Major headline today: European Markets Tumble in Response to US Economic Chaos.

McCain Response: Obama attended a meeting with Bill Ayers in 1995.

Palin Response: Obama has a funny name.

But don’t worry, America. God has a plan. You betcha.

Major headline today: European Markets Tumble in Response to US Economic Chaos.

Palin Response: Obama has a funny name.

The Democrats are just as capable of trying to deflect criticism from politically-inconvenient truths. Yesterday Barney Frank claimed that blaming the crisis on loans to unqualified home buyers was “racism”.

Frank was a supporter of the idea of lowering lending standards to make it possible for poor people to buy houses. Since many of these unqualified buyers were African American, Frank apparently thinks that making it harder for African Americans to participate fully in the reckless, irresponsible financial values of our culture is discriminatory.

Republicans passed the “Responsible Lending Act,” which was opposed by Barney Frank. This act weakened existing federal laws that protected borrowers. The sponsors of that bill, which passed with overwhelming Republican support in 2005, were Bob Ney (R-OH) and Paul Kanjorski (D-PA). Ney received $173,000 from Sub-Prime lenders and Kanjorski received $140,000 from them. This is a Bi-Partisan debacle…as I said in the other post…FOLLOW THE MONEY…. ~~~~W

Major headline today: European Markets Tumble in Response to US Economic Chaos.

But don’t worry, America. God has a plan. You betcha.

EVD, your list is incomplete unless and until you also state what Obama, Nader, McKinney and Barr said today. Looking at an issue through partisan glasses is no solution.

“Since many of these unqualified buyers were African American, Frank apparently thinks that making it harder for African Americans to participate fully in the reckless, irresponsible financial values of our culture is discriminatory”

Yea, but most of them were white. So maybe you’re a tad racist.

Oh nevermind – I forgot that you think you’re better than everyone else without regard to race, so you’re “peterist”

Weren’t you the guy that tried unsuccesfully to argue that Wall Street had no criminal culpability in this?

Why is the FBI investigating Lehman and AIG?

For the past 5 years the economy has been booming – in large part on borrowed money. Virtually *everyone* has benefited – some more than others – we have all been on the take. In order to keep the excesses from recurring we need to change and improve regulation and oversight. We need a lot more transparency. We need more competancy and understanding.

Pointing fingers and making acrimonious remarks is not helpful at this point. Let’s first put out the fires, then implement new ecomomic safety measures based upon the experience.

I tend to agree with Mr Schecter and would extend the “Plunder” idea to the Federal Reserve, who in exchange for printing $850 Billion of fiat money out of thin air and devaluing our currency , will be collecting taxes from the government who will be taxing us the American taxpayers to feed it. Let’s take a look at what Russ Paul has brought to light – the never-ratified federal income tax concurrent with the establishment of the Federal Reserve as a private banking elite in charge of our nation’s currency and the value thereof.

Why is NO ONE talking about a windfall profits tax to go after these guys? Go back 10 years and do a retroactive tax on every single person and corp that made hundreds of millions of dollars on the sub-prime meltdown and bring that revenue into the govt to help pay for this mess.

Good topic, but we’re mixing a lot of statements and allegations in the dialogue – outrage over CEO pay and FDI investigations, which have nothing to do with eachother.

I’m angry about the CEO pay issue, but it is not illegal. Exactly what are the FBI investigations about.

Mr Schecter – your right on the money – a bit of a pun – this is all about manipulation from the highest level on down. Henry Paulson is the highest level criminal in this scenario and deserves to go down in histor as a thief and crook. If he really cares about his country maybe he should pay his fair share of taxes!

Question: do you think the clause in the bailout about the federal reserve paying interest to regional banks on their reserve deposits is illegal as I feel that was one of the major items the banks wanted fro mthe bailout. No one mentioned it all but it is in there. Any time a banking bill passes and there is unprecedented new form of interest being paid I suspect corruption and criminal activity.

Tom, send collection agencies after these criminals to give the money back to people. If it was me I am sure that is what the creditors would have done to me. This time around they stole our money. line them up and deliver justice.

Danny Schecter’s message and passionate outrage should be heard by everyone. The argument that we should fix the problem first and punish the perpetrators later is a fatuous one. Postponing investigations into malfeasance allows the wrongdoers more time to salvage what they can from the debacle, to protect themselves and to massage the evidence of possibly criminal behavior. The drive to postpone all this is also an attempt to minimize its impact on McCain’s electoral chances.

This attempt to re-frame this whole thing as the result of “do-gooder” policies, carried out by the right wing propaganda machine, is fatuous and reprehensible, and is, as usual, well-orchestrated from top to bottom, Fox News, talking heads for hire, and all the rest.

Our democracy has lost its foundation of a well-informed electorate, and we have to do something to counteract this ideological misinformation or we will keep bouncing from one disaster to another — 2000 election, Iraq war, torture, domestic spying, free-market fundamentalism – what next?

I have to say that I find it unbelievably offensive that the new conservative line for what’s behind this mess is the Community Reinvestment Act. Did Fanny and Freddy implement the goals of of the act poorly? Sure, do they deserve severe and harsh criticism? absolutely, but that doesn’t mean that the goal of encouraging home ownership and financial advancement of lower and middle income families is a flawed program pushed by a bunch of do good liberals. So lets talk about accountability and consecquences, my Dad is foreclosure what’s Lehman Brother’s CEO stand to lose here!

Ben
Middlebury VT

It seems to me that the only reason housing prices have been able to increase in an era in which middle and lower class incomes have not kept up with inflation is that mortgages have become increasingly relaxed. 15-year mortgages were the rule until several decades ago; when average people could no longer afford that, 30-year mortgages became the the rule. Both of these required 20% down. When people’s income could no longer allow them to afford a house at current prices, then the 20% down was relaxed. Relaxed mortgages and other credit have masked the financial distress of “average” Americans. Our politicians have been complicit in allowing this to happen. Could your guests please comment on this. Thanks, Amanda

Excellent segment. I think Schechter has targeted the issues perfectly, and I agree, these robber-barons should end up like Keating did, in a small room with steel blinds.

Liked your program covering both the housing crisis and the possible investigations, as supported by Danny Schechter. I echo Tom Ashbrook’s statement: rescuing our economy AND investigating the causes could and should happen simultaneously. The potential for an ongoing calamity is too big to ignore why this crisis happened and who might have been co-responsible or even criminally liable. This is not about fingerpointing, but about coming up with fundamental solutions for our future.

I made a comfortable six figure salary & bought my house with a substantial down at 6 pct. I became disabled and had to retire at age 38. I tried to start a business to get off disability but it failed. Unfortunately, I got into a terrible loan which rose to 12 pct . After a seven month negotiation with my lender I was able to modify my mortgage. Then this month my disability insurer hartford got into trouvé and my check came a week late and 800 dollars short. I don’t see anything to help the elderly and disabled who will be most hurt and will face winter without help in weeks.

During the conversation a caller mentioned an organization that did some kind of analysis of what steps could be done to address the current financial problems. Does anyone know its name?

I don’t understand how anyone can blame this on getting low income folks into homes. This crisis was created almost solely in 4 previously “hot” markets – CA, NV, AZ, FL – and it was created by a lot of middle class folks looking to get rich quickly and being offered loan products that allowed them to become “investors.”

This allowed home prices to get so far out of reach, that in these regions, middle class people could only own a home by taking on absurd loans just to get an “average” house.

I have been a Real Estate Broker for 25 years. I am also an ex-Mortgage Banker. Presently, I am working towards a graduate degree in Economic Sociology as I have been sickened by the lack of professionalism and ethics throughout the real estate industry. I agree with Mr. Schecter on many points. We need a total restructing and that includes the real estate industry. When people work for commission only, no base pay, no benefits, and they have bills to pay, many agents go into “sell mode” and act in their own best interests rather than those of their clients. Changes need to be made in licensing laws,education and the way we do real estate/real estate compensation in this country.

“Since many of these unqualified buyers were African American, Frank apparently thinks that making it harder for African Americans to participate fully in the reckless, irresponsible financial values of our culture is discriminatory”

Yea, but most of them were white. So maybe you’re a tad racist.

Where did I say most of them they weren’t white? Frank is the one claiming that the fact that many of them were African American makes complaints against expanding the mortgage base racist. Read a newspaper, Michael, so you can follow the discussion here.

Weren’t you the guy that tried unsuccesfully to argue that Wall Street had no criminal culpability in this?

Nope. I’ve said repeatedly that if laws were broken people would go to jail. What I did say was that lawbreaking was not the cause of the problem, i.e., even if no laws were broken this crisis would still have occurred.

( Michael is so easily excited – I love getting him all aroused in these forums.)

This attempt to re-frame this whole thing as the result of “do-gooder” policies, carried out by the right wing propaganda machine, is fatuous and reprehensible, and is, as usual, well-orchestrated from top to bottom, Fox News, talking heads for hire, and all the rest.

I don’t see how you can deny that this contributed to the problem. No one is saying that it was the ONLY factor, but there is no question that an unholy alliance of investment bankers and liberal do-gooders BOTH found common cause in relaxing mortgage standards so people who should never have taken out a mortgage found themselves qualified for houses they could not afford.

This crisis would never have happened if we stuck to the older conservative standard of 20% down and a fixed-rate mortgage. I’ve been complaining about loosening mortgage standards since the 1980’s and I can tell you that most of the pushback I got was from liberals who said I was standing in the way of poor people owning their own homes.

I agree that making home ownership more accessible has social benefits, but lowering standards is the wrong way to do that. The CORRECT way is to lift people out of poverty, reduce income disparity, address the health-insurance, etc. Lift people UP, don’t lower mortgage standards.

“Since many of these unqualified buyers were African American, Frank apparently thinks that making it harder for African Americans to participate fully in the reckless, irresponsible financial values of our culture is discriminatory”

Peter Nelson did you not listen to a word Danny Schechter had to say about this? If you did how could come to this conclusion.

Franks was wrong with Fannie and Freddie but this is not the main reason we are in this mess.

It starts with the republicans and the wall street democrats.

We need a total restructing and that includes the real estate industry. When people work for commission only, no base pay, no benefits, and they have bills to pay, many agents go into “sell mode” and act in their own best interests rather than those of their clients. Changes need to be made in licensing laws,education and the way we do real estate/real estate compensation in this country.

I agree that this needs to be addressed. The incentivization scheme especially makes no sense. For example, there is nothing about the way “buyer’s agents” are incentivized that would motivate them to get a lower price for theior client.

But I think the real estate industry is a side issue. The bottom line is STILL that people took out mortgages they had no rational basis to think they could afford.

It’s a cultural issue and it stretches from the top to the bottom of our society – there is precious little difference between a sales clerk taking out a $250K, 0-down ARM and Congress passing a $870B “bailout” bill to be paid for strictly with borrowed money. They are both financially reckless.

Franks was wrong with Fannie and Freddie but this is not the main reason we are in this mess.

Where did I say it was the main reason?

Loosening mortgage standards was certainly a contributing reason. Do you really think that if the only mortgages written in the last 10 years were 20% down fixed-rate mortgages we would be in this crisis now?

My comments were about Frank’s comments. It is not racist to suggest that people should not not take out 5% down-payment mortgages. But Barney Frank thinks it is. He thinks that by requiring large down payments we’re locking African Americans out of the housing market.

There were not that many sales clerks buying houses for no money down.

Again you seem to be blaming the little guy for not knowing how the real estate business works.

A lot of people had been sold a bill of goods and lied to just so money could be made.

The bottom line our economy has been robed buy this system. We the people have been screwed and now we are being dragged down buy the greed of wall street.

I put the lion share on them, they created this mess and they lobbied for it.

How can anyone not come away from watching this segment on the Congressional Hearing of Lehman Brothers Finances without a feeling of outrage.

This man is crook period.

http://cspanjunkie.org/?p=747

Nelson your wrong, Franks effort to lower the down payment on houses for low and middle income people is not why this went wrong. It was the predatory lending practices of the all these companies and then the problem was compounded when Freddie and Fannie bought into this mess.

Had these people been offered good fixed rate mortgages on properties that had been fairly priced the 5% down payment would not have been a issue.

Again blaming the little guy is not problem.

Nelson your wrong, Franks effort to lower the down payment on houses for low and middle income people is not why this went wrong. It was the predatory lending practices of the all these companies and then the problem was compounded when Freddie and Fannie bought into this mess.

Had these people been offered good fixed rate mortgages on properties that had been fairly priced the 5% down payment would not have been a issue.

Again blaming the little guy is not helping

Fixing blame makes sense to me. It helps us decide who can justly be inconvenienced, regulated, taxed, assessed, fined, etc. to give us the tools to fix the problem.

Republicans and financiers have hit on the notion that poor people caused the problem–irresponsible borrowing. Please. One of the first things they teach in elementary economics is that you evaluate from the point of view of the fictional but useful “economically rational person.”

So housing prices are rising steadily, and poor people (not advised by economists) are presented by corporations (advised by economists) with a spectacular opportunity for financial leverage: Take the money you pay month-to-month for rent, and put it instead into mortgage payments. Take a low interest rate now. There will be a higher rate later, but maybe your payment ability will be better later. If not, just sell the property and take your profits. No money down, or just a little, and deduct the payments from your income for tax purposes.

No other investment you could make is even remotely this advantageous. You don’t have to be poor forever. And you have little or nothing to lose. Remember, you’re poor, so nothing can really go wrong that isn’t wrong already.

Any economist who says it isn’t rational to sign up for that loan is lying. The only thing irrational would be failing to take as big a loan as you could possibly manage, to maximize your leverage. So the poor people were doing exactly what the economists expected and always recommend for everybody.

So who is to blame?–the people who wrote the rules and entered into these transactions from an economically irrational standpoint. They were the ones across the table (broadly and collectively) from Ms. Jones, innocently (if ambitiously) signing the contracts written for her by the mortgage industry.

Had these people been offered good fixed rate mortgages on properties that had been fairly priced the 5% down payment would not have been a issue.

Not true. During the S&L crisis house prices in some markets dropped by 12%, which means 5% mortgages would be underwater. Furthermore, lowering the entry barrier places more bidders in the market, which drives up prices. It should be HARD to get into a mortgage.

If there was no such thing as a subprime mortgage then Wall Street would not have been able to play games with subprimes – misrepresenting them, repackaging them, etc. And if the barrier to entry was 20% plus the typically higher interest rate of a fixed-rate mortgage (when we bought our last house ARMs were at least 100 basis points below fixed) speculators and flippers would have found it much harder to get in.

So I still say that if we stiuck with the same lending standards we had when I bought my first house – 20% down (or maybe 10% if you pay a HEFTY PMI premieum), fixed rate, this crisis would never have happened.

No other investment you could make is even remotely this advantageous. You don’t have to be poor forever. And you have little or nothing to lose. Remember, you’re poor, so nothing can really go wrong that isn’t wrong already.

You’re assuming the poor people are stupid enough to believe that prices will go up forever.

Anyway, you’re missing the point. Poor people are not being blamed for the crisis.

Loose mortgage writing standards written on behalf of poor people are being blamed for the crisis. I’ve been speaking out publically against loose mortgage standards since they first started to become popular in the 1980’s and most of the pushback I got was from liberals who said that we needed to loosen standards so home ownership would not just be a privelege for the well-to-do. But that doesn’t mean that the poor were the only ones buying houses with 5% down and ARMs that went up, in amounts that stteched their ability to pay. I live in an exurb of Boston and I saw plenty of ordinary people buying $500K houses here that they would never have qualified for under the old rules.

There IS a simple solution. Lenders have known for hundreds of years that risky loans get even more risky with predatory interest rates, so those who wrote the sub-prime mortgages had to know many of them would end up in default. Thus, they were committing fraud against the borrowers by knowingly creating a “defective financial product” and selling it to them.

Those who bundled the bad loans created more defective financial products. They committed fraud against the investors by selling that worthless paper as a valuable asset.

Defective products are subject to recall. The simple solution is to issue a blanket federal charge of criminal fraud against everyone who created or sold these defective financial products, but offer them a plea bargain. Allow them to avoid prosecution with full restitution and a long jail sentence if they immediately recall their defective products; i.e., they buy them back from the investors at the original price, de-bundle them, and rewrite the original mortgages at the lowest possible rate, retroactive to the original date, forgiving all fees and charges. Borrowers who had already gone through foreclosure would be given a full refund of all moneys paid in.

Why did Tom allow his guest Danny Schechter to belittle callers and run over the top of opposing views on this issue? That kind of rhetoric is readily available on other media outlets. I tune in to On Point for a civil and reasoned discussion of complex issues. Sadly that standard was dropped today.

“You’re assuming the poor people are stupid enough to believe that prices will go up forever.”

Not at all.

I’m saying that stupid or smart they were behaving rationally. And that people who design a system which breaks down when used rationally and foreseeably (as you have apparently foreseen) ought to take the rap for that.

Sounds like you’ve been saying much the same thing. We just seem to disagree on who the designers were. Because this is a financial crisis, I favor putting most of the blame on the ones who managed the money, got the money, and wrote the rules for the money.

Probably others share in the blame. But, hey, it’s a financial crisis. Going after “liberals” will do nothing to fix it. Maybe make it worse. Maybe give us a financial crisis plus a political crisis. Going after financiers…better chance to do some good.

In 2005, after 7 failed attempts and three years of lobbying by financial institutions such Goldman, Merrill Lynch and Bear Stearns, the Republican congress passed the Bankruptcy Abuse Prevention and Consumer Protection Act.

The act provided creditors with greater control over the mortgage assets, undoing many established consumer protections, and promoted a creditor-friendly foreclosure process.

Easing of regulatory enforcement continued to spread under this current administration. Under SEC Secretary Cox, penalties levies by the SEC drop from $1.5billion in 2005 to $507million 2007.

Housing bubble continued to inflate and peaked in 2006. Wall St profits were at a record high.
Institutions continued to push the limited of financial engineering with more complex derivative products and structured investment vehicle.
Leverage was the name of the game reaching 40:1 at some brokerage houses.

The market participants fell in line to make money – from developers to realtors, appraisers to underwriters, loan originators to servicers, investment bankers to investors all were making money off the bubble.

At the same time the bubble was inflating deficit spending by the federal government was accelerating, trigging the decline in the value of the dollar resulting a sell-out of American assets to foreign investors.

After seven years of a republican presidency and six years of a republican Congress with failing economic and regulatory policies, we are being handed private sector bailouts exceeding $1 trillion.

Americans are also face crashing home values, rising prices and dwindling investments in a time when Wall St bonuses and executive compensation are at record levels.

Never before in the history of this country have so many paid so much for so few.

This whole process was not about unqualified borrowers taking sub-prime mortgages. It was about extracting every bit of liquidity out of the value in American and lining the pockets of a few. Once that was accomplished the real “sting” could be pulled-off. The use of complex CDOs, Swaps and ofter complex instruments enable Wall Street to make sometime out of nothing!

Great show today!

“You’re assuming the poor people are stupid enough to believe that prices will go up forever.”

I’m saying that stupid or smart they were behaving rationally.

No. I do not believe they behaved rationally.

I think I’m rational and in my 25 years in the real estate market I’ve always made large down payments, gotten fixed-rate mortgages, computed what I could afford based on distressed scenarios (e.g., my wife and I form a dual income but it’s always been our policy to only take out mortages based on what we can pay comfortably on the lower of one income), etc.

To me it is NOT rational to base all of one’s financial assumptions on best-case, or even status quo, scenarios. I don’t know why you assume that rational utility maximizer (to use the classical economics term) would automatically make the most optimistic assumption. To me the rational agent says “I might lose my job, I might get sick, my car might burn up” etc, and construct his financial plans to allow for that. I think this would be especially true for a low income person because they are less likely to have a safety net like health insurance or savings, so they should be more risk-averse than someone like me.

Also, a rational utility maximizer would not necessarily assume what the “experts” say is correct, since we all have everyday experience of experts being wrong, so I disagree that they would necessarily be influenced by what economists say (indeed economists seldom are in agreement).

Now, mind you, I don’t actually believe that Homo economicus is a rational utility maximizer – I’m just trying to follow your assumption. In fact I’m an adherent of David Laibson and Dan Ariely and other behavioral economics. If you’re looking for a good, professional lecture series on some of these topics, go to the London School of Economics (LSE) website and download their podcasts – they’re excellent!

“But that doesn’t mean that the poor were the only ones buying houses with 5% down and ARMs that went up, in amounts that stretched their ability to pay. I live in an exurb of Boston and I saw plenty of ordinary people buying $500K houses here that they would never have qualified for under the old rules”.

Peter, I agree……
I am a Realtor (ex-mortgage banker) in an expensive area, so the people I observed and worked with were not first time buyers or poor or stupid. But they acted stupid. Many behaved irrationally and unethically. Greed ruled the market. Back in the early 2000’s, I spoke at an office meeting about interest rates being too low, too long. I said that Greenspan needed to increase interest rates or the housing market would be in crisis in the coming years. No one wanted to hear this and I was told I should try to be more positive about the real estate market. I advised clients that they should not be taking out 100% mortgages or paying these overblown prices. But money was cheap so they changed Realtors. Most everyone (not just buyers and sellers), no matter how stupid or smart, was in denial and each wanted what they wanted, when they wanted it. Crazy! So I decided I needed a new career as I could not ethically advise anyone to participate in this lunacy.

“Weren’t you the guy that tried unsuccesfully to argue that Wall Street had no criminal culpability in this?

“Nope. I’ve said repeatedly that if laws were broken people would go to jail. What I did say was that lawbreaking was not the cause of the problem, i.e., even if no laws were broken this crisis would still have occurred.”

That’s an outright lie and you know it. You and I had an argument about this, which, by the way, you lost as evidenced by the fact that now the FBI is investigating some of the culprits.

I don’t know why I think this is such great sport: making you look like a pompous ass is just too easy.

“Read a newspaper, Michael, so you can follow the discussion here.”

This is too funny. An arrogant ignorant mental lightweight is telling me to get better informed.

Oh, I forgot – you know everything about everything and the rest of us are lucky if we’re smart enough to walk around.

That’s an outright lie and you know it. You and I had an argument about this, which, by the way, you lost as evidenced by the fact that now the FBI is investigating some of the culprits.

I never said no crimes were committed. I said whatever crimes may have been committed did not cause the problem. If you think otherwise feel free to post the link.

( I’d love to own stock in Michael’s underwear company – he must go through it like crazy. )

I’d love to own stock in the company that supplies material to Peter’s hat company. It’s got to take a lot of material to make a hat big enough to fit on his head.

To Peter and Michael,
While I am finding your back and forth arguments amusing and informative you guys are starting to sound like two kids fighting in a sand box.

I wish this forum had a moderator to keep this kind of stuff in check. (I am guilty of going down this path sometimes myself.)

Jeff,

There’s a big difference between me and Peter.

I tell Peter he’s an idiot.

Peter implies that everyone else on this board are idiots.

I’m glad that Tom Ashbrook did not allow his guest, Russ Roberts, to continue his ludicrous right-wingnut attempt to pin the blame for the bursting bubble on government policy rather than on Wall Street itself. It’s a disgusting attempt to blame the most vulnerable people. And your other guest, Danny Schechter, was just too populist/bleeding-heart to offer a reasonable response.

I want to see an investigation into how Wall Street used obscure derivative products to allow them to LAUNDER RISK. This risk-laundering allowed them to leverage risky bets far more than would have been otherwise borne by regulation or the market.

So, the poor whom have lost all of the savings of a lifetime trying to buy a house are to blame for the global economic pillage?

Wow!

Peter Nelson –

How you can defend insinuations by these lying crackpots that Obama is a Palestinian terrorist or compare incredibly dishonorable lies like that to anything Obama has done suggests you suffer from (a very common form of) moral stupidity.

About the show –

I find it hilarious and frustrating how so many people who seem to know what they’re talking about just got finished assuring us that the bailout last week was the answer to our problems.

The credit markets are still frozen and the global economy is sliding towards a recession — as of today.

Back when everyone was so positive we just had to go to war in Iraq, those of us who doubted the possibility of a clean quick victory were lambasted as unpatriotic defeatists.

Not to say I told you so.

But what about now? Were we just populist simpletons when we asked last week, “What will this bailout do to address the problem?”

Michael I know i was trying to inject some humor.

Peter’s thing is relating everything to his world.
It’s to black and white.

My case with the real estate market points to that.

A lot of people have been burnt and a lot how played the game by the rules. This is what Danny Schechter was saying. This is his thesis the average person in this country has been screwed and this has been happening for years.

Now Iceland is about to go bankrupt. A few months ago this country had the one of highest standards of living in Europe.

This is serious read this article and tell me the world financial market is not on the verge of hemorrhaging.

http://news.scotsman.com/uk/British-savers-denied-cash-as.4567943.jp

Michael I know i was trying to inject some humor.

Peter’s thing is relating everything to his world.
It’s to black and white.

My case with the real estate market points to that it’s shades of gray.

A lot of people have been burnt and a lot who played the game by the rules. This is what Danny Schechter was saying. This is his thesis the average person in this country has been screwed and this has been happening for years.

Now Iceland is about to go bankrupt. A few months ago this country had the one of highest standards of living in Europe.

This is serious read this article and tell me the world financial market is not on the verge of hemorrhaging.

http://news.scotsman.com/uk/British-savers-denied-cash-as.4567943.jp

Jeff,

In restrospect, I think your point was valid. I love On Point, and I hate to see some pompous knuckelead discourage debate among intelligent people by telling them that they don’t know what they’re talking about and they can’t even think straight, when in fact he’s the one that is ignorant. I won’t stop calling him on this.

However, I did let him drag me into juvenile tit-for-tat when the real point is that he’s toxic to any intelligent debate.

Thank you for pointing that out for me.

To Peter Nelson,

“I don’t know why you assume that rational utility maximizer (to use the classical economics term) would automatically make the most optimistic assumption.”

Here’s why. Bridge players often confront a situation in which making a contract requires them to assume something which may be contrary to fact–that the high cards are distributed in a particular way in the hands of their opponents. If the assumption is correct, the player can win if he follows it, but will lose otherwise. This situation, called playing a finesse, is one of the fundamentals of the game. It is entirely rational.

I believe you do behave rationally in your economic choices. What you seem not to have noticed is that the fundamentals are different for the poor, and that means what might be irrational for you can be rational for them. Compared to the poor, you generally hold an excess of high cards. You don’t need the finesse to win. You are fortunate.

The poor, unfortunate, readily accept your assumption that they may encounter adversity. In fact, they assume it. They are short of high cards most of the time. It’s what they are accustomed to. That’s why they know they are going to have to gamble–assume the cards are distributed in a certain favorable way–to escape debilitating circumstances. Holding fewer high cards than you do is a circumstance which dictates a change in tactics–you have to play the finesse. You are rational and they are rational, you are just differently situated.

10/08/2008

It ain’t happening

Why is the FED and others unable to stop the stocks from sliding or open up the credits lines? With all the money being thrown out in to the debt abyss, you would think that we would have been able to stop the spiral.

The reason here is simple, the money being supplied to the banks, the credit lines take over of banks and whatever is unable to stop the drain and stabalize the stock markets is simple. This money has already been spent, by the banks that made bad loans already and now can only fill in the holes in their portfolios. The loans have already been made and the monies spent and lost, and the conmsumers who are not worthy of loaning money to are still unqualified as they were two weeks ago.

Just a question:

Why if you can rent, can’t you be able to buy a house? Some monthly rents exceed in money many monthly mortgages payments.When, in the history of the US, homeownership became the exclusif privilege of a certain class of citizens(middle class and up)? What has become of the pioneer spirit that founded this country? We should see houses in the market that are accessible to all level of income. Renting should be a choice! I know low income people who worked all their life and paid in rent thousands of dollars that could have paid off a house! But nobody gave them credit.At the end of their life, without equity money to sustain their retirement, they fall in poverty, homelessness and misery, after having given society their honest contribution. Maybe we need more socialism!…Yes i’ve said it socialism, a more socialized capitalism.

This guy Peter is always quite convinced of his arguments… until time proves him wrong. Follow his comments for a while and you’ll see he easily does a 180 and contradicts his previous stance once the weather has changed.

I remember listening to pundit after pundit on NPR last year going on and on about how another depression could just never happen as I drove up and down 93 on my way to work before gas went up. How there were regulations that would stop this from happening, how we had learned lessons, etc. etc. I listened to this stuff in part to reassure myself because I had my own personal depression as a young single parent. This had involved going hungry in America, getting my heat turned off in the middle of the winter, not being able to take part in the American dream, despite holding down jobs. Now, as an aging woman, I wondered and hoped I would be able to have a pension, not to face poverty in my old age. when bush II was elected, when the deficit stated building, when the wars began, I felt, oh, boy, here we go, the third world ization of the USA, which it has always been for some of us anyway, but it felt like a conflagration was beginning then. This is a sad, and amazing broadcast, by an American ikon, Danny Schechter. Tell it, Danny! And keep telling it, as I know that you will. Very, very few are, very few want to know what will happen to people like me, and how it was done to us.

I completely agreed with the author of “Plunder” Mr Schecter on his views; where’s the outrage?. Well two things occured to bringgs us to this situation we are in today: 1. The way the people would have reacted if what happened in Wall street was Sex stories involving Bill Clinton would have been very different, the congress would have called all the prosecutors in town; the Supreme court would have asked for his head and everybody who had had any association with him even only a visit could have been dragged to the grand-jury to testify. But what we all hear now is “THIS IS NOT THE TIME TO BLAME ANYBODY BUT TO FIX WHAT IS BROKEN”.
2. The American People gambled in 2000 and in 2004 and this is the reward of their gains or winning.

The question I have been asking myself is why are we not in the streets protesting?

[...] Investigating the Subprime Scandal | WBUR and NPR’s On Point with Tom Ashbrook 1070708: Investigative reporter Danny Schechter has never been quiet about the slick ways of Wall Street and American finance. He won Emmys and was out front on the 1980s S&L crisis. [...]