Thoughts on Obama SO FAR?

Joe Broke goes to the real estate agent, who wants to make a big commission, and who given the current banking practices convinces Joe Broke this is the smart move to make. Joe consults the bank, and the bank says, "Yeah, you can afford this loan, easy. We approve you." Is Joe being snowed? Yes. Is he being stupid? Yes, but most first time home buyers are by definition inexperienced in these matters and rely heavily on what the experts tell them. Is Joe a victim? I don't care if you paint him as a victim or not. Is Joe the culprit? Certainly not. The banks are the culprits and those deregulators on the dole of banking lobbyists are the culprits.

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Originally Posted by trish

Joe Broke goes to the real estate agent, who wants to make a big commission, and who given the current banking practices convinces Joe Broke this is the smart move to make. Joe consults the bank, and the bank says, "Yeah, you can afford this loan, easy. We approve you." Is Joe being snowed? Yes. Is he being stupid? Yes, but most first time home buyers are by definition inexperienced in these matters and rely heavily on what the experts tell them. Is Joe a victim? I don't care if you paint him as a victim or not. Is Joe the culprit? Certainly not. The banks are the culprits and those deregulators on the dole of banking lobbyists are the culprits.

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So Joe Broke signs the loan that he knows he won't be able to live up to.

Who's running the scam?

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So Joe Broke signs the loan that he knows he won't be able to live up to.

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No. Where did I give you that impression? Joe has been snowed.

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Who's running the scam?

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I didn't say it was a scam, though I do confirm the gist of Giovanni's post. It was all perfectly legal. Though if you ask who expected to profit from the situation, I'd say just about everyone involved thought they were going to profit. Joe thought he was buying a nice house. The real estate agent got her commission. The bank bundled the debt and sold it for a profit. The broker who bought the derivative thought it was a worthwhile risk. That's the way bubbles work in a deregulated market.

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Originally Posted by trish

No. Where did I give you that impression? Joe has been snowed.

I didn't say it was a scam. It was all perfectly legal. Though if you ask who expected to profit from the situation, I'd say just about everyone involved thought they were going to profit. Joe thought he was buying a nice house. The real estate agent got her commission. The bank bundled the debt and sold it for a profit. The broker who bought the derivative thought it was a worthwhile risk. That's the way bubbles work in a deregulated market.

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So the guy gets a house that he can't afford. This is how the world works when morality is relative. And when new regulatory controls are in the hands of immoral politicians, you will have your empty victory. Political capital.

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Originally Posted by PomonaCA

So Joe Broke signs the loan that he knows he won't be able to live up to.

Who's running the scam?

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This recession has NOTHING to do with "Joe Broke".
This recession has EVERYTHING to do with monetary policy,The Fed and Wall Street.

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So the guy gets a house that he can't afford.

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No. Joe loses the house and his equity because he can't afford it.

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And when new regulatory controls are in the hands of immoral politicians...

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Banking regulations need neither be moral nor immoral. They are simply needed to govern the stability of the banking and economic system; just as a steam governor is neither moral nor immoral but regulates the stability of the engine.

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you will have your empty victory.

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What victory? I not at war with anyone, I simply want a healthy and stable economy.

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Originally Posted by trish

No. Joe loses the house and his equity because he can't afford it.

Banking regulations need neither be moral nor immoral. They are simply needed to govern the stability of the banking and economic system; just as a steam governor is neither moral nor immoral but regulates the stability of the engine.

What victory? I not at war with anyone, I simply want a healthy and stable economy.

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Banking regulations in the hands of immoral politicians. That's what the left is screaming for, strict government control of the economy. And when you have that, you will have your empty victory. Political capital.

Now you're just repeating points that have already been answered.

We went through a major housing bubble in the '80s. When it burst, it crashed the entire savings & loan industry.There was an S&L on every corner, but when the smoke cleared, there probably wasn't a half dozen in the country with open doors.

There was one in the '70s too. It didn't get bad enough to crash the financials because the "stagflation" slowed it down & the oddball baloon loans were exposed early for the scam they were.

I guess my point is that this isn't a recent or 'right now' problem. It's just minor tweaks on the same crap over & over. Everybody's forced to jack up profit margins by whatever means because they're hedging against inflation. Stable margins don't work when everything's unstable. The problem isn't politics or any of the other crap that most of the bitching's about. The problem's inflation. The only ones charged with the fight against inflation are the Fed, & all they can do tighten credit. We already have tight credit, & you see what that does. The economic templates don't work because this inflation is artificial. The currency market is a skimming operation, & there's a direct corelation between the amount being skimmed & the rate of decline. Shut it down. You do that by pegging the currencies to each other & fixing the exchange rates.

Housing didn't crash the banks. It was a major factor, but they were leveraged way beyond solvency. Still are. The CDOs were a fraud, & it really needs to be prosecuted. The problem is that all this junk paper is still floating around out there & nobody knows exactly how to clear it off the books. It's going to take a while.

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Originally Posted by russtafa

if america started to stop its rich from buying expensive foriegn cars it might help and importing cheap labour

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Actually most of the " foreign" cars in the US market are actually built in the USA.

They are also built to higher quality standards and have more advanced technology and systems.