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Close Topic OptionsWas The USA Setup To Crash?
Was Usa Setup Crash - Politics, Business, Civil, History - Posted: 23rd Oct, 2008 - 1:33am
Posts: 9 - Views: 1089
Post Date: 9th Jul, 2008 - 9:06pm / Post ID: #
NOTE: News [?]
Was The USA Setup To Crash?
Five Ways Wall Street and Washington Set Us Up for the Crash: Author Nomi Prins Explains Where Congress Went Wrong on Lending
The worst of the economic crisis may be far from over. That was the message of Federal Reserve Chairman Ben Bernanke Tuesday. He indicated that the housing and financial turmoil will persist deep into next year. The Senate, meanwhile, is deliberating a bill this week that would provide government-backed loans to 400,000 homeowners on the brink of foreclosure. We speak with former investment banker turned journalist and author, Nomi Prins, about "Why the Economy Went South."
Ref. https://www.democracynow.org/2008/7/9/five_..._and_washington
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Post Date: 10th Jul, 2008 - 1:57pm / Post ID: #
Crash Setup USA Was
I do not think the USA was set up to fail. I think the mortgage industry going out of its way to find a way to get around one law has created a mess out of everything. As this all boils down to the end of this problem we are going to find that we will still be here and will once again be able to rise back up. I have a feeling this is going to cause some changes to come about in the mortgage area. It may make it harder for low to middle income people to afford a house.
Was The USA Setup To Crash? History & Civil Business Politics
Corporate influence, high-stakes "financiers," and other back-room agreements have certainly set up the economy to crash - but not before these high rollers made their billions off the top.
But even beyond that, the economy goes in boom/bust cycles all the time. This is a really bad one, eventually maybe even equal to or worse than the Great Depression, but it's still just part of the cyclical nature of the economy. It's going to be bad for a long time, but things will turn around in the long run.
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Crash Setup USA Was
The US economy is very cyclical, as is the world economy for that matter. It usually comes around when loopholes in the business world have been abused to perverse levels that actually distort the very reason they were set up. The good times have been slowly grinding to a hault in the US following "overstated earnings" by complanies like Enron. "Overstated Earnings" is a rather polite way to say that they lied through their teeth and as a result are "sorry" for blood bath that their employees took when the stocks bottom dropped out. Then we couple that with the most recent oil price increase and mortgage scams that are rocking the US Economy. Oil prices are just making everything go up which hurts. But the real frosting on the cake is the great big ponzi scheme or that childhood favorite hot potato that the mortgage companies are winding down now. The first bank underwrites a bunch of loans that they know are bad because they want to get the mortgages on their balance sheet. Then they bundle all the bad loans (and a couple of good ones together) and sell them to another lender becauase they want to expand their balance sheet. They see all the bad loans that they just bought from a few banks and they bundle them for sale to another lender... Meanwhile...while all this is going on...the homeowners are taking further loans out against their house to pay for the loan that they cannot afford. The bank holding the loan doesnt want them to default, so the make the loan to them and then sell them out. The last bank standing with the loans before everyone realizes that the loans are garbage loses...BIG! That day is NOW!
SO...why did they grant the loan again?
Well, the mortgage companies like to get loans and beef up their balance sheets. Loans are also bought and sold routinely between investment companies. Usually, good loans are a very reliable income source, but when the initial mortgage company really wants to grant the loan and they learn how to beat the underwriters to make sure they are willing to underwrite the loan there is no stopping it. Simply lie about the income level of the applicant...that was one way to beat the underwriters loan program.
Flashback to 1980's and we see the Savings and Loan Crisis in the US. The Savings and Loan companies enjoyed a unique status within US banking. They got deregulated. Now the deregulation was done in order to help them solve some of their issues that they faced with potential insolvency. However, the freedoms granted by deregulation were perverted to extremes. In order to get your money in their bank, they offered guaranteed high yield CD's. Sounds pretty good, but there was no really good way for them to make good on the CD's with the exception of granting loans and loans with high interest rates. Those were the more risky ventures. So in order to pay the high yield CD's, they granted loans for a large number of speculative ventures that failed (huge malls that never got built and other real estate failures). The CD's became due and there was no money. There were other reasons but that was the gist of it...a rule that was abused not to mention all the fraud with deregulation.
Mortgage underwriting rules will be in for a overhaul after this and in the future some clever accountants and managers will figure out a way to make something from nothing again and we will have to close that loop hole. True middle income families with income to back up a loan should not have problems, but if you have no savings and nothing to put down and a sketchy employment and credit record...your days of getting a low interest loan are pretty much over.
The 90's werent all wonderful for the economy as we had the asian flu that swept through the world when the bubble burst in Japan. Lots of lending for things that didnt come true and it caught up with them.
In the 70's, the world enjoyed stagflation and many failed attempts by governments to understand the mechanisms there.
The 50's were good after the war as were the 20's before the market crash of '29.
Honestly, this is one of the few times I think that the federal government needs to step in and try to smooth it out.
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Crash Setup USA Was
We are going to follow as well in your nose dive though they claim not as deep due to variances in Canadian lending policy. Our pit fall was the zero down that was started and then a 40 or 50 year mortgage to offset the huge debt load.
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Was USA Setup Crash
Yes a country will make it every time it is just the hardship in between. One has to keep heart and be thankful knowing the other side will be better then it was before.
International Level: Senior Politician / Political Participation: 188 18.8%
Was USA Setup Crash Politics Business Civil & History
Preach on BROTHER! AMEN!
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Would the Last Honest Reporter Please Turn On the Lights? By Orson Scott Card Editor's note: Orson Scott Card is a Democrat and a newspaper columnist, and in this opinion piece he takes on both while lamenting the current state of journalism. An open letter to the local daily paper - almost every local daily paper in America: I remember reading All the President's Men and thinking: That's journalism. You do what it takes to get the truth and you lay it before the public, because the public has a right to know. This housing crisis didn't come out of nowhere. It was not a vague emanation of the evil Bush administration. It was a direct result of the political decision, back in the late 1990s, to loosen the rules of lending so that home loans would be more accessible to poor people. Fannie Mae and Freddie Mac were authorized to approve risky loans. What is a risky loan? It's a loan that the recipient is likely not to be able to repay. The goal of this rule change was to help the poor - which especially would help members of minority groups. But how does it help these people to give them a loan that they can't repay? They get into a house, yes, but when they can't make the payments, they lose the house - along with their credit rating. They end up worse off than before. This was completely foreseeable and in fact many people did foresee it. One political party, in Congress and in the executive branch, tried repeatedly to tighten up the rules. The other party blocked every such attempt and tried to loosen them. Furthermore, Freddie Mac and Fannie Mae were making political contributions to the very members of Congress who were allowing them to make irresponsible loans. (Though why quasi-federal agencies were allowed to do so baffles me. It's as if the Pentagon were allowed to contribute to the political campaigns of Congressmen who support increasing their budget.) Isn't there a story here? Doesn't journalism require that you who produce our daily paper tell the truth about who brought us to a position where the only way to keep confidence in our economy was a $700 billion bailout? Aren't you supposed to follow the money and see which politicians were benefiting personally from the deregulation of mortgage lending? I have no doubt that if these facts had pointed to the Republican Party or to John McCain as the guilty parties, you would be treating it as a vast scandal. "Housing-gate," no doubt. Or "Fannie-gate." Instead, it was Senator Christopher Dodd and Congressman Barney Frank, both Democrats, who denied that there were any problems, who refused Bush administration requests to set up a regulatory agency to watch over Fannie Mae and Freddie Mac, and who were still pushing for these agencies to go even further in promoting sub-prime mortgage loans almost up to the minute they failed. As Thomas Sowell points out in a TownHall.com essay entitled "Do Facts Matter?" ( Source 7] ): "Alan Greenspan warned them four years ago. So did the Chairman of the Council of Economic Advisers to the President. So did Bush's Secretary of the Treasury." These are facts. This financial crisis was completely preventable. The party that blocked any attempt to prevent it was ... the Democratic Party. The party that tried to prevent it was ... the Republican Party. Yet when Nancy Pelosi accused the Bush administration and Republican deregulation of causing the crisis, you in the press did not hold her to account for her lie. Instead, you criticized Republicans who took offense at this lie and refused to vote for the bailout! What? It's not the liar, but the victims of the lie who are to blame? Now let's follow the money ... right to the presidential candidate who is the number-two recipient of campaign contributions from Fannie Mae. And after Freddie Raines, the CEO of Fannie Mae who made $90 million while running it into the ground, was fired for his incompetence, one presidential candidate's campaign actually consulted him for advice on housing. If that presidential candidate had been John McCain, you would have called it a major scandal and we would be getting stories in your paper every day about how incompetent and corrupt he was. But instead, that candidate was Barack Obama, and so you have buried this story, and when the McCain campaign dared to call Raines an "adviser" to the Obama campaign - because that campaign had sought his advice - you actually let Obama's people get away with accusing McCain of lying, merely because Raines wasn't listed as an official adviser to the Obama campaign. You would never tolerate such weasely nit-picking from a Republican. If you who produce our local daily paper actually had any principles, you would be pounding this story, because the prosperity of all Americans was put at risk by the foolish, short-sighted, politically selfish, and possibly corrupt actions of leading Democrats, including Obama. If you who produce our local daily paper had any personal honor, you would find it unbearable to let the American people believe that somehow Republicans were to blame for this crisis. There are precedents. Even though President Bush and his administration never said that Iraq sponsored or was linked to 9/11, you could not stand the fact that Americans had that misapprehension - so you pounded us with the fact that there was no such link. (Along the way, you created the false impression that Bush had lied to them and said that there was a connection.) If you had any principles, then surely right now, when the American people are set to blame President Bush and John McCain for a crisis they tried to prevent, and are actually shifting to approve of Barack Obama because of a crisis he helped cause, you would be laboring at least as hard to correct that false impression. Your job, as journalists, is to tell the truth. That's what you claim you do, when you accept people's money to buy or subscribe to your paper. But right now, you are consenting to or actively promoting a big fat lie - that the housing crisis should somehow be blamed on Bush, McCain, and the Republicans. You have trained the American people to blame everything bad - even bad weather - on Bush, and they are responding as you have taught them to. If you had any personal honor, each reporter and editor would be insisting on telling the truth - even if it hurts the election chances of your favorite candidate. Because that's what honorable people do. Honest people tell the truth even when they don't like the probable consequences. That's what honesty means . That's how trust is earned. Barack Obama is just another politician, and not a very wise one. He has revealed his ignorance and naivete time after time - and you have swept it under the rug, treated it as nothing. Meanwhile, you have participated in the borking of Sarah Palin, reporting savage attacks on her for the pregnancy of her unmarried daughter - while you ignored the story of John Edwards's own adultery for many months. So I ask you now: Do you have any standards at all? Do you even know what honesty means? Is getting people to vote for Barack Obama so important that you will throw away everything that journalism is supposed to stand for? You might want to remember the way the National Organization of Women threw away their integrity by supporting Bill Clinton despite his well-known pattern of sexual exploitation of powerless women. Who listens to NOW anymore? We know they stand for nothing; they have no principles. That's where you are right now. It's not too late. You know that if the situation were reversed, and the truth would damage McCain and help Obama, you would be moving heaven and earth to get the true story out there. If you want to redeem your honor, you will swallow hard and make a list of all the stories you would print if it were McCain who had been getting money from Fannie Mae, McCain whose campaign had consulted with its discredited former CEO, McCain who had voted against tightening its lending practices. Then you will print them, even though every one of those true stories will point the finger of blame at the reckless Democratic Party, which put our nation's prosperity at risk so they could feel good about helping the poor, and lay a fair share of the blame at Obama's door. You will also tell the truth about John McCain: that he tried, as a Senator, to do what it took to prevent this crisis. You will tell the truth about President Bush: that his administration tried more than once to get Congress to regulate lending in a responsible way. This was a Congress-caused crisis, beginning during the Clinton administration, with Democrats leading the way into the crisis and blocking every effort to get out of it in a timely fashion. If you at our local daily newspaper continue to let Americans believe - and vote as if - President Bush and the Republicans caused the crisis, then you are joining in that lie. If you do not tell the truth about the Democrats - including Barack Obama - and do so with the same energy you would use if the miscreants were Republicans - then you are not journalists by any standard. You're just the public relations machine of the Democratic Party, and it's time you were all fired and real journalists brought in, so that we can actually have a news paper in our city. |
Always follow the money...it caught Capone too!
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TOPIC: Was The USA Setup To Crash?