Where did the credit crisis of today get it's start?
-
One thing AQ boy, neither Fortis or Dexia lent money to home buyers in the US. If the debts had not been exported through what are now junk bonds, never this crisis would have been so severe worldwide.
If you kill a whale, you get Greenpeace and Jacques Cousteau on your back, but wipe out sardines and you get a canning subsidy! Fold with us! ¤ flickr
Ka?l wrote:
One thing AQ boy, neither Fortis or Dexia lent money to home buyers in the US. If the debts had not been exported through what are now junk bonds, never this crisis would have been so severe worldwide.
Did that make sense in Urdu? Or French? How does what you said relate to an article written in 1999? Just because your mentor strings phrases together that make no sense and have no bearing on the subject at hand, doesn't mean that you should.
Jon Smith & Wesson: The original point and click interface
-
MrPlankton wrote:
I would have loved to link to the article that Adam °Wimsatt found that indicates it is not a myth or racism on my part
It was linked to about four days ago. You are obviously not paying attention, young man.
Jon Smith & Wesson: The original point and click interface
Just reading your reply from post earlier this week...
MrPlankton
-
One thing AQ boy, neither Fortis or Dexia lent money to home buyers in the US. If the debts had not been exported through what are now junk bonds, never this crisis would have been so severe worldwide.
If you kill a whale, you get Greenpeace and Jacques Cousteau on your back, but wipe out sardines and you get a canning subsidy! Fold with us! ¤ flickr
The question is why these mortgages were securitized into junk assets - the answer is that it was expected that there would be government intervention in the markets (read: bail-out) in case of mass defaults. That is why government interference in the markets (i.e. the socialist ideology) is the worst thing that could ever happen and why government should play as little a role as possible in capital markets.
...that mortally intolerable truth; that all deep, earnest thinking is but the intrepid effort of the soul to keep the open independence of her sea; while the wildest winds of heaven and earth conspire to cast her on the treacherous, slavish shore.
-
Ka?l wrote:
One thing AQ boy, neither Fortis or Dexia lent money to home buyers in the US. If the debts had not been exported through what are now junk bonds, never this crisis would have been so severe worldwide.
Did that make sense in Urdu? Or French? How does what you said relate to an article written in 1999? Just because your mentor strings phrases together that make no sense and have no bearing on the subject at hand, doesn't mean that you should.
Jon Smith & Wesson: The original point and click interface
You're getting lower and lower everyday, Hatred is like a cancer, it is eating you alive... what a pity to witness such a decay. I explain once again, I hope you will be able to understand my bad english. I don't think this article explains the roots of this crisis. Either it doesn't go far in the past enough missing the original fault which was transforming a government agency in a profit-maximizing private company or it it miss the cause of the severity of the current crisis, the financial games made by the banks to make more money with the debts.
If you kill a whale, you get Greenpeace and Jacques Cousteau on your back, but wipe out sardines and you get a canning subsidy! Fold with us! ¤ flickr
-
The question is why these mortgages were securitized into junk assets - the answer is that it was expected that there would be government intervention in the markets (read: bail-out) in case of mass defaults. That is why government interference in the markets (i.e. the socialist ideology) is the worst thing that could ever happen and why government should play as little a role as possible in capital markets.
...that mortally intolerable truth; that all deep, earnest thinking is but the intrepid effort of the soul to keep the open independence of her sea; while the wildest winds of heaven and earth conspire to cast her on the treacherous, slavish shore.
73Zeppelin wrote:
the answer is that it was expected that there would be government intervention in the markets (read: bail-out) in case of mass defaults
You accuse the government to intervene because private companies expect the government to intervene. 'It' was expected the government would not let 1929 happen again, and would eventually intervene, whatever the extraordinary risks taken by private companies. The bet was that if the risks were shared by enough companies, there would be no risk at all, taxpayers would pay in case of failure. This expectation is dishonest, disgusting, and tantamount to extortion.
If you kill a whale, you get Greenpeace and Jacques Cousteau on your back, but wipe out sardines and you get a canning subsidy! Fold with us! ¤ flickr
-
Hey, fire them all, Bush, Cheney, Paulson, Pelosi, Reid, Franks ... the whole stinkin' crew. Just be sure you get Pelosi before Cheney. I don't think I could stand even one minute of Nasty Nancy, POTUS.
-
The question is why these mortgages were securitized into junk assets - the answer is that it was expected that there would be government intervention in the markets (read: bail-out) in case of mass defaults. That is why government interference in the markets (i.e. the socialist ideology) is the worst thing that could ever happen and why government should play as little a role as possible in capital markets.
...that mortally intolerable truth; that all deep, earnest thinking is but the intrepid effort of the soul to keep the open independence of her sea; while the wildest winds of heaven and earth conspire to cast her on the treacherous, slavish shore.
The system worked pretty well from 1933 until 1999 except for the S&L crisis in the late 1980s. What happened in the 80s? Reagan deregulated government oversight of S&Ls. What happened in 1999? Phil Gramm pushed through an evisceration of the Glass-Steagall Act that had prevented mass bank failures between 1933 and 1999. In 2000, Gramm got a bill passed that deregulated financial instruments and allowed the creation of CDSs and the other toxic garbage at the root of the current mess.
-
You're getting lower and lower everyday, Hatred is like a cancer, it is eating you alive... what a pity to witness such a decay. I explain once again, I hope you will be able to understand my bad english. I don't think this article explains the roots of this crisis. Either it doesn't go far in the past enough missing the original fault which was transforming a government agency in a profit-maximizing private company or it it miss the cause of the severity of the current crisis, the financial games made by the banks to make more money with the debts.
If you kill a whale, you get Greenpeace and Jacques Cousteau on your back, but wipe out sardines and you get a canning subsidy! Fold with us! ¤ flickr
Ka?l wrote:
Hatred is like a cancer
You seem to mistake amusement for hatred. That's a fascinating neurosis, though it may get you in trouble later in life.
Ka?l wrote:
it is eating you alive
But not enough that I get a petty pleasure from 1-voting someone I disagree with.
Ka?l wrote:
I hope you will be able to understand my bad english
I try.
Ka?l wrote:
Either it doesn't go far in the past enough missing the original fault which was transforming a government agency in a profit-maximizing private company or it it miss the cause of the severity of the current crisis, the financial games made by the banks to make more money with the debts.
Do you understand that the article was written in 1999 about 1999 and you are criticizing it for not describing things that did not take place until after the turn of the century?
Jon Smith & Wesson: The original point and click interface
-
Actually, the defeat of the bailout bill has saved the world from Global warming. By depressing the economy to the point that the demand for fossil fuels is severely diminished, it has single handedly accomplished more than Kyoto ever did. Al Gore is so furious he can hardly stand it... no more need for carbon credits... how will he live...:rolleyes:
-
fat_boy wrote:
Global Warming alarmism was the pin that burst the subprime mortgage bubble
:zzz: :zzz: :zzz: :zzz: :zzz: :zzz:
Jon Smith & Wesson: The original point and click interface
-
The system worked pretty well from 1933 until 1999 except for the S&L crisis in the late 1980s. What happened in the 80s? Reagan deregulated government oversight of S&Ls. What happened in 1999? Phil Gramm pushed through an evisceration of the Glass-Steagall Act that had prevented mass bank failures between 1933 and 1999. In 2000, Gramm got a bill passed that deregulated financial instruments and allowed the creation of CDSs and the other toxic garbage at the root of the current mess.
There's nothing inherently wrong with credit default swaps. The problem with CDSs is when the the debt-holder can't pay. And under what circumstances can a debt-holder not repay? When they're extended credit credit lines they shouldn't be allowed to have as the result of ... government policy. I work for what is basically and investment bank in their structured products division. I will tell you first hand that derivatives are not dangerous provided the people using them understand them, there is a healthy respect and understanding of risk that is inherent in an unfettered free market. That is to say, there is an understanding that they are risky and that borrowers can default. If there is no promise of governmental bail-out then people are much, much more careful in using these contracts. Incidentally, the Glass-Steagall act was an attempt to control speculation, even though there is very little evidence (others would argue no evidence) that speculation adversely affects markets. Indeed, the commodity markets operate on the principle that speculation is inherent to their proper functioning. No good ever comes from government manipulation of the free market. The single important thing for the capital markets is transparency - take that away and you're in for a mess.
...that mortally intolerable truth; that all deep, earnest thinking is but the intrepid effort of the soul to keep the open independence of her sea; while the wildest winds of heaven and earth conspire to cast her on the treacherous, slavish shore.
-
73Zeppelin wrote:
the answer is that it was expected that there would be government intervention in the markets (read: bail-out) in case of mass defaults
You accuse the government to intervene because private companies expect the government to intervene. 'It' was expected the government would not let 1929 happen again, and would eventually intervene, whatever the extraordinary risks taken by private companies. The bet was that if the risks were shared by enough companies, there would be no risk at all, taxpayers would pay in case of failure. This expectation is dishonest, disgusting, and tantamount to extortion.
If you kill a whale, you get Greenpeace and Jacques Cousteau on your back, but wipe out sardines and you get a canning subsidy! Fold with us! ¤ flickr
Ka?l wrote:
The bet was that if the risks were shared by enough companies, there would be no risk at all, taxpayers would pay in case of failure. This expectation is dishonest, disgusting, and tantamount to extortion.
No, that's not it at all - there is always the risk that the borrower defaults regardless of the level of diversification. The expectation was that government would provide a bail-out if a significant number of mortgages were to fail (borrower defaults). It's in the NY Times article from 1999 that Adam posted - I even quoted the passage.
Ka?l wrote:
You accuse the government to intervene because private companies expect the government to intervene. 'It' was expected the government would not let 1929 happen again, and would eventually intervene, whatever the extraordinary risks taken by private companies.
But intervention is and was the expectation. Look at the bail-out before congress, for example. That is why companies took the extraordinary risks on bad mortgages; bad mortgages mandated by the U.S. government. Remove government from that statement and there would be no crisis right now - it's that simple.
...that mortally intolerable truth; that all deep, earnest thinking is but the intrepid effort of the soul to keep the open independence of her sea; while the wildest winds of heaven and earth conspire to cast her on the treacherous, slavish shore.
modified on Wednesday, October 1, 2008 4:01 AM
-
You're getting lower and lower everyday, Hatred is like a cancer, it is eating you alive... what a pity to witness such a decay. I explain once again, I hope you will be able to understand my bad english. I don't think this article explains the roots of this crisis. Either it doesn't go far in the past enough missing the original fault which was transforming a government agency in a profit-maximizing private company or it it miss the cause of the severity of the current crisis, the financial games made by the banks to make more money with the debts.
If you kill a whale, you get Greenpeace and Jacques Cousteau on your back, but wipe out sardines and you get a canning subsidy! Fold with us! ¤ flickr
Ka?l wrote:
I don't think this article explains the roots of this crisis. Either it doesn't go far in the past enough missing the original fault which was transforming a government agency in a profit-maximizing private company or it it miss the cause of the severity of the current crisis, the financial games made by the banks to make more money with the debts.
The article exactly explains the origins of the current crisis. It is based on the philosophy of individual home ownership independent of the borrower's ability to repay; a socialist philosophy. There is no other cause to the crisis other than this and too much government interference in the free-market (i.e. expectation of tax-payer bail-outs). There's nothing else I can say to get the message across. Your only possible argument is that the banks abused the financial instruments at the root of the crisis, which is true, but they abused them under the expectation of government support should there be mass default on the mortgages in question. And there was default because of the policy of home ownership independent of ability to repay. It is an attempt (by socialists) to provide equality (in the form of home ownership) to all - a policy that has only lead to problems, both currently and historically. The message is simple, you don't buy what you can't fucking afford. Period.
...that mortally intolerable truth; that all deep, earnest thinking is but the intrepid effort of the soul to keep the open independence of her sea; while the wildest winds of heaven and earth conspire to cast her on the treacherous, slavish shore.
-
Ka?l wrote:
I don't think this article explains the roots of this crisis. Either it doesn't go far in the past enough missing the original fault which was transforming a government agency in a profit-maximizing private company or it it miss the cause of the severity of the current crisis, the financial games made by the banks to make more money with the debts.
The article exactly explains the origins of the current crisis. It is based on the philosophy of individual home ownership independent of the borrower's ability to repay; a socialist philosophy. There is no other cause to the crisis other than this and too much government interference in the free-market (i.e. expectation of tax-payer bail-outs). There's nothing else I can say to get the message across. Your only possible argument is that the banks abused the financial instruments at the root of the crisis, which is true, but they abused them under the expectation of government support should there be mass default on the mortgages in question. And there was default because of the policy of home ownership independent of ability to repay. It is an attempt (by socialists) to provide equality (in the form of home ownership) to all - a policy that has only lead to problems, both currently and historically. The message is simple, you don't buy what you can't fucking afford. Period.
...that mortally intolerable truth; that all deep, earnest thinking is but the intrepid effort of the soul to keep the open independence of her sea; while the wildest winds of heaven and earth conspire to cast her on the treacherous, slavish shore.
73Zeppelin wrote:
It is based on the philosophy of individual home ownership independent of the borrower's ability to repay; a socialist philosophy
No, a socialist philosophy would never let banks manage this as they want, it would never have accepted a subprime-based system, subprimes which are the roots of the current crisis. A socialist government would lend directly the money to the poor, with rates lower than the ones given by banks, through a public service. It would directly guarantee the loans, and would take the responsibility of reimbursements defaults. A socialist philosophy would never transform a government agency made to serve the public in a private company made to make profits. The US government failed its responsibilities. The original perversion came from there.
73Zeppelin wrote:
they abused them under the expectation of government support should there be mass default on the mortgages in question
I steal somebody with the expectations insurances will compensate the loss, so it is not a steal?
73Zeppelin wrote:
It is an attempt (by socialists) to provide equality (in the form of home ownership) to all
A socialist government would not consider equality as being able to own a home! Transforming people in home owners in a right wing preoccupation. A socialist government would rather build housings with a rent low enough so the poorer ones could afford to pay.
73Zeppelin wrote:
you don't buy what you can't f***ing afford
I agree on this one, that's why I have no credit to pay. Which countries are touched by the loans crisis? The US and UK. There's no such thing neither in France nor in Germany. A clear demonstration that social oriented policies in these areas are much more efficient than the market-oriented anglo-saxon philosophy.
When they kick at your front door How you gonna come? With your hands on your head Or on the trigger of your gun?
-
Ka?l wrote:
The bet was that if the risks were shared by enough companies, there would be no risk at all, taxpayers would pay in case of failure. This expectation is dishonest, disgusting, and tantamount to extortion.
No, that's not it at all - there is always the risk that the borrower defaults regardless of the level of diversification. The expectation was that government would provide a bail-out if a significant number of mortgages were to fail (borrower defaults). It's in the NY Times article from 1999 that Adam posted - I even quoted the passage.
Ka?l wrote:
You accuse the government to intervene because private companies expect the government to intervene. 'It' was expected the government would not let 1929 happen again, and would eventually intervene, whatever the extraordinary risks taken by private companies.
But intervention is and was the expectation. Look at the bail-out before congress, for example. That is why companies took the extraordinary risks on bad mortgages; bad mortgages mandated by the U.S. government. Remove government from that statement and there would be no crisis right now - it's that simple.
...that mortally intolerable truth; that all deep, earnest thinking is but the intrepid effort of the soul to keep the open independence of her sea; while the wildest winds of heaven and earth conspire to cast her on the treacherous, slavish shore.
modified on Wednesday, October 1, 2008 4:01 AM
73Zeppelin wrote:
the expectation was that government would provide a bail-out if a significant number of mortgages were to fail
- Did the US government guaranteed the initial values of the bonds emitted on debts? - Is the US government responsible for the subprimes system? Who lent money, the US government or the banks? - Is the US government responsible for the speculations that lead to the housing bubble?
When they kick at your front door How you gonna come? With your hands on your head Or on the trigger of your gun?
-
OK, I guess the tongue in cheek aspect of my isnt obvious enough.
Morality is indistinguishable from social proscription
-
There's nothing inherently wrong with credit default swaps. The problem with CDSs is when the the debt-holder can't pay. And under what circumstances can a debt-holder not repay? When they're extended credit credit lines they shouldn't be allowed to have as the result of ... government policy. I work for what is basically and investment bank in their structured products division. I will tell you first hand that derivatives are not dangerous provided the people using them understand them, there is a healthy respect and understanding of risk that is inherent in an unfettered free market. That is to say, there is an understanding that they are risky and that borrowers can default. If there is no promise of governmental bail-out then people are much, much more careful in using these contracts. Incidentally, the Glass-Steagall act was an attempt to control speculation, even though there is very little evidence (others would argue no evidence) that speculation adversely affects markets. Indeed, the commodity markets operate on the principle that speculation is inherent to their proper functioning. No good ever comes from government manipulation of the free market. The single important thing for the capital markets is transparency - take that away and you're in for a mess.
...that mortally intolerable truth; that all deep, earnest thinking is but the intrepid effort of the soul to keep the open independence of her sea; while the wildest winds of heaven and earth conspire to cast her on the treacherous, slavish shore.
So, this fellow and the many others like him who've written similar articles are liars and don't know what they're talking about. Okay....... Pyramids Crumbling[^]