FOIST!!!!

Milton Friedman lives!

Nicole,

I'm glad you're keeping us updated on these C&Ls, but the totality of today's posts is starting to make me physically ill. I think I need to go home and lay down.

Oh wait, I forgot - I can't afford to be sick. Must . . keep . . working . .

Boy, is he right. I didn't even see all these abandoned houses in my neighborhood until Hillary and Obama told me they were there. Then I looked out, and there they were on just about every street, two or three sometimes per block. We didn't even notice that gas was creeping up to over three dollars a gallon until Hillary and Obama told us about it. Yeah, he's right, it's all their fault.

[Deleted. Off topic-Sitemonitor]

It's good I'm not the only one broke.

yes uncontrolled capitalism is as bad as you can get because you have unchecked greed. If you have more then you can ever spend why do you continue to make more?
I mean really what good does it do?
Will it make you healthier or make you live longer?
Can it make you happy?
Can you take it with you?
Wouldn't you be better off spending time with your children and taking care of your family.
When it's all said and done would you not be and everyone around you be better off with a more relaxed pace and a willingness to help others versus spending all your time trying to pile up money for monies sake?

Unchecked capitalism is bad...wow.

I just love the way that we've managed to have torture, habeas corpus, open racism, spying on our own people, etc. trotted out in front of us as part of the "debate." Like, hmmmm, if we don't bother to understand the historical significance of these things, we might be able to dismiss them as quaint and start over, in our new, perfect world. Trust the fat old white man in the black suit...he knows what is best.

The Idiocracy is alive and well in 2008, thanks to the GOP!

P.S. The Euro is trading at 1.51 today! Wheeeeeeeee!

ConcernedCanuck @ 6:

Once again, he's partially correct. Markets are affected negatively when the threat of a Dem new leader is real. They would much rather have a pro-business government. Same here. Canada's markets went nuts when they thought the Conservatives were coming to power because they favour business tax breaks over citizens. Not a real stretch of the imagination.
What's killing the economy? Easy. Overspending and not enough tax to compensate for it. How much does anyone want to bet that the next President (Dem) will raise taxes? Whoever it is, has to because of debt, and that will hurt the economy even more.

Ah Canuck, my friend, I agree with most of your post, except the last part...Taxes will be raised undoubtedly, buy at the same time, all this insane spending that these neo-cons have been doing...that will be stopped (hopefully) not long after the next prez is sworn in...unless...gawd ferbid...McBain is handed the office by his corporate overlords.
Sure, we're in for hard times, but we'll survive, and (again, hopefully) we'll be smarter and stronger for it.

"Murder is the logical extension of Capitalism." - Charlie Chaplin

So it’s true then. People like Sam Zell, and his ilk, believe that all one has to do is say something, simply utter the words, and it will magically come true. That’s odd. I have a sudden urge for a pony.

Roket @ 21:

So it’s true then. People like Sam Zell, and his ilk, believe that all one has to do is say something, simply utter the words, and it will magically come true. That’s odd. I have a sudden urge for a pony.

then you must keep digging

Has anyone else read the comments on that linked Zell article? They make the comments here look like C&L is nothing but PhD's & the money watchers are high school dropouts.

Talk about zombie republicans...

OIL: $102.71/Barrel
Gas: $3.50/Gallon

US Economy: Tanking

Punishment for supoporting a Democrat for president: Higher Prices!

The ultimate capitalist economy is where corruption is rampant.

Corruption arose not due to layers and layers of bureaucracy. Corruption arose because there is lack of bureaucracy, lack of controls, and when govt faces tremendous backlogs and is stretched too thin.

This is contrary to popular beliefs and teachings from US educated MBA professors. But that is reality.

RayC @ 30:

I am wondering if sometime between 70 and 100 years we need a devastating and painful economic meltdown. The private sector's failures will be pointed out for all to see. The government's ability respond being hampered at every turn and weakened because of privatization and deregulation will be exposed. Then it will take another 70 to 100 years for the population forget the lessons and it can start all over again.

CCS - Cyclical Collective Stupidity . . just a thought

sooooo... thousands of people were doing ok financially, but after hearing Hillary and Obama say the economy is bad they suddenly decided to not pay their morgage?

and the dollar was worth plenty, but when O and H spoke out it suddenly dropped to half its value? Damn!! who needs wmd's or sanctions when we can just launch Obama and Hillary to make speaches to destroy economies?

Well, now that internet gossip blogger Matt Drudge has put Prince Harry's life and the lives of his entire unit in danger, can the Brits charge him with something? Can they toss Drudge in prison where he can be anally violated even more than he is in his daily social life?

Actually, the whole cause of this goes back to the Community Reinvestment Act (CRA) of 1977, encacted under Jimmy Carter and amended in 1997 under Bill Clinton.
"The law provides a framework for depository institutions and community organizations to work together to promote the availability of credit and other banking services to underserved communities. Under its impetus, banks and thrifts have opened new branches, provided expanded services, adopted more flexible credit underwriting standards, and made substantial commitments to state and local governments or community development organizations to increase lending to underserved segments of local economies and populations." You can try to pin this on republicans but it just isn't so.
http://www.occ.treas.gov/crainfo.htm

The problem is that Republicans are quick to point to capitalism and the free market, until a big company fails and then they are the first to violate capitalism and the free market by proposing bail outs.

Either you are for the free market and its consequences or not. The problem with Republicans is that they want an exception to free market consequences. This just leads to more abuse because companies know they can get exemptions, credits, regulatory change, or outright bailouts. Democrats want to rob Peter (big bad evil corporations) to pay Paul (some smuck who won't even work but could). Again there have to be consequences to being a lazy ass, or people will be lazy and beg the government for what they should get on their own.

I'd argue that much, though not all, problems with big bad corporations is that they are in bed with government to strong arm outcomes and exceptions to the free market *JUST LIKE CITIZENS DO*.

We obviously need some kind of regulation here and there, but it's highly debatable if this should be a government entity. It's highly debatable if we should have as much regulation as we do. Government is expensive and aggressive. Government steals money through taxes and fines, under threat of imprisonment. That is a violent and aggressive relationship. It's inherently adversarial. The founding fathers had it exactly right, limited government, limited power. If you don't like what a company is doing, stop doing business with it instead of bellyaching to the government.

The more power we give to government against companies, the more we empower government to help companies against citizens when there isn't explicit regulation preventing it. And this is how things have come to how they are now. This is how conservatives and liberals consistently get this issue completely wrong and consistently encourage an ever larger government, with increasing unfairness to both companies and its citizens.

"Here’s what bugs me to no end. I’m a capitalist through and through. I love buying and selling stuff. And frankly, I think most people do too.
But here’s the problem. You have to have rules. Unchecked capitalism is a bad idea. That’s what we’ve had. And it has failed."
Um, you're not a capitalist through and through because you love buying and selling stuff. You could buy and sell stuff in another kind of economy as well, like socialism for instance. You'd be a capitalist if you owned a factory, for example, and exploited other people for the their labor. If you do that, you can say that you're a capitalist through and through. And the reason capitalism fails isn't because the federal reserve doesn't regulate enough, but because it is a system predicated on exploitation that intrinsically requires poverty and war. That's why it fails.

greg white @ 40:

The older generation Republican aristocracy always wanted to undo the New Deal. Now it looks like they've succeeded in undoing everything.

What's that crashing sound?

Sigh.....really?

liberalNmoderation @ 17:

ConcernedCanuck @ 6:

Once again, he's partially correct. Markets are affected negatively when the threat of a Dem new leader is real. They would much rather have a pro-business government. Same here. Canada's markets went nuts when they thought the Conservatives were coming to power because they favour business tax breaks over citizens. Not a real stretch of the imagination.
What's killing the economy? Easy. Overspending and not enough tax to compensate for it. How much does anyone want to bet that the next President (Dem) will raise taxes? Whoever it is, has to because of debt, and that will hurt the economy even more.

Ah Canuck, my friend, I agree with most of your post, except the last part...Taxes will be raised undoubtedly, buy at the same time, all this insane spending that these neo-cons have been doing...that will be stopped (hopefully) not long after the next prez is sworn in...unless...gawd ferbid...McBain is handed the office by his corporate overlords.
Sure, we're in for hard times, but we'll survive, and (again, hopefully) we'll be smarter and stronger for it.

I can't see the spending getting reined in too much unless they take it from social programs. They can't and won't cut financing the military, and that my friend is the main target of US tax dollars. I actually wonder why either Obama or Hillary would want to be Prez. One term presidencies are soon forgot, and that is what the economy will do to whoever is Prez. History always repeats.

biglib @ 38:

So, it's not so much "regulation", "de-regulation", "taxation", "republicans", "capitalism" and other political issues that are continuously mentioned that are the root of our economic woes, it's the fact that we lack any sort of truly stable currency on which to build a foundation. It's a central bank run amok, and a nation that is so ignorant of it, that is destroying us.

The Fed is made up of private, for-profit, member banks. That's what it is. So I agree with your general complaint about the Fed, but it is absolutely about taxation, republicans and capitalism. Those banks wanted this capability, and it suited the government very well. In collusion with banks, they have all defrauded us from a valuable currency. A dollar is now worth less than a penny was at the start of the 20th century. They continue to defraud us through inflation, which we are taxed on unfairly, and the government even lies about the rate of inflation which is generally considered to be a little higher than U9 now running around something like 9%.

As the Fed continues to make the problem worse, by flooding the market with too much supply of money and cheap credit. The problem is too much spending, too little savings, and they have encouraged that.

And you're right, people don't know squat. Both parties just gave away almost $200 billion dollars in meaningless credits that the people are "ho hum but hey I'll take $600 from the government" not realizing that it's being borrowed.

At this point there's really no option but monetizing the debt. We'll get to see just exactly how worthless the fiat dollar really is when that happens. The necessary correction is going to be a rude awakening for people, many of whom did not buy in or benefit from all of these bad decisions.

chrismurphy @ 47:

biglib @ 38:

So, it's not so much "regulation", "de-regulation", "taxation", "republicans", "capitalism" and other political issues that are continuously mentioned that are the root of our economic woes, it's the fact that we lack any sort of truly stable currency on which to build a foundation. It's a central bank run amok, and a nation that is so ignorant of it, that is destroying us.

The Fed is made up of private, for-profit, member banks. That's what it is. So I agree with your general complaint about the Fed, but it is absolutely about taxation, republicans and capitalism. Those banks wanted this capability, and it suited the government very well. In collusion with banks, they have all defrauded us from a valuable currency. A dollar is now worth less than a penny was at the start of the 20th century. They continue to defraud us through inflation, which we are taxed on unfairly, and the government even lies about the rate of inflation which is generally considered to be a little higher than U9 now running around something like 9%.

As the Fed continues to make the problem worse, by flooding the market with too much supply of money and cheap credit. The problem is too much spending, too little savings, and they have encouraged that.

And you're right, people don't know squat. Both parties just gave away almost $200 billion dollars in meaningless credits that the people are "ho hum but hey I'll take $600 from the government" not realizing that it's being borrowed.

At this point there's really no option but monetizing the debt. We'll get to see just exactly how worthless the fiat dollar really is when that happens. The necessary correction is going to be a rude awakening for people, many of whom did not buy in or benefit from all of these bad decisions.

" Fed, but it is absolutely about taxation, republicans and capitalism"

I disagree, I think that's just noise that distracts us from the real issue, this problem of collusion between banks and government started long before 1913, the Fed is just a continuation of what began in europe and the elites who owned those banks were lusting after the economic control of the united States long before the current greedy crop of politicians took office.

NoGWBpolicyleftinplace @ 48:

ConcernedCanuck @ 6:

Once again, he's partially correct. Markets are affected negatively when the threat of a Dem new leader is real. They would much rather have a pro-business government. Same here. Canada's markets went nuts when they thought the Conservatives were coming to power because they favour business tax breaks over citizens. Not a real stretch of the imagination.
What's killing the economy? Easy. Overspending and not enough tax to compensate for it. How much does anyone want to bet that the next President (Dem) will raise taxes? Whoever it is, has to because of debt, and that will hurt the economy even more.

Not if we tax the rich, and take back the trillions from Bush's tax cuts; 88% of which went to $300,000 a year and up folks.

This will do nothing to help us, dig a little deeper. Even if we raised taxes on all the "rich" people, we couldn't possibly keep pace with even the interest payments on the debt we're incurring every year to pay for our massive empire. We're all slaves on this sinking ship, and we don't even have a bucket.

corporations
oops!

Could it be there's another agenda orchestrated by the global government/power elite that operates a level above the governance of regular humans?

Think now. Think hard.

Hank “Redcoat” Paulson turn on his pals today.

“I’m seeing a series of ideas suggested involving major government intervention in the housing market, and these things are usually presented or sold as a way of helping homeowners stay in their homes,” Mr. Paulson said. “Then when you look at them more carefully what they really amount to is a bailout for financial institutions or Wall Street.”

RayC @ 58:

Mark @ 56:

Along the lines of this article, the USA had many more great depressions than the one we hear about in the 30s. In fact, the USA had a great depression nearly every 20-25 years going back to 1776.

They stopped in the the 30s for one reason only. Government intervention in the marketplace.

You attenutate that regulation with 30 years of deregulation and you set yourself up for a return to the 19th century. And for the life of me I cannot understand how people can continue to vote for the people who want to repeal the 20th century.

Because gays might get married.

The whole gay or not too be gay issue is just another cog used to create divisions between peoples different lifestyles, religion, beliefs, culture...this way if the media and public are concentrating on issues such as this and other racism then we are not concentrating on the bigger issues affecting us, such as war, government corruption, lack of work, sky high inflation, etc, etc, etc...just another cog in the racism wheel and we the people fall for it hook line and sinker.

chris @ 60:

The Market will self correct, the companies will loose billions the home owners will loose there home and everyone will learn there lesson. We don't need regulation from some senator who does not know his ass from his elbow.. Free markets work unless your stupid then they punish you, so don't do stupid things like get a home you can not afford!

Your a fu*cking idiot. Wall Street, speculators, lenders are the cause of this $7trillion dollar fiasco.

The losses can't be hidden anymore.

Mark @ 56:

Along the lines of this article, the USA had many more great depressions than the one we hear about in the 30s. In fact, the USA had a great depression nearly every 20-25 years going back to 1776.

They stopped in the the 30s for one reason only. Government intervention in the marketplace.

You attenutate that regulation with 30 years of deregulation and you set yourself up for a return to the 19th century. And for the life of me I cannot understand how people can continue to vote for the people who want to repeal the 20th century.

The answer is simple... Reagan and the conservatives wanted to know how to get the American People to turn against labor and become pro-business. In the 70's and early 80's only about 5% of the population owned stock.

Reagan's answer was to introduce the 401K for retirement and shifted the nation away from cash based retirement funds to stock based retirement funds.

Virtually over night you had a nation that now saw the corporations as the key to their retirements... until you saw Enron, Tyco, Global crossings and the rest of them bilking people out of hundreds of millions of dollars. Those scandals pulled back the curtain and some people began to realize that "the little guy" is just cannon fodder for the big sharks and their "insider trading" and stock price inflation scams. (asset inflation by another name.)

This is also true in the subprime scandal because it was a "Ponzi Scheme", where banks were issuing mortgages and then bundling the debt into CDOs, collateralized Debt Obligations... and selling them as a commodity on the international market.

The problem came about because they would bundle these mortgages and loans into bundles, mark them up for their profit and sell them. The new purchaser would take several of these bundles, put them together and re-bundle them and mark them up again. This would happen over and over until the price of the CDOs exceeded the value of the properties and loans within them... sometimes with a 300 to 1 ratio of real dollar value to inflated price estimations.

Insider trading also reared its heads and speculators within these companies selling these CDOs knew that the hedge funds would fail with the degree of asset inflation that they were doing and on the side... began "buying them short" privately. The practice is actually betting that the stock will fail.

The FBI and SEC have set up specific task forces to investigate this and the first two indictments were handed down this week:

FBI investigates 14 firms in subprime crackdown

WASHINGTON (Reuters) - The FBI has opened criminal investigations into 14 corporations as part of a crackdown on improper subprime lending, agency officials said on Tuesday.

FBI officials told reporters the probes involved potential violations, including accounting fraud and insider trading.

They did not identify the companies. But the probes reached across the industry to include developers, subprime lenders, companies that securitized loans and investment banks that held them, said Neil Power, head of the FBI's economic crimes unit.
"Currently there are ... 14 investigations, inquiries open right now," he said.
Cases involving individual loans have also risen sharply in a crackdown on subprime lending irregularities, officials said.

"We anticipate in the next year that another wave of adjustable rate mortgages will reset and with that we anticipate that the mortgage corporate fraud potential cases to increase," said Sharon Ormsby, head of the FBI's financial crimes section.

The FBI is investigating the corporate cases in parallel with the Securities and Exchange Commission, which has opened about three dozen civil investigations into the subprime market collapse. Some of the probes overlap, an official said.

Targets of the SEC probe include Swiss bank UBS AG and U.S investment banks Morgan Stanley, Merrill Lynch, Bear Stearns, as well as bond insurer MBIA.

The SEC, which has formed an internal subprime mortgage task force, is looking at how financial firms priced mortgage-based securities and whether they should have told investors earlier about the declining value of those securities.

The U.S. attorney in Brooklyn, New York and the FBI earlier launched a criminal investigation into two mortgage-related hedge funds at Bear Stearns that collapsed during the summer.

There are also state investigations.

The corporate investigations are part of an FBI crackdown on improper subprime lending, which also includes a focus on fraud in loan origination.
The agency has about 1,200 active cases, up 40 percent from 2006, with 321 criminal complaints or indictments, officials said.

"Subprime loans are decreasing but ... suspicions of mortgage fraud are increasing," Ormsby said.

Some of the loan origination cases are spurred by individuals lying to qualify for mortgages, but about 80 percent of the cases involved fraud for profit, Power said.
Particular problem areas included California, Texas, Arizona, Florida, and the Midwest, officials said.

http://news.yahoo.com/s/nm/20080129/ts_nm/subprime_crime_dc

L.A. Confidential @ 57:

Hank “Redcoat” Paulson turn on his pals today.

“I’m seeing a series of ideas suggested involving major government intervention in the housing market, and these things are usually presented or sold as a way of helping homeowners stay in their homes,” Mr. Paulson said. “Then when you look at them more carefully what they really amount to is a bailout for financial institutions or Wall Street.”

That's because as U.S. Treasurer, he has to go out and sell U.S. bonds to foreign investors. The perception that new U.S. bonds are bailing out wall street stupidity is not a good sales pitch.

unfrozencaveman @ 65:

L.A. Confidential @ 57:

Hank “Redcoat” Paulson turn on his pals today.

“I’m seeing a series of ideas suggested involving major government intervention in the housing market, and these things are usually presented or sold as a way of helping homeowners stay in their homes,” Mr. Paulson said. “Then when you look at them more carefully what they really amount to is a bailout for financial institutions or Wall Street.”

That's because as U.S. Treasurer, he has to go out and sell U.S. bonds to foreign investors. The perception that new U.S. bonds are bailing out wall street stupidity is not a good sales pitch.

Everyone with any basic knowledge of economics-trading knows it's worthless paper.

It's all a matter of how long Bush Co can keep this mirage going. April 15 will be the last cash infusion these clowns are going to get.

chris @ 60:

The Market will self correct, the companies will loose billions the home owners will loose there home and everyone will learn there lesson. We don't need regulation from some senator who does not know his ass from his elbow.. Free markets work unless your stupid then they punish you, so don't do stupid things like get a home you can not afford!

Imagine your doctors telling you that you have ED, and you believe him, and you bought all the drugs the doctors recommend.
Only to find out years later, that you did not actually have ED, that the doctors are pushing the ED pill on you so that they can earn the commission selling the ED pills.
But by the time you find out, you now have chronic fatigue syndrome because of that ED pills, you gulped from the experts advice. How would you feel Chris?

The doctors in the above story, are the legitimate bank lenders, and Wall Street pushing their brand new spanking home and low mortgage payment to all, the "ED" pill. And everywhere you talk to, the banks/lenders tell the same story. This "ED" pill will work wonders for you.

Free markets, yes, definitely. Gullible public, yes. No control, most definitely. The experts have free rein to fool you, and do whatever they like.

I watched king george in his press conference today"everything is fine our dollar is sound"
Hmmmm US $1= $1.0265 CDN
US $1= $1.5193 EURO
US $1= 1.989 Pound Sterling
Oil $102.59
Gold $967.50
Then I read a news article that someone from the US fed said Stagflation is not a problem. Can someone tell me how much the average raise is this year in the US. The reason I ask is because one of your experts said that wages are keeping pace with prices, and oh yah how are those house prices doing?

unfrozencaveman @ 72:

The bad spending choices by the government have been mirrored in the private sector. We used our easy access to credit for instant gratification and square footage on our houses. Such choices did not expand or tax base sustainably and thus the pie isn't getting bigger. At the end of the day, its not how much you borrow but the quality of what you are borrowing for. Same with tax policy - afterall much is discretionary.

Just the tip of the iceberg. Here's scam 101 for everyone. See It, Study It, ABSORB IT.

"As financial engineering improved in the 1990s, these individual loans were gathered into bundles -- 10,000 home loans of $100,000 each, let's say -- and turned into a $1 billion security that could be traded in ways the individual mortgages never could. But that wasn't enough. The financiers realized they could boost their profits by carving the $1 billion package into different slices, with different risk levels. In that way, a pool of B-rated mortgage assets could generate a slice that was rated AAA, because it was judged the slice most likely to be repaid.

But what happened when the real estate market confounded recent history and began to turn down?"

http://www.washingtonpost.com/wp-dyn/content/article/2008/02/20/AR200802...

Mike the Canuck @ 71:

I watched king george in his press conference today"everything is fine our dollar is sound"
Hmmmm US $1= $1.0265 CDN
US $1= $1.5193 EURO
US $1= 1.989 Pound Sterling
Oil $102.59
Gold $967.50
Then I read a news article that someone from the US fed said Stagflation is not a problem. Can someone tell me how much the average raise is this year in the US. The reason I ask is because one of your experts said that wages are keeping pace with prices, and oh yah how are those house prices doing?

I found a diary on this at D-Kos;

5% unemployment, stagnant wages and horse races
by Jerome a Paris

Excerpt:

4.3% - hmmm, where did I see that number already? Oh, yes, in the Labor statistics article:

Average hourly earnings increased $0.07, or 0.4%, to $17.71. That was up 4.3% from a year earlier, indicating some pressure on wage costs from relatively tight labor markets.

Okay, this is worth going into some detail:

* the yearly increase in wages is equal to inflation - which means that real wages have been exactly flat;

* these are averages: as we know, the top 0.1% capture most of income growth these days, which means that wage increases for the middle classes and the poor have been much lower: in fact, as this graph suggests, they have been consistently underperforming the overall economy (the median wage is that such that half earn more, and half earn less).

* of course, in addition, poorer households spend a lot more of their money on food and gas, so the average inflation index likely underestimates inflation as it applies to the spending needs of the majority. So actual inflation-corrected wages are really lower.

The recession is already here, in practice, for a majority of Americans;

* nevertheless, that 4.3% wage increase is presented as high, or even excessive, and dangerous: "tight" labor markets means (in theory) that workers can impose their conditions on corporations because they are in relative scarcity. And as we know, wage increases are bad, because they are a cost to corporations (ie something that cuts into profits and dividends), because they feed inflation (as opposed to oil prices which are not in the Fed's main inflation index, or to house prices, which represent increased wealth) and because they weaken economic competitivity.

http://www.dailykos.com/storyonly/2008/1/4/92338/97557

Republican Ideology Has Broken The Economy AGAIN!

Since it is no coincidence the same things happened seven years after Nixon was elected.
They try to blame Carter, incorrectly, of course, but it was not Carter who use a "political business cycle" to manipulate the economy. Nixon, Reagan, and Bush all used "political business cycles" to manipulate the economy. All produced recessions.

wild_idea @ 69:

chris @ 60:

The Market will self correct, the companies will loose billions the home owners will loose there home and everyone will learn there lesson. We don't need regulation from some senator who does not know his ass from his elbow.. Free markets work unless your stupid then they punish you, so don't do stupid things like get a home you can not afford!

Imagine your doctors telling you that you have ED, and you believe him, and you bought all the drugs the doctors recommend.
Only to find out years later, that you did not actually have ED, that the doctors are pushing the ED pill on you so that they can earn the commission selling the ED pills.
But by the time you find out, you now have chronic fatigue syndrome because of that ED pills, you gulped from the experts advice. How would you feel Chris?

The doctors in the above story, are the legitimate bank lenders, and Wall Street pushing their brand new spanking home and low mortgage payment to all, the "ED" pill. And everywhere you talk to, the banks/lenders tell the same story. This "ED" pill will work wonders for you.

Free markets, yes, definitely. Gullible public, yes. No control, most definitely. The experts have free rein to fool you, and do whatever they like.

First of all, this analogy is ridiculous.

Borrowers know exactly what they're getting into, they got greedy and bought into the appreciation hype and over extended themselves. To fucking bad, eat it, file bankruptcy, walk away from the home, i don't care. Next time, use your damned brain.

If a doctor kills me due to malpractice, or deliberate reasons, that's murder. Selling crappy products for high prices is bad ethics, but it's not going to kill anyone, and maybe you come out of the situation having learned that there isn't always a pot of gold at the end of the rainbow and that making millions is going to be harder than flipping real estate.

ProJecKt2501 @ 77:

Republican Ideology Has Broken The Economy AGAIN!

Since it is no coincidence the same things happened seven years after Nixon was elected.
They try to blame Carter, incorrectly, of course, but it was not Carter who use a "political business cycle" to manipulate the economy. Nixon, Reagan, and Bush all used "political business cycles" to manipulate the economy. All produced recessions.

Surely you're joking? The evil republicans have caused these recessions? Recessions are a political creation? GOOD! Then let's pass a law that forbids them!

sigh....

L.A. Confidential @ 73:

unfrozencaveman @ 72:

The bad spending choices by the government have been mirrored in the private sector. We used our easy access to credit for instant gratification and square footage on our houses. Such choices did not expand or tax base sustainably and thus the pie isn't getting bigger. At the end of the day, its not how much you borrow but the quality of what you are borrowing for. Same with tax policy - afterall much is discretionary.

Just the tip of the iceberg. Here's scam 101 for everyone. See It, Study It, ABSORB IT.

"As financial engineering improved in the 1990s, these individual loans were gathered into bundles -- 10,000 home loans of $100,000 each, let's say -- and turned into a $1 billion security that could be traded in ways the individual mortgages never could. But that wasn't enough. The financiers realized they could boost their profits by carving the $1 billion package into different slices, with different risk levels. In that way, a pool of B-rated mortgage assets could generate a slice that was rated AAA, because it was judged the slice most likely to be repaid.

But what happened when the real estate market confounded recent history and began to turn down?"

http://www.washingtonpost.com/wp-dyn/content/article/2008/02/20/AR2008022002270.html

These three closing graphs tell the tale:

But what happened when the real estate market confounded recent history and began to turn down? People holding the paper could no longer be sure if or when their particular slice would be repaid. The traditional accounting approach -- of estimating the projected cash flow and then discounting for the risk -- didn't work. With 10,000 disparate mortgages underlying the paper, both the rate of cash payments and the risk of default were impossible to predict. So the pyramid began to wobble.

The hubris in this system was Wall Street's confidence that it could value paper securities that had been sliced and diced so many times that they no longer had solid connections to their underlying assets. The nation's leading financier, Warren Buffett, had warned years before that "derivatives," whose value was balanced loosely on the real assets underneath, were the equivalent of "financial weapons of mass destruction." But in the rush for profits, nobody listened.

I've saved the worst for last. Do you want to know who is bailing out America's biggest banks and financial institutions from the consequences of their folly -- by acting as the lender of last resort and controller of the system? Why, it's the sovereign wealth funds, owned by such nations as China and the Persian Gulf oil producers. The new titans are coming to the rescue, if that's the right word for their mortgage on America's future.

The closing three graphs of that article laying it out pretty well but its is much worse and far more complicated than the author suggests.

1. It is a classic "ponzi scheme" in that assets were inflated far beyond their real value and the "financial wizzards" in the hedge funds who used the SIVs (structured investment vehicles) and CDOs (collateralized debt obligations) devised ways to defraud investors and hide the real value of the assets from the purchasers.

In fact... get this... the hedge funds could change the contents of the bundles after the sale to investors. Its like buying ten box cars that you are told contain brand new Ferraris and after the purchase you open the box cars to find one Ferraris and the rest of the cars are beat-up used volkswagens from the sixties!

2. The real underlying problem is how Reagan and his "free traders" decided to create a new way to "create wealth"... borrow money and lend it for the purchase of assets that could then be inflated in value and sold.

In short, Reagan institutionalized the "Ponzi Scheme" or "the bubble economy" and this is what economist Thomas Palley points out in his article:

The Debt Delusion
http://commentisfree.guardian.co.uk/thomas_palley/2008/02/the_debt_delus...

3. The government central banks and the sovereign nation funds are bailing out the financial institutions and that means tax payers (you and me) are propping up the banks already.

It is true what the author says that foreign sovereign nation funds are buying into these hedge funds and other mortgage lenders big time and he mentions the Chinese and the Japanese, but the Saudis have thrown $80 billion into Bear sterns and the Russians have now been purchasing Freddie Mae and Freddie Mac bonds as well.

In the UK they had their first bank run in 100 years and the British Government nationalized their largest mortgage lender at a cost of $59 Billion US. This is a bank bail out by any other name.

It was just revealed last week that the American Federal Reserve has loaned US banks $59 Billion dollars through a below market price vehicle that they have tried to keep out of the press. In short... the Federal Reserve is already propping up the banks with our tax dollars.

At this moment there are several bank/mortgage bail out packages being designed in the House of representatives... most notably one by Rep. Barney Frank that is getting good reviews because it would buy the mortgages from the banks, keep single home owners in their homes and paying what they can.

Which would leave the speculators out to dry but keep families off the street and in their homes. this solves the bank liquidity problem, keeps home owners paying what they can... but it means buying these homes at prices that were inflated and we tax payers pick up the tab.

4. The real size of the debt is not in billions of dollars... it is in trillions of dollars and while many think that the Federal Reserves estimates of $100bn to $150bn last summer was the worst of it... think again:

THE bloodbath is not over yet.

Sub-prime-related write- offs may hit US$400 billion (S$567.8 billion) - more than treble the US$130 billion losses that Wall Street banks and other financial institutions have revealed in recent weeks, according to the world’s top finance officials.

Speaking on Saturday after last weekend’s Group of Seven (G-7) meeting in Tokyo, German Finance Minister Peer Steinbrueck said the grouping now feared that write-offs of losses on securities linked to United States sub-prime mortgages could reach US$400 billion.

This is also far bigger than the US Federal Reserve’s estimates for sub-prime losses last year of US$100 billion to US$150 billion.

According to Bank of Italy governor Mario Draghi, the next two weeks will be critical in revealing how much damage the credit crisis has done to the global financial system.

‘The next 10 days to two weeks will be crucial because we are going to have the first audited accounts from financial institutions since the crisis started,’ said Mr Draghi, who is the chairman of the Financial Stability Forum (FSF). The FSF, a committee of international regulators and central bankers, is heading an international inquiry into the crisis.

Some of the world’s biggest banks have already disclosed billions of dollars of bad credits related to the US sub-prime mortgage market collapse, but these are only preliminary estimates, he added.

‘Auditors have become more vigilant’ as the fallout from the sub-prime crisis continues to spread and audited accounts for last year could reveal a grimmer picture, Mr Draghi told The Business Times.

The FSF’s preliminary report at the G-7 meeting warned that ‘there remains risk that further shocks may lead to a recurrence of the acute liquidity pressures experienced last year’, adding that ‘it is likely we face a prolonged adjustment, which could be difficult’.

Mr Draghi also said regulators were ready to force banks to reveal their losses and replenish their equity ratios.

He did not rule out the possibility that governments might eventually need to inject capital into banks, although he stressed that market solutions should take precedence. The FSF will issue its full report on the causes of the credit crisis and ways to tackle it in April.

The G-7 policymakers, in their statement, painted a grim picture, saying the US economy may slow further, eroding global growth, while banks, despite falling interest rates, will tighten credit even further.

While the G-7 did not propose specific measures, European Central Bank (ECB) president Jean-Claude Trichet said countries will do what was necessary, both individually and collectively, to counter a ’significant market correction’.

Economists, however, said the ECB is held back from cutting interest rates by its fears of rising inflation.

‘The problems are going right through all parts of the financial markets and there’s not much the G-7 can do about this,’ Mr Gilles Moec, an economist at Bank of America in London, told Australia’s The Age newspaper.

‘There’s a danger that the downturn will become a self- fulfilling prophecy,’ he was quoted as saying.

Source : Straits Times - 12 Feb 2008

http://lushhomemedia.com/2008/02/12/write-downs-from-sub-prime-problems-...

So you see the Federal Reserve figure of $100bn to $150bn was an estimate, based on information from banks who were hiding the debt off their books.

Now auditing firms have been empowered to force the banks to open their books and those reports are due in the first two weeks of April... next month is when the real shit hits the fan!

5. But wait... there is more! This article doesn't bring up the fact that the hedge funds, Bear Sterns in particular, took sub-prime debt and mixed it into packages and sold them specifically to retirement funds... In 2006 alone they sold $530 billion of these CDOs to pension funds!

They have been selling these CDOs containing "toxics" (as the investment community likes to call subprime bad debt) for five years now. the actual amount of these "equity tranches" (another term for the toxics they dreamed up) is unknown... but potentially into the trillions of dollars.

I've been investigating this debacle for a long time and the more I dig... the deeper it goes. This is the deepest rabbit hole I have ever seen and we will be lucky if we manage to escape a full collapse of the worlds financial network... ie. a global depression.

repro @ 79:

First of all, this analogy is ridiculous.

Borrowers know exactly what they're getting into, they got greedy and bought into the appreciation hype and over extended themselves. To fucking bad, eat it, file bankruptcy, walk away from the home, i don't care. Next time, use your damned brain.

If a doctor kills me due to malpractice, or deliberate reasons, that's murder. Selling crappy products for high prices is bad ethics, but it's not going to kill anyone, and maybe you come out of the situation having learned that there isn't always a pot of gold at the end of the rainbow and that making millions is going to be harder than flipping real estate.

First of all, you're wrong. Borrowers did not always know exactly what they were getting into. There are scores of documentation citing the misrepresentation of subprime loans to clients. This was brought about because of the greed of the financial institutions yet you would rather scapegoat the victims than the perpetrators.

But let's say, for the sake of argument, that you are (gag) totally correct and the subprime mess was due only to the stupidity of the home buyers. Why was there no oversight in place so the rest of us were not adversely effected by this? The government should have some responsibility in protecting citizens from the financially disasterous results of allowing these borrowers to act so stupidly. Heaven knows, they're busy taking away our Constitutional rights in order to "protect" us from other things, why not have some oversight on this?

Perhaps you should research this a little before trying to simplify it down to an inane "it was the stupid borrowers fault and they're just going to have to suck it up" argument. Start with Rasputin's posts. Those might give you some glimmer of how we're all going to be in a world of hurt as a result of this.

Exxon profits aren't broken -- what's the problem?

Halliburton is making more money than ever.

Failure is not an option -- keep trying.

"There will always be a debate about the need and extent of regulation. This debate is healthy; it should prevent one side from pushing too far against the other."

One "side" from the "other"??? This reeks of class warfare and/or group think. A debate about this issue does not mean you have to belong on one side or the other, causing a separation of you from other people. We are all in this together. Also, the perceived need to debate this issue, when there shouldn't be one at all considering the history of the world, is simply to ensure people have something to do with their time. It's needed by those who are living a life they do not want to live.

"However, as the financial system continues to experience a high amount of turmoil, it is clear that deregulation has exceeded the “too much of a burden on business” argument. Instead, too little regulation has broken the economy."

The writer of this article CLEARLY has no idea what caused the financial "turmoil". If he/she did, they would be able to show exactly how their claim of "de-regulation" caused the crisis. And the non-sequitor that goes from the "financial system" to "broken down the economy" is CLEARLY evidence that the writer is not interested in the facts but rather an agenda. Agendas can be seen when there is such jumping to conclusions. The "too much of a burden" is not merely an argument had over dinner. It is about the long term health of the economy. Anti-capitalists simply cannot see how regulations hurt REGULAR PEOPLE MORE THAN BUSINESS. The housing crisis was CAUSED BY FEDERAL RESERVE MANIPULATION OF MONEY, NOT "DE-REGULATION". Sometimes I have the word "sheep" in my head, and I want to use it here real bad. Doesn't anyone there at C&L understand banking?

"From the NY Times:"

OK, right off the bat a clearly biased anti-business MSM newspaper is being sited. The same paper that Paul Krugman writes for. Ooooh, this ought to be good.

"Edward M. Gramlich, a Federal Reserve governor who died in September, warned nearly seven years ago that a fast-growing new breed of lenders was luring many people into risky mortgages they could not afford."

Riiiiggggghhht. Let's all take FEDERAL RESERVE EMPLOYEES(!!!!) as unbaised and truth-seeking when it comes to business cycles and finance. Ya, the Federal Reserve....they're TOTALLY all about markets, but not power and manipulation AT ALL. Nooooooo.....let's TRUST those people....they're the very same people who CAUSE crises!! They will DEFINITELY own up to things and take responsibility. Man, I have that word sheep in my head again...

"But when Mr. Gramlich privately urged Fed examiners to investigate mortgage lenders affiliated with national banks, he was rebuffed by Alan Greenspan, the Fed chairman."

Imagine these words in CAPS: That's because Greenspan and Bush did not want to have a recession after the late 1990's bubble burst, so they lowered the interest rate to 1%........1%!!!!!!.....for over a year!!! Greenspan ALSO TOLD banks to make cheap loans to mortgage customers, because it was the only way they could keep consumer spending high to avert the recession!! Rapidly rising house prices acts like a credit card for consumer spending.

Amazing really. You are complaining about bad business, but you don't even explain how bad Greenspan acted in this regard. Without Greenspan keeping rates low and thus financing the housing boom, the recession would have hit. The fact that he engineered a SEEMINGLY profitable housing industry does not mean it was. Mr. Gramlich is simply trying to COVER HIS ASS, because he KNOWS that it's the Fed's fault.

"That’s right — too much regulation will get in the way."

What the hell do you call manipulation of money and credit? A cocktail party? Running the countries finances IS A REGULATION.

"We know how to manage risks now, so we don’t need to stinkin rules.[..]"

There I will agree.

"Here’s what bugs me to no end. I’m a capitalist through and through. I love buying and selling stuff. And frankly, I think most people do too. But here’s the problem. You have to have rules. Unchecked capitalism is a bad idea. That’s what we’ve had. And it has failed."

He's no "capitalist". The "rules" he wants to enact are not rules placed on monetary policy, as all true capitalists would try to do, he rather wants more rules on business, the supply creaters.

He is just another example of someone who does not understand how monetary policy works, and how pervasive it is in all our lives and thus the economy's. He takes the Federal Reserve as a GIVEN, then when problems arise due to the Fed, he ignores the Fed, and attacks business. Typical typical....

Rasputin--

Great info here. More than I want to know, but it's important reading.

Thanks for the distillation.

Republican Ideology Has Broken The Economy

EXACTLY!!!!!!!!!!!!!!!!!!!

Drew...

Now as to your twaddle about monetary policy of the Fed... you really shouldn't use terms that you don't understand.

Let me help you out with Economist Thomas Palley on monetary policy of the Fed and the House of cards that Reagan built:

The debt delusion
The US economy relies upon asset price inflation and rising indebtedness to fuel growth - and this contradiction has global implications

A second big American interest-rate cut in a fortnight, alongside an economic stimulus plan that united Republicans and Democrats, demonstrates that US policymakers are keen to head off a recession that looks like the consequence of rising mortgage defaults and falling home prices. But there is a deeper problem that has been overlooked: the US economy relies upon asset price inflation and rising indebtedness to fuel growth.

Therein lies a profound contradiction. On one hand, policy must fuel asset bubbles to keep the economy growing. On the other hand, such bubbles inevitably create financial crises when they eventually implode.

This is a contradiction with global implications. Many countries have relied for growth on US consumer spending and investments in outsourcing to supply those consumers. If America's bubble economy is now tapped out, global growth will slow sharply. It is not clear that other countries have the will or capacity to develop alternative engines of growth.

America's economic contradictions are part of a new business cycle that has emerged since 1980. The business cycles of presidents Ronald Reagan, George Bush Sr, Bill Clinton, and George Bush share strong similarities and are different from pre-1980 cycles. The similarities are large trade deficits, manufacturing job loss, asset price inflation, rising debt-to-income ratios, and detachment of wages from productivity growth.

The new cycle rests on financial booms and cheap imports. Financial booms provide collateral that supports debt-financed spending. Borrowing is also supported by an easing of credit standards and new financial products that increase leverage and widen the range of assets that can be borrowed against. Cheap imports ameliorate the effects of wage stagnation.

This structure contrasts with the pre-1980 business cycle, which rested on wage growth tied to productivity growth and full employment. Wage growth, rather than borrowing and financial booms, fuelled demand growth. That encouraged investment spending, which in turn drove productivity gains and output growth.

The differences between the new and old cycle are starkly revealed in attitudes toward the trade deficit. Previously, trade deficits were viewed as a serious problem, being a leakage of demand that undermined employment and output. Since 1980, trade deficits have been dismissed as the outcome of free-market choices. Moreover, the Federal Reserve has viewed trade deficits as a helpful brake on inflation, while politicians now view them as a way to buy off consumers afflicted by wage stagnation.

The new business cycle also embeds a monetary policy that replaces concern with real wages with a focus on asset prices. Whereas pre-1980 monetary policy tacitly aimed at putting a floor under labour markets to preserve employment and wages, it now tacitly puts a floor under asset prices. This is not a matter of the Fed bailing out investors. Rather, the economy has become so vulnerable to declines in asset prices that the Fed is obliged to intervene to prevent them from inflicting broad damage.

All these features have been present in the current economic expansion. Wages have stagnated despite strong productivity growth, while the trade deficit has set new records. Manufacturing has lost 1.8m jobs. Prior to 1980, manufacturing employment increased during every expansion and always exceeded the previous peak level. Between 1980 and 2000, manufacturing employment continued to grow in expansions, but each time it failed to recover the previous peak. This time, manufacturing employment has actually fallen during the expansion, something unprecedented in American history.

The essential role of asset inflation has been especially visible as a result of the housing bubble, which also highlights the role of monetary policy. Despite the massive tax cuts of 2001 and the increase in military and security spending, the US experienced a prolonged jobless recovery. That compelled the Fed to keep interest rates at historic lows for an extended period, and rates were raised only gradually because of fears about the recovery's fragility.

Low interest rates eventually jump-started the expansion through a house price bubble that supported a debt-financed consumer-spending binge and triggered a construction boom. Meanwhile, prolonged low interest rates contributed to a "chase for yield" in the financial sector that resulted in disregard of credit risk.

In this way, the Fed contributed to creating the sub-prime crisis. However, in the Fed's defence, low interest rates were needed to maintain the expansion. In effect, the new cycle locks the Fed into an unstable stance whereby it must prevent asset price declines to avert recession, yet must also promote asset bubbles to sustain expansions.

So, even if the Fed and US treasury now manage to stave off recession, what will fuel future growth? With debt burdens elevated and housing prices significantly above levels warranted by their historical relation to income, the business cycle of the last two decades appears exhausted.

It is not enough to deal only with the crisis of the day. Policy must also chart a stable long-term course, which implies the need to reconsider the paradigm of the past 25 years. That means ending trade deficits that drain spending and jobs, and restoring the link between wages and productivity. That way, wage income, not debt and asset price inflation, can again provide the engine of demand growth.

In cooperation with Project Syndicate, 2008.

http://commentisfree.guardian.co.uk/thomas_palley/2008/02/the_debt_delus...

Reaganite Free traders like yourself have a theme song... "I'm forever blowing bubbles" because that is the only way that you can think of to stimulate the economy, especially since you have successfully de-industrialized America by outsourcing our jobs over seas.

The soaring trade deficit caused by the influx of cheap goods was tolerated because cheap goods masked the stagnation of wages... and easing of credit card debt terms allowed people to enjoy the good life while stacking up unheard of levels of personal debt.

The cheap goods and mortgages were more about winning elections than anything else
as Bush chortled in 2003 about the "ownership society" and "the haves and the have mores."

The Feds easing of credit terms definitely plays a role in the subprime debacle, but was pressured into it to keep the economic expansion going. So welcome to the "Free traders" new "American Bubble Economy"... but remember all bubbles eventually POP!

fastfeat @ 93:

Rasputin--

Great info here. More than I want to know, but it's important reading.

Thanks for the distillation.

Believe me... this bag of crap is tough to distill down, but it is important because come April when the Bank Auditors report and we do have the bank failures that Bernanke has testified are coming... The reichwingers will be trying to spin this that the Democrats are some how responsible for this.

It is a very complex situation and I provide links for you people to file away for debate purposes, because a shit storm is coming and if we are to really identify the causes and deal with the problems... you need to understand how it all happened, who is really at fault, and then we can begin to seek solutions.

Drew @ 98:

Rasputin @ 94:

In all your copying and pasting job, you never once mentioned how the Federal Reserve's MASSIVE manipulation of money in the early part of this decade is the SOLE CAUSAL FACTOR for the economic crisis. In fact, ALL recessions and depressions occur when the government and Fed intervenes in the marketplace.

I dealt with your BS about Monetary policy with the Thomas Palley article which is concentrated on the Fed's monetary policy explicitly.

Educate yourself!

Rasputin @ 101:

Drew @ 98:

Rasputin @ 94:

In all your copying and pasting job, you never once mentioned how the Federal Reserve's MASSIVE manipulation of money in the early part of this decade is the SOLE CAUSAL FACTOR for the economic crisis. In fact, ALL recessions and depressions occur when the government and Fed intervenes in the marketplace.

I dealt with your BS about Monetary policy with the Thomas Palley article which is concentrated on the Fed's monetary policy explicitly.

Educate yourself!

What's with all the bold type?

I HAVE educated myself. You should too.

Palley is a political hack and not an economist.

Drew @ 100:

Rasputin @ 97:

Thomas Palley? Who???

He points out every single Republican President since 1980 as the cause?

Gee, he's not biased now is he? Definitely not bi-partisan. Definitely cognizant of monetary policy...ya...

Rasputin, quit wasting my time with shit you copy and paste from the net. If I wanted to know what Palley said, I would look him up myself. I don't need you for that.

Palley is an Economist and you should look him up, he doesn't care about Dems of GOopers because he is English . He could care less about your partisan hackery because he is worried about the global impact to his country... the UK!

Secondly... as to tracing the business cycles back to the 1980's, it may be hard for you to understand but that is what Economists do... they study business cycles to see what worked, what didn't work, why it isn't working now... and get at solutions about how to fix the problems.

Personally I prefer an economists educated analysis to some jack ass who doesn't understand economics in the slightest spouting vapid talking points!

Rasputin @ 106:

Drew @ 104:

I sense a huge post from Raspy coming...

Nah... if you haven't learned to read by now or think for yourself... no hope for you!

I love reading...I just don't like reading shit.

What's with all the bold type?

I HAVE educated myself. You should too.

Palley is a political hack and not an economist.
---Drew

That is Dr. Thomas Palley to you!

Dr. Thomas Palley is an economist living in Washington DC. He holds a B.A. degree from Oxford University, and a M.A. degree in International Relations and Ph.D. in Economics, both from Yale University.

He has published in numerous academic journals, and written for The Atlantic Monthly, American Prospect and Nation magazines.

Dr . Palley has recently started a project, Economics for Democratic & Open Societies. The goal of the project is to stimulate public discussion about what kinds of economic arrangements and conditions are needed to promote democracy and open society.

Dr . Palley was formerly Chief Economist with the US – China Economic and Security Review Commission. Prior to joining the Commission he was Director of the Open Society Institute’s Globalization Reform Project.

You really do need to learn how to read! ;-)

Rasputin @ 109:

What's with all the bold type?

I HAVE educated myself. You should too.

Palley is a political hack and not an economist.
---Drew

That is Dr. Thomas Palley to you!

Dr. Thomas Palley is an economist living in Washington DC. He holds a B.A. degree from Oxford University, and a M.A. degree in International Relations and Ph.D. in Economics, both from Yale University.

He has published in numerous academic journals, and written for The Atlantic Monthly, American Prospect and Nation magazines.

Dr . Palley has recently started a project, Economics for Democratic & Open Societies. The goal of the project is to stimulate public discussion about what kinds of economic arrangements and conditions are needed to promote democracy and open society.

Dr . Palley was formerly Chief Economist with the US – China Economic and Security Review Commission. Prior to joining the Commission he was Director of the Open Society Institute’s Globalization Reform Project.

You really do need to learn how to read! ;-)

You are so typical...I meet a few people like you every now and then. "Dr."'s can be mistaken. After all, every policymaker in the US usually have PhDs...but uh....in case you haven't noticed....sometimes even PhD's make mistakes. Just look at the economy. Our economy is a product of PhDs you know.

Drew @ 111:

Rasputin @ 109:

What's with all the bold type?

I HAVE educated myself. You should too.

Palley is a political hack and not an economist.
---Drew

That is Dr. Thomas Palley to you!

Dr. Thomas Palley is an economist living in Washington DC. He holds a B.A. degree from Oxford University, and a M.A. degree in International Relations and Ph.D. in Economics, both from Yale University.

He has published in numerous academic journals, and written for The Atlantic Monthly, American Prospect and Nation magazines.

Dr . Palley has recently started a project, Economics for Democratic & Open Societies. The goal of the project is to stimulate public discussion about what kinds of economic arrangements and conditions are needed to promote democracy and open society.

Dr . Palley was formerly Chief Economist with the US – China Economic and Security Review Commission. Prior to joining the Commission he was Director of the Open Society Institute’s Globalization Reform Project.

You really do need to learn how to read! ;-)

You are so typical...I meet a few people like you every now and then. "Dr."'s can be mistaken. After all, every policymaker in the US usually have PhDs...but uh....in case you haven't noticed....sometimes even PhD's make mistakes. Just look at the economy. Our economy is a product of PhDs you know.

First it was GOoper stratagem #1... Attack the mesenger! "he's not an economist"

Second it was GOoper stratagem #2... Attach negative labels like "hate" when losing a debate. "No, you prefer economists that share your hate."

Third it was GOoper Strategem #3... When losing a debate with an educated opponent turn education into handicap by using "intellectual" as an epithet. See Karl Rove hand book for "war on Science."... "you haven't noticed....sometimes even PhD's make mistakes. Just look at the economy. Our economy is a product of PhDs you know."

ROTFLMAO!!! You are just too much Fun!

Take a look at this and you will know were all fucked.

www.cia.gov/library/publications/the-world-factbook/rankorder/2187rank.html
www.cia.gov/library/publications/the-world-factbook/rankorder/2079rank.html

Rasputin @ 114:

Well it has been interesting but I gotta put kids to bed! See ya in the next news cycle Drew... Still ROTFLMAO!

I want to say I am surprised...but leaving when confronted is usually the mark of an intellectual coward. They are so common these days...

[Nice ad hominem, Drew-Sitemonitor]

For more on the topic of deregulation et al being bad for the economy, read Dean Baker's "The United States Since 1980." Yes, it's that magic 1980 year again, the year everybody's favorite demigod, Ronald Reagan, was elected president. Hmmmm ... what could he have to do with this subject?

Rank Order - Debt - external

Home Reference Maps Appendixes Download Datafile

Countries for which no information is available are not included in this list.
Rank Country Debt - external Date of Information
1 World

[Deleted. Too long. Post a link-Sitemonitor]

Yes the repukes have ruined everything they have touched. I don't think you can blame them totally afterall they are ignorant morons with a greedy lust for money. Which make them dangerous to everyone they come into contact with.
The worst is when you let one of them have a radio talk show like limpballs or insanity or billo then you really get to see ignorance first hand and wow it is something to behold.
When these guys start broadcasting their hate and fear and above all stupidity the combined blind loyalty to ignorance is breath taking.
It's like watching a monkey at the Zoo fling crap at the people. The sad part is there are people in America that actually like to have shit thrown on them, they are the fox news crowd, the knuckle draging bush voting fools that don't give a shit if bush kills all the Iraqi's as long as it doesn't come close to them. Just Cowardly fools one and all!

Perhaps what's more ridiculous than that is what the Repubs plan to do next:

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

There is no easy way out, but these people certainly aren't making it any easier.

ConcernedCanuck @ 45:

liberalNmoderation @ 17:

ConcernedCanuck @ 6:

Once again, he's partially correct. Markets are affected negatively when the threat of a Dem new leader is real. They would much rather have a pro-business government. Same here. Canada's markets went nuts when they thought the Conservatives were coming to power because they favour business tax breaks over citizens. Not a real stretch of the imagination.
What's killing the economy? Easy. Overspending and not enough tax to compensate for it. How much does anyone want to bet that the next President (Dem) will raise taxes? Whoever it is, has to because of debt, and that will hurt the economy even more.

Ah Canuck, my friend, I agree with most of your post, except the last part...Taxes will be raised undoubtedly, buy at the same time, all this insane spending that these neo-cons have been doing...that will be stopped (hopefully) not long after the next prez is sworn in...unless...gawd ferbid...McBain is handed the office by his corporate overlords.
Sure, we're in for hard times, but we'll survive, and (again, hopefully) we'll be smarter and stronger for it.

I can't see the spending getting reined in too much unless they take it from social programs. They can't and won't cut financing the military, and that my friend is the main target of US tax dollars. I actually wonder why either Obama or Hillary would want to be Prez. One term presidencies are soon forgot, and that is what the economy will do to whoever is Prez. History always repeats.

Shit, Bush has already cut most social programs to point of ridiculousness. I know that the military gets the lions share of our moneys. That will never change. But the money could be spent more wisely, instead of defense contractor makin bundles, and our troops getttin squat! I think Hillary has wanted to be prez for a looooong damn time, and is willing to do damn near anything to get there. Obama...I think he genuinely wants to bring this country back from the edge, and also is probably damn tired of the Neo-Con BS like the rest of us.
Wish us luck!

Rasputin,

You do nice work. Very informative, per your usual.

A comment on the final comment you made @83, "I’ve been investigating this debacle for a long time and the more I dig… the deeper it goes. This is the deepest rabbit hole I have ever seen and we will be lucky if we manage to escape a full collapse of the worlds financial network… ie. a global depression."

I think you may even be a little optimistic. "Global depression" may not adequately describe how bad things could get. I see total global economic meltdown, an irreversible destruction of the global economy as it is now structured. As the global banking community functions pretty much in ideological lockstep, and much of the economic plans involve ponzi schemes embedded within pyramid scams, all producing a system that is essentially exploitive and predatorally fraudulant at its root, we have a global economic system that is utterly non-sustainable. Add to that the fact that the principal activity of numerous national central banks is not only to rip off their respective nations but to gain de facto control over their governments, or that the IMF and World Monetary Fund exist chiefly to strip developing nations of ownership rights of their natural resources and exist to create lasting dependancies, we have a system that is doomed to eventual failure. The system violates too many principles to be viable.

It can't survive over the long term. And, because the entire system is essentially designed to parasitize, confiscate and concentrate wealth instead of genuinely create and distribute new wealth, it means that when you look under the hood, there's nothing there. It must crash, and crash on a grand scale, sooner or later. This is a situation that has been building for 40+ years, and I think the sooner-or-later is upon us.

There are going to be losses and deprivation in epic proportions.... terrible lessons to be learned by the entire world. Though the immediate future looks dark, on the other side of it there might be some good things come out of it. First, I expect that the world's monetary system is going to be taken out of the hands of private banking cartels, because it will finally be understood that these private and interlocking cartels (masquerading under such euphenisms as the "Federal" Reserve, the German Central Bank, or whatever) serve only themselves, and no others. If the lessons that must yet be learned are as bad as I think they are going to be, you could even see a single global monetary system arise, under a central governing authority like the UN or alliances of national governments like NATO, banded together under treaty, wherein the governing authority collectively controls and establishes all monetary policy and in which the banks are excluded from any policy or decision-making participation and are denied any opportunities to wield control. Under such a system, a universal currency system could arise, akin to the Euro, a development which would level the economic playing field for all who join in. This could lead to expanding circles of economic and political unity in which predation, fraud and corruption might have a much more difficult time gaining a foot hold. Who knows? As can be seen from the example of the European Community, the greater the degree of unity across the broadest possible spectrum of nations, the greater tends to be the well-being of all involved.

Dark and stormy times ahead, in which a rickety and termite-rotted old house is probably going to get destroyed. But after the storm, maybe the sun will come out and a new house can be built.

And if nations and peoples persist in refusing to learn what needs to be learned, the same old problems will keep presenting themselves anew, a little worse each time the cycle repeats itself.

not_me @ 130:

Problem is we do not have unfettered free market capitalism. We have a managed oligarchy. Trade is managed, rules and regs governing interstate commerce are managed, private and public monopolies are enforced. Its delusional to believe that we live in a "capitalist" society. The government creates rules that effectively creates obstacles for competition for large established corporations, enforced by the gun of the FDA, the FCC, the DEA, or any other government agency that has a clique of enforcement goons.
Private Venture capitalist may monetize start ups, but eventually those start ups will find themselves at the mercy of government regulators, decrees, laws, subsections, code enforcement Nazis.
We live in more of a socialist society that lets big corporations finance their political ally's campaign contributions for "most favored corporation status". These political hacks are then patted on the head like good little boys and awarded with board memberships latter when they leave politics.
Its a racket, its not capitalism.

FINALLY, some sanity is brought to this thread. Those who relegate themselves to blaming which sock puppet is at fault, the left one or the right one, have absolutely no clue about the larger issue, which is the purposeful devaluation of the dollar which, mark my words everyone, will have CATASTROPHIC consequences.

I have already told my friends that have large investments, that this coutry is going to have an INFLATIONARY DEPRESSION. It will start once all the foreign countries start to float their currencies instead of pegging them to an weakening dollar.

Once they do this, all their reserves of US dollars are going to be worth ZILCH, and they are going to find their way back here, causing a HUGE spike in prices at the same time as the country's economic system goes down the drain.

Our consumption right now is not coming from our production. It comes from foreigners subsidizing our consumption by accepting all our dollars. Once they wake up to this game, we're toast.

Paul @ 132:

Rasputin,

One more thing. What the other guy called cut-and-paste is what I would call attribution. Good job.

Your comments about the international impacts are insightful and in our current economic meltdown our banks and financial institutions are being bailed out by "sovereign nation funds"... in short the Chinese, Japanese, Russians, Saudis, and others are buying huge chunks of our assets by buying out Bear Sterns, Freddie Mae and Freddie Mac Bond (which Russia just announced). The full political implications of this have yet to be realized.

I spent most of the last two decades in international business and maintain contacts in most of the countries in the world. Most Americans don't see what is happening and are focused on the destruction of the middle class here and the large disparity of wealth distribution that has occurred here in the last 25 years... but it is a global phenomena and portends the destruction of the nation state and replaces it with a global financial aristocracy centered on multinational corporations.

Here are two very interesting articles on what it occurring globally:
Excerpt:

Rising Inflation Creates Unease in Middle East
By ROBERT F. WORTH

AMMAN, Jordan — Even as it enriches Arab rulers, the recent oil-price boom is helping to fuel an extraordinary rise in the cost of food and other basic goods that is squeezing this region’s middle class and setting off strikes, demonstrations and occasional riots from Morocco to the Persian Gulf.

Here in Jordan, the cost of maintaining fuel subsidies amid the surge in prices forced the government to remove almost all the subsidies this month, sending the price of some fuels up 76 percent overnight. In a devastating domino effect, the cost of basic foods like eggs, potatoes and cucumbers doubled or more.

In Saudi Arabia, where inflation had been virtually zero for a decade, it recently reached an official level of 6.5 percent, though unofficial estimates put it much higher. Public protests and boycotts have followed, and 19 prominent clerics posted an unusual statement on the Internet in December warning of a crisis that would cause “theft, cheating, armed robbery and resentment between rich and poor.”

The inflation has many causes, from rising global demand for commodities to the monetary constraints of currencies pegged to the weakening American dollar. But one cause is the skyrocketing price of oil itself, which has quadrupled since 2002. It is helping push many ordinary people toward poverty even as it stimulates a new surge of economic growth in the gulf.

“Now we have to choose: we either eat or stay warm. We can’t do both,” said Abdul Rahman Abdul Raheem, who works at a clothing shop in a mall in Amman and once dreamed of sending his children to private school. “We’re not really middle class anymore; we’re at the poverty level.”

http://www.nytimes.com/2008/02/25/world/middleeast/25economy.html?_r=1&h...

Excerpt:

Polarization in the Japanese Economy

Globalization can be understood to be in essence a profit revolution and a process by which the welfare state (big government) is being dismantled. The welfare state is the twentieth-century face of the modern sovereign state, which dates from the sixteenth century, and which developed into the nation- state through citizens’ revolutions. In that sense, globalization can also be seen as the dissolution of the sovereign state and the nation-state. The breakup of the Soviet Union, an extreme form of big government, led to the dismantling of the welfare state there. At the same time, the globalization process amounts to the revival of the empire. Deepak Lal states in his 2004 work In Praise of Empires that an empire is a nation that can exercise influence over not just the foreign policies but also the domestic policies of its partners. Because moving capital across borders makes no sense in the absence of this influence over the domestic policies of partners, globalization and empires have a close, inseparable relationship.

From the time of the foundation of the British East India Company in 1600 until the middle of the 1990s, capitalism assumed a number of forms, including mercantilism (physiocracy), free trade ideology, and imperialism, but these were all the same in the sense that capital and the state were wedded together. In the second half of the 1990s, however, this character of capitalism completely changed, with capital gaining ascendancy over the state. In the 1950s one often heard the phrase "What’s good for General Motors is good for the United States," but the same cannot be said of Microsoft, Google, and other such supranational corporations.

http://www.japanecho.com/sum/2008/350105.html

Both of these articles indicate a real major period of global redefinition of the world as we know it, a major global paradigm shift and as you can see in the middle east article some pretty dire consequences... a destabilized Middle East region with food riots and the potential collapse of moderate Islamic nation states.

While our income disparity in this country has returned to 1920s levels, the global political situation seems to reflect the 1930s. What happens next is not going to be pretty.

I'd like to point out to most of the commenters here a few things:

1. If you have a Central Bank that has monopoly control over the issuance of currency, you do not have a free market.
2. If you have corporations that have "rights" like individuals, yet hardly any ability to be prosecuted as one, you do not have a free market.
3. If competition is stifled by idiotic regulations and taxes set up to benefit large corporations, you do not have a free market.
4. If a corporation or industry is subsidized by the government, you do not have a free market.

The list could go on and on...
So the next time you want to complain about the "free market" realize that this is a thing that does not exist in the United States.

Save Our Troops @ 135:

I'd like to point out to most of the commenters here a few things:

1. If you have a Central Bank that has monopoly control over the issuance of currency, you do not have a free market.
2. If you have corporations that have "rights" like individuals, yet hardly any ability to be prosecuted as one, you do not have a free market.
3. If competition is stifled by idiotic regulations and taxes set up to benefit large corporations, you do not have a free market.
4. If a corporation or industry is subsidized by the government, you do not have a free market.

The list could go on and on...
So the next time you want to complain about the "free market" realize that this is a thing that does not exist in the United States.

But then how will anti-capitalists have an opportunity to blah blah blah about how bad it is? How will they understand the world? It's soooooooooo much easier if "the market" is blamed for every problem, that way these uneducated (AND MISEDUCATED) people can sleep at night.