The Market is seemingly in free-fall. by Wulfenstar

REAL WORLD EVENT DISCUSSIONS

The Market is seemingly in free-fall.

POSTED BY: WULFENSTAR
UPDATED: Friday, October 10, 2008 04:13
SHORT URL:
VIEWED: 1893
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Monday, October 6, 2008 5:03 AM

WULFENSTAR

http://youtu.be/VUnGTXRxGHg

Below 10,000.

The Bailout did nothing.

Whats the next move?

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Monday, October 6, 2008 5:07 AM

6IXSTRINGJACK

Heh... don't sell your GE if you got any from a few months back.

It's only money, but you don't lock in your 30% losses unless you sell.

Like Tupac said, Life Goes On.

We'll survive. If you've been saving, maybe you should take a little vacation that the family remembers, ya know... just in case.

"A government is a body of people, usually notably ungoverned." http://www.myspace.com/6ixstringjack

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Monday, October 6, 2008 5:09 AM

HERO

Quote:
Originally posted by Wulfenstar:
Below 10,000.

The Bailout did nothing.

Whats the next move?

Wow, that's kinda like the folks who said the surge didn't work...BEFORE the troops got there.

The money from the Bailout has not gotten there yet. They next move is to wait and see if the market stabilizes after the money has been put to work. Also the FED needs to cut rates by .5% (actually they are a week late on that).

Your being all fearful over this market thing when you really should just be worrying about fear itself. Let this shake out and see were we stand at 4pm today...then 4pm Friday...then 4pm on Nov. 1st.

H

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Monday, October 6, 2008 5:20 AM

CHRISISALL

Quote:
Originally posted by Hero:

Your being all fearful over this market thing when you really should just be worrying about fear itself.

Actually, I'm with Hero on this one (try not to faint

).

The peeps at the top will not let their asses even begin to fall through the grate on this, and they'll save this economy to save themselves.

Yachts cost real money, y'know.

isall

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Monday, October 6, 2008 5:29 AM

6IXSTRINGJACK

My late uncle said nobody is happy. Even the rich have to get the engines in their yachts fixed.

Try telling me that you'd live anymore within your means if you were making 500,000 a year when you have the temptations of the Joneses all around. Status Quo is where most choose to go.

If you were in the hole now, most likely, you would be in just as deep a hole now if you were semi-rich....

Exponentially speaking, of course.....

Ain't the end of the world people. Put the bi-partisan fear down and realize that we can be good people and take care of our own even if things ever really got rough. Why should Wall Street and Politics rule our lives? WTF is the point then?

Serving materialism this long is what got us here. You're choice... stay on the sinking ship or grow a brain.

"A government is a body of people, usually notably ungoverned." http://www.myspace.com/6ixstringjack

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Monday, October 6, 2008 5:30 AM

HERO

Quote:
Originally posted by chrisisall:
Actually, I'm with Hero on this one (try not to faint).

Don't some of these folks around here sound downright French with all their "all hope is gone" talk?

A little adversity and suddenly these folks are willing to throw down their guns and start goose stepping to the sound of L'Internationale (the Commie International Anthem).

Give me a break, I had a chicken biscuit from McDonalds this morning...its gonna be ok.

H

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Monday, October 6, 2008 5:34 AM

6IXSTRINGJACK

Quote:
Originally posted by Hero:
Quote:
Originally posted by chrisisall:
Actually, I'm with Hero on this one (try not to faint).

Don't some of these folks around here sound downright French with all their "all hope is gone" talk?

A little adversity and suddenly these folks are willing to throw down their guns and start goose stepping to the sound of L'Internationale (the Commie International Anthem).

Give me a break, I had a chicken biscuit from McDonalds this morning...its gonna be ok.

H

Must be the Twilight Zone here or something. Two posts in a row and Chris and 6 are in complete agreement with Hero.

If the Cubs were still in it, I'd think it was the 7th sign of the apocolypse.

EDITED TO ADD: I believe that if I really looked, I could find a very old post in here saying we'd all be better off if the market was 10,000 and that it was vastly inflated. That's even with the admission that after the last week, I've officially gone from being a Wall Street Winner to a Wall Street Loser.

I ain't worried.

Nothing to be worried about that could be any worse than some of the things that I thought might and still could happen in the future.

Don't play into the fears. We cool.....

EDIT 2: Especially if you're not in financials, don't sell low. You've only lost money once you've locked in a profit. If the system is going to collapse (which I HIGHLY doubt), we're all in the same fucking sinking ship anyways. If you sell low now, you're just selling to some douchebag on the other side who knows better and will profit from your fear.

Get some silver on the side. Just leave your stocks be at the moment... ESPECIALLY THE LOSERS LIKE MY 30% LOSS SO FAR ON GE

EDIT 3: It's like any good Texas Hold 'Em player will tell you..... ANY HAND YOU'RE IN, ANY BET YOU HAVE IS ALL DEPENDING ON THE IMMEDIATE ODDS IN FRONT OF YOU, NOT WHAT YOU'VE SPENT TO GET THIS FAR.

If you shouldn't have been gambling in the first place, shame on you.

Now is the time to wager the rest of your stack that things will rebound. Weigh that against the fact that money won't be worth anything when the towers crumble and it's pretty easy to see that you should just hold firm like Mal would and the chances you will not only make back but profit on your investments far oughtweights the alternatives.

I wish you all good luck and the persuit of happiness in the future.

~6

"A government is a body of people, usually notably ungoverned." http://www.myspace.com/6ixstringjack

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Monday, October 6, 2008 7:16 AM

FREMDFIRMA

Oh the irony.

Due to the economic slump and gas prices, many folk are turning to scooters for short range transportation, and right after the only big name cycle shop within 20 miles of here closed up and moved out...

I seem to be deluged with scooter neophytes needing repairs, maintainence and instruction, as of late - it's been quite a while since the last time I actually had a waiting list, and my ability to find and aquire parts for the more estoric and antique stuff is currently worth it's weight in gold.

Speakin of which, the dude who just got a full engine replacement on a Honda CN250 - he paid for that with a 1oz Maple Leaf, word seems to have gotten around quick that I don't take paper, as evidenced by the one kid who paid me with 250 empty pop cans, lmao.
(In MI they're worth $0.10 in return value, so that's $25.00USD)

Like I've said before, skills are an ultimate value, they weigh nothing, can't be stolen and you get to set the price for em.

-Frem

It cannot be said enough, those who do not learn from history, are doomed to endlessly repeat it

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Monday, October 6, 2008 7:22 AM

6IXSTRINGJACK

Yeah, even better, like Frem said, get some skills....

Chicks like guys with skills.

"A government is a body of people, usually notably ungoverned." http://www.myspace.com/6ixstringjack

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Monday, October 6, 2008 7:48 AM

WULFENSTAR

http://youtu.be/VUnGTXRxGHg

I've got Bow-fighting skills, computer-hacking skills, nunchuck-skills....

Girls like guys with skills...

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Thursday, October 9, 2008 1:49 PM

OUT2THEBLACK

Quote:
Originally posted by Wulfenstar:
Below 10,000.

The Bailout did nothing.

Whats the next move?

Downward...The 'next move' is still downward...

The bailout tossed a lot of greenbacks to the wind , insured the continuation of the debt-cycle , and guaranteed
runaway inflation...

Thanks , you barney-bitches !

Freefalling 'til it goes splat !

That's when they say it has 'bottomed out'...

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Thursday, October 9, 2008 1:53 PM

RUE

I have a vote and I'm not afraid to use it!

Taking Hard New Look at a Greenspan Legacy
By PETER S. GOODMAN

“Not only have individual financial institutions become less vulnerable to shocks from underlying risk factors, but also the financial system as a whole has become more resilient.” — Alan Greenspan in 2004

George Soros, the prominent financier, avoids using the financial contracts known as derivatives “because we don’t really understand how they work.” Felix G. Rohatyn, the investment banker who saved New York from financial catastrophe in the 1970s, described derivatives as potential “hydrogen bombs.”

And Warren E. Buffett presciently observed five years ago that derivatives were “financial weapons of mass destruction, carrying dangers that, while now latent, are potentially lethal.”

One prominent financial figure, however, has long thought otherwise. And his views held the greatest sway in debates about the regulation and use of derivatives — exotic contracts that promised to protect investors from losses, thereby stimulating riskier practices that led to the financial crisis. For more than a decade, the former Federal Reserve Chairman Alan Greenspan has fiercely objected whenever derivatives have come under scrutiny in Congress or on Wall Street. “What we have found over the years in the marketplace is that derivatives have been an extraordinarily useful vehicle to transfer risk from those who shouldn’t be taking it to those who are willing to and are capable of doing so,” Mr. Greenspan told the Senate Banking Committee in 2003. “We think it would be a mistake” to more deeply regulate the contracts, he added.

Today, with the world caught in an economic tempest that Mr. Greenspan recently described as “the type of wrenching financial crisis that comes along only once in a century,” his faith in derivatives remains unshaken.

The problem is not that the contracts failed, he says. Rather, the people using them got greedy. A lack of integrity spawned the crisis, he argued in a speech a week ago at Georgetown University, intimating that those peddling derivatives were not as reliable as “the pharmacist who fills the prescription ordered by our physician.”

But others hold a starkly different view of how global markets unwound, and the role that Mr. Greenspan played in setting up this unrest.

“Clearly, derivatives are a centerpiece of the crisis, and he was the leading proponent of the deregulation of derivatives,” said Frank Partnoy, a law professor at the University of San Diego and an expert on financial regulation.

The derivatives market is $531 trillion, up from $106 trillion in 2002 and a relative pittance just two decades ago. Theoretically intended to limit risk and ward off financial problems, the contracts instead have stoked uncertainty and actually spread risk amid doubts about how companies value them.

If Mr. Greenspan had acted differently during his tenure as Federal Reserve chairman from 1987 to 2006, many economists say, the current crisis might have been averted or muted.

Over the years, Mr. Greenspan helped enable an ambitious American experiment in letting market forces run free. Now, the nation is confronting the consequences.

Derivatives were created to soften — or in the argot of Wall Street, “hedge” — investment losses. For example, some of the contracts protect debt holders against losses on mortgage securities. (Their name comes from the fact that their value “derives” from underlying assets like stocks, bonds and commodities.) Many individuals own a common derivative: the insurance contract on their homes.

On a grander scale, such contracts allow financial services firms and corporations to take more complex risks that they might otherwise avoid — for example, issuing more mortgages or corporate debt. And the contracts can be traded, further limiting risk but also increasing the number of parties exposed if problems occur.

Throughout the 1990s, some argued that derivatives had become so vast, intertwined and inscrutable that they required federal oversight to protect the financial system. In meetings with federal officials, celebrated appearances on Capitol Hill and heavily attended speeches, Mr. Greenspan banked on the good will of Wall Street to self-regulate as he fended off restrictions.

Ever since housing began to collapse, Mr. Greenspan’s record has been up for revision. Economists from across the ideological spectrum have criticized his decision to let the nation’s real estate market continue to boom with cheap credit, courtesy of low interest rates, rather than snuffing out price increases with higher rates. Others have criticized Mr. Greenspan for not disciplining institutions that lent indiscriminately.

But whatever history ends up saying about those decisions, Mr. Greenspan’s legacy may ultimately rest on a more deeply embedded and much less scrutinized phenomenon: the spectacular boom and calamitous bust in derivatives trading.

Faith in the System

Some analysts say it is unfair to blame Mr. Greenspan because the crisis is so sprawling. “The notion that Greenspan could have generated a totally different outcome is naïve,” said Robert E. Hall, an economist at the conservative Hoover Institution, a research group at Stanford.

Mr. Greenspan declined requests for an interview. His spokeswoman referred questions about his record to his memoir, “The Age of Turbulence,” in which he outlines his beliefs.

“It seems superfluous to constrain trading in some of the newer derivatives and other innovative financial contracts of the past decade,” Mr. Greenspan writes. “The worst have failed; investors no longer fund them and are not likely to in the future.”

In his Georgetown speech, he entertained no talk of regulation, describing the financial turmoil as the failure of Wall Street to behave honorably.

“In a market system based on trust, reputation has a significant economic value,” Mr. Greenspan told the audience. “I am therefore distressed at how far we have let concerns for reputation slip in recent years.”

As the long-serving chairman of the Fed, the nation’s most powerful economic policy maker, Mr. Greenspan preached the transcendent, wealth-creating powers of the market.

A professed libertarian, he counted among his formative influences the novelist Ayn Rand, who portrayed collective power as an evil force set against the enlightened self-interest of individuals. In turn, he showed a resolute faith that those participating in financial markets would act responsibly.

An examination of more than two decades of Mr. Greenspan’s record on financial regulation and derivatives in particular reveals the degree to which he tethered the health of the nation’s economy to that faith.

As the nascent derivatives market took hold in the early 1990s, and in subsequent years, critics denounced an absence of rules forcing institutions to disclose their positions and set aside funds as a reserve against bad bets.

Time and again, Mr. Greenspan — a revered figure affectionately nicknamed the Oracle — proclaimed that risks could be handled by the markets themselves.

“Proposals to bring even minimalist regulation were basically rebuffed by Greenspan and various people in the Treasury,” recalled Alan S. Blinder, a former Federal Reserve board member and an economist at Princeton University. “I think of him as consistently cheerleading on derivatives.”

Arthur Levitt Jr., a former chairman of the Securities and Exchange Commission, says Mr. Greenspan opposes regulating derivatives because of a fundamental disdain for government.

Mr. Levitt said that Mr. Greenspan’s authority and grasp of global finance consistently persuaded less financially sophisticated lawmakers to follow his lead.

“I always felt that the titans of our legislature didn’t want to reveal their own inability to understand some of the concepts that Mr. Greenspan was setting forth,” Mr. Levitt said. “I don’t recall anyone ever saying, ‘What do you mean by that, Alan?’ ”

Still, over a long stretch of time, some did pose questions. In 1992, Edward J. Markey, a Democrat from Massachusetts who led the House subcommittee on telecommunications and finance, asked what was then the General Accounting Office to study derivatives risks.

Two years later, the office released its report, identifying “significant gaps and weaknesses” in the regulatory oversight of derivatives.

“The sudden failure or abrupt withdrawal from trading of any of these large U.S. dealers could cause liquidity problems in the markets and could also pose risks to others, including federally insured banks and the financial system as a whole,” Charles A. Bowsher, head of the accounting office, said when he testified before Mr. Markey’s committee in 1994. “In some cases intervention has and could result in a financial bailout paid for or guaranteed by taxpayers.”

In his testimony at the time, Mr. Greenspan was reassuring. “Risks in financial markets, including derivatives markets, are being regulated by private parties,” he said.

“There is nothing involved in federal regulation per se which makes it superior to market regulation.”

Mr. Greenspan warned that derivatives could amplify crises because they tied together the fortunes of many seemingly independent institutions. “The very efficiency that is involved here means that if a crisis were to occur, that that crisis is transmitted at a far faster pace and with some greater virulence,” he said.

But he called that possibility “extremely remote,” adding that “risk is part of life.”

Later that year, Mr. Markey introduced a bill requiring greater derivatives regulation. It never passed.

Resistance to Warnings

In 1997, the Commodity Futures Trading Commission, a federal agency that regulates options and futures trading, began exploring derivatives regulation. The commission, then led by a lawyer named Brooksley E. Born, invited comments about how best to oversee certain derivatives.

Ms. Born was concerned that unfettered, opaque trading could “threaten our regulated markets or, indeed, our economy without any federal agency knowing about it,” she said in Congressional testimony. She called for greater disclosure of trades and reserves to cushion against losses.

Ms. Born’s views incited fierce opposition from Mr. Greenspan and Robert E. Rubin, the Treasury secretary then. Treasury lawyers concluded that merely discussing new rules threatened the derivatives market. Mr. Greenspan warned that too many rules would damage Wall Street, prompting traders to take their business overseas.

“Greenspan told Brooksley that she essentially didn’t know what she was doing and she’d cause a financial crisis,” said Michael Greenberger, who was a senior director at the commission. “Brooksley was this woman who was not playing tennis with these guys and not having lunch with these guys. There was a little bit of the feeling that this woman was not of Wall Street.”

Ms. Born declined to comment. Mr. Rubin, now a senior executive at the banking giant Citigroup, says that he favored regulating derivatives — particularly increasing potential loss reserves — but that he saw no way of doing so while he was running the Treasury.

“All of the forces in the system were arrayed against it,” he said. “The industry certainly didn’t want any increase in these requirements. There was no potential for mobilizing public opinion.”

Mr. Greenberger asserts that the political climate would have been different had Mr. Rubin called for regulation.

In early 1998, Mr. Rubin’s deputy, Lawrence H. Summers, called Ms. Born and chastised her for taking steps he said would lead to a financial crisis, according to Mr. Greenberger. Mr. Summers said he could not recall the conversation but agreed with Mr. Greenspan and Mr. Rubin that Ms. Born’s proposal was “highly problematic.”

On April 21, 1998, senior federal financial regulators convened in a wood-paneled conference room at the Treasury to discuss Ms. Born’s proposal. Mr. Rubin and Mr. Greenspan implored her to reconsider, according to both Mr. Greenberger and Mr. Levitt.

Ms. Born pushed ahead. On June 5, 1998, Mr. Greenspan, Mr. Rubin and Mr. Levitt called on Congress to prevent Ms. Born from acting until more senior regulators developed their own recommendations. Mr. Levitt says he now regrets that decision. Mr. Greenspan and Mr. Rubin were “joined at the hip on this,” he said. “They were certainly very fiercely opposed to this and persuaded me that this would cause chaos.”

Ms. Born soon gained a potent example. In the fall of 1998, the hedge fund Long Term Capital Management nearly collapsed, dragged down by disastrous bets on, among other things, derivatives. More than a dozen banks pooled $3.6 billion for a private rescue to prevent the fund from slipping into bankruptcy and endangering other firms.

Despite that event, Congress froze the Commodity Futures Trading Commission’s regulatory authority for six months. The following year, Ms. Born departed.

In November 1999, senior regulators — including Mr. Greenspan and Mr. Rubin — recommended that Congress permanently strip the C.F.T.C. of regulatory authority over derivatives.

Mr. Greenspan, according to lawmakers, then used his prestige to make sure Congress followed through. “Alan was held in very high regard,” said Jim Leach, an Iowa Republican who led the House Banking and Financial Services Committee at the time. “You’ve got an area of judgment in which members of Congress have nonexistent expertise.”

As the stock market roared forward on the heels of a historic bull market, the dominant view was that the good times largely stemmed from Mr. Greenspan’s steady hand at the Fed.

“You will go down as the greatest chairman in the history of the Federal Reserve Bank,” declared Senator Phil Gramm, the Texas Republican who was chairman of the Senate Banking Committee when Mr. Greenspan appeared there in February 1999.

Mr. Greenspan’s credentials and confidence reinforced his reputation — helping him to persuade Congress to repeal Depression-era laws that separated commercial and investment banking in order to reduce overall risk in the financial system.

“He had a way of speaking that made you think he knew exactly what he was talking about at all times,” said Senator Tom Harkin, a Democrat from Iowa. “He was able to say things in a way that made people not want to question him on anything, like he knew it all. He was the Oracle, and who were you to question him?”

In 2000, Mr. Harkin asked what might happen if Congress weakened the C.F.T.C.’s authority.

“If you have this exclusion and something unforeseen happens, who does something about it?” he asked Mr. Greenspan in a hearing.

Mr. Greenspan said that Wall Street could be trusted. “There is a very fundamental trade-off of what type of economy you wish to have,” he said. “You can have huge amounts of regulation and I will guarantee nothing will go wrong, but nothing will go right either,” he said.

Later that year, at a Congressional hearing on the merger boom, he argued that Wall Street had tamed risk.

“Aren’t you concerned with such a growing concentration of wealth that if one of these huge institutions fails that it will have a horrendous impact on the national and global economy?” asked Representative Bernard Sanders, an independent from Vermont.

“No, I’m not,” Mr. Greenspan replied. “I believe that the general growth in large institutions have occurred in the context of an underlying structure of markets in which many of the larger risks are dramatically — I should say, fully — hedged.”

The House overwhelmingly passed the bill that kept derivatives clear of C.F.T.C. oversight. Senator Gramm attached a rider limiting the C.F.T.C.’s authority to an 11,000-page appropriations bill. The Senate passed it. President Clinton signed it into law.

Pressing Forward

Still, savvy investors like Mr. Buffett continued to raise alarms about derivatives, as he did in 2003, in his annual letter to shareholders of his company, Berkshire Hathaway.

“Large amounts of risk, particularly credit risk, have become concentrated in the hands of relatively few derivatives dealers,” he wrote. “The troubles of one could quickly infect the others.”

But business continued.

And when Mr. Greenspan began to hear of a housing bubble, he dismissed the threat. Wall Street was using derivatives, he said in a 2004 speech, to share risks with other firms.

Shared risk has since evolved from a source of comfort into a virus. As the housing crisis grew and mortgages went bad, derivatives actually magnified the downturn.

The Wall Street debacle that swallowed firms like Bear Stearns and Lehman Brothers, and imperiled the insurance giant American International Group, has been driven by the fact that they and their customers were linked to one another by derivatives.

In recent months, as the financial crisis has gathered momentum, Mr. Greenspan’s public appearances have become less frequent.

His memoir was released in the middle of 2007, as the disaster was unfolding, and his book tour suddenly became a referendum on his policies. When the paperback version came out this year, Mr. Greenspan wrote an epilogue that offers a rebuttal of sorts.

“Risk management can never achieve perfection,” he wrote. The villains, he wrote, were the bankers whose self-interest he had once bet upon.

“They gambled that they could keep adding to their risky positions and still sell them out before the deluge,” he wrote. “Most were wrong.”

No federal intervention was marshaled to try to stop them, but Mr. Greenspan has no regrets.

“Governments and central banks,” he wrote, “could not have altered the course of the boom.”

***************************************************************

Silence is consent.

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Thursday, October 9, 2008 2:02 PM

SIGNYM

I believe in solving problems, not sharing them.

Quote:
The peeps at the top will not let their asses even begin to fall through the grate on this, and they'll save this economy to save themselves

No, sorry Chris. While people starved and roamed homless in the Great Depression, there was also a booming business in luxury goods....

---------------------------------
Let's party like its 1929.

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Thursday, October 9, 2008 2:15 PM

SIGNYM

I believe in solving problems, not sharing them.

Gonna add my $0.02 here: There is PLENTY of blame to go around:

big income gap
government debt
"trickle down" economics
the repeal of the Glass-Steagall Act
SEC allowed the lowest capitalization rate ever
the Fed's low, low, low interest rates
subprime mortgage purchases by Fannie/ Freddie
prevention of prosecution for predatory lending

---------------------------------
Let's party like its 1929.

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Thursday, October 9, 2008 2:34 PM

RUE

I have a vote and I'm not afraid to use it!

big income gap -

Book Says GOP Widens Income Gap
By Dan Balz
The most important issue rarely mentioned on the campaign trail this year is the gap between rich and poor in America. ...

In his book ("Unequal Democracy: The Political Economy of the New Gilded Age"), Bartels challenges conventional wisdom about American politics in a variety of ways. But his most telling conclusion is that there is a clear partisan pattern to the relationship between incomes of rich and poor. Over the past half-century, he concludes, Republican presidents have allowed the income inequality to expand, while Democratic presidents have not.

government debt

http://en.wikipedia.org/wiki/National_debt_by_U.S._presidential_terms
Bill Clinton 1993 - 1997 debt -0.6 %
Bill Clinton 1997 - 2001 debt -8.2 %
George Bush 2001 - 2005 debt +6.9%
George Bush 2005 - 2008 +3.9% (before the meltdown)

"trickle down" economics

the repeal of the Glass-Steagall Act
Not a problem until 'investment banks' were allowed lower capitalization rates under Bush (see below)

SEC allowed the lowest capitalization rate ever

the Fed's low, low, low interest rates

subprime mortgage purchases by Fannie/ Freddie
2003 - 2005

prevention of prosecution for predatory lending
2003 - current

***************************************************************

Silence is consent.

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Thursday, October 9, 2008 2:52 PM

SIGNYM

I believe in solving problems, not sharing them.

Gonna add the the EU is also partly to blame. THEIR banks- unlike ours- have historically been allowed to act both as depository institutions and investment centers. They implemented Basel II, which is a series accounting definitions and requirements, we stuck with Basel I (and we ran our depository institutions under and entirely different set of rules) Under Basel II, the EU risk to capital turned out to be far higher than ours. (Ours is roughly 20:1, theirs is roughly 35:1) Part of the argument (brought by Phil Gramm, now VP of United Bank of Switzerland) was that the US banks needed to "compete".

"Derivatives"- those opaque slippery investments of which Buffet spoke so negatively- are "off balance" investments; they don't even SHOW UP on a bank's balance sheet!

Also, there is something called "mark to market" in which you value your assets for what you "could" sell them for at that moment: a temptation to overstate value if there ever was one.

England and Ireland ALSO had a "housing bubble", and the EU institutions started making phenomenal profits on highly leveraged mortgage products like Credit Default Swaps (CDSs) and Structured Investment Vehicles (SIVs). The pofits were too phenomal to pass up; any institution that DIDN'T get involved was taken to task by its shareholders incluidng Fannie and Freddie.

The financial meltdown (failed depository/ investment banks, lack of credit) boils down to speculation, leverage, and greed. The economic meltdown (lost jobs, failed business )that will come as a result is derived from the wage gap and the concentration of capital.

ETA: So pointing the finger at Fannie and Freddie as the sole source of the problem is just... well.... ridiculous!
---------------------------------
Let's party like its 1929.

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Thursday, October 9, 2008 3:18 PM

SIGNYM

I believe in solving problems, not sharing them.

BTW- after discussing this thoroughly with my SO, we think this is going to be a DEFLATIONARY recession.

HYPERINFLATION only occurs when money gets put into the hands of the vast majoirty of the population. What's happening, however, is that money is being injected AT THE TOP. That $$ will not "trickle down" to our level.

---------------------------------
Let's party like its 1929.

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Thursday, October 9, 2008 3:44 PM

GEEZER

Keep the Shiny side up

Quote:
Originally posted by 6ixStringJack:
Yeah, even better, like Frem said, get some skills....

I can sharpen a hand saw.

"Keep the Shiny side up"

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Thursday, October 9, 2008 4:37 PM

KWICKO

"We'll know our disinformation program is complete when everything the American public believes is false." -- William Casey, Reagan's presidential campaign manager & CIA Director (from first staff meeting in 1981)

I can do magic things with Honda cars.. Not a bad skill to have, since the Civic just became the best-selling car in America. :)

My little daily-driver '91 CRX DX (the "mid-line" model) is quicker to 60mph than a stock Si model was when new, by a full second, AND gets better gas mileage than that Si did. The secret is in the transmission .

Honda skills can be handy.

Mike

This world is a comedy for those who think, and a tragedy for those who feel.

Trolls Against McCain!

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Thursday, October 9, 2008 9:18 PM

OUT2THEBLACK

Quote:
Originally posted by rue:
Taking Hard New Look at a Greenspan Legacy
By PETER S. GOODMAN

“Not only have individual financial institutions become less vulnerable to shocks from underlying risk factors, but also the financial system as a whole has become more resilient.” — Alan Greenspan in 2004

George Soros, the prominent financier, avoids using the financial contracts known as derivatives “because we don’t really understand how they work.” Felix G. Rohatyn, the investment banker who saved New York from financial catastrophe in the 1970s, described derivatives as potential “hydrogen bombs.”

And Warren E. Buffett presciently observed five years ago that derivatives were “financial weapons of mass destruction, carrying dangers that, while now latent, are potentially lethal.”

Whoa Howdy , 'rue' , if you're gonna nick my best finds from a whole 'nother' thread , could you at least not copy an entire article into this thread ?

Folk oughta see and discuss this stuff , but copy/pasting something as long as that doesn't facilitate discussion ,
it kills it...That may qualify for the hugest cut/paste of an article since like , EVER , at FFF.net...

http://www.fireflyfans.net/mthread.asp?b=18&t=35215

My post was Definitely Much Funnier...Killjoy !

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Friday, October 10, 2008 3:27 AM

SIGNYM

I believe in solving problems, not sharing them.

I can diagnose ppl really well, and suggest home remedies where appropriate, or a doctor where not. For example: one guy at work had symptoms indicating an ulcer, so I told him that's what I thought he had and strongly suggested that he see a doctor. He did, and... he did.

But he ALSO had symptoms that he described as "vertigo" which troubled him greatly. On further discussion, it turned out that what he had was really one-second moments of syncope. Usually you get that from "skipped" heartbeats. I asked him about his typical diet; it was very low in magnesium. So I gave him some magnesium capsules to try, and they fixed his problem.

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Let's party like its 1929.

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Friday, October 10, 2008 4:13 AM

FREMDFIRMA

Again, Mikey.. Irony.

Much of the scooter work I do is also Honda.

NQ50 Spree, Aero, Elite, CN250/Helix and related models - damn solid engineering and nearly indestructible.

If you wanna learn a whole bunch about that kinda thing for free, you could raid DIO-SD's channel on Youtube, here's a short example.

His main channel is here.

He took a Honda Aero 50cc and just went crazy with it, using DIO and other parts, and his bike *easily* clears 70mph, which is pretty nuts on a bike that small.

Honda makes some really good stuff, to be honest, but it's always annoyed the hell out of me that no american manufacturer has even tried to compete in the scooter/moped market, even the near legendary Indian mopeds were actually built around an engine imported from china.

Not like there ain't a market for em neither, especially now - too bad US Automakers are shortsighted dimwits, it don't take that much effort to slam a bike together around a fairly primitive two-stroke engine with a CVT transmission, but they're too busy building crap nobody wants...

-Frem

It cannot be said enough, those who do not learn from history, are doomed to endlessly repeat it

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