I take back anything I said about McCain not being an economic trainwreck.

Started by Vekseid, September 22, 2008, 07:07:11 PM

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Vekseid



And he just called for the chairman of the SEC to be fired.

If he's still unwilling to consider what a catastrophic mistake this is - currently estimated to have a $1 trillion plus pricetag - then this man is not mentally qualified to hold any sort of public office, much less the presidency.

Holy crap.

ShrowdedPoet

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Porphyre


Pumpkin Seeds

I used to like him because it felt like he would go after Democrats and Republicans.  For awhile he seemed like the perfect bipartisan canidate.  Now he just...ug.  He feels so compromised and dirty now.

Will

Quote from: Asku on September 23, 2008, 06:13:58 PM
I used to like him because it felt like he would go after Democrats and Republicans.  For awhile he seemed like the perfect bipartisan canidate.  Now he just...ug.  He feels so compromised and dirty now.

You just can't make it through the primaries without appealing to the base.  Unfortunately, both bases are composed of extreme radicals with too much power.  Normally this hasn't been so much of a problem, because most presidents migrated a little closer to center once they got into office.  Maybe the responsibility of sitting in the Big Chair tempered their intentions somewhat, I don't know.  It doesn't seem like that anymore, though.  Even though Bush Jr. was elected with less than half of the popular vote, he never stepped back from that party line one inch.  The campaign never stops now.  Would McCain stop that?  I think he might.  Would his party let him?  I can't imagine they would.  I think he's sold his soul at this point. 
If you can heal the symptoms, but not affect the cause
It's like trying to heal a gunshot wound with gauze

One day, I will find the right words, and they will be simple.
- Jack Kerouac

NightBird

Considering McCain has the blessing of Rove, this ties him to the same group that's been behind deregulation and backing trickle-down/supply-side economics, which gets us back to the issue that Veks raised: McCain has become another clone of the corporate-welfare state.

I do urge everyone to read the article I linked. It proves that some parts of the world are a bit better versed in a broader sort of economics.

Methos

Oh Nightbird are you SERIOUSLY going to use FRANCE as an example of economic rectitude? That's just intellectually sloppy on so many levels. France basically is solvent on the basis that they dreamed up the EU to scam the Germans for money perpetually, thus the French agricultural sector consists of many small inefficient and frankly economically silly farms propped up with German money. Beyond that their busineses generally aren't internationally competitive, their country is over regulated and possessed of far too much red tape and bureaucracy. Even the French seem to realize that they can't continue on in such a fashion as Sarkozy was actually elected on the basis on making the French economy more like its Anglo-Saxon counterparts. Not to mention the fact the French have an aging and shrinking tax base, and that most of the people young enough to support them are rioting Islamic youths.
"Till shade is gone, till water is gone, into the Shadow with teeth bared, screaming defiance with the last breath, to spit in Sightblinder’s eye on the last Day."

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NightBird

Actually, hon, that's why I was so surprised to hear Sarkozy saying what he did. It meshes with what I'm hearing from most of the economists at school (profs from the school and visiting scholars invited to speak) in discussions about the current world crisis.

It's not France as a whole (particularly its past) that I'm referring to, it's the specific remarks made in a particular speech.

OldSchoolGamer

The American public that elects these people is itself so disconnected from economic reality that I really don't see much hope of saving the U.S. economy.  At this juncture, I think "saving the economy" from collapse is in and of itself impossible.  The economy is based on the fantasy that homes are magic sources of cash (a pot of gold at the end of the banking rainbow called "equity"), and that every three to five years a homeowner has some God-given "right" to refinance and draw out $15-30K in cash to buy SUVs and big-screen TVs and deck remodels and plastic surgery.

The idea that an assembled mass of wood, glass, concrete and plastic sitting in the sun and rain and slowly weathering away should get MORE valuable over time is in direct violation of the laws of thermodynamics and is absurd.  What we're seeing in America today is not a crash, crisis, or disaster.  It is a correction.  It is a return to reality.  Sure, it feels like a crash for those who were on the meth-like high of fantasy money, but it is no such thing.

Methos

The problem with the banks and financial institutions in the US Nighbird is that the government guaranteed so many of their loans through the quasi public mortgage companies it set up. Having the government there to step in as a last resort has made the entire industry lazy. They haven't been a prudent as they should have simply because there is a safetynet there for them to fall into just as has happened. If it were a sharp cliff they'd have never gone nuts with this sub-prime non-sense.
"Till shade is gone, till water is gone, into the Shadow with teeth bared, screaming defiance with the last breath, to spit in Sightblinder’s eye on the last Day."

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NightBird

And eliminated all the regulations that had been put into place to reduce wild speculation and other unsound business practices, like carrying inadequate reserves for the insurance portion of their portfolios, so that large losses wouldn't be crippling. Simply being allowed to be imprudent tends to be temptation enough for some who think they're too much a financial genius to be caught with their pants down, so to speak.

Sadly, sub-prime lending was only part of it. Using the funds and programs set up for primary home ownership for what amounted to sole proprietorship businesses (flipping houses) also contributed significantly, as did the way that these companies handled investing their reserves.

However, for the area where I'm living, one of the worst hit in the eastern half of the US, approximately half of the foreclosures are from job losses, which have been terrible the past three years, and the other half from variable rate or other non-traditional mortgage formats that people had known they would need to refinance, but were unable to do so when the banks made the decision not to allow refinancing at the current terms or other compromise solutions. The banks are losing a great deal more through the foreclosure process than if they'd been less knee-jerk punitive. Compassion isn't always bad business. ;)

Methos

The problem with the government guaranteeing the banks solvency like this is its undermining the free market where stupidity would be punished with institutional death. A few death spirals and the financial institutions would get their act together in any case.

As for the people who took those ridiculous sub-prime mortgages I honestly don't feel sorry for them. They knew they were going to have to pay all that money back eventually. Their naively hoping that somehow their 'introductory' rate would stay low forever, as they desired to live beyond their means and then defaulting is rather predictable but its still fundamentally their fault. If your a janitor you can't buy a big house - deal with it. Now it was stupid of the banks to lend that sort of money to those sorts of people in the first place, it was also dumb for them to borrow more than they could pay back.

"Till shade is gone, till water is gone, into the Shadow with teeth bared, screaming defiance with the last breath, to spit in Sightblinder’s eye on the last Day."

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ShrowdedPoet

Quote from: Methos on September 24, 2008, 01:26:34 AM
Now it was stupid of the banks to lend that sort of money to those sorts of people

Now what sorts of people are you referring to?  Your paragraph mentions janitors that would like bigger houses but really what type of PEOPLE are you speaking about?
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Methos

I'm referring to people that won't be able to afford the eventual regular payment, essentially anyone who rather foolishly borrowed more than they're capable of paying back.
"Till shade is gone, till water is gone, into the Shadow with teeth bared, screaming defiance with the last breath, to spit in Sightblinder’s eye on the last Day."

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ShrowdedPoet

Quote from: Methos on September 24, 2008, 01:00:18 PM
I'm referring to people that won't be able to afford the eventual regular payment, essentially anyone who rather foolishly borrowed more than they're capable of paying back.

A lot of people do not realize that they will be unable to pay it back.  You may see it as foolish borrowing practices but at the time for them it may have been ok or they just may not have realized what exactly they were getting themselves into.  Sales people can be very fast and things can happen that you didn't realize were happening. 
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Methos

Well if you making 40 grand you should realize a half a million dollar home is a might bit out of reach at the time. Its just common sense.
"Till shade is gone, till water is gone, into the Shadow with teeth bared, screaming defiance with the last breath, to spit in Sightblinder’s eye on the last Day."

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ShrowdedPoet

Quote from: Methos on September 24, 2008, 01:11:32 PM
Well if you making 40 grand you should realize a half a million dollar home is a might bit out of reach at the time. Its just common sense.

People don't forsee things such as job loss, pay cuts, emergencies. . .things happen.  Also it might make sense to them. 

*whispers, "Are those dashes sposed to be in your sig?"*
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Methos

No some people had bad things happen to them, fair enough. Some people just borrowed more than they ever should have in the first place.

And er no they aren't suposed to be there. I've just never really noticed them before you mentioned it.
"Till shade is gone, till water is gone, into the Shadow with teeth bared, screaming defiance with the last breath, to spit in Sightblinder’s eye on the last Day."

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Methos

"Till shade is gone, till water is gone, into the Shadow with teeth bared, screaming defiance with the last breath, to spit in Sightblinder’s eye on the last Day."

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ShrowdedPoet

Quote from: Methos on September 24, 2008, 01:20:45 PM
Well that's fixed.

*grins*  Thankies!

Money managment just isn't taught like it should be.  Parents should teach children and it should be a required course at school.  Most of the time the econ class in high school just doesn't cut it.  Most people don't understand they're taking on too much. . .
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Methos

I have trouble believing that people can't realize that paying back a debt of that size will be rather burdensome. They would have had to live somewhere so paying rent was already a part of their life. Realizing eventually that the cost of acommodation was going to increase considerably even assuming everything else was constant should have occured to them if they'd given the matter the serious thought it warrants.
"Till shade is gone, till water is gone, into the Shadow with teeth bared, screaming defiance with the last breath, to spit in Sightblinder’s eye on the last Day."

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Will

A lot of people just don't know well enough to look at the fine print.  Some of the practices that led to these mortgage defaults were more than just stupid; they were almost predatory, and that's worse, I think.  It's one thing to leave it up to the system to sort out the morons, and quite another to suck the money out of them and then expect a bailout by the Feds.

But anyway, about McCain, I actually kind of appreciated it when he admitted he wasn't an economics expert.  I expected him to do like Obama did with foreign policy:  pick a VP with experience in his weakness.  Wrong!  And now he's trying to act like he knows what he's talking about!  I don't see how it could be anything but an economic disaster if he gets elected.  He'll leave it up to Congress and lobbyists to determine financial policy, and they'll keep doing what they've been doing. *sigh*

Also, I think a half-million dollars is a little exaggerated.  And some people don't even understand what an adjustable rate mortgage means.  I know of some (legal) immigrants that got screwed like that.
If you can heal the symptoms, but not affect the cause
It's like trying to heal a gunshot wound with gauze

One day, I will find the right words, and they will be simple.
- Jack Kerouac

ShrowdedPoet

Quote from: Methos on September 24, 2008, 01:32:00 PM
I have trouble believing that people can't realize that paying back a debt of that size will be rather burdensome. They would have had to live somewhere so paying rent was already a part of their life. Realizing eventually that the cost of acommodation was going to increase considerably even assuming everything else was constant should have occured to them if they'd given the matter the serious thought it warrants.

Opened a debate thread that this matter would be better discussed in.
Kiss the hand that beats you.
Sexuality isn't a curse, it's a gift to embrace and explore!
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RubySlippers

Welll I'm saving for the down payment on my own house someday and out of my extra money from my self-employment I'm putting 50% into savings, I already have $6000 saved. And figure for most first time home programs in my area would need 15% down to be safe and get a suitable afordable loan. So for a $100,000 small house I figure I will need $15,000 cash. I'm aiming for $30,000 if I can get that much it should get my house with a decent fixed rate mortgage when I'm ready with good terms. Why make it easier for me a house is a major goal and used to be somethng people worked towards. My father had the GI Bill to help him buy the house he lives in now and even he had to put down 12% and show credit worthiness.

As for this mess I agree with Congress rushing with this kind of funding is a bad idea, its better to have a plan for the money backed by experts and proper oversight to make sure some of it ,if not all, is paid back. I'd favor personally giving loans not a bailout and have the Federal Courts oversee the companies while the debt is owed to the American People.