bostonbubble.com

[Guest]

http://www.youtube.com/watch?v=dib2-HBsF08

I don't get it, this scene is now more than thirty years old and yet, this banking crisis (plus associated bailout) and the lie about the ownership society hasn't stirred the pot.

So what gives? Has everyone fallen asleep.

[StallionMang]

Nobody trusts the government... we're all in a state of shock. It does seem like politicians are incapable of solving big problems. I hope Obama does better. http://www.esquire.com/features/what-bush-meant-1008

As the man took his seat in the wing chair next to the president's desk, he began to explain his problem with the president's decision. The fact of the matter was that in this area of policy, this advisor was one of the experts, really top-drawer, and had been instrumental in devising some of the very language now used to discuss these concepts. He was convinced, he told Bush, that the president's position would soon enough be seen as "bad policy."

This, it seems, was the wrong thing to say to the president.

According to senior administration officials who learned of the encounter soon after it happened, President Bush looked at the man. "I don't ever want to hear you use those words in my presence again," he said.

"What words, Mr. President?"

"Bad policy," President Bush said. "If I decide to do it, by definition it's good policy. I thought you got that."

[john p]

I just read this article, it's more of the Bush sucks and implies that McCain is Bush and staple McCain to Bush and let him sink in the cement shoes he made for himself....

It's not that simple because McCain isn't Bush and that is shining through. The two stages of this election are 1: Iraq and 2: the Economy. McCain wins the Iraq because of the Surge and Obama's throwing in the towell too early, and the jury is still out on the Economy.

Here's the long rebuttal that most of you Obama kool-aid types might not want to read. Let your defense mechanisms prevent you from any information that may alter your way of thinking...

Just because Bush was a cement head doesn't mean that everything Obama stands for is correct.

Going into Iraq was a tough call. Nuclear weapons and terrorists are things you want to err on the side of caution, and I think people were more afraid of Saddam Hussein getting nukes than of G.W. Bush's incompetence. Given the fact that Hussein had recently invaded a neighboring country, an ally to us and he was offering financial rewards to terrorists that targeted the United States, and he was blowing off inspectors and the UN had no spine to enforce their "Resolutions"; inaction had risks.

Obama never voted on the War and never saw the intelligence reports that Hillary Clinton, John Kerry, and Joe Biden did when they authorized the use of force in Iraq. Obama was currently in a far left district in the South Side of Chicago where among other community leaders were Jeremiah Wright, Father Flagler, Bill Ayers and other radicals. Obama's position given his constituency was right in line with what people wanted to hear and took no political courage to hold. The basis for his not going into Iraq did not include the intelligence estimates because he did not have access to them. If he was jumping up and down saying that the Pentagon, Condi Rice, Colin Powell, Donald Rumsfeld were lying at the time, I would have an Obama sign on my front lawn right now. He didn't. In fact, while a Senator, after giving that speech to get elected and leaving the impression to his constituents that he was against the War, he voted to authorize over $300 Billion to the War, and voted to promote Condi Rice to Secretary of State. He funded the War and went along with the likes of Condi Rice until he saw the opportunity of his earlier position. His rhetoric did not align with his actions. Then comes the Democratic Primary and Obama does a little math. There are two coalitions that he can put together to win in a three person race: first because he gave the speech being against the War he gets the angry people that hate the War, and he gets the African American vote who went for him 90 percent. This opportunity is too good to pass up despite his earlier comments that he was too inexperienced to run for the Executive. He knows that Bush is like cement shoes for the Republicans and the most far left person in Congress will be in the position of power because if you vote 97% of the time with your own Party, you haven't made any enemies and will get more delegates. Clinton, being the front runner was attacked by her own Party and by the Republican candidates almost up to Super Tuesday in February. Obama had a nice clear shot and the Press fell in love with him (Chris Matthews of MSNBC saying that when Obama speaks it gives him a tingle up his leg).

Meanwhile, McCain, in 2004, an election year, fires back against the Swift Boats for what he characterizes as a dishonorable attack on his friend John Kerry. This takes moral courage to cross party lines in an election year. Then McCain realizes that our strategy to win the War is flawed and takes on Donald Rumsfeld of his own Party and publicly criticizes his own Party's President and Secretary of Defense. This, again, takes moral courage. Then, when things look their worst, and the majority want to end the War, Democrats gain Congress to end the War and they are too limp to even follow the charge of the people that put them there, become the "do-nothing Congress of 06 and 07). McCain calls for the Surge when everyone wants to retreat. The Surge works and the Democrats who have shifted on the political winds are caught in a position where they not only wanted to run away in defeat, but were too incompetent and weak to even retreat.

Now we have to weigh the risks and costs of action and inaction. People don't have to think about the reality of a Saddam Hussein still in power today because he isn't. People want their cake and eat it, the same way they trash capitalism yet enjoy their flat screen TV’s, I-pods, bachelor parties in Vegas, etc.

So, based on the first Debate, McCain gains traction because he sets the record straight with Iraq, and Americans understand that Obama's retreat plan would not have served our interests well.

Since, the Economy has hit the news with the bailout. Obama, the "change" guy blames Wall Street and the Republicans for "deregulation". So, looking into it we find that the torpedo that hit our bow was deregulation, but it was deregulation of capitalistic fundamentals issued by socialists through the Community Reinvestment Act. The Community Reinvestment Act was a socialistic attempt to force banks to lend to the subprime market. Obama serves as a lawyer that actually sued a bank for not issuing enough subprime mortgages. The Clinton led Administration uses research based on our own Boston Fed's that low income and minority families aren't getting enough access to housing so the Administration allows the securitization of subprime mortgages which ends up manufacturing the largest toxic economic waste that gets so heavy and worthless that people just can't buy it any longer despite all the money the FED has pumped in the M3 with rates that are too low. Initially as Fed Chair, Bernanke steadily increases the rates in a methodical process in order to fight inflation. Realizing that the markets are now accustomed to this liquidity, and people like Jim Cramer are screaming for working capital in the market, Bernanke starts to lower rates in increments with longer tread steps until April where he stops lowering rates. Gas prices become an issue as the dollar weakens due to the liquid market, a decision needs to be made, what is worse, more expensive gas or a credit freeze? Bernanke decides inflation is worse. I say worse for whom? Like Dorchester Grandma, I think that if 20% of the value of the markets burn off as steam in an overheated market, so be it, and it actually reduces the difference between the rich and poor by 20% right? So instead of letting capitalism run its course, the rich don't want to lose their 20% like that old couple on the skit on Saturday Night Live and they try to force politicians on the take to push this Bailout. The Fed's decision to stop lowering rates in April signaled inflation and people who are heavily invested feared being diluted in currency devaluation and the drying up process of working capital making the capital scarce and therefore more expensive. LIBOR rates skyrocket just in time when the majority of maturing ARMS reset, which add to the list of casualties. So our medicine is socialism, the same type of socialism that torpedoed us with the securitizing of subprime loans in the Community Reinvestment Act.

So this economic trouble which Bush tried to square up to in 2003 in trying to reform Fannie Mae and Freddie Mac, and McCain trying in 2005 somehow get's flipped around in a population that wants to have their legs tingle by Obama's oratory. This is coming from a Registered Democrat; I am hoping that as McCain set the record straight on the Surge and Iraq, he will do tomorrow night with the economy in their 2nd debate.

Stallion, I get your concerns about Bush, but McCain is not Bush. The whole 90 percent thing includes everyday measures that at least 80 percent of Democrats were voting for. Where it mattered, the execution of the War, McCain was Bush's biggest critic; he was more vociferous than Obama, who lets face it was doing it for political self promotion. If he cared so much about the South Side of Chicago, why is it still a crappy place to live? Shouldn't he have spent his efforts improving it instead of writing books about himself? I would have thought that you would first have to show a little success in one small part of the Country before you ran for Governor or Senator? Obama doesn't care that he has never moved the line of scrimmage for any substantial amount of people anywhere; he'll get out in front of a crowd in Germany and address "People of the World". His ego and socialistic beliefs scare the hell of me. I mean Dennis Kucinich was the best anti-War candidate that actually had experience running a City, Cleveland. The problem for Kucinich was that he was too short and didn't have the strong oratory voice and celebrity as Obama. Judgment, experience; Kucinich mops the floor with Obama. Now comes the delusion. People have to put up this delusional force field to defend the most inexperienced candidate for President in over 50 years. They are so delusional that they think nothing of having Gwen Ifil who is writing a book called Breakthrough, African American Politicians in the time of Obama. They, NY Times, are so delusional that they put out a false story about McCain having an affair, while Edwards is cheating on his wife with Cancer and they know it. If Edwards was out of the race because the Press told the truth and reported the News and didn't filter it because it didn't align with their agenda, you might be looking at Clinton as the nominee because Edwards was sticking the knife in Hillary during the Primaries.

Stallion, I get that McCain's flip flop on the tax break for the rich does not smell right. I am uncomfortable with that as well. What I want you to consider is if Socialism is the right antidote for the problems we have. I think it will make us a second tier nation in a dangerous world. Think about the Community Reinvestment Act; think about how you are not hearing about it on NBC and other main stream media. Do you want the media to filter out news? Do you think it is right that Gwen Ifil moderated that debate despite having written a book with "breakthrough" and "Obama" in the title and incidentally, is being released on inauguration day....? The Boston Globe hasn’t written in depth about the Community Reinvestment Act and most of those writers know that it was the torpedo that hit our hull. When you have to see the story in the Herald, you understand why the Globe’s circulation is dwindling.

Whether or not we have a war with Iran or not isn't really up to us, it is up to Iran and Israel. If Iran gets and uses nuclear weapons we're in a War period. That was my biggest fear with McCain; that he was a war monger and he'd trump up a reason to go to war. I don't see us wanting to be in Iran; we'll be forced into a war there an it won't matter if Obama or McCain is in office. Beyond that, socialism is a pair of cement shoes for our Economy. We need fins on our feet and not cement shoes of socialism. Obama's philosophy to tax the rich to pay for everything goes only so far. It makes people less interested and motivated to go out and work hard to earn more if they get little and little out of the gains they make, so it slows the engine down, and worse, it makes lazy deadbeats comfortable feeling entitled being on the dole. This delusion will be underscored when Obama actually gives money to people who don't pay a cent to the cost of government. The moral hazard of Obama is that he is not an ambassador of hard work and achievement; he is an ambassador of self absorption, self promotion, and trading on the misfortunes of others and making empty promises. Most of what I see of him today is being a cheerleader for failure.

[Boston ITer]

Well John, socialism as it stands today is a failure but realize, it's occurring as a result of years of a financial economy which, in itself, generated little but a succession of asset bubbles.

Unfortunately, I don't believe there's a solution here but a path towards 3rd world-ism, from either corrupt socialistic leadership or long term asset devaluation (the free market).

All and all, the only way for socialism to work is to put all the engineers on govt subsidies but then make everyone else work a normal job including the executives. Then, let the engineers have, at minimum, 1% of their IP, by legal mandate, so that entrepreneurs can market the technologies into a product line and churn a profit. Of course, the royalties can be greater but at least this way, there's no way the engineer will be living on the streets. All and all, that'll keep hi-tech in the nation and then the govt can also work on tax relief and strategies for keeping hi-end work stateside and letting the cheaper stuff (outer casings/labels, kids toys, etc) be offshored. But are any of other leaders willing to do any of the above? I doubt it. In fact, no one's really aware of what made our nation prosperous to begin with (*Hint: Tesla and friends didn't attend places like Columbia Law School). From here forth, our best and brightest will always be attending law or medical school just to keep a roof over their heads. Some will work for ad companies like Goggle.

[john p]

Honestly, it's guys like you, Stallion Mag, Admin, Still Renting, Finance Mike, and the rest that actually give me confidence in our future because the level of discussion is sophisticated, barring the 98 percent of my rants that are off topic.

I think we might be hitting a hundred year storm of sorts. A major change that hits a society every 100 years.

These include:

Introduction of the Printing Press - within 20 or so years you get the spread of ideas and information and two major Revolutions that free people from Aristocracy.

Industrial Revolution versus Slavery- When the Northern Cities started to get factories and labor started to organize and demand more, the factories were beginning to move South where factory owners could have put slaves to work. There was no way one part of a country could compete paying for workers when the other had slaves. I believe this was the real reason for the Civil War.

American Indians versus land ownership and capitalism- There was no way you could have both, nomadic people and people that owned and worked farms and ranches. The incongruent notion of ownership of land could not coexist.

Today - We have technology that has globalized the markets and you can't have ultra rich and ultra poor nations. In the past decade, we had smaller operations in China, but now all the money we sent over there when we bought our t.v.'s and stuff transferred our wealth, same as the oil. Unless we have currency equilibrium and a legal system that is based on business models that are fair, the difference in the cost of living will just make the more wealthy nations deflate as the emerging nations inflate.

The Community Reinvestment Act was bogus socialism, Fannie and Freddie were corrupt and bogus, but I think the internal stresses that built up came from the aforementioned global ones that nobody had a real solution about.

Expect to hear discussions about Protectinism.

http://en.wikipedia.org/wiki/Protectionism

Anyone, anyone Bueller, Bueller.

http://en.wikipedia.org/wiki/Hawley-Smoot

[Boston ITer]

http://en.wikipedia.org/wiki/South_Korean_economy

I think South Korea's focus is what the USA had lacked since the days of Digital Equipment Corporation. All and all, S Korea is a resource poor nation with respect to N Korea and especially, the US and Canada. Yet, with only 48 million persons (less than Japan) and a hi-tech focus, they're the premier electronics nation.

In contrast, we're a present day consumption-based, debtors economy which, even during the heyday of DEC and Xerox, wasn't that far from a 2010 east Asian tech power despite the fall of Big 3 Auto (1st rust belt but prior to the oil patch bust which had destroyed Houston's economy). Instead, everything was squandered, the focus had shifted to finance, and then soon, MIT was sending its normal graduates (not just the greedy ones) into quant/trading desks at Salomon and Morgan & Stanley, starting with the early 90s. There was quite a hiring spree on Wall St, during this recession for MITers, for modeling and rules based trading. They did a good job of stealing 'em from Kendall Sq startups back then.

Now, if you check last years placement, some 40% of MIT graduates went into finance or management consulting, no different than a typical Ivy League/Oxbridge/Seven Sister type of grooming program of the 1950s. I'm pretty sure that a lot of other MITers were premed (or pre Patent Law) if the Google executive track didn't pander out. So, other than persons like myself who'd been warning everyone about this trend, away from engineering and towards financial services, is everyone so surprised that we're up the creek?
[/quote]

[samz]

I feel like there has been a cultural element to the housing bubble. I remember talking to people who would brag about how much their house had appreciated in the last year -- "I just made $100K without doing anything!"

I wonder if part of the problem is that we *like* asset bubbles -- we like the idea that something we own could suddenly be worth a mint. It's seductive; the lure of easy money.

That's where strong regulation comes in: you have to have a mechanism that prevents that impulse from destroying everything.

PS (off topic) -- Just my two bits, but I think you're fooling yourself if you think the Iraq war was about anything other than securing the oil supply. I'm not judging that motive, but let's at least admit it.

[Boston ITer]

[Renting in Mass]

john p says ... we find that the torpedo that hit our bow was deregulation, but it was deregulation of capitalistic fundamentals issued by socialists through the Community Reinvestment Act.

Seriously? You actually believe that? Wow...

Here's some information for anybody tempted to believe that tripe.

[Boston ITer]

Here's a relativistic formula...

Unfettered deregulation, in many situations, leads to robber baronism.

Rampant socialism, in many situations, leads to an unproductive middle class with a corrupt chain-of-command on top.

On the other foot, general deregulation (so entrepreneurs can find their opportunities) plus targeted socialism (geared towards science and engineering work) not on keeping the masses off the payroll, equals a successful modern society.

[showgunx]

The reason people are not as mad as they should be, is because most of us are deeply in debt at this point. Therefore most of us are falsely hoping that as the government wasting tax money to bail out corperations, we will get our chance to be bailed out as well. Or at lease the economy will be stablized by this bailout or rate cutting non-senses.
Well, when the reality finally hits(in a year or two), when we realize that there is no bail out for small guys, only higher tax and loads of national debt for our children to pay off, people will be more mad.
And, after the next "shallow" recession passed(next year or so), when people found out their house price is not f**king recoving as the economy is. Indebted people then will finally realized they have been fooled again by their lenders, which lower their rate for half a point because the lenders "care" about them losing their homes. The lenders did them a "favior" to allow them continue living in their overpriced-unappricating properties for a long long time. During the mean time, Uncle Sam will TAX these suckers, based on their overpriced properties ' sales tag.
Haha, let's get most mad at that time.

[Boston ITer]

[showgunx]

[quote="Boston ITer"]

[Boston ITer]

[Guest]

[quote="Boston ITer"]