Brontoforumus Archive

Please login or register.

Login with username, password and session length
Advanced search  

News:


This board has been fossilized.
You are reading an archive of Brontoforumus, a.k.a. The Worst Forums Ever, from 2008 to early 2014.  Registration and posting (for most members) has been disabled here to discourage spambots from taking over.  Old members can still log in to view boards, PMs, etc.

The new message board is at http://brontoforum.us.

Pages: 1 ... 6 7 8 9 10 [11] 12 13 14 15 16 ... 50

Author Topic: It's the economy, stupid!  (Read 53746 times)

0 Members and 1 Guest are viewing this topic.

Classic

  • Happens more often than you'd think.
  • Tested
  • Karma: -58471
  • Posts: 7501
    • View Profile
Re: It's the economy, stupid!
« Reply #200 on: October 10, 2008, 12:52:49 PM »

IDIOT ANSWER VOLLEY RETURN! (prana method diagram)
... is that supposed to be an Exalted reference?
:whoops:
Logged

Guild

  • High-Bullshit
  • Tested
  • Karma: -2
  • Posts: 5136
    • View Profile
Re: It's the economy, stupid!
« Reply #201 on: October 10, 2008, 01:05:42 PM »

I prefer to describe it as the "everyone forgot that money was real and a bunch of rich people decided to rob everyone again thanks to republican fueled deregulation crisis".

That's how I run it down...
Though... I might... be... slightly spinning it.
Obama/Biden08!

If you want to get technical, the creation of a market for mortgages was FDR's* doing.

Lowering requirements for mortgage applications: Also a frequent push-item for modern liberals.

*FDR: Arguably the most modernly "left" president in the last century.
Logged

Classic

  • Happens more often than you'd think.
  • Tested
  • Karma: -58471
  • Posts: 7501
    • View Profile
Re: It's the economy, stupid!
« Reply #202 on: October 10, 2008, 01:32:26 PM »

We could get technical... :humpf: or we could do sound bites!

But no. I think we're basically in agreement that this has been largely caused by predatory loans. Yes?
Logged

Brentai

  • https://www.youtube.com/watch?v=DnXYVlPgX_o
  • Admin
  • Tested
  • Karma: -65281
  • Posts: 17524
    • View Profile
Re: It's the economy, stupid!
« Reply #203 on: October 10, 2008, 01:32:52 PM »

The problem is that most of the people who make the Stuff You Want do, and it's going to start limiting the availability of Stuff You Want.

This unfortunately includes jobs, if you happen to be on board the california cyber-gravy train.

Not me!  Although I'm flat broke at this moment from all my clients exploding into thousands of pieces and not sending any work my way for the past two weeks, now every single one of those pieces has formed its own little mini-colony and desperately needs me to do something at my new inflated rate!
 :perfect:

That said, I still don't expect to come out exactly ahead.  We're talking about a wheelbarrow full of money when it takes that much to buy a loaf of bread, here.
Logged

Classic

  • Happens more often than you'd think.
  • Tested
  • Karma: -58471
  • Posts: 7501
    • View Profile
Re: It's the economy, stupid!
« Reply #204 on: October 10, 2008, 01:34:39 PM »

If you're not selling yourself into slavery for our corporate masters Brent, you're part of the inflation problem.
Logged

Superface

  • Captain Obvious, AWA-A-A-AY
  • Tested
  • Karma: 0
  • Posts: 68
    • View Profile
    • The HOTWWATR Conspiracy
Re: It's the economy, stupid!
« Reply #205 on: October 10, 2008, 01:53:53 PM »

Gas fell more than 60 cents a gallon yesterday. I'm fucking terrified.

I now own a small business, as of 2 months ago.

If shit hits the fan, I promise all of you I'm moving to Canada. I heard about the Great Depression from Steinbeck, I'm not fucking sitting through that just because I'm too lazy to leave. I'll panhandle in Vancouver before I starve in Missouri.
Logged

Royal☭

  • Supreme Court Judge President
  • Tested
  • Karma: 88
  • Posts: 6301
    • View Profile
Re: It's the economy, stupid!
« Reply #206 on: October 10, 2008, 01:56:29 PM »

If shit hits the fan, I promise all of you I'm moving to Canada.

Mongrel

  • Emoticon Knight-Errant
  • kodePunc Team
  • Tested
  • *
  • Karma: -65340
  • Posts: 17029
    • View Profile
Re: It's the economy, stupid!
« Reply #207 on: October 10, 2008, 02:52:21 PM »

For Kazz those of you still wondering "what the fuck is going on?", here are some relevant quotes from earlier in this very thread:

relevant nyt article from 1999: [ugly fucking URL inexplicably posted straight]

THAD EDIT: The article is titled Fannie Mae Eases Credit To Aid Mortgage Lending, and lays out the beginning of the subprime mortgage trend.

also, if you haven't been paying attention, foreign currency is also unstable right now.  the world economy will burn with the us economy.  you will lose money.  the past sixty years have shown that when all this turns around, the us dollar will gain faster than other currencies.  you would lose money if trends continue as they have in the time of modern economics.

I'm going to try and detail my understanding of the issue; someone please tell me how wrong I am.

1-The government deregularizes mortgages in order to encourage banks to lend to the poor and to minorities.
2-The banks start loaning money to people in order to get them to buy houses they can't actually afford.
3-Now that there are lots more people who want to buy houses, the prices rise across the board due to the increased demand.
4-It turns out that the people who couldn't afford houses really couldn't afford them. A foreclosure epidemy ensues.
5-All the foreclosures kick property values in the nuts. The people who still have houses are stuck with mortgages much more expensive than what the actual houses are worth. The banks are stuck with devalued houses worth a fraction of what they paid for them.
6-The banks run out of money and collapse under the weight of the debts they've incurred in exchange for all that worthless real estate. I guess they gambled that it was more likely that home prices were going to continue to rise, and therefore that it didn't matter too much that the home buyers would never be able to repay them.
7-Now since the banks are all bound together, insuring each others' debt in an arcane, incestuous network that involves massive amounts of money that never existed in the first place, they all fall like dominoes.
8-Everyone freaks the fuck out and wants to get back whatever cash they can salvage out of this wreck, therefore thoroughly raping the stock market all over the place.

So, am I close?

Close enough to serve as a quick-n-dirty explanation for the everyman. An bit of an expansion would help though:

Debt has a value as an investment. If I hold your mortgage, I can drink your milkshake be (in theory) assured of regular mortgage payments (i.e. dividends on my investment). The banks got very very good in the last decade at slickly repackaging mortgages as solid, reliable investments. These were typically purchased by other financial-sector firms (the firms like Lehman brothers, who are in the worst shape).

Now, before deregulation, this worked out, because mortgages OVERALL had a reliable default rate, which you could work into the calculations. After deregulation, a viscious cycle was started, where mortgages were progressively offered to more and more people who wouold never be able to afford them normally. The problem was exacerbated by several factors:
1 - People though the banks were doing good by helping ordinary folks buy homes who might not otherwise be able to.
2 - Since the mortgages were often sold to other firms, the banks who did the credit checks on the homebuyers were not assuming the true risks for those bad loans, which removed a vital check against overextension of credit.
3 - The US economy has been encouraging expansion through credit-fuelled consumerism for two decades now (a problem with deeper roots).
4 - The investments became so popular and profitable, that demand was insatiable and banks were constantly encouraged to find new ways to expans the number of people who were eligable for mortgages.
5 - Important credit rating agencies, who are supposed to provide impartial appraisals, allowed the wool to be pulled over their eyes and gave the repackaged investments their highest triple-A credit rating, lulling many industry players into a false sense of security.
6 - Extreme short term thinking and the 'fast buck' mentality has been a problem in the north american corporate world for some time now.

6-The banks run out of money and collapse under the weight of the debts they've incurred in exchange for all that worthless real estate. I guess they gambled that it was more likely that home prices were going to continue to rise, and therefore that it didn't matter too much that the home buyers would never be able to repay them.

Maybe.  But anecdotally, I heard a caller on NPR yesterday who said he knew people on Wall Street who just shrugged and said "If this goes south, the government will bail us out."

Where the "let them fail" argument DOES have merit is that if we bail them out this time, they'll run their businesses like they expect one next time.

Where it doesn't, again, is that if they go, they'll take everybody else down with them.

Important addendum by Thad ^

Personal responsibility took a walk at the highest levels here. And I'm cynical enough to believe no one will learn from this unless things become much, much worse.

there are three parts of the collapse that haven't been discussed, that i've seen.  the intertwining debt mentioned came about from banks and lending groups bundling together toxic assets (failure mortgages, bad loans) and selling them to people who didn't know any better.  the organizations would give them billions in credit to take up these bundles of loans, assuming the loans would then pay off and return a profit.

many of these organizations were international entities, based in china and europe.  the joke that's been going around economic circles is, "yeah, china's been selling us all these toxic toys, foods, and everything else.  all we've been selling them is toxic assets."

the third part of this is all that credit these outside organizations are extending in exchange for toxic assets is that once they caught a smell of what was happening, when the loans started really turning sour, they stopped extending that credit to companies like lehman and bear sterns, not to mention freddy and fannie.  without those credit lines, these companies could no longer afford to continue making bad loans, which meant they could no longer make any money.

but they had so much credit they were trying to cover from previous bad loans that the debt over just a few days of not earning retard money collapsed companies worth hundreds of billions of dollars.

if these companies aren't saved, their creditors crumble in the same way they have.

and now two interesting solutions i've heard, one which bails out the world market at the sacrifice of the US dollar and economy in general, and one that erodes the world economy, lowering all world currency to be competitive with the dollar again.  both plans include a few depression years, but, honestly, i don't think there's any avoiding that at this point.

the first plan extends the bailout money to money managers who have proven themselves responsible by avoiding this huge collapse.  spread it evenly among as many of these banks, funds, groups, whatever you can find.  attain the real value of the assets that are currently showing highly inflated value (which is one reason the paulson plan was so bad: he wanted to buy toxic assets at the value the companies who tanked set them, or close to it, with no way to assess their true market value) and have a big auction.  smart money managers will obviously pay only the closest thing to their true appraisal of market value as they can get and still profit from it, so they will not assume toxic assets, they will be granted privilege to refinance the deals in an appropriate way after getting the assets at cost.

this would lead to profit and, in the end, ways to reduce the pressures on outside creditors.

the other option is to take the bailout money and use it to invest in infrastructure and industrial programs, new deal-style.  create jobs, factories, etc.  then use those factories to produce american goods at affordable prices, sell them to other countries, and actually have an american product worth exporting for the first time since cheap chinese goods came on to the market.  after a few years of global depression, quality goods flooding the world market could put america back on top.

Additional blather ^
Logged

SCD

  • Tested
  • Karma: 18
  • Posts: 1856
    • View Profile
Re: It's the economy, stupid!
« Reply #208 on: October 11, 2008, 02:11:11 PM »

so, has anyone else re-invested any money they put into the stock market in Wine and Single malt? I hear that stuff never devalues..
Logged

Mongrel

  • Emoticon Knight-Errant
  • kodePunc Team
  • Tested
  • *
  • Karma: -65340
  • Posts: 17029
    • View Profile
Re: It's the economy, stupid!
« Reply #209 on: October 11, 2008, 04:22:53 PM »

It may reduce in volume however. :shifty:
Logged

Thad

  • Master of Karate and Friendship for Everyone
  • Admin
  • Tested
  • Karma: -65394
  • Posts: 12111
    • View Profile
    • corporate-sellout.com
Re: It's the economy, stupid!
« Reply #210 on: October 11, 2008, 04:42:44 PM »

Tangentially: awhile back, Brad and I were on the beer aisle at Safeway, and an enthusiastic young employee engaged us in conversation.  He pointed out the "per ounce" fine print on the price tags and tried to explain how that's useful for knowing what you're really paying.  I responded that that's great for produce but is completely irrelevant when you're buying a product that, uniformly, comes in 6- or 12-packs of 12-ounce bottles.  He didn't seem to follow.
Logged

Classic

  • Happens more often than you'd think.
  • Tested
  • Karma: -58471
  • Posts: 7501
    • View Profile
Re: It's the economy, stupid!
« Reply #211 on: October 11, 2008, 08:20:52 PM »

... you don't get any full pint beers?
Logged

Thad

  • Master of Karate and Friendship for Everyone
  • Admin
  • Tested
  • Karma: -65394
  • Posts: 12111
    • View Profile
    • corporate-sellout.com
Re: It's the economy, stupid!
« Reply #212 on: October 11, 2008, 08:23:33 PM »

Not in bottles, no.
Logged

Kazz

  • Projekt Direktor
  • Admin
  • Tested
  • Karma: -65475
  • Posts: 6423
    • View Profile
Re: It's the economy, stupid!
« Reply #213 on: October 11, 2008, 08:23:57 PM »

3.99 for 6 pints of PBR!  Drink up!
Logged

Kayma

  • kodePunc Team
  • Tested
  • *
  • Karma: 31
  • Posts: 2692
    • View Profile
    • http://twitter.com/kayma
Re: It's the economy, stupid!
« Reply #214 on: October 11, 2008, 09:02:38 PM »

3.99 for 6 pints of PBR!  Drink up!

PBR tastes like rusty water. It's tetanus in a can.
Logged

Thad

  • Master of Karate and Friendship for Everyone
  • Admin
  • Tested
  • Karma: -65394
  • Posts: 12111
    • View Profile
    • corporate-sellout.com
Re: It's the economy, stupid!
« Reply #215 on: October 11, 2008, 11:24:15 PM »

McClatchy: Private sector loans, not Fannie or Freddie, triggered crisis.

Quote
Commentators say that's what triggered the stock market meltdown and the freeze on credit. They've specifically targeted the mortgage finance giants Fannie Mae and Freddie Mac, which the federal government seized on Sept. 6, contending that lending to poor and minority Americans caused Fannie's and Freddie's financial problems.

Federal housing data reveal that the charges aren't true, and that the private sector, not the government or government-backed companies, was behind the soaring subprime lending at the core of the crisis.

Subprime lending offered high-cost loans to the weakest borrowers during the housing boom that lasted from 2001 to 2007. Subprime lending was at its height vrom 2004 to 2006.

Federal Reserve Board data show that:

_ More than 84 percent of the subprime mortgages in 2006 were issued by private lending institutions.

_ Private firms made nearly 83 percent of the subprime loans to low- and moderate-income borrowers that year.

_ Only one of the top 25 subprime lenders in 2006 was directly subject to the housing law that's being lambasted by conservative critics.
Logged

Royal☭

  • Supreme Court Judge President
  • Tested
  • Karma: 88
  • Posts: 6301
    • View Profile
Re: It's the economy, stupid!
« Reply #216 on: October 12, 2008, 06:42:40 AM »

So how can we make this Obama's fault?

Brentai

  • https://www.youtube.com/watch?v=DnXYVlPgX_o
  • Admin
  • Tested
  • Karma: -65281
  • Posts: 17524
    • View Profile
Re: It's the economy, stupid!
« Reply #217 on: October 12, 2008, 08:22:51 AM »

By completely ignoring the fact?
Logged

Catloaf

  • Tested
  • Karma: 14
  • Posts: 1740
    • View Profile
Re: It's the economy, stupid!
« Reply #218 on: October 12, 2008, 09:30:00 AM »

I can't help but think:  I KNEW IT YOU RIGHT-WING BITCHES!!!:lol:
Logged

Mongrel

  • Emoticon Knight-Errant
  • kodePunc Team
  • Tested
  • *
  • Karma: -65340
  • Posts: 17029
    • View Profile
Re: It's the economy, stupid!
« Reply #219 on: October 13, 2008, 05:12:35 AM »

I have it on authority from some auto industry insiders (family in michigan) that Chrysler will likely be no more as of february 2009. Note to those of you living in Michigan. Get out while you still can.

I cannot say for certain that my source is credible, but honestly, it's only a matter of time before one of the big 3 collapses, and if we do enter a depression as the economists are predicting, it's going to be sooner rather than later. (edit: a big 3 collapse, that is)

Subtle update on the above.

Note the lines towards the bottom of the article.
Logged
Pages: 1 ... 6 7 8 9 10 [11] 12 13 14 15 16 ... 50