That's an awfully naive world view. I'm going to go out on a limb and say you're white from an upper middle class family.
Every time I doubt the GOP's group think prowess they surprise me. The greedy rich people who caused this fucking mess are now blaming low income families and colored folk (nevermind lower income whites benefited proportionally far more than blacks on this)...and low income conservatives are eating the excuse up.
The emperor truly has no clothes
I think that we need to take steps to keep as many people in their homes as possible, but housing prices definitely need to drop. An average house should cost about 3-4 times an average person's annual income, not 10-20 times that amount. Someone making 50,000 a year should not be buying a house for $750k. $150-200k is where the sweet spot should be, given current median incomes in the U.S. Furthermore, if we could eliminate out of control housing costs while also socializing medicine, we'd have a much stronger middle class,
I don't think that everyone should get to stay in their houses. However, I think that people in variable rate mortgages who were able to make their mortgage payments at the original interest rates, but couldn't afford the payments after the rates were increased on them should have their mortgages renegotiated at a fixed rate. Ideally, we'd just force the banks and investors to suck it up and take the lower payments, but if Uncle Sam has to step in, then that's what has to happen.:lol Thats everyone.
If more people could A) afford to have a house of their own, and B) afford health care, then more people could be considered middle class. I think it's a pretty obvious concept.
I thought greed was the only predictable thing in the market? In fact thats what makes capitalism sogreatdangerous. We can always count on people to want something at other people's and society's expense and try go get more money which in turn creates morecapitalsocial instability.
I thought greed was the only predictable thing in the market? In fact thats what makes capitalism so great. We can always count on people to want something and try go get more money which in turn creates more capital.
Creating capital is not dangerous to society. In fact we would have a middle class with the capitalism.
Whats your solution?I thought greed was the only predictable thing in the market? In fact thats what makes capitalism so great. We can always count on people to want something and try go get more money which in turn creates more capital.
Greed ultimately corrupts. There will always be someone that wants a little more than the other guy, so much that they will break the law. That or do what happened now, find devices to work around regulation entirely, like credit default swaps, that basically just calls a liability an asset. It is pretty clever but since they were unregulated, predictably, it all turned into a house of cards that is currently collapsing.
Now we're at a point in the Dow in the 90s where CDS were still being introduced and there is still tens of trillions of dollars worth of CDS still out there that could take the Dow down to the early 90s. In this case, greed fucked everyone over from the dirt poor to the filthy rich. No new capital was created and now it has created an atmosphere of FUD, which paralyzes initiative far more than regulation, which just makes certain actions transparent and accountable.
So I don't really agree. Greed winds up fucking almost everyone over. It is possible for businesses to be aggressive yet law abiding but since the Reagan days, businesses now feel free to violate whatever rule they want because the government is too paralyzed to stop anything until the very same businesses now want lucrative bailouts.
good luck, zero. even tho you are a dirty sony fan ;):-*
Whats your solution?
Back on topic. If that Peter Schiff guy was so accurate at predicting all of this two years ago why should we not listen to him now? It seems like he is the only one telling us that things wont be ok unless we bit the bullet.
Back on topic. If that Peter Schiff guy was so accurate at predicting all of this two years ago why should we not listen to him now? It seems like he is the only one telling us that things wont be ok unless we bit the bullet.
Lots of economists more prominent than myself, such as Wynne Godley, and Stephen Roach, are most terribly worried about the following state of affairs:
The American consumer is pretty much all that's holding up the entire world economy at the moment. This is because final demand has to come from investment or consumption, and nobody appears to be in the mood to invest. Meanwhile, the Japanese don't care to (deflation and recession), the Europeans don't dare to (an ECB more worried about credibility than sensible anticyclical monetary policy), so mad dogs and Americans have to go down to the shopping mall.
Which wouldn't be a problem, except that, as far as we can tell, the American consumer is basically only still spending because he thinks that magic beans grown on the Internet will pay for everything. The strong suspicion is that when the Yanks look under the bed and discover that all of their magic Internet stock market money has turned back into rotting leaves, they're going to feel a little bit embarrased (and broke), and stop buying goods from Asia with money borrowed from Europe, a process which doesn't look like it would be enough to keep the world going but in fact is. And given that the stock market's been performing pretty badly these days, and is beginning to appear on the cover of USA today, lots of people are beginning to worry that the day of reckoning might be at hand. Which would obviously, leave us in the shit.
This is the doctrine of the "wealth effect", and if you can dig up a few factoids and linear regressions to illustrate it and avoid using the word "shit", you can make a quite decent living as a pundit by repeating the paragraph above. On the other hand, if you had been placing bets on a US double-dip recession so far, you'd have lost them, because Alan Greenspan and his merry gang at the Fed have a solution to this problem. Basically, the solution's pretty simple and it involves screwing interest rates down to the floor until mortgage rates follow them down to Low Low Prices levels, and pointing out to the Great American Consumer that it's "Bye-Bye, Magic Stock Market Bubble Money!" but "Hello, Magic Housing Market Bubble Money!". Marvellous.
Cleverer readers at this point will be formulating an objection. The objection goes along the lines of:
"Yeah, yeah, laughing boy, but what happens when the housing bubble bursts then?"
Which is a damn good question to ask, particularly since the official policy of the Federal Reserve appears to be "hmmm yeh, never thought of that, I suppose we'd be kind of fucked".
The Chicago school, forever cursed by physics-envy, likes to assume a "frictionless economy" where every person is a perfectly rational maximizer of utility and there are no information or transaction costs.
The freedom to dice up and trade derivative financial products without regulation was meant to improve the flow of information (price signals! efficient markets theory!) but instead it made it possible for people to obfuscate the actual value (or lack thereof) of what they were selling.
One of the few things that I dislike about Obama is that he's tight with some Chicago school folks, since he taught Constitutional law there and all.
I can speak with experience with this sub prime shit. We bought our house a few years ago at an interest rate of 7.7% on an $85000 loan. They said it would be fixed for 3 years and then go variable. We just wanted the house. It turns out, since we bought our house in November, that we only really had 2 years 1 month of fixed rate since the rate was by CALENDAR year. Our interest boomed to 10.7% and an additional $400/month, all interest, was added to our mortgage payment. No one would re-finance us since we didn't live in our house long enough or because we couldn't put down a $4000 down payment. And now it may be too late.zero, i am obligated by decree of master ken to offer you and your family a space under my bed if you need it. it's on risers so i think you can probably fit any children/animals you have on top of you if they're not fat.
Our rate has dropped with the fed cuts though I think we are still only paying $200 less than what was our peak. :'(
At least we are still here and clawing back.
As the economy worsens and Election Day approaches, a conservative campaign that blames the global financial crisis on a government push to make housing more affordable to lower-class Americans has taken off on talk radio and e-mail....
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 from 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.
The "turmoil in financial markets clearly was triggered by a dramatic weakening of underwriting standards for U.S. subprime mortgages, beginning in late 2004 and extending into 2007," the President's Working Group on Financial Markets reported Friday.
The perks of being a Sony fan. X's and O's to Kev. :-*I can speak with experience with this sub prime shit. We bought our house a few years ago at an interest rate of 7.7% on an $85000 loan. They said it would be fixed for 3 years and then go variable. We just wanted the house. It turns out, since we bought our house in November, that we only really had 2 years 1 month of fixed rate since the rate was by CALENDAR year. Our interest boomed to 10.7% and an additional $400/month, all interest, was added to our mortgage payment. No one would re-finance us since we didn't live in our house long enough or because we couldn't put down a $4000 down payment. And now it may be too late.zero, i am obligated by decree of master ken to offer you and your family a space under my bed if you need it. it's on risers so i think you can probably fit any children/animals you have on top of you if they're not fat.
Our rate has dropped with the fed cuts though I think we are still only paying $200 less than what was our peak. :'(
At least we are still here and clawing back.