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A question for you Liberals.Follow

#1 Dec 14 2009 at 8:45 PM Rating: Decent
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After watching Obama on 60 minutes say that the Banks and Wall Street are responsible for the economic meltdown, I'm curious if you all agree with him?

If so why?

If not what do you think caused the economic problem?
#2 Dec 14 2009 at 9:38 PM Rating: Excellent
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#3 Dec 14 2009 at 9:45 PM Rating: Good
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What do you mean "you liberals"???
#4 Dec 14 2009 at 9:51 PM Rating: Decent
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No-one actually likes you.
#5 Dec 14 2009 at 10:02 PM Rating: Good
I agree with him. Banks and Wall Street were deregulated, and they proved once and for all that they can't handle that kind of freedom. Laissez-faire economics is dead.
#6 Dec 14 2009 at 10:04 PM Rating: Excellent
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catwho wrote:
I agree with him. Banks and Wall Street were deregulated, and they proved once and for all that they can't handle that kind of freedom. Laissez-faire economics is dead.


Not for those who profit off them.

You just need to blame it all on the "business cycle".
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#7 Dec 14 2009 at 10:04 PM Rating: Decent
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ThiefX wrote:
After watching Obama on 60 minutes say that the Banks and Wall Street are responsible for the economic meltdown, I'm curious if you all agree with him?

If so why?

If not what do you think caused the economic problem?


I blame Zombie Reagan and voodoo economics.
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#8 Dec 14 2009 at 10:07 PM Rating: Good
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I blame ThiefX. If he were in charge this never would have happened, but he was too lazy to run for office.


Edited, Dec 15th 2009 2:52am by Turin
#9 Dec 14 2009 at 10:18 PM Rating: Excellent
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catwho wrote:
I agree with him. Banks and Wall Street were deregulated

Which means that government shares part of the blame, although not in the GOP "The liberals made the banks give all their money to illegal alien homeless people!" sort of way.

I think Obama's answer was sufficent enough for a seven minute interview segment on 60 Minutes.
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#10 Dec 14 2009 at 10:53 PM Rating: Decent
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You Conservatives.
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we all know liberals are well adjusted american citizens who only want what's best for society. While conservatives are evil money grubbing scum who only want to sh*t on the little man and rob the world of its resources.
#11 Dec 14 2009 at 10:58 PM Rating: Decent
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It's probably not a good idea to be leveraged 30-50 to 1. I'm sure ther are consequences to that, but we may never know.
#12 Dec 14 2009 at 11:08 PM Rating: Decent
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You foreigners.
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#13 Dec 14 2009 at 11:12 PM Rating: Decent
You're just mad that you can't find a way to convince yourself the economic recession that happened during W's term is Obama's fault.

So you settle on blaming it on Clinton, right?
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#14 Dec 14 2009 at 11:15 PM Rating: Good
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I love these threads that include the words "you Liberals" in the title. It's like putting up a big giant neon sign advertising all-you-can-eat lulz.
#15 Dec 14 2009 at 11:27 PM Rating: Excellent
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Ambrya wrote:
I love these threads that include the words "you Liberals" in the title. It's like putting up a big giant neon sign advertising all-you-can-eat lulz.

I went to a tavern with some friends a few years back that had an all-you-can-eat ten-cent wings special. We went through over four hundred before they ran out. At that point we were building Inca pyramids with the bones and they also cut us off from the booze.
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publiusvarus wrote:
we all know liberals are well adjusted american citizens who only want what's best for society. While conservatives are evil money grubbing scum who only want to sh*t on the little man and rob the world of its resources.
#16 Dec 14 2009 at 11:33 PM Rating: Decent
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Omegavegeta wrote:
You're just mad that you can't find a way to convince yourself the economic recession that happened during W's term is Obama's fault.

So you settle on blaming it on Clinton, right?

There's always Nancy Pelosi!
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#17 Dec 15 2009 at 1:40 AM Rating: Excellent
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I'm not a "liberal" but I blame Wall Street, Banks, The Clinton Administration and The Bush Administration.

The blame falls on everyone in this matter. The deregulation during both Clinton and Bush's terms, the excesses of Wall Street and the banks.

Everyone except Obama, really. The meltdown happened before he was even elected, let alone when he took office. It's like Saying FDR caused the Great Depression.

Edited, Dec 15th 2009 2:47am by Driftwood
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#18 Dec 15 2009 at 2:18 AM Rating: Excellent
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ThiefX wrote:


If not what do you think caused the economic problem?


Spending more than you earn is always the cause of economic problems.

Edited, Dec 15th 2009 8:22am by paulsol
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#19 Dec 15 2009 at 4:20 AM Rating: Excellent
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Personally, I do blame Obama.

For not putting those empty FEMA camps to work once he took office. C'mon, there are Republicans everywhere! Glenn Beck gets a permanent tour!
#20 Dec 15 2009 at 4:56 AM Rating: Excellent
I blame it on the sunshine, I blame it on moonlight, I blame it on the good times...
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#21 Dec 15 2009 at 6:25 AM Rating: Good
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RedPhoenixxx wrote:
I blame it on the sunshine, I blame it on moonlight, I blame it on the good times...


Next you'll be blamin' it on the boogie.

Kids.
#22 Dec 15 2009 at 6:43 AM Rating: Excellent
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Banks and Wall St. Not the Republicans. Not the Democrats. Here's why:

Let me make an analogy. Say you set up a system of lucky dip. Each time you buy a ticket, you have one chance to pull out three things. The things will either be a car worth $10,000, or a microwave worth $100. So for each ticket you buy, you might get three cars, or two cars and a microwave, or one car and two microwaves, or three microwaves.

What do you think each ticket should be worth buying and selling for? It's a bit tricky, isn't it? The buyer would be stupid to pay $30,000. After all s/he might get 3 microwaves. And the seller would be stupid to sell each ticket for $300. After all, they might have to hand over 3 cars for that. In cases like these, people trust the credit ratings agencies to make an independent assessment, and tell people what statistically speaking, something is probably worth.

In this analogy, If you were just going to directly sell a car, the credit ratings agency would slap a AAA [*] on it, and buyers would hand over $10,000, knowing they were getting what they paid for. If you were just going to directly sell a microwave, the credit ratings agency would slap a C [**] on it, and the buyer wouldn't cough up more than $100, because they knew it was low in value.

Now to our lucky dip. In this case, the credit ratings agencies (CRA) ought to have put a medium to low rating on each ticket. Perhaps the tickets were worth about $1,000 each. Because there was a good chance you'd end up with one, two, or three microwaves. But maybe you'd get a car. so $1,000 is fair. But instead, in an incredibly morally dubious decision, the credit ratings agencies put a high rating on each lucky dip ticket. Such a high rating, that people paid $20,000-$30,000 for each ticket. The high rating gave the illusion that people could expect to receive at least two or three cars from each ticket.

In effect our lucky dip is a con job in which banks and investment companies offload microwaves to unsuspecting investors at car prices, with the collusion of CRAs. The buyers buy the microwaves at car prices, because the microwaves are disguised by being put into blind batches with cars and turned into tickets. When the buyers buy the tickets, they make their decision by the rating on the ticket to tell them what the ticket is worth, without knowing actually what the ticket really IS or what it contains.

Now to the real world. Turn the cars into AAA (prime) home loans, which banks and investors often buy from each other at high prices. Turn the microwaves into C rated (subprime) home loans, which banks and investors often buy from each other at very very low prices. The mortgage market in the USA was fairly deregulated, and the banks and investment companies came up with these Mortgage Backed Securities (lucky dip tickets). Investors wouldn't have bought batches of C rated (subprime) mortgages for much money. But because the C rated mortgages were invisibly cut up and mixed in with AAA rated mortgages, and then the RESULTANT MIX was rated at AAA, instead of at some B level, at which they were really worth, hundreds of thousands of investors paid way too much money for something. As time went along, it turned out their asset (thier MBS) wasn't worth the amount of money they paid for it. So their money went *POOF*. Lots of people's money went *POOF*. Banks' monies went *POOF*. Disaster.

Now, the fact that this con job was pulled with subprime mortgages has NOTHING to do with the people who took out these subprime mortgages in the first place. It even has nothing to do with particular unethical sales-people on commission who push-sold these subprime mortgages onto uneducated customers who couldn't read reams of fine print and didn't know that the interest rate of the mortgage was going to jump drastically after the first couple of years. Although I do despise those particular occurrences where they happened. It also has nothing to do with people who knowingly entered into mortgages that they couldn't afford, or people who thought they could afford mortgages who later failed to be responsible with their money.

Subprime mortgages are taken out, and as long as every investor can SEE that what they are buying is a subprime mortgage loan, then they will be bought and sold at the right low price, for the high risk of default on it, and nothing is going to go much wrong.

Mortgage backed securities are a form of Collatorized Debt Obligation - CDO. This con job could have been pulled with any form of CDO. Maybe one involving Black (high grade) coal mixed in with Brown (low grade) coal. Maybe one involving investments existing in a first world country mixed in with investments existing in a third world country going through a coup and a civil war. CDOs and MBSs don't have to be a con job, as long as they are rated correctly, and sold to investors who are sophisticated enough to know what kind of esoteric thing they are investing in.

We had the economic meltdown not because subprime mortgages exist, and were defaulted on, but because banks and Wall Street pulled a fast one, mixing low grade investments with high grade investments and selling them all off at high grade prices.

The fact that the MBS's in America could be unethically manipulated by greedy sellers in the way they were argues that there wasn't enough, or the right, regulation in the American financial sector. Sadly, no-one, not governments, and not private industry, seems to be able to see ahead to what is going to cause the next financial disaster. And whatever regulation goes in, people are going to want as much creative accounting possible to maximise their own returns. As usual, all one can do is diversify, diversify, diversify.


*Aaa Moody judges obligations rated Aaa to be the highest quality,[1] with the "smallest degree of risk".
**C Moody judges obligations rated C as "the lowest rated class of bonds and are typically in default,"[1] and "potential recovery values are low".

#23 Dec 15 2009 at 6:52 AM Rating: Good
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Blame Canada.
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#24 Dec 15 2009 at 7:15 AM Rating: Good
You breeders.
#25 Dec 15 2009 at 7:32 AM Rating: Good
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ThiefX wrote:
After watching Obama on 60 minutes say that the Banks and Wall Street are responsible for the economic meltdown, I'm curious if you all agree with him?

If so why?

If not what do you think caused the economic problem?
I think there were many contributing factors. However, the lending practices of the banks and the burst of the housing bubble that they created was the log that broke the camels back.

Listening to the radio this am, it sounds like the US could net up to $14billion on the monies lent out to investment banks. However, with the other bail-outs and rescue programs will still see the US taxpayer footing much of the economic recovery bill.
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#26 Dec 15 2009 at 7:43 AM Rating: Excellent
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lolgaxe wrote:
Blame Canada.
Yes, God damn them and their regulated banking industry!
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