Blowing the Whistle on the Mortgage Bubble • Hacker News Board

Re: Blowing the Whistle on the Mortgage Bubble

#21

Post by Nursie » Fri, Jan 25, 2013, 2:24 PM UTC

martinced wrote: post #15

"industry insiders were ringing the alarm bells" Just as today many economists are ringing the alarm bells: the governments public debt issues (both in U.S., Japan and many countries in the Eurozone) are going to end up very badly. Many central banks (including in the U.S.) have basically become bad banks. Anyone holding medium and long-term public government debt (like many insurance products) are basically bankrupt…

That's right, socialists are the ones to blame. Good citizen, you've been well trained to see socialist enemies hiding around every corner.

We do not live in a socialist world. If you had any comprehension of what the word meant you would stop using it.

Re: Blowing the Whistle on the Mortgage Bubble

#22

Post by spot » Fri, Jan 25, 2013, 2:25 PM UTC

martinced wrote: post #15

"industry insiders were ringing the alarm bells" Just as today many economists are ringing the alarm bells: the governments public debt issues (both in U.S., Japan and many countries in the Eurozone) are going to end up very badly. Many central banks (including in the U.S.) have basically become bad banks. Anyone holding medium and long-term public government debt (like many insurance products) are basically bankrupt…

"that's where we're arriving now"

you know, years ago the deficit scolds said the US would turn into Greece "within two years". they were wrong. they said inflation would spike. they were wrong. and here you go doing the same thing again.

the US will never default on its debt. period. it's the law. they will just use inflation to pay it if they have to. more likely the economy will return to growth and a combination of forces will keep it under control.

yes this is a tax on savings. act accordingly. it's not the end of the world, we have all kinds of taxes. this one exists for a good reason.

Re: Blowing the Whistle on the Mortgage Bubble

#23

Post by gizmo » Fri, Jan 25, 2013, 2:26 PM UTC

martinced wrote: post #15

"industry insiders were ringing the alarm bells" Just as today many economists are ringing the alarm bells: the governments public debt issues (both in U.S., Japan and many countries in the Eurozone) are going to end up very badly. Many central banks (including in the U.S.) have basically become bad banks. Anyone holding medium and long-term public government debt (like many insurance products) are basically bankrupt…

Ug. So many misconceptions and conspiracy theories, where do I begin?

1. The US and the Eurozone are suffering from very different problems. The debt in the US is likely to stabilize at around 80% GDP (source: http://krugman.blogs.nytimes.com/2013/01/24/tim-geithner-is-...). European countries are in quite a bit of trouble, but it will most likely take the the form of a slow and painful recovery. Greece has already partially defaulted on its debt (and the world didn't end).

2. There is no reason to assume that many (American?) banks will collapse anytime soon. The realistic worst-case scenario is another multi-trillion dollar bailout at the expense of the taxpayer.

3. The trillion dollar coin idea was a legal gimmick to counter another legal gimmick (debt ceiling). Minting a trillion dollar coin is not substantially different from conventional methods of "printing money" (there are some differences: e.g. no interest is paid on currency). The trillion dollar coin wouldn't be used to pay off the public debt. Minting coins to pay off the public debt is a bad idea, and not a single economist seriously suggested doing that. To reiterate: the trillion dollar coin is a legal trick and has almost no impact on the actual economy.

4. The cost of printing money isn't zero in all situations. Which is why printing money can partially fix some financial problems, but not all of them. Printing money is a good idea for instance when there is a shortage of money in the economy (i.e. risk of deflation). Printing money is never a substitute for real economic activity.

5. Inflation certainly works like a tax. Those with money are hurt by inflation and those with net debt benefit from it. It also encourages investment, which is why most economists think a little inflation is a good thing.

6. US Government bonds are in very high demand. Hence the low interest rate on them.

7. Your crazy rants about how the US is a socialist state don't have any bearing on reality.

Re: Blowing the Whistle on the Mortgage Bubble

#24

Post by sophiabatka464 » Fri, Jan 25, 2013, 2:28 PM UTC

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Re: Blowing the Whistle on the Mortgage Bubble

#25

Post by darkarmani » Fri, Jan 25, 2013, 2:28 PM UTC

cremnob wrote: post #3

This documentary didn't reveal anything that wasn't already known. There aren't any criminal prosecutions because it's hard to prove that there was fraud. It then goes on to speculate why Breuer hasn't been able to charge anyone.

> There aren't any criminal prosecutions because it's hard to prove that there was fraud.

No it's not that hard to prove their was fraud. It just takes forever to bring up Federal Grand Juries for some many cases of fraud.

The Fed Grand Jury I was on one was dealing with financial crimes from 5-6 years ago. They had so much evidence. My lesson was that only the big fish get fried in federal financial crimes, because everyone else gets immunity to compel their grand jury testimony. (if you can't be prosecuted you are unable to take the 5th and remain silent -- you must testify)

Re: Blowing the Whistle on the Mortgage Bubble

#26

Post by logn » Fri, Jan 25, 2013, 2:29 PM UTC

"I think we’ve developed in our society an idea that any time we see a problem, we can create a law that’s going to prevent that problem from happening in the future. We don’t need new laws. We need to enforce the laws that have been on the books before." -Tom Leonard (Mortgage underwriter)

That's the duty of the Executive branch.

"we have a responsibility in the person of our President; he cannot act improperly, and hide either his negligence or inattention; [...] far from being above the laws, he is amenable to them in his private character as a citizen, and in his public character by impeachment." -James Wilson (a Founding Father of the US)

"Not but that crimes of a strictly legal character fall within the scope of the power [of impeachment]; but that it has a more enlarged operation, and reaches, what are aptly termed political offenses, growing out of personal misconduct or gross neglect, or usurpation, or habitual disregard of the public interests, various in their character, and so indefinable in their actual involutions, that it is almost impossible to provide systematically for them by positive law." -Joseph Story (Supreme Court Justice, 1811-1845)

Re: Blowing the Whistle on the Mortgage Bubble

#27

Post by xutopia » Fri, Jan 25, 2013, 2:31 PM UTC

jcven wrote: post #11

The best whistle blowing before the bubble popped had to be Peter Schiff telling a huge crowd of mortgage bankers they were about to lose their jobs in Nov 2006: http://www.youtube.com/watch?v=jj8rMwdQf6k

Peter Schiff fascinates me. He's had many right predictions and he's been making money off of these, all while telling the world exactly how he'll do it.

Re: Blowing the Whistle on the Mortgage Bubble

#28

Post by niggler » Fri, Jan 25, 2013, 2:32 PM UTC

spot wrote: post #22

martinced wrote: post #15

"industry insiders were ringing the alarm bells" Just as today many economists are ringing the alarm bells: the governments public debt issues (both in U.S., Japan and many countries in the Eurozone) are going to end up very badly. Many central banks (including in the U.S.) have basically become bad banks. Anyone holding medium and long-term public government debt (like many insurance products) are basically bankrupt…

"that's where we're arriving now" you know, years ago the deficit scolds said the US would turn into Greece "within two years". they were wrong. they said inflation would spike. they were wrong. and here you go doing the same thing again. the US will never default on its debt. period. it's the law. they will just use inflation to pay it if they have to. more likely the economy will return to growth and a combination…

> inflation would spike

Inflation did spike but what happened was that the definition was redefined in a deceptive way.

Look at cereal prices and volumes. Prices have spiked and the containers/volumes have shrunk, but that's not taken into account under measures that exclude food prices. Energy prices have spiked. Gold prices have been running for more than 12 years.

It's not to say we are seeing hyperinflation, but the CPI and other measures have changed in such a way that it makes inflation appear low.

Re: Blowing the Whistle on the Mortgage Bubble

#29

Post by josefresco » Fri, Jan 25, 2013, 2:35 PM UTC

rauljara wrote: post #7

cremnob wrote: post #3

This documentary didn't reveal anything that wasn't already known. There aren't any criminal prosecutions because it's hard to prove that there was fraud. It then goes on to speculate why Breuer hasn't been able to charge anyone.

That is largely what Frontline does. They sometimes break original stories, but a lot of what they do is building on other people's reporting and compiling the information in a clear and organized fashion. Then they add interviews for depth and insight. They don't try to be breaking news. They try to be comprehensive. I'm a big fan. They aren't perfect (who is), but they take reporting and informing very seriously, a…

I cannot agree more, and cannot express more my wish that we had more programs like Frontline that "go deep" and focus on topics that are important to society not just trending.

Re: Blowing the Whistle on the Mortgage Bubble

#30

Post by Create » Fri, Jan 25, 2013, 2:40 PM UTC

Nrsolis wrote: post #17

Create wrote: post #14

http://video.pbs.org/video/2327953844 http://www.rollingstone.com/politics/blogs/taibblog/outrageo...

Matt Taibbi isn't what I would call the most distinguished journalist to be getting your info from. He's a bit sensationalist for my taste. For that matter, he seems to enjoy picking a position to write from before he really has all the facts.

Still, some prosecutors proposed that Attorney General Eric H. Holder Jr. meet with Treasury Secretary Timothy F. Geithner, people briefed on the matter said. The meeting never took place.

After months of discussions, prosecutors decided against a criminal indictment, but only after securing record penalties and wide-ranging sanctions.

http://dealbook.nytimes.com/2012/12/10/hsbc-said-to-near-1-9...

"This process has highlighted some unacceptable shortcomings that HSBC deeply regrets," said Levey in written testimony. "While our old model served us well historically, it does not work in an interconnected world where transactions cross borders instantaneously and where weaknesses in one jurisdiction can be quickly exported to others."

WASHINGTON – Global banking giant HSBC and its U.S. affiliate exposed the U.S. financial system to a wide array of money laundering, drug trafficking, and terrorist financing risks due to poor anti-money laundering (AML) controls, a Senate Permanent Subcommittee on Investigations probe has found.

http://www.hsgac.senate.gov/subcommittees/investigations/med...