Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
I called no one ignorant; I said the position that it was the consumers fault was ignorant.
Explain how the consumer could possibly be the first domino. The entire scenario had to be in place in order to draw the consumer into the mix.
Monetary policy already had to be lax flooding the banks with money to loan. The derivatives already had to be in place to allow the banks to lay off any risk in making the bogus loans. Fanny and Freddy had to be on board to raise their loan guarantees to accommodate the higher valuations.
The bus was fueled, and the course laid out, long before the consumer got onboard.
I have done my research. Follow the money; it will always lead to the truth. Who made all the money from the bubble? Who got the government bail outs?
Who got million dollar bonuses while millions of people lost their homes? Who got off and was never prosecuted for any of the fraud and misconduct including forging trust deeds?
I am referring to standard of living in an economic sense, as this is an economic conversation. Americans have the luxury of more 'stuff' now than they used to. Americans (in an economic sense through purchasing power and net consumption levels) have reaped great rewards over the last few decades.
If you feel people are 'wage slaves' today, then that is a different discussion. I am discussing economics, not the philosophy of work.
You cannot separate service from goods in an economy. They are both components of an economy.
The truth is that in fact service is the more expensive portion of the economic pie.
That is why, as consumers, we receiving more cheaply manufactured junk, and less service. Service is expensive.
Service is also associated with luxury, therefore the more service you receive, the higher your standard of living. Just ask the wealthy.
The subject of going into debt to finance a lifestyle you cannot afford on current wages is pertinent to any discussion on comparison of standard of living.
The recession was caused by the burst housing bubble (which was caused by you and me). The speed at which the recession accelerated was precipitated by banking policy.
No, the average Joe didn't create the unstable financial products that made the housing bubble possible, nor are they to blame when those financial products exploded.
Quote:
Originally Posted by hnsq
What was the first domino in that chain? Do some research before you call other people ignorant.
The creation of structured investment vehicles that allowed banks to hide risks and therefore lend to people that traditionally were undesirable. That was the first domino, without this the housing bubble would not have even started.
The subject of going into debt to finance a lifestyle you cannot afford on current wages is pertinent to any discussion on comparison of standard of living.
That is the problem with our Private (FED) money debt system.
We need to go back to debt free dollars. Greenbacks of 1862.
Give the control back to the people and take it away from the Criminal globalist bankers. That create our poverty, wars and bubbles.
You cannot separate service from goods in an economy. They are both components of an economy.
The truth is that in fact service is the more expensive portion of the economic pie.
That is why, as consumers, we receiving more cheaply manufactured junk, and less service. Service is expensive.
Service is also associated with luxury, therefore the more service you receive, the higher your standard of living. Just ask the wealthy.
The subject of going into debt to finance a lifestyle you cannot afford on current wages is pertinent to any discussion on comparison of standard of living.
I think you mis-understood my post. Obviously service is an important part of an economy, however it is NOT nearly as important as production and investments. When analyzing net GDP growth, GDP growth of a country mirrors production and mirrors investment, it does not measure service levels.
as you said in a previous post,
Quote:
Standard of living is not only measured in gadgets, but in levels of service and of freedom to do as you wish, when you wish.
That is not standard of living from an economic sense. That is standard of living from a political and moral sense, which is not pertinent to this conversation.
Quote:
Originally Posted by user_id
No, the average Joe didn't create the unstable financial products that made the housing bubble possible, nor are they to blame when those financial products exploded.
The housing bubble was not created by unstable financial products. The steep decline AFTER the bubble burst was accelerated by those products.
There have been economic bubbles throughout history, before modern financial systems were even in place. (research the tulip bubble of 1637, or the south sea bubble of 1720 as two examples). Bubbles are caused by average, ordinary people (look up the term 'greater fool theory'). We (the fools) think of the market (whether tulips in the 1600's or houses today) as overly optimistic (which is also why casinos boom), and we buy at prices beyond what is reasonable because of our overly optimistic psychology. Bubbles are NOT caused by the financial markets. Those are simply tools, no more, no less. Don't blame a poorly built house on the hammer that was used to make it.
Quote:
The creation of structured investment vehicles that allowed banks to hide risks and therefore lend to people that traditionally were undesirable. That was the first domino, without this the housing bubble would not have even started.
But that is the thing. The investment vehicles did not hide risk, it managed it. Any reasonable person knows not to spend 40% of their overall salary buying a home with no money down. Financial instruments did not create this bubble. People have a responsibility to educate themselves on the industries and investments which they use. If people who should not have bought homes were smart enough to not overextend themselves in the first place, the trading options in question would not have been able to exist. People overextending themselves, not having backup plans and being at great risk of default was the thing which causes the bubble in the first place.
You are joking right? How many stars had to line up to create the housing bubble?
Lets see... we had to have loose Fed policy, we had to have over inflated housing values, we had to have massive fraud in loan applications, we had to have the bankers and Wall St. conspiring to take the risk off the banks and to bundle the garbage mortgages and sell them to pension funds and other patsies, we had to have Freddy and Fanny guarantee the over inflated mortgages, we had to have rating agencies give AAA ratings to the garbage loans, we had to have people at the highest levels of government stop any attempt at regulation the derivatives that fueled the entire machine, we had to have the NAR run one of the most successful and dishonest marketing campaigns ever seen, and finally we had to have people stupid enough to believe that they could afford $500,000 houses on middle class wages.
Yea, it is all the fault of the home buyers..... What an incredibly ignorant position.
at least you point out that a LOT of people are in collusion (either directly or indirectly). don't forgot the government-with overspending and with opening the borders to increase the population (and the labor) to service that bubble cheaply, and making NO effort to contain it.
there is going to be pain no matter how this is resolved at this point-because cuts slow down the economy and tax increases slow down the economy-as greece is finding out.
the illusion of prosperity is not the same as actual prosperity.
The recession was created by individual people overextending themselves and buying houses beyond what they could really afford. The financial markets responded in kind to the wants and needs of their clients (you and me). Sure, highly leveraged quant traders sped up the decline, but the housing bubble that caused it was caused by you and me buying a 2,400 sqft home with 0% down on a 30 year mortgage when we couldn't afford it.
Someone had to give/approve the mortgages, and those "someone's" are the very ones that have lied, ro-bo signed documents and over looked a whole lot and even lied to individuals about the interest rates etc...to give that loan. So, don't even go there.
Someone had to give/approve the mortgages, and those "someone's" are the very ones that have lied, ro-bo signed documents and over looked a whole lot and even lied to individuals about the interest rates etc...to give that loan. So, don't even go there.
So it is a bank's fault that a person makes the poor decision to buy a home they cannot afford? Seriously?
Is it McDonald's fault that people are fat? Or is it the person's fault for stuffing cheeseburgers in their face?
So it is a bank's fault that a person makes the poor decision to buy a home they cannot afford? Seriously?
Is it McDonald's fault that people are fat? Or is it the person's fault for stuffing cheeseburgers in their face?
Don't even go there.....you are crying there is no personal responsibility, what about the responsibility of the bankers, wall street et al...... They could have said NO! just as they used to.......but the fact is they did not, and why??? GREED!! They are not suffering any consequences of their irresponsible behavior. The American people are!
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
