toyota, Honda, et. al. have this perception of higher quality and better vehicles when this type of info gets buried, but Big Three woes/recalls are front page news?
I'm not saying the Big Three haven't made mistakes, and certain changes are definitely needed. But the fact is, it's not a completely level playing field here, and a lot of the US media/public's perception is often wrong.
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Now Larry Flint and Joe Francis are asking for a $5 billion bailout for the adult entertainment industry. They told Congress that while it is unlikely that their industry would fail, free money is always good and why take chances. So is this just going to be added to everything else, or is it the straw that will actually convince the American people of the absurdity of bailouts?
EPIC WIN.
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Mediocre sale due to a lack of excitement about their product is in part what has gotten them here. They need to find ways to get people excited about their product again, and asking for billions in tax payer dollars is not the way to do it.Taking quotes out of order; sorry. But this isn't the real reason for the trouble the companies are in. Sales for the foreign car companies are down about as much as for the Big Three.
It is true that many of the foreign manufacturers did have down years, same as the Big Three. However, according to CNN both Subaru and Ferrari saw increases in their sales figures last year.
A porn industry bailout would be the ultimate "money shot."
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It is true that many of the foreign manufacturers did have down years, same as the Big Three. However, according to CNN both Subaru and Ferrari saw increases in their sales figures last year.Mediocre sale due to a lack of excitement about their product is in part what has gotten them here. They need to find ways to get people excited about their product again, and asking for billions in tax payer dollars is not the way to do it.Taking quotes out of order; sorry. But this isn't the real reason for the trouble the companies are in. Sales for the foreign car companies are down about as much as for the Big Three.
Well, OK, that's true. According to the Washington Post, Subaru saw a gain of .3% for 2008, and sold a total of 187,699 vehicles. That's about 1.4% of all auto sales in the US (of 13.2 million). Ferrari is hardly a company that's indicative of the average person's car, especially when you consider they sell about 1500 cars worldwide in a year.
Are you trying to suggest that even though all of the Big 6 automakers had 30%+ declines in sales (GM, Ford, Chrysler, Toyota, Honda, and Nissan), the fact that Subaru and Ferrari saw increases proves the American companies have a lack of excitement about their product?
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Are you trying to suggest that even though all of the Big 6 automakers had 30%+ declines in sales (GM, Ford, Chrysler, Toyota, Honda, and Nissan), the fact that Subaru and Ferrari saw increases proves the American companies have a lack of excitement about their product?
No, what I am saying is, particularly with Subaru, that they are doing something to increase their sales, even if it is just .3%, and that maybe the other auto manufacturers should take a look and see what that is. After all if they are getting increased sales when everyone else is suffering double ddget losses, that maybe Subaru is doing something right that the other guys can learn from.
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FYI, did you know that in 2005, Toyota recalled 2.68 million vehicles in the US...
Actually, according to the Detroit News, the number was 2.2 million. At the same time Ford recalled six million cars in 2005 and GM recall five million. In order for us to understand and solve the problems facing this country, we have to stop propagandizing and start facing har realities. I respect your loyalty to your employer, but only telling one side of the story is not going to help.
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FYI, did you know that in 2005, Toyota recalled 2.68 million vehicles in the US...Actually, according to the Detroit News, the number was 2.2 million. At the same time Ford recalled six million cars in 2005 and GM recall five million. In order for us to understand and solve the problems facing this country, we have to stop propagandizing and start facing har realities. I respect your loyalty to your employer, but only telling one side of the story is not going to help.
Ummm ... I wasn't telling "one side of the story." If anything, I was telling the OTHER side of the story. You made the following claims:
1. The Big Three weren't as bad off as they claimed. This was mainly based on you saying, and I quote again:Meanwhile Chrysler had announced that it hd to shut down for a month as a money saving maneuver, but the father of my student also clued me in to the fact that they always shut down for two or three weeks at Christmas anyway. That means that they are doing something that they always do and claiming that it's proof of this apocolypse they say is coming.
I pointed out that this was, in fact, untrue.
2. You stated that Toyota, Honda, and Nissan didn't ask for bailout money and that they paid comparable wages and benefits. You then saidbut without things like the job bank, they are able to stay econmically viable.
I pointed out that you left out several important things, like the fact that those companies do, in fact, receive regular subsidies from their own governments (oh, and huge tax breaks from states like Alabama and Tennessee, by the way) and also don't have to pay pensions and healthcare to retirees (a far larger cost to the Big Three than the jobs bank).
3. You then said,Mediocre sale due to a lack of excitement about their product is in part what has gotten them here. They need to find ways to get people excited about their product again, and asking for billions in tax payer dollars is not the way to do it.
I was trying to make the point that the evidence doesn't support this; that based on the fact that the 6 largest car makers in the world all had huge declines, the reasons are found elsewhere.
I then said
I'm not saying the Big Three haven't made mistakes, and certain changes are definitely needed. But the fact is, it's not a completely level playing field here, and a lot of the US media/public's perception is often wrong.
So yes, I know and understand the American companies have made mistakes - being unable to adjust to the decline in SUV sales during the gas crunch is one glaring example. I also never said, nor implied, that the American companies DIDN'T have recalls in those years mentioned above; on the contrary, that was part of what I was trying to get across. Everyone heard about Ford and GM's recalls, and the information is easily located (and our local papers are the loudest trumpeters). But I put the Toyota information out there simply because it ISN'T as well known, because it gets buried on the back pages of the business section.
I think it's a bit unfair of you to claim I'm only presenting one side when that was exactly what you were doing; am I supposed to sit back and let people make untrue statements that paint us in an even more negative light than we already are? Are making incorrect statements and only telling half the story going to help us "understand and solve the problems facing this country?"
I'm personally amazed (and this isn't directed at you, David) at the absolute hatred a huge portion of this country has for the industry that was a big part of making the US what it is today. And it's not just one side - Democrats and liberals think we only make huge gas-guzzlers and got where we are because of corporate greed; Republicans and conservatives blame the union. The reality is that there are a few elements of truth to both, a whole lot of false perceptions, and what I think is a complete glossing over of the largest problem - people who want to buy cars, and could in the past, now can't. Even after the $700 billion to Wall Street.
I think the inauguration will be a historical moment in American history. I didn't support Obama's candidacy, but I can appreciate the affirmation of the basic solidity in the American constitutional process that this changeover heralds. I think it is wonderful that after centuries of discrimination that an African American was elected to the spot, despite my disagreeing with his politics.
Contrast this to several other 'democracies' where the people in power are trying to ram constitutional measures down their electorates' throats to stay in power indefenitely and disregard the people's wishes.
Many disrespect America, but we have had over 200 years of uninterrupted peaceful exchanges of power to our credit. Not too shabby.
Well 149 anyway. Many historians consider Lincoln's election as one of the root causes of the Civil War.
Point granted. Although Lincoln did assume office, and went on to become one of America's greatest presidents. There has never been a coup d'etat in America, or anyone who attempted to become 'president-for-life'. Although some could argue the latter with FDR.
Ok, another fun subject to discuss: The shiny new stimulus bill. Neccessary economic bailout or pork-ridden package?
Ok, another fun subject to discuss: The shiny new stimulus bill. Neccessary economic bailout or pork-ridden package?
10% stimulus, 90% pork. A disgraceful bill by any stretch of the imagination.
Spend a trillion dollars invading another country for no good reason isn't mortgaging our children's future, but even thinking about spending that much on the the economy that provides their livelihood is? Republican legislators look pretty hypocritical on this one. It's going to take a lot better arguments than "small government" and "tax cut our way to prosperity" for me to think that the economists who say that government has to spend in times of depression are wrong. Oh, and be sure to cut out what you would have spent on education, because that has nothing to do with creating jobs... :S
Spend a trillion dollars invading another country for no good reason isn't mortgaging our children's future, but even thinking about spending that much on the the economy that provides their livelihood is? Republican legislators look pretty hypocritical on this one. It's going to take a lot better arguments than "small government" and "tax cut our way to prosperity" for me to think that the economists who say that government has to spend in times of depression are wrong. Oh, and be sure to cut out what you would have spent on education, because that has nothing to do with creating jobs... :S
I bet there would be millions of Iraqis that now have freedom
would disagree with your "invading for no good reason" statement. I will agree that there are some stimulus aspects to this bill, but the majority of the bill is just junk.|
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I would say that the absolute biggest problem with this bill is that it seems very short sighted. There seems to be no thought about how this is going to generate any long term activity. I think it's a great idea to spend money on projects that put people to work now. My brother-in-law works in construction and it would be a great benefit if he had more work coming in. But as he pointed out to me, even if the bill creates a job for them now, as it is written there is nothing that creates jobs later.
The bill, as I understand it, really doesn't address the root cause of the crisis. Most people I have heard talk about it say we got into this crisis because of the housing market collapse. According to the figures I heard on the Today Show this morning, we have already spent enough on bailout projects to pay off 90% of the mortgages in America. Not just the bad ones either, all of them.
Finally, I heard on This Week yesterday that now the government is talking about maybe letting GM declare bankrupcy. The treasury department is now saying that it might be the only way to keep the taxpayers from getting soaked on this. But if that is the case, why didn't we just do that beck in December and January?
I feel that a lot of what is being done in the name of stimulus is like rearranging deckchairs on the Titanic, and making sure we keep the heat on in the first class lounge. It might make things more comfortable in the short term, but still does nothing to address the fact that the ship is sinking.
I bet there would be millions of Iraqis that now have freedom
would disagree with your "invading for no good reason" statement. I will agree that there are some stimulus aspects to this bill, but the majority of the bill is just junk.
Sure, although there are also millions of Iraqis who would make an even more extreme statement than the one I made. Instead of saying "no good reason," I should have said "no commensurate good reason," and certainly not the reasons initially given. I'm for doing good at home first and then seeing what good is left over for external responsibilities and external charities. If your last statement is a correct assessment, then this is what the Republican legislators need to show, and I what I have heard so far of them through the media is half hot air and half meaningless generalities.
I look at it this way. If someone has a huge credit card debt, do they:
a) Secure even more credit cards to make sure that they can keep up their lifestyle?
b) Cut out the unneccessary and try to live within their means?
I don't have a problem with trying to fix the economy, I just don't think the government has the chops to do it. This amount of money is causing a feeding frenzy among lawmakers, and they are lining up to get 'their' projects included. You have to ask yourself: What will this money do? It doesn't just appear out of nowhere. It will all have to be paid back at some point, and that debt load will cripple our economy. We are leaving a legacy of massive debt for our children.
or ...
We might just keep printing bills up until we inflation the debt away. Of course that beggars anyone with USD in their savings and makes our credit line disappear internationally.
Stuff
I thought you hated political threads. ;p
Yeah, I kicked myself afterward, but I just don't see the argument that makes me think that every economist I have heard speak on the subject is wrong and that a group of politicians with a prior politico-economic prejudice, smarting from a lost election, are right.
Yeah, I kicked myself afterward, but I just don't see the argument that makes me think that every economist I have heard speak on the subject is wrong and that a group of politicians with a prior politico-economic prejudice, smarting from a lost election, are right.
Are these the same economists that were gaga over the first Bush/Congress stimulus bill? We know how that worked out.
Well, I don't know if I would say ga-ga, because they thought it was necessary doesn't mean they would have written it exactly the same way. And while we have clearly seen problems with the way it was written/carried out, I think it is probably still to early to say that we already know how that turned out fully.
And, just for the record, my comments about economic threads were as much for people to keep having free political discussions here without getting cut off as it was for me to avoid the temptation of joining in them. :)
Well, I don't know if I would say ga-ga, because they thought it was necessary doesn't mean they would have written it exactly the same way. And while we have clearly seen problems with the way it was written/carried out, I think it is probably still to early to say that we already know how that turned out fully.
And, just for the record, my comments about economic threads were as much for people to keep having free political discussions here without getting cut off as it was for me to avoid the temptation of joining in them. :)
My apologies for not being clearer. I was talking about the tax credit bill(everybody got $500 back) that Bush and Congress came up with last year. It didn't work at all, even though the economists liked it.
Got ya. Yeah, I think something that small only put off the inevitable (by that point) dive...although I guess strictly speaking we'll ever know if it softened the blow any. My take on this is that the economists really had no idea how big and bad this was going to be. But it seems to me that kind of prediction is much more difficult to make than whether the spending of money will create jobs.
Although, I've gotta say that my bro-in-law, who used to be with FBR, has been saying that this was coming and that it was going to be bad for at least two years ahead of time. There's some F-ers out there who really need to be seriously punished for their greed, and its not your average American worker.
Got ya. Yeah, I think something that small only put off the inevitable (by that point) dive...although I guess strictly speaking we'll ever know if it softened the blow any. My take on this is that the economists really had no idea how big and bad this was going to be. But it seems to me that kind of prediction is much more difficult to make than whether the spending of money will create jobs.
Although, I've gotta say that my bro-in-law, who used to be with FBR, has been saying that this was coming and that it was going to be bad for at least two years ahead of time. There's some F-ers out there who really need to be seriously punished for their greed, and its not your average American worker.
Yep, the American worker always gets hurt by these things. That's the way capitalism works. The good trickles down to the workers but the bad trickles down to them as well. We do need to put some heads on a pike for this. Some CEOs and politicians need to go to jail, but as always they'll get away with it.
There's some F-ers out there who really need to be seriously punished for their greed, and its not your average American worker.
Oh no, my myopic friend......
We should not punish greed...as that is what our capitalist society is set up to promote. That is, unless you consider punishment to be one where we apply already established laws to the scenario and or act as one and discontinue business with the "greedy F-er's" corporations. People tend to forget that is the greatest "democratic" power we have.
What a shame we opt to continue putting money into the coffers of groups like Wal-Mart and AIG out of convenience and / or inertia...
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Some CEOs and politicians need to go to jail, but as always they'll get away with it.
That's because they are the ones making the laws and the ones paying the ones making the laws. Why has none of the bailout money made it's way to the people who need it? Because the people in charge are too busy helping their friends to worry about the people they are supposed to work for. I mean think about it, the guy that became chief of staff over at the treasury was a lobbyist for Goldman Sachs until he quit to join the Obama campaign. I think that just shows that the guys in charge, regardless of party, are going to make sure the first money pipeline that gets the kinks worked out is the one that flows to their re-election campaign.
Some CEOs and politicians need to go to jail, but as always they'll get away with it.That's because they are the ones making the laws and the ones paying the ones making the laws. Why has none of the bailout money made it's way to the people who need it? Because the people in charge are too busy helping their friends to worry about the people they are supposed to work for. I mean think about it, the guy that became chief of staff over at the treasury was a lobbyist for Goldman Sachs until he quit to join the Obama campaign. I think that just shows that the guys in charge, regardless of party, are going to make sure the first money pipeline that gets the kinks worked out is the one that flows to their re-election campaign.
QFT. I am disgusted with both mainstream parties at this moment. They are both showing a shocking lack of leadership or even an attempt to do things outside of their box. Should just start calling them all the Reporkucrats.
QFT. I am disgusted with both mainstream parties at this moment. They are both showing a shocking lack of leadership or even an attempt to do things outside of their box. Should just start calling them all the Reporkucrats.
AMEN brother...AMEN...
Personally, I am all in favor of tearing down our "government" brick by brick and starting from scratch. As a whole, it is infected with pedantic cronyism and greed....from stem to stern...
QFT. I am disgusted with both mainstream parties at this moment. They are both showing a shocking lack of leadership or even an attempt to do things outside of their box. Should just start calling them all the Reporkucrats.Some CEOs and politicians need to go to jail, but as always they'll get away with it.That's because they are the ones making the laws and the ones paying the ones making the laws. Why has none of the bailout money made it's way to the people who need it? Because the people in charge are too busy helping their friends to worry about the people they are supposed to work for. I mean think about it, the guy that became chief of staff over at the treasury was a lobbyist for Goldman Sachs until he quit to join the Obama campaign. I think that just shows that the guys in charge, regardless of party, are going to make sure the first money pipeline that gets the kinks worked out is the one that flows to their re-election campaign.
How true. I wish a conservative third party would come about and would actually have a chance of winning an election. I like the modern whigs, but I don't see them going anywhere.
How true. I wish a conservative third party would come about and would actually have a chance of winning an election. I like the modern whigs, but I don't see them going anywhere.
What your asking for is something to the effect of Episcopal vs Catholic...
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There's some F-ers out there who really need to be seriously punished for their greed, and its not your average American worker.Oh no, my myopic friend......
We should not punish greed...as that is what our capitalist society is set up to promote. That is, unless you consider punishment to be one where we apply already established laws to the scenario and or act as one and discontinue business with the "greedy F-er's" corporations. People tend to forget that is the greatest "democratic" power we have.
What a shame we opt to continue putting money into the coffers of groups like Wal-Mart and AIG out of convenience and / or inertia...
Well, of course, it is quite easy to blame fat cats and politicians, but there has to be an element of personal responsibility in all of this. Are we to assume that the average man on the street is so stupid that he doesn't understand that when he borrows money, he has to pay it back? Remember that these mortgage backed securitites that kicked all of the problems off were secured on sub-prime debt lent to individuals, and it is the fact that these individuals borrowed money and couldn't pay it back is actually at the root of a lot of this. These same individuals probably saw the property market booming and decided they wanted a piece of the actions, and didn't think through the consequences - greed, just on a smaller scale to match their smaller achievable aspirations, but greed all the same. That's not to say that the CEOs and bankers and so on are squeaky clean, of course - particularly in the loan origination, packaging and securitisation, where a lot of people turned a blind eye to the risks. But it was the ordinary Joes who provided the raw materials, and nobody forced them to borrow money by holding a gun to their heads.
Insightful point
QFT. Too many people lived WAY beyond their means. I have two sets of friends who got caught up in the whirl and pushed above their financial limits with endless mortgage refinancings, taking all their equity out and taking trips to Cancun and eating out every night.
The days of wine and roses are over. They both now rent rather than own.
Well, of course, it is quite easy to blame fat cats and politicians, but there has to be an element of personal responsibility in all of this. Are we to assume that the average man on the street is so stupid that he doesn't understand that when he borrows money, he has to pay it back? Remember that these mortgage backed securitites that kicked all of the problems off were secured on sub-prime debt lent to individuals, and it is the fact that these individuals borrowed money and couldn't pay it back is actually at the root of a lot of this. These same individuals probably saw the property market booming and decided they wanted a piece of the actions, and didn't think through the consequences - greed, just on a smaller scale to match their smaller achievable aspirations, but greed all the same. That's not to say that the CEOs and bankers and so on are squeaky clean, of course - particularly in the loan origination, packaging and securitisation, where a lot of people turned a blind eye to the risks. But it was the ordinary Joes who provided the raw materials, and nobody forced them to borrow money by holding a gun to their heads.
I was addressing the fat cat's and the politicians...but by NO means was I addressing the average Joe.
When I bought a house back in 2000, I was offered an ARM as an option..I said, lemme get this straight...4.25% at a fixed rate, or I could be a complete rube and go for something that could change next month to a figure I never could have possibly foreseen due to forces beyond my control? Are you kidding?
To the people who lost their houses...although my heart goes out to them, my brain does not. It was their responsibility as adults to thoroughly understand the reality of the situation, NOT the DREAM. And frankly, if they were not of the mental capacity to understand the reality, well then, they should have had someone with them to translate the reality to them.
Sorry, no sympathy here.
And as to all of us accepting responsibility for this?
Ahemm...no.
Some of us saw the reality in things, refused to be suckered into materialism for the sake of materialism...and lived within their means.
P.T. Barnum is rolling over in his grave right now with laughter...
Now Larry Flint and Joe Francis are asking for a $5 billion bailout for the adult entertainment industry. They told Congress that while it is unlikely that their industry would fail, free money is always good and why take chances. So is this just going to be added to everything else, or is it the straw that will actually convince the American people of the absurdity of bailouts?
David, even (my hero) Larry Flint and (not my hero) Joe Francis admitted that they were absolutely 100% joking. They were in all reality rubbing it into the face of the industries who screwed around and needed bailouts...
Unfortunately, you completely mistook this as truth.
No, I got the joke. The real joke though is being played on the American people with all this bailout nonsense.
David, I absolutely agree with you on the fact that the American People are being screwed with by this concept of a bailout.
HUZA!!! We agree!!! :)
YEAY!!!!!
Let the gay festivities begin!!!
Flynnster:
OK, another fun subject: The Israeli elections. Looks like the hard-liners are going to be the dominant power this cycle. Any thoughts as to what this portends for the Obama Administration, Hamas and the Palestinian people?
it was the ordinary Joes who provided the raw materials, and nobody forced them to borrow money by holding a gun to their heads.
Are you really willing to say that no one manipulated or mislead them? I'm all for recognizing everyone's responsibilities in these matters, even my own, but it seems clear to me that some people are much more guilty than others. Some people, for example, will go to jail for this. Not all of them that should, but some.
With bad debt on the scale that we produced, you not only have the ever-stretched-out hand to borrow, but you have those who know they are making bad loans and then selling them to others as if they were not bad loans. This is a major factor in our current crisis. Further, you have the knowledge/profession power imbalance. Those making the loans tend to know much better than those taking them. And then they pay people to convince people to borrow more, and so on.
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Not all of them, and there are none so blind as will not see. Who doesn't actually know that investments can go down in value as well as up? Who trusts sales people? That is not to excuse those sales people, but people had to be willing to buy. Abandon sensible prudence and the market will sort out the rest, even in normal conditions.
We are all guilty if we borrowed money to fuel the boom, or spent our inflated salaries, or sold stuff to punters to get bonuses. Finger-pointing solves nothing - the point is to work out what went wrong, and fix it (if it can be fixed - considering human nature and the inability of the human mind to genuinely assess risk properly) and try and make sure it doesn't happen again. Finding the "guilty" is just about rying to shirk our own, individual responsibility.
If you think there was a series of evil genuises running all this, and if we can find them and punish them we will stop it happening again, I think you fail to see the reality. We were all in on it, and it was good while it lasted. I have no doubt that many of the people who did all the mortgage origination and securitisation, as well as pocketing fees and bonuses, probably thought they were doing good by increasing the access of the relatively poor to credit and allowing them to purchase property and better their lot. And they were, initially. It just got out of hand, like these things do. Even Greenspan didn't see it - no one really understood the risks.
And stuff like this happens. The next boom and bust will be both like the last, and different so we don't see it coming in exactly the same way. People will forget what happened and repeat the mistakes, and ignore the warning signs because the incentives work that way. That is the lesson of history.
(Actually, people borrowing have much more information than those lending - they know their own personal balance sheets much better than the party lending them money, and they can lie and maybe get away with it. The problem was not that the lenders knew much more, but that they began to pay less interest to the quality of the borrowers. This was because, supposedly, when repackaged and securitised the quality of the individual borrower didn't matter because the risk of that individual could be diversified away through the portfolio effect. Unfortunately, when the whole market turned down due to oversupply, the portfolio effect failed and the individual credit impacts became correlated.)
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OK, another fun subject: The Israeli elections. Looks like the hard-liners are going to be the dominant power this cycle. Any thoughts as to what this portends for the Obama Administration, Hamas and the Palestinian people?
I think that Hamas is about to get some more missles shoved down their throats.
But seriously...we just need to get out of there. SOme of my early political memories were of Pres. Reagan trying to fix things over there...just let them end it themselves.
My money is on the Israelies.
Not all of them, and there are none so blind as will not see. Who doesn't actually know that investments can go down in value as well as up? Who trusts sales people? That is not to excuse those sales people, but people had to be willing to buy. Abandon sensible prudence and the market will sort out the rest, even in normal conditions.
We are all guilty if we borrowed money to fuel the boom, or spent our inflated salaries, or sold stuff to punters to get bonuses. Finger-pointing solves nothing - the point is to work out what went wrong, and fix it (if it can be fixed - considering human nature and the inability of the human mind to genuinely assess risk properly) and try and make sure it doesn't happen again. Finding the "guilty" is just about rying to shirk our own, individual responsibility.
If you think there was a series of evil genuises running all this, and if we can find them and punish them we will stop it happening again, I think you fail to see the reality. We were all in on it, and it was good while it lasted. I have no doubt that many of the people who did all the securitisation, as well as pocketing fees and bonuses, probably thought they were doing good by increasing the access of the relatively poor to credit and allowing them to purchase property and better their lot. And they were, initially. It just got out of hand, like these things do. Even Greenspan didn't see it - no one really understood the risks.
And stuff like this happens. The next boom and bust will be both like the last, and different so we don't see it coming in exactly the same way. People will forget what happened and repeat the mistakes, and ignore the warning signs because the incentives work that way. That is the lesson of history.
I don't need an evil genius in the comic book or conspiracy theory sense, but sure, there were evil geniuses. I have a bro-in-law who worked for FBR and he was screaming about this for at least two years before it happened. Saying "it just got out of hand" and then using the very real systemic issues and individual human foibles without analyzing the differences in degree of culpability is either morally myopic or a cop-out, in my opinion. Sure the market has cycles, but when you can trace effects to causes, you should do so. And a part of the cause analysis here has to include human intentions. And that some people intended evil will likely produce criminal sentences. I'd be hard pressed to be convinced that those folks are only scape goats to allow ourselves to blindly ignore warning signs and take incentives.
I don't need an evil genius in the comic book or conspiracy theory sense, but sure, there were evil geniuses. I have a bro-in-law who worked for FBR and he was screaming about this for at least two years before it happened. Saying "it just got out of hand" and then using the very real systemic issues and individual human foibles without analyzing the differences in degree of culpability is either morally myopic or a cop-out, in my opinion. Sure the market has cycles, but when you can trace effects to causes, you should do so. And a part of the cause analysis here has to include human intentions. And that some people intended evil will likely produce criminal sentences. I'd be hard pressed to be convinced that those folks are only scape goats to allow ourselves to blindly ignore warning signs and take incentives.
I think what Aubrey is saying is that everyone involved, from the politicans who garnered huge contributions from the lenders (and cushy jobs for themselves and their family members), to the lenders (who banked on the government backing their toxic debts), to the lendees (who got caught up in their greedy thoughts of using their house as a constantly-expanding line of credit) is guilty. The standards of lending should not have been loosened (no money down mortgages, I am looking at you). Banks shouldn't have written shaky loans knowing that Fannie and Freddie would have to assume the mess. Home owners should have done their homework and worked towards paying off their mortgages rather than constant refis to aspire to a level of living their actual income couldn't support. Anyone who signed an ARM without going over the paperwork is a fool. Actually, anyone who signs ANY contract without going over the terms with a fine-toothed comb is a fool.
What I don't want to see is some 'keep people in their homes' legislation that lets the idiots who scooped out all the equity in their house to buy goodies keep their house with taxpayer assistance. That will be a back-breaking piece of national debt.