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Blowing the Whistle on the Mortgage Bubble

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Re: Blowing the Whistle on the Mortgage Bubble

#161

Post by wintersFright »

aliston wrote: post #78
patrickgzill wrote: post #69

Earlier quoted context omitted.

Gold has an intrinsic value, 1 gram of cotton based paper with some ink on it, does not.

Legitimately curious... what exactly is the intrinsic value of gold? Are you basing it's "intrinsic" value on its commercial value or something else? There are a number of metals that have much more useful applications than gold. From what I've read, gold's intrinsic value was ultimately a western idea that, again, stemmed from a confidence in it's value. When the Spanish discovered gold in central Mexico, the Aztecs…

there is no intrinsic value, but if one produces more than one consumes then one must save their excess production by some means. One could hoard potatoes but thereby deprive some people of eating. plus they have a shelf life. so potatoes are not a good choice.

Gold's value is it's uselessness! It's value is derived from the network effect of other producers willing to trade their services/goods in the future for the gold you have stored.

Currency is for earning and spending. there is no bound to how much currency can be conjured to claim on goods from the real world. When the currency system fails under the weight of debt incurred in that currency - then those holding physical tangible goods will do well against those whose wealth is denominated in an arrangement of 1's and 0's.

Re: Blowing the Whistle on the Mortgage Bubble

#162

Post by mynameishere »

gizmo wrote: post #37
mseebach wrote: post #34

Earlier quoted context omitted.

So, for your point 1, neither Krugman nor the CBPP report he links to claims that the debt will stabilise at 80%. It will arrive at 80% with a rising slope, not flatten like the "cuts" scenario. Also, good thing you didn't link to anything containing conspiracy theories: To say what should be obvious: Republicans don’t care about the deficit. They care about exploiting the deficit to pursue their goal of dismantling…

You're correct that the debt will continue to go up after 10 years if there are absolutely no cuts and no revenue increases. But 10 years is plenty time to bring the budget in line with GDP growth, and after the depression is behind us there should be bi-partisan interest in reducing the deficit. I'll be very surprised if the US deficit is over 80% of GDP in 10 years. The comment by Krugman about Republicans wanting…

But 10 years is plenty time to bring the budget in line with GDP growth

You are out of your mind. Absolutely, 100 percent out of your mind.

Re: Blowing the Whistle on the Mortgage Bubble

#163

Post by duncan_bayne »

ww520 wrote: post #95

The people in the high-up knew. A lot of people in all levels knew. People knew it was a bubble and it cannot last. What people didn't know was how to pop the bubble gently to have a soft landing. Remember real estate and mortgage were majority drivers of the economy from 2000 on after the Dotcom and stock crash. Popping the bubble meant wrecking the economy. People were really uneasy in deliberately engineering a re…

Nit pick - a bubble bursting doesn't wreck the economy any more than dismantling an engine for a tune up wrecks that engine. A recession is really a readjustment of the economy, bringing it in line with reality.

Re: Blowing the Whistle on the Mortgage Bubble

#164

Post by Tycho »

aliston wrote: post #78
patrickgzill wrote: post #69

Earlier quoted context omitted.

Gold has an intrinsic value, 1 gram of cotton based paper with some ink on it, does not.

Legitimately curious... what exactly is the intrinsic value of gold? Are you basing it's "intrinsic" value on its commercial value or something else? There are a number of metals that have much more useful applications than gold. From what I've read, gold's intrinsic value was ultimately a western idea that, again, stemmed from a confidence in it's value. When the Spanish discovered gold in central Mexico, the Aztecs…

Gold is always in demand as a luxury item for jewelry and decoration. The fact that it's primarily wanted for luxury and not for practical purposes is actually in its favour - peoples wants are unlimited, whereas their needs are finite. And a metal that's needed for some practical purpose one day, might become obsolete the next.

Aside from that it's ideal for currency because it's fungible (all gold the same, so exchange is easy), portable (small amount is worth a lot, also easy to melt down into smaller lumps), durable (doesn't rust or rot).

It's a virtuous circle whereby its intrinsic physical properties and luxury status make it a good choice for money/currency, which then gives it a new dimension of value as that idea spreads.

Re: Blowing the Whistle on the Mortgage Bubble

#165

Post by eli_gottlieb »

xxchan wrote: post #154
eli_gottlieb wrote: post #144

Earlier quoted context omitted.

Geithner was instrumental in guiding Obama away from this heavy handed approach, as he recognized (I think quite accurately) that confidence was really the only thing keeping the system from crashing completely. Which means that system deserved to crash, die, burn to ashes, and leave us clean ground on which to rebuild.

Thought I appreciate the sentiment "just do the right thing and let the chips fall where they may" and try to live my life according to it, on a scale of countries and when hundreds of million of people lives would be affected, it's simply irresponsible and stupid.

You misunderstand. I don't mean, "do the right thing and let the chips fall where they may"; I'm not talking about deontological ethics.

I'm talking about the fact that the system does not work. It was and is ruining people's lives, and all the bail-outs (which have become systemic) did is prop it up for its few "winners" at the expense of everyone else. Economically speaking, the West is being transformed into Japan: a zombie economy run for zombie banks through zombie companies by ever-more-impoverished workers and propped up at the taxpayers' expense.

Re: Blowing the Whistle on the Mortgage Bubble

#166

Post by sageikosa »

notahacker wrote: post #143
sageikosa wrote: post #133

Earlier quoted context omitted.

http://mises.org/daily/6277/Socialism Much better read

Reading tracts on socialism by Mises is similar to learning about capitalism from Marx or mainline Christianity from the Church of Latter Day Saints. I'm not the biggest fan of Wikipedia social science articles, but on the whole I'd still see it as a better starting point than someone beating straw men to death in order to promote their own fringe agenda.

I had no agenda, except to provide a better reference point for defining socialism than Wikipedia. From my experiences, most people have never heard of von Mises, so may not even be aware that definitions and criticisms of socialism may extend beyond how it is categorized on a site whose goal is collective ownership of information.

Of course, not many people understand that psychology (for price tolerance) and sociology (for price determination) are not the same thing; so trying to understand why any old "economic system" won't do, and why society's governing structure cannot just be changed like an operating system.

Re: Blowing the Whistle on the Mortgage Bubble

#167

Post by chrisbennet »

wcgortel wrote: post #106
nicholasjarnold wrote: post #93

Earlier quoted context omitted.

I cannot express how angry reading comments like this makes me. Clearly many of these guys at the top (bank CEO's, fund managers, ect.) were systematically defrauding everyone in order to turn a larger profit. Call me naive, but isn't this shit (the massive fraud perpetrated on us by banks) supposed to result in hefty jail sentences?

I mean, you're justified in a way. I don't think it's fraud though. Consumers are equally complicit. What I mean by that is that as the buyer of a product, you usually would go out and read the reviews, kick the tires, etcetera. At this time, many buyers of investments didn't do that at all. Our sales guys didn't understand the product for sure, but if they had a customer who asked the right question they would have…

"I mean, you're justified in a way. I don't think it's fraud though. Consumers are equally complicit."

That reminds me of the Homer Simpson quote: "Marge, it takes two to lie. One to lie and one to listen."

Re: Blowing the Whistle on the Mortgage Bubble

#168

Post by snowwrestler »

aliston wrote: post #157
snowwrestler wrote: post #148

Earlier quoted context omitted.

Replying to myself since I can't reply directly to you. Social Security gets special bonds specifically to avoid the bond market distortions you describe. They have been purchasing these bonds in high volume for decades prior to the financial crisis, and marketable Treasury rates were much higher for most of that time. In addition, in 2011, SS tax receipts dropped below expenditures for the first time since 1983, so…

I'm not trying to be an ass, but I'm actually legitimately curious where our misunderstanding is. My understanding is that, all other things being equal, when government/government controlled agencies purchase government debt ("cause"), the result ("effect") is lower interest rates. Here it is, directly from the head of the Fed regarding the rationale behind QE2: "What we're doing is lowering interest rates by buying…

The Fed is using quantitative easing to lower market interest rates because their typical lever against market interest rates--the interest rates of short-term U.S. Treasuries--was already effectively zero.

They were already effectively zero because there has been such strong demand for U.S. Treasury bonds from customers both domestic and foreign, which was my point at the beginning.

Re: Blowing the Whistle on the Mortgage Bubble

#169

Post by ChuckMcM »

shawn-butler wrote: post #160
ChuckMcM wrote: post #126

Earlier quoted context omitted.

"After reading the whole thing, I was a little shocked to realize the answer is 'No, there was no one important who would listen.'" There is a scene in the Fifth Element where Gary Oldman knocks a glass off the table to demonstrate how destruction is "good" for the world because it gives all the support actors a chance to play their role. Its a pretty chilling example when you realize that there are people who actual…

And after reading your entry I viewed the photos of all these bloodsuckers and ethical CEOs enjoying Sean Parker's dbag-fuelled taxidermy party at Davos. Morality and ethics don't count for anything in a contemporary society where punishment for misdeeds exists only for those who cannot afford to buy their freedom.

Being ethical is something you do for you, not society.

Re: Blowing the Whistle on the Mortgage Bubble

#170

Post by [deleted] »

snowwrestler wrote: post #168
aliston wrote: post #157

Earlier quoted context omitted.

I'm not trying to be an ass, but I'm actually legitimately curious where our misunderstanding is. My understanding is that, all other things being equal, when government/government controlled agencies purchase government debt ("cause"), the result ("effect") is lower interest rates. Here it is, directly from the head of the Fed regarding the rationale behind QE2: "What we're doing is lowering interest rates by buying…

The Fed is using quantitative easing to lower market interest rates because their typical lever against market interest rates--the interest rates of short-term U.S. Treasuries--was already effectively zero. They were already effectively zero because there has been such strong demand for U.S. Treasury bonds from customers both domestic and foreign, which was my point at the beginning.

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