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Rich People Actually Don't Create The Jobs


Salty Dog

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lifeisgood

 

blah, blah, and more blah...

Justifying bad practice by saying its common practice doesn't make it good practice. 

 

You are just full of sunshine.  I am glad I don't see the world the way you see it.  So black and white!

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You sound like a guy who has never done a loan.   Most definitely someone who hasn't worked with a lot of mortgage brokers.   A 6th grade reading level is going to know what this verbage means, eh?

Yeah, and it had nothing to do with people buying shit they couldn't afford and stacking up debt. Must have been the fault of the evil banks who gave the retarded middle class exactly what they asked

By Henry Blodget, Business Insider   As America struggles with high unemployment and record inequality, everyone is offering competing solutions to the problem. In this war of words (and classes), o

Majorsco

You are just full of sunshine.  I am glad I don't see the world the way you see it.  So black and white!

 

 

I would appreciate accurate quotes vs. modifying my words to "blah, blah, and more blah..." within my quote box.  Feel free to quote, but don't change it and attribute it back to me changed.

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lifeisgood

Ruff, ruff

 

Look at you trying to bark orders.  I think I will continue doing as I choose and you can bark away.  Try relaxing a little.  It's only your fault if you get wound up, ya know.

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Majorsco

Look at you trying to bark orders.  I think I will continue doing as I choose and you can bark away.  Try relaxing a little.  It's only your fault if you get wound up, ya know.

 

 

I guess courtesy and etiquete are beyond your reality.

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Brucewayne

If only it were that simple.  Banks, mortgage companies, and other financial service firms had a role in the crash to be sure.  However, you  ignore the government's role who during the last 20 years or longer set the stage for banks to offer the mortgage products they did, and for the pressuring/forcing of the issuance of mortgages to people who could not qualify.  That has been going on by the Democratic party since Carter's presidency till the time of the crash.  Bush's team warned of the impending crash but the Democratically controlled congress (and in particular Rep Barney Frank) refused to hear of it.

 

Then you have the people themselves buying what they know they can't afford.

 

 

 

There is a lot of blame to go around, but many lay the blame solely on the bankers.

 

Again, you miss my point.

Who is the federal government comprised of?

At least the ones in charge of finances, all are wealthy and most, if not all are greedy, thoughtless creatures.

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Brucewayne

Okay, look at it like this.

Rich people were convicted and sent to prison for fraud.

Rich banks were shut dow.

Rich banks and mortgage companies were charged with fraud, paying kickbacks to ignorant customers, switching paperwork at the time of signing and downright forging names to loans.

The news was ripe with examples as to how the economy was crippled.

The middle class and poor don't have the power to bring down a world class economy.

Read this from the Wall Street Journal and draw your own conclusion;

 

 
By
Bill Thomas, Keith Hennessey And Douglas Holtz-Eaki
Keith Hennessey And Douglas Holtz-Eakin Eakin
Updated Jan. 27, 2011 12:01 a.m. ET

Today, six members of the Financial Crisis Inquiry Commission—created by the last Congress to investigate the causes of the financial crisis—are releasing their final report. Although the three of us served on the commission, we were unable to support the majority's conclusions and have issued a dissenting statement.

In a November 2009 article, Brookings Institution economists Martin Baily and Douglas Elliott describe the three common narratives about the financial crisis. The first argues that the primary cause was government intervention in the housing market. This intervention, principally through Fannie Mae and Freddie Mac, inflated a housing bubble that triggered the crisis. This is the view expressed by one of our co-commissioners in a separate dissent.

The second narrative blames Wall Street and its influence in Washington. According to this narrative, greedy bankers knowingly manipulated the financial system and politicians in Washington to take advantage of homeowners and mortgage investors alike, intentionally jeopardizing the financial system while enjoying huge personal gains. That's the view of the six majority commissioners.

We subscribe to a third narrative—a messier story that emphasizes both global economic forces and failures in U.S. policy and supervision. Though our explanation of the crisis doesn't fit conveniently into the political order of Washington, we believe that it is far superior to the other two.

We recognize that the other two narratives have popular appeal: They each blame a clear entity, and thus outline a clear set of reform proposals. Had the government not supported housing subsidies (the first narrative) or had policy makers implemented more restrictive financial regulations (the second) there would have been no calamity.

Both of these views are incomplete and misleading. The existence of housing bubbles in a number of large countries, each with vastly different systems of housing finance, severely undercuts the thesis that the housing bubble was a phenomenon driven solely by the U.S. government. Likewise, the multitude of financial-firm failures, spanning varied organizational forms and differing regulatory regimes across the U.S. and Europe, makes it implausible that the crisis was the product of a small coterie of Wall Street bankers and their Washington bedfellows.

We believe the crisis was the product of 10 factors. Only when taken together can they offer a sufficient explanation of what happened:

Starting in the late 1990s, there was a broad credit bubble in the U.S. and Europe and a sustained housing bubble in the U.S. (factors 1 and 2). Excess liquidity, combined with rising house prices and an ineffectively regulated primary mortgage market, led to an increase in nontraditional mortgages (factor 3) that were in some cases deceptive, in many cases confusing, and often beyond borrowers' ability to pay.

However, the credit bubble, housing bubble, and the explosion of nontraditional mortgage products are not by themselves responsible for the crisis. Our country has experienced larger bubbles—the dot-com bubble of the 1990s, for example—that were not nearly as devastating as the housing bubble. Losses from the housing downturn were concentrated in highly leveraged financial institutions. Which raises the essential question: Why were these firms so exposed?

Chad Crowe

Failures in credit-rating and securitization transformed bad mortgages into toxic financial assets (factor 4). Securitizers lowered the credit quality of the mortgages they securitized, credit-rating agencies erroneously rated these securities as safe investments, and buyers failed to look behind the ratings and do their own due diligence. Managers of many large and midsize financial institutions amassed enormous concentrations of highly correlated housing risk (factor 5), and they amplified this risk by holding too little capital relative to the risks and funded these exposures with short-term debt (factor 6). They assumed such funds would always be available. Both turned out to be bad bets.

These risks within highly leveraged, short-funded financial firms with concentrated exposure to a collapsing asset class led to a cascade of firm failures. The losses spread in two ways. Some firms had large counterparty credit risk exposures, and the sudden and disorderly failure of one firm risked triggering losses elsewhere. We call this the risk of contagion (factor 7). In other cases, the problem was a common shock (factor 8). A number of firms had made similar bad bets on housing, and thus unconnected firms failed for the same reason and at roughly the same time.

A rapid succession of 10 firm failures, mergers and restructurings in September 2008 caused a financial shock and panic (factor 9). Confidence and trust in the financial system evaporated, as the health of almost every large and midsize financial institution in the U.S. and Europe was questioned. The financial shock and panic caused a severe contraction in the real economy (factor 10).

We agree with our colleagues that individuals across the financial sector pursued their self-interest first, sometimes to the detriment of borrowers, investors, taxpayers and even their own firms. We also agree that the mountain of government programs supporting the housing market produced distorted investment incentives, and that the government's implicit support of Fannie Mae and Freddie Mac was a ticking time bomb.

But it is dangerous to conclude that the crisis would have been avoided if only we had regulated everything a lot more, had fewer housing subsidies, and had more responsible bankers. Simple narratives like these ignore the global nature of this crisis, and promote a simplistic explanation of a complex problem. Though tempting politically, they will ultimately lead to mistaken policies.

Mr. Thomas is a former Republican congressman from California. Mr. Hennessey served as director of the White House National Economic Council in 2008. Mr. Holtz-Eakin is a former director of the Congressional Budget Office.

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Majorsco

 

 

Who is the federal government comprised of? At least the ones in charge of finances, all are wealthy and most, if not all are greedy, thoughtless creatures.

 

The federal govt has a revolving door problem on the administration side.  In the House and Senate it is a different problem, but all are involved in the government.  Barney Frank for example had a huge impact to the creation of the bubble but was not a rich financial professional.

 

In the administration, this one and ones past of both parties, the treasury has had a number of wall street executives come in, do their government thing and go back to wall street.   Geithner is the most recent who after leaving the treasury, just got a cushy wall street job.

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Brucewayne

 

 

Barney Frank

 

As of 2010, Frank's net worth is estimated by the Center for Responsive Politics to be between $619,024 and $1,510,000.

 

Sounds pretty wealthy to me and I am sure his wealth has grown in the last 3 years or so.

He isn't an investor, but he does live well.

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Majorsco

As of 2010, Frank's net worth is estimated by the Center for Responsive Politics to be between $619,024 and $1,510,000.

 

Sounds pretty wealthy to me and I am sure his wealth has grown in the last 3 years or so.

He isn't an investor, but he does live well.

By comparison to other long time senators and reps, he's a pauper. He's had a lot paid for that real people would have to pay out of pocket. Plus as a member of congress he had market moving info before the public and congress had exempted themselves from insider trading laws. He must be a pretty poor businessman if that's all he racked over his years

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You say get someone to explain it and I am saying they had someone to explain it and they got screwed.

They had someone selling them something explain it. That's like blindly trusting a used car salesman to tell you the God's ho eat truth about the mechanical history of a car.

 

You take that contract to a lawyer who you are paying to have your interest in mind to tell you what's going on. Anyone working on commission should have their advice on the product being sold with a grain of salt. They are no better than a used cars sales men or a door to door vacuum cleaner salesman.

 

People who sign contracts without understanding them are morons, idiots, not the sharpest tool in the shed, retarded downright stooped. End of story. They are NOT victims.

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Brucewayne

By comparison to other long time senators and reps, he's a pauper. He's had a lot paid for that real people would have to pay out of pocket. Plus as a member of congress he had market moving info before the public and congress had exempted themselves from insider trading laws. He must be a pretty poor businessman if that's all he racked over his years

 

Yes, I concede.

He should have invested or invested more wisely, but then we would be bashing him.

I really think he was a bit of a pawn in the deal, but someone had to be the sacrificial lamb.

He did cause a lot of scandals in his time and he had a gay affair or two that blew up in his face, so maybe he is just one of those people who are destined to be naive for a lifetime.

Besides, the article I posted really seems to sum it all up and if you read it, it isn't one sided at all.

It also says the bankers scammed politicians and we all know they are mostly lawyers.

So if they fell into the same trap as those of us who are not lawyers, who is to say we were the cause?

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Majorsco

Yes, I concede.

He should have invested or invested more wisely, but then we would be bashing him.

I really think he was a bit of a pawn in the deal, but someone had to be the sacrificial lamb.

He did cause a lot of scandals in his time and he had a gay affair or two that blew up in his face, so maybe he is just one of those people who are destined to be naive for a lifetime.

Besides, the article I posted really seems to sum it all up and if you read it, it isn't one sided at all.

It also says the bankers scammed politicians and we all know they are mostly lawyers.

So if they fell into the same trap as those of us who are not lawyers, who is to say we were the cause?

I did read the article and I agree with most points. The article brings in a bigger picture than was discussed in this thread, that of the credit bubble and the different nature of foreign housing bubbles that blew up at the same time.

 

I contend that it is partially due to internationally linked economies that caused so much to blow up T the same time.

 

Also I don't let old Barney frank off so lightly. He was a key member of the house banking committee during most of his tenure and at times chaired it. He was one of the driving forced for lowering the credit standards for mortgages which connecting it to the article was part of the govt intervention and lack of sufficient oversight.

 

I also don't agree that the bankers scammed the politicians. There was inbreeding among them and lobbying both ways. On the progressive agenda was the expansion if home ownership to the less credit worthy. The bankers resisted that but were forced and coerced by progressive politicians to do it. Once forced into the position, I believe banker self interest for short term gain kicked in and exacerbated the problem.

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