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Property bubbles
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balor123



Joined: 08 Mar 2008
Posts: 1204

PostPosted: Mon Jan 18, 2010 4:49 pm GMT    Post subject: Property bubbles Reply with quote

Beijing's Bubblicious Prices: 27:1 Apartment to Average Income Value

We know that all bubbles can be dangerous to economic but we know that property bubbles in particular are among the most dangerous. It also seems to be a good indicator of other bubbles. Why do we allow them to happen? Why isn't anyone even talking about preventing not all bubbles (much harder) in the future but in particular housing bubbles? I'm guessing this might have something to do with current efforts to prop up the existing bubble but once that's over, will there be talk of legislation or policy changes to prevent them in the future? With the government dictating so much about housing policy, it should be possible. They could tie mortgage limits and rates to CSI for example.

I suspect that part of it might be rooted in democracy. It's just not popular to kill a bubble. Doing so will certainly lead to harm amongst a bunch of players (many who lobby) with no apparent benefit to anyone since bubbles take years to crash. Or even if there are players they aren't voters. Why should the city of Boston try to contain housing prices when the current voters are benefiting from it? In theory, the buyers should be smart enough not to jump into bubbles but we know in practice they aren't. For that matter, what can a city do to contain its housing prices other than expand? Could the state of MA add its own surcharge to loans in its state and would voters support this or are we doomed to repeat housing bubbles again in the future?

I'm bringing these questions up because the article above made me wonder why China seems to be heading down the same road. What's shocking about China is that it isn't a democracy so, especially with the US and Japan in the rear view mirror, they should be able to prevent a bubble there.
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john p



Joined: 10 Mar 2006
Posts: 1820

PostPosted: Mon Jan 18, 2010 8:34 pm GMT    Post subject: Reply with quote

If you go back to prior posts you'll notice that a lot of stuff happened in the mid 90's.

Check out the Household Debt Service Ratio:

http://pewsocialtrends.org/charts/?chartid=543&topicid=5

Check out 1995 regarding the money supply:

http://en.wikipedia.org/wiki/File:Components_of_the_United_States_money_supply2.svg

http://en.wikipedia.org/wiki/File:Us_proportionate_m3.svg

In the mid 90's through 2000 we had surplusses because people were spending their future earnings i.e. putting too much on credit cards, drawing out of home equity etc. The Clinton Bubble was about people spending money they didn't have, buying homes they couldn't afford etc. We all were psyched to see government surplusses, but it was just a bubble; it wasn't real.
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balor123



Joined: 08 Mar 2008
Posts: 1204

PostPosted: Tue Jan 19, 2010 12:29 am GMT    Post subject: Reply with quote

Wasn't familiar with that social trends website. Looks neat though. How did you find it? Google?

Anyway, the point is I don't understand why government(s) allow property values as a whole to rise. I guess maybe another part of the problem I didn't recognize is that there is no identifiable element of the government that is responsible for preventing it and I don't see much discussion about preventing them in the future, only discussions about preventing bubbles in general (a much harder problem which is why it isn't being taken seriously). But we can special case property bubbles! While the topic is hot, we can define the metrics necessary to identify property bubbles and the process for containing them. I think we have enough experience at this point to accomplish this goal.
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PostPosted: Wed Jan 20, 2010 11:05 pm GMT    Post subject: Reply with quote

It proved that everyone around the world all got fucked by ultra low interest rate. Don't belive me? Check the interest rate on regular saving account in Chinese banks. Chinese are hedging inflation by buying overpriced property.
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mpr



Joined: 06 Jun 2009
Posts: 344

PostPosted: Thu Jan 21, 2010 4:12 am GMT    Post subject: Reply with quote

john p wrote:
If you go back to prior posts you'll notice that a lot of stuff happened in the mid 90's.

Check out the Household Debt Service Ratio:

http://pewsocialtrends.org/charts/?chartid=543&topicid=5

Check out 1995 regarding the money supply:

http://en.wikipedia.org/wiki/File:Components_of_the_United_States_money_supply2.svg

http://en.wikipedia.org/wiki/File:Us_proportionate_m3.svg

In the mid 90's through 2000 we had surplusses because people were spending their future earnings i.e. putting too much on credit cards, drawing out of home equity etc. The Clinton Bubble was about people spending money they didn't have, buying homes they couldn't afford etc. We all were psyched to see government surplusses, but it was just a bubble; it wasn't real.


Well that's an interesting bit of revisionism. The reason we had surpluses
in the mid 90's to 2000 is that the economy was growing very quickly
and in particular the stock market was going up very quickly, so
the treasury was flush with capital gains receipts. Granted part of
that was another (dot com) bubble.

Your own link on the household debt service ratio refutes your claim:
During 95-2000 that ratio did increase but not much past its previous
peak in the 80's. Only after 2000 did it really take off. Note also that
in 95-2000 interest rates were relatively high, whereas after the dotcom
bust they were of course much lower so the fact that the *debt service*
ratio increased means that the level of indebtedness (debt/income)
was really out of control.

So, as is very well known, the "house as credit card" phenomenon
happened much more during Bush's term.

I suppose I'm wasting my time explaining this, since at this point
you've been consumed by talk radio memes. A shame since based
on some of your early posts you seemed like a smart guy. I used
to enjoy reading them. Oh well ...
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balor123



Joined: 08 Mar 2008
Posts: 1204

PostPosted: Thu Jan 21, 2010 4:26 am GMT    Post subject: Reply with quote

This is going to sound strange, but in my head "mpr" and "melonrightcoast" are the same person. I know they're not but it seems I can't distinguish between "m" names on this board.

In any case, I think we can all agree that the real enemy of everyone on this board is the people who won't sell us their homes for dirt cheap prices (present company excluded of course). That is, mostly the same people who simultaneously voted for Clinton AND Brown!
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john p



Joined: 10 Mar 2006
Posts: 1820

PostPosted: Thu Jan 21, 2010 5:21 am GMT    Post subject: Reply with quote

MPR likes to rag on me, but I told you guys to beware what Obama tells you, he's a politician and he won't deliver. I was RIGHT MPR, sorry, there is no denying it. Turns out, I wasn't alone..... If you listened to me you may have not wasted a year of your life being duped by a chicago-style politician. Being smart isn't being someone who pleases others ears, it's being ahead of the curve and being open to change when good information becomes clear. As always, I challenge you to find any data to undermine my position. You have never once been able to convince me, and I can honestly say, God as my judge, that I am totally open to changing my position if you can offer any good data.

What did he accomplish at the G-20? Zero. What did he accomplish at Copenhagen? Zero. Now this was the guy that was so self absorbed that he actually said that he was going to lower the ocean level.

The Clinton Era's surpluses were totally bubble money:

Baby Boomers had their nest eggs growing and they entered their peak earning years in the mid 90's. All that money was being pumped into the stock market made the P/E Ratios swell. Yesterday's earnings (the nest egg) was a surcharge to the market at the time. Salaries went up and therefore income tax revenue grew.

Because there were more dollars chasing fewer goods, we had inflation. People who weren't participating in the growth were forced to use credit cards. Many others used credit cards to buy luxuries. The chart I posted is clear that we had a spike in debt during the Clinton Era. We started to spend future earnings to pay todays bills. People thought they were WEALTHY so they became more materialistic and they thought they'd be richer and richer so they were too bullish with future prospects. Read about the Wealth Effect and think about that in context with the Clinton Era.

For capitalism to work you need filters, circuit breakers, etc. We had affordability benchmarks that were used as a filter to underwrite mortgages. The CRA was Government telling society that they didn't matter. The banks went along because they were allowed to securitize the loans and send the risk down the line. The circuit breaker didn't work because Greenspan manipulated rates which should have gone up to curb inflation. When a business needs capital, they can either issue stock or take a loan out of the bank. Because issuing stock was so attractive because of the stock market bubble, Greenspan needed to make borrowing more attractive.

Lower rates created a housing bubble. You're right, credit cards exploded once people were forced to use credit cards to meet monthly bills and not just buy luxuries. The market was already correcting and going downward steeply BEFORE Bush came into power.

What kept the market afloat for many years was the housing bubble. Because people could use their homes as ATM's via HELOC's, they could draw money out to pay their bills. The housing bubble veiled a lot of economic stress. The hot money coming in from emerging markets kept mortgage rates low. Basically as we poured our wealth to China, they had more money than they needed so they invested in our Treasuries. The second wave of capitalism not working was caused by the housing bubble and the purchase of treasuries from emerging nations. Along with the wealth we were sending over seas, went jobs. Is that Bush's fault? Is it Bush's fault that people sent their money to China? Gee, he makes a nice scapegoat, but that isn't intellectually honest to blame him for all of this.

So let's recap, during Clinton, we were spending past decade's wealth (nest eggs), future earnings in credit cards. Then comes Bush, after we drained our savings and maxed out our credit cards now we drained the value of our homes. Now that all that is gone (12 TRILLION in bubble money eaten through), Obama shows up and he wants to spend future generations money.

Now many are saying that he was put in this situation. Does that mean he can give hundreds of millions in special deals, give the Unions and the Trial Lawyers special deals? etc.

What people were tolerating was his efforts to prevent a collapse of deflation. For many on this blog's benefit, I wanted a market correction in housing, but I feared it happening too quickly because it would freeze the markets, as it did in Sept. 2008. I thought a responsible approach was to land the plane without creating too much of a moral hazard and a reward or bailout for too much risk taking.

We couldn't engage in real discussions about the real cause of our economic issues i.e. globalization and our consumerism sending wealth over seas and also the jobs because Obama was successful making Bush a scapegoat.

When Obama gave us that scapegoat, it provided cover for Fannie Mae and Freddie Mac, the CRA, the Unions, etc. and anyone who wanted to investigate the real causes was attacked and framed a right wing nutcase. So that was bad enough last year, now we have to see the Democrats giving special deals to their friends. I mean I don't know how people can still say that Obama didn't disappoint them. I don't know any promise he's kept.

He totally lied to you and somehow you're so twisted up in your loyalty, you're attacking the guy who warned you that he was a politician and was lying to you. Are you mad at me that I was right? Are you mad that I remind you that you were wrong? In the end, the guy who looks out for you is the guy who gives you the truth.

You can find your truth from Obama on C-SPAN with the Health Care debate.
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Renting in Mass



Joined: 26 Jun 2008
Posts: 381
Location: In a house I bought in December 2011

PostPosted: Thu Jan 21, 2010 11:56 am GMT    Post subject: Reply with quote

Quote:
For capitalism to work you need filters, circuit breakers, etc.


I think the word you're looking for is regulation.

Quote:
He totally lied to you and somehow you're so twisted up in your loyalty, you're attacking the guy who warned you that he was a politician and was lying to you.


Thanks for your concern.
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Boston ITer



Joined: 11 Jan 2010
Posts: 269

PostPosted: Thu Jan 21, 2010 2:56 pm GMT    Post subject: Reply with quote

Quote:
We couldn't engage in real discussions about the real cause of our economic issues i.e. globalization and our consumerism sending wealth over seas



John, there was never a discussion about the cause/effect of our issues. I think the original NSF lie in 1988, about the impending shortage of scientists/engineers, was one of them. Slowly, instead of building a nation where those, w/ difficult applied sciences education, could prosper, came a nation of MBAs, double talk, and spin maesters. Well, think about it... twenty years of that, 1988 to 2008 and lo and behold, we have crash which "no one saw coming" and the exodus of well paying jobs from our shores.

I just don't buy it. The signs were out there for years. My wiser colleagues had left for MBA, law, health care, and then stopped their cousins, children, etc from studying sciences outside of premed type of activities. Law, Medicine, and even "Finance" are nontradeable goods and services and that's the refuge of our honors graduates.
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john p



Joined: 10 Mar 2006
Posts: 1820

PostPosted: Thu Jan 21, 2010 5:09 pm GMT    Post subject: Reply with quote

Here's another way to look at it:

Take a Democratic Run State and compare it to the Republican run Federal Government:

http://www.census.gov/govs/www/apes.html

you can select the date on the upper right and either choose federal or choose a state.

I look at the total amount of FTE's or full time equivalents and the total salary amounts.

Federal Government: from 1998 to 2008 had salaries grow 68% and the total FTE's reduce slightly.

Massachusetts: same period, had salaries grow 50% and FTE's grew 15%

In comparison, Massachusetts increased significantly more employees than the Federal Government, but must be paying them less. The Federal Government hasn't added jobs, but the jobs they have are making a lot more money. We also had Republicans as Governors, Mitt Romney, Paul Cellucci, etc. who had a lot of control in State Government.

Since Deval Patrick, we have increased almost 6,500 jobs and a whopping $50 Million (total March Pay).


Now lets compare this to California:

California had wages grow 85% in the same period that Massachusetts grew 50% and the Federal Government grew 68%.

Now California didn't fight a War on Terror. Massachusetts is losing population.

Can you imagine if the "Hole" that Bush dug was dug by a Democrat? It would have been much worse.

I am, however, concerned about the skyrocketing pay of Federal Government employees.....


These numbers above are basically administration, executive restraint.

The real numbers to consider when critizing Bush is the difference between Discretionary Spending (where a government has choices) and Entitlement Spending (mandatory i.e. Medicare, Social Security, etc.)\

http://www.heritage.org/research/features/budgetChartbook/Mandatory-Spending-Increased-Faster-Than-Discretionary-Spending.aspx

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

Now this is the chart that I would say supports MPR's philosophy:

http://www.heritage.org/research/features/budgetChartbook/Federal-Spending-Growing-Faster-Than-Federal-Revenue.aspx

I agree with his logic that spending less during the Clinton years absolutely helped, but if you look at 1992 to 2000 as where we ought to draw our wisdom from, the spending went down and the revenue went up; if you subscribe to that philosophy how can you look at 2009 and say that this is going the right direction?

My point is that it was great that Clinton slowed down spending, it was just that we saw a big bubble in revenue. Revenue, again, is income tax dollars. We had an income bubble because we were spending prior decades wealth and future decades wealth. The policies that were put into place accelerated things to unsustainable levels and when people tried to come in and slow things down they met resistance. I mean an engine has an RPM level that needs to be geared and properly monitored in order to get the most efficient work from it. The CRA was great until the RPM's redlined. Fannie Mae and Freddie Mac shouldn't have been purchasing Subprime Loans the way they did. Just like environmental laws, we understand what is a pollutant and what isn't and people who tried to talk about the risky properties of subprime loans were deemed racist because if you said that subprime loans were risky you were characterized as saying that "subprime" was code for minorities and if you wanted to talk about the risk of subprime loans you were really trying to keep minorities from having the American Dream. Here is proof:

http://www.youtube.com/watch?v=_MGT_cSi7Rs

When you see the Republicans trying to ask for regulations, notice how they are attacked. Those that fought them made Fannie Mae and Freddie Mac out to be sacred cows and put this force field of racism around them so that if anyone tried to tune the engine to healthy amounts of risk to the system, they were attacked and framed as racist. This is basically playing the victim aggressively.

2008 was tough for me because I had done enough research to know that the people who caused the problems controlled the message and not only lived to fight another day, but increased spending so irresponsibly it is unbelieveable. Today, the bluest of the blue States understands the enormity of the problem and to think that some people still don't get it is amazing.
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balor123



Joined: 08 Mar 2008
Posts: 1204

PostPosted: Thu Jan 21, 2010 5:45 pm GMT    Post subject: Reply with quote

Boston ITer wrote:

I just don't buy it. The signs were out there for years. My wiser colleagues had left for MBA, law, health care, and then stopped their cousins, children, etc from studying sciences outside of premed type of activities. Law, Medicine, and even "Finance" are nontradeable goods and services and that's the refuge of our honors graduates.


And of those who stay in the sciences where are they going? Over the past decade, most of them went to internet startups. While there's some value to websites like Facebook, for the most part most of these business, even today, are money losing ventures that will never make money outside of an acquisition. Even those that make money are largely ad driven and ad money is largely driven by consumerism. I think I remember reading in 2005 that 1/3 of Google's ad revenue came from mortgage companies. Add in legal services, pharma companies, etc and it's even larger. My point is, we've even redeployed our scientists and engineers to servicing these industries.

As a EE I can tell you that one substantial impact of this trend is that engineers don't want to work on power systems anymore. Why become a power EE making, even in Boston, maybe $50k - $75k, go through a much harder curriculum, when you can learn to program and even without a college degree hit the lottery with pretty good odds at an internet startup? The result is that our power grid is old, falling apart, and stupid. The cost to build the power grid is 6x that of the internet and IMO, while the internet is certainly valuable, it doesn't compare to the grid. Only thanks to stimulus funding is this problem even getting some attention but the pay still isn't there.
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john p



Joined: 10 Mar 2006
Posts: 1820

PostPosted: Thu Jan 21, 2010 5:52 pm GMT    Post subject: Reply with quote

Hey Renting:

Socrates must have been a Concerned Troll.

This notion is hilarious. It reminds me of the Boston Globe editorial writer who wanted to eliminate the "Comments" section on the boston.com website. This elite didn't like commoners blowing holes in his flawed reason or worse citing factual data to prove that he wasn't on solid footing.

The week before the election, the Boston Globe had a poll that said that that Coakley was leading Brown by 15 points. 15 freaking points. The weekend prior to the election 5 out of 6 polls showed Brown ahead by an average of 4-5 points (which proved to be accurate). The Globe wrote their article based only on a left leaning poll that had it as a dead heat.

http://www.boston.com/news/local/massachusetts/articles/2010/01/10/senate_poll_coakley_up_15_points/

read the comments section:

One of the first ones has some liberal ragging on Fox News because Fox had Coakley behind Brown.

Quote:
syguy wrote:
it's amazing. Fox news once reputed to be a news organization, has Martha Coakley somewhat behind her opponentin the race for Kennedys Senate seat.The Boston Globe has her 15 points ahead. This leads me to suspect the polling methods of Fox news. There is little with them which is not partisan in the extreme and they are little more than the propaganda arm of the Republican Party. what a disgustingly dishonest organization. Rupert Murdoch is one of the principal reasons why journalism has fallen to such low esteem. The truth does not enter into their reporting as they repeatedly air phony interviews and predetermined answers to questions and topics. A press that is not free and fair is a danger to our nation.


82 people recommended this post Very Happy

Fox News was right, Brown was slightly ahead and BROWN WON. Note how this commenter attacked Fox News, Rupert Murdoch and says that "the truth does not enter into their reporting..." Again, the Globe had Coakley AHEAD 15 FREAKING POINTS!!! And this bonehead who was duped by the Globe most likely still spews hatred towards Fox News that actually gave him TRUTH.


That comment troll stuff is bullshit. Thank God we have the Internet so we don't have the provincially controlled media filtering out data and misleading people. Concerned trolls might be concerned citizens who are trying to do their due dilligence as citizens.[/quote]
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Renting in Mass



Joined: 26 Jun 2008
Posts: 381
Location: In a house I bought in December 2011

PostPosted: Thu Jan 21, 2010 7:07 pm GMT    Post subject: Reply with quote

Quote:
When you see the Republicans trying to ask for regulations...


Yeah, if there's one thing Republicans are know for, it's a burning desire to regulate Rolling Eyes
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Boston ITer



Joined: 11 Jan 2010
Posts: 269

PostPosted: Thu Jan 21, 2010 7:14 pm GMT    Post subject: Reply with quote

Quote:
As a EE I can tell you that one substantial impact of this trend is that engineers don't want to work on power systems anymore. Why become a power EE making, even in Boston, maybe $50k - $75k, go through a much harder curriculum, when you can learn to program and even without a college degree hit the lottery with pretty good odds at an internet startup?


I think this has been a continuous phenomena for various sections of engineering. How many trained & experienced nuclear engineers do we have, outside of the Navy?

All and all, when a nurse anesthesiologist is nearly guaranteed a +$110K/yr salary, if I were studying "medical" physics, how much effort would it be to drop the MS program (since the kinematics of radiopharmas don't pay the bills), get accepted to a nurse anesthesiology program, and find myself with a job down the road?

Scientist and engineers may need to accept the dictum and that's if one's not a member of the military-industrial complex, that one shouldn't do science w/o first having a trust fund in place. That'll set the record straight. Perhaps the Army Corp of Engineers can hire the remaining power engineers and keep 'em on the payroll for life so that the experience isn't lost.
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john p



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PostPosted: Thu Jan 21, 2010 8:41 pm GMT    Post subject: Reply with quote

Hey Renting:

The claim that Republicans don't want regulation is true in many industries and it bothers the hell out of me. If you ever saw the documentary Food Inc. someone like you would need to be restrained (as did I).

Anyway I don't know if you ever heard of this:

http://www.govtrack.us/congress/record.xpd?id=109-s20060525-16

http://www.govtrack.us/congress/bill.xpd?bill=s109-190

Note all the cosponsors who tried to regulate Fannie and Freddie all lost elections. Imagine that, one of the most toxic things to poison our economy, Subprime Loans and a huge player Fannie and Freddie defeat reform regulation. Their CEO, Franklin Raines falsifies data to give himself more bonuses.

from above:

Quote:
The OFHEO report also states that Fannie Mae used its political power to lobby Congress in an effort to interfere with the regulator's examination of the company's accounting problems. This report comes some weeks after Freddie Mac paid a record $3.8 million fine in a settlement with the Federal Election Commission and restated lobbying disclosure reports from 2004 to 2005. These are entities that have demonstrated over and over again that they are deeply in need of reform.



http://www.foxnews.com/story/0,2933,423701,00.html

from above:

Quote:
A group called the Center for Responsive Politics keeps track of which politicians get Fannie and Freddie political contributions. The top three U.S. senators getting big Fannie and Freddie political bucks were Democrats and No. 2 is Sen. Barack Obama.


The others rounding out the top three were John Kerry and Chris Dodd.

http://www.wnd.com/index.php?pageId=75586

So think about the propaganda that you've been fed. The Democratic Media tell you that the Republicans fight regulation while the worst deregulation that caused our most serious problems were in fact deregulated by DEMOCRATS.

CRA allowed the securitization of Subprime Loans, that was bad, that was the Democrats.

The repeal of Glass Steagall (Graham Leachy) which allowed the comingling of Commercial and Investment Banks was signed by Bill Clinton.

Phil Graham, McCain's economic advisor, who sponsored this Bill is a primary reason why Obama won. At the time, Clinton was going full steam ahead in trying to capture global market share and he wanted our banks to be as big and badass as any others.

NAFTA signed by Bill Clinton. This was good for globalization and getting cheap stuff, but it needed some basic regulatory consistency between the countries so those in the US wasn't at a disadvantage by having more regulations than others, in which case you have regulatory arbitrage and polluters and exploiters just choose to do business in other nations that allow it. When you buy a product from China you too support deregulation because you've sent your wealth to a deregulated nation...

When you think about this mess, think about it this way: The subprime lending was the toxic flammable source. The Securitization of Subprime Loans made the nature not only toxic, but portable and transferrable because risk could be sent down the line to someone else. The Graham Leachy Bill eliminated the firewall between commercial and investment banks, the Credit Default Swaps magnified the flammability of the toxic Subprime Loans. The housing bubble popping created the "Credit Event" that triggered all these payments all at once. This is September 2008. It is a whole chain of events, both Democrats and Republican POLITICIANS messed up. McCain did more to try to reform the situation than Obama, who was getting bought off by the corrupt system. McCain's friend Phil Graham sunk him and now Obama, Dodd, Frank, Summers, etc. are in charge of fixing the problem. It is amazing the audacity of how people who were responsible learn that instead of asking for forgiveness, they know that they can manipulate the majority and grab more power in the process. You would think that the person who got the second most amount of politicial graft from the corrupt Fannie Mae and Freddie Mac would have to resign in shame. This guy became President.

http://www.thefreemanonline.org/featured/did-deregulated-derivatives-cause-the-financial-crisis/

from above:

Quote:
The poster child for the (alleged) failure of the deregulated financial sector is the market for credit default swaps (CDSs). These contracts are traded over the counter, so no one knows exactly how much exposure they contain, but estimates place the worldwide notional value of all CDSs in the neighborhood of $50 trillion at the end of 2007. It was largely because of its issuance of CDSs that the giant insurer AIG needed a government bailout. The AIG episode showed that the financial panic was not limited to firms that foolishly overinvested in mortgage-backed securities but also could spread to those companies that had issued credit default swaps on the bonds of these now at-risk firms.



http://partners.nytimes.com/library/financial/102399banks-congress.html

from above regarding the Graham Leachy Bill (this is 1999):

Quote:
Treasury Secretary Lawrence H. Summers said in an interview, "At the end of the 20th century, we will at last be replacing an archaic set of restrictions with a legislative foundation for a 21st-century financial system." The measure, he added, "would provide significant benefits to the national economy."


So this is rich, Democrats claim that it is deregulation and the Liberals who claim this choose Lawrence Summers (Harvard's Lawerence Summers) the guy who promoted the repeal of Glass Steagall....

also from above:

Quote:
Small banks with satisfactory or excellent track records of lending to the underserved would be reviewed less frequently under the Community Reinvestment Act


Don't let anyone fool you, negotiations with the CRA was part of the repeal of Glass Steagall. The political hacks wanted their trough to let the liberals eat from and Wall Street wanted their new massive infrastructure where they could milk us and create a churning turbulence so they could get transaction fees. There is no mystery as to why Wall Street gave 3 times as much to Obama as McCain.

Even now, Obama is going to use Wall Street as a scapegoat to distract against his loss with Brown's victory. Behind the scenes, nothing is being done to bring the bad guys in. Geithner and Dodd fought for the bonuses and Summers wanted Graham Leachy.

Do you homework please, the fox is guarding the henhouse. It is no different from when the National Realtors Association was controlling the message about Real Estate conditions during the bubble. I am sorry if I"m down on Obama but ungrounded optimism creates bubbles and Obama was the poster child for ungrounded optimism.
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