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The man who saw the Financial Crisis coming - 10/26/2008 5:06:12 PM
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tony.nz
Posts: 226
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I thought this was interesting to share, from a New Zealand news source...
http://www.stuff.co.nz/4739991a13.html
In particular, I was struck by this comment that he made in 2005...
"They buy everybody else's stuff, but unfortunately there's nothing left in the kitty to pay the producers. If you want to sell to Americans then you must first lend them money. Good tactic! And what they do is write it down in their IOU book, in their own collapsing currency, and everyone will be happy."
I hate to say this, but perhaps the US is mortgaged out to the Arabian oil producers, and Asian cheap goods producers.
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RE: The man who saw the Financial Crisis coming - 10/26/2008 6:11:02 PM
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rlj
Posts: 2350
Joined: 4/14/2005
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quote:
I thought this was interesting to share, from a New Zealand news source...
http://www.stuff.co.nz/4739991a13.html
In particular, I was struck by this comment that he made in 2005...
"They buy everybody else's stuff, but unfortunately there's nothing left in the kitty to pay the producers. If you want to sell to Americans then you must first lend them money. Good tactic! And what they do is write it down in their IOU book, in their own collapsing currency, and everyone will be happy."
I hate to say this, but perhaps the US is mortgaged out to the Arabian oil producers, and Asian cheap goods producers.
I don't remember anyone mentioning Fannie and Freddie here on CW but the rest of this was brought up here in some form or another for the last few years. We were told we were liberals, ignorant, stupid, Bush bashing, etc. I'm sure no one here wants to listen to this now either.
_____________________________
-Roger
I could wile away the hours
Conferrin' with the flowers
Consultin' with the rain
And my head I'd be scratchin'
While my thoughts were busy hatchin'
If I only had a brain
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RE: The man who saw the Financial Crisis coming - 11/7/2008 11:36:08 PM
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rockominal
Posts: 33
Joined: 8/15/2007
From: Indiana
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quote:
ORIGINAL: tony.nz
I thought this was interesting to share, from a New Zealand news source...
I don't really need opinions from New Zealand.
Richard Baker, R-La. , warned about this in 2004. I wonder what obaama was up to around that time? 
http://vodpod.com/watch/1038839-dems-refuse-to-reform-freddie-fannie-in-2004-video
_____________________________
I might tell you the truth, or something pretty close to it. Jesus says, "I Am the Truth."
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RE: The man who saw the Financial Crisis coming - 11/8/2008 3:43:00 AM
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tony.nz
Posts: 226
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quote:
ORIGINAL: rockominal
quote:
ORIGINAL: tony.nz
I thought this was interesting to share, from a New Zealand news source...
I don't really need opinions from New Zealand.
Richard Baker, R-La. , warned about this in 2004. I wonder what obaama was up to around that time?
http://vodpod.com/watch/1038839-dems-refuse-to-reform-freddie-fannie-in-2004-video
Well, he certainly wasn't President. What was Bush doing?
The fact is, there were a lot of people who saw, or should have seen, this coming. Most of them were too busy lining their own pockets while the sun was shining. Like, if it was that obvious that Fannie & Freddy were headed for disaster, what on earth were their Directors doing? Sitting on their own fannies collecting ever higher fees, no doubt!
And, I think the efforts I have seen to try to blame Obama for all of this, is about as pathetic as I have seen on this forum.
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RE: The man who saw the Financial Crisis coming - 11/8/2008 9:39:32 AM
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redeemedsaint
Posts: 496
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This all has been coming for quite some time way before Bush and Clinton. We need to go back during the years of FDR and read the history and find out why he established the programs he did when the Great Depression hit. A lot of this will open your eyes.
_____________________________
Woody
Get off the track cause the freight train is coming - Coach Bobby Lee Duke from Facing the Giants
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RE: The man who saw the Financial Crisis coming - 11/8/2008 9:55:35 AM
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willfs
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I don't like deficits that much either but it wasn't the deficits that brought about our eco downturn.
President Bush continually tried to warn us about the need to regulate Fannie Mae and Freddie Mac. But few listened to those warnings and democratic lawmakers provided the opposition to such reform.
The Bush admin even argued that without such reform their would be "strong repercussions in financial markets".
http://www.whitehouse.gov/news/releases/2008/10/20081009-10.html
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RE: The man who saw the Financial Crisis coming - 11/8/2008 10:28:07 AM
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rlj
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Thank you Willfs! I have been asking for that for ages. All I wanted to see was some sources about this and you FINALLY provided. (you as in anyone)
All I can think of is can we outsource Congress? Could it possibly be worse than what we have and have had? Both sides were totally ignorant, inept and stupid when they had control over this issue. I believe the House did actually pass a bill that did many of the things you mentioned but it never made it out of committee in the Senate.
_____________________________
-Roger
I could wile away the hours
Conferrin' with the flowers
Consultin' with the rain
And my head I'd be scratchin'
While my thoughts were busy hatchin'
If I only had a brain
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RE: The man who saw the Financial Crisis coming - 11/8/2008 10:44:13 AM
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StephK
Posts: 2237
Joined: 4/11/2005
From: Southwest Louisiana
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quote:
ORIGINAL: tony.nz
quote:
ORIGINAL: rockominal
quote:
ORIGINAL: tony.nz
I thought this was interesting to share, from a New Zealand news source...
I don't really need opinions from New Zealand.
Richard Baker, R-La. , warned about this in 2004. I wonder what obaama was up to around that time?
http://vodpod.com/watch/1038839-dems-refuse-to-reform-freddie-fannie-in-2004-video
Well, he certainly wasn't President. What was Bush doing?
The fact is, there were a lot of people who saw, or should have seen, this coming. Most of them were too busy lining their own pockets while the sun was shining. Like, if it was that obvious that Fannie & Freddy were headed for disaster, what on earth were their Directors doing? Sitting on their own fannies collecting ever higher fees, no doubt!
And, I think the efforts I have seen to try to blame Obama for all of this, is about as pathetic as I have seen on this forum.
0bama was involved in the organization who filed lawsuits to give loans to people without the means to pay them back in the mid 90's. Up until that point if someone couldn't afford a mortgage they were denied the loan. That is basic finance. He is partly responsible.
As far as Richard Baker, he was a US Representative who was the chairman of the Subcommittee on Capital Markets, Insurance and Government Sponsored Enterprises who evidently was dealing with Fannie Mae at least as early as 2001.
More evidence that he was sounding the alarm.
Congress is more responsible than the POTUS because they control the purse strings and pass the legislation.
_____________________________
Stephanie
The heart of the wise inclines to the right but the heart of the fool to the left.
Even as he walks along the road, the fool lacks sense and shows everyone how stupid he is. ~ Ecc. 10:2-3
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RE: The man who saw the Financial Crisis coming - 11/8/2008 12:54:28 PM
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rlj
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quote:
Congress is more responsible than the POTUS because they control the purse strings and pass the legislation.
Exactly.
_____________________________
-Roger
I could wile away the hours
Conferrin' with the flowers
Consultin' with the rain
And my head I'd be scratchin'
While my thoughts were busy hatchin'
If I only had a brain
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RE: The man who saw the Financial Crisis coming - 11/8/2008 7:27:45 PM
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tony.nz
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Putting I what have read into my own words -
There was legislation passed in the US which required banks to make loans available to individuals in poorer areas. This was based upon the observation that these areas were becoming run down, partly because of bank policies prohibiting lending to individuals living in these areas. The legislation was intended to redress that issue, but did not go so far as prescribing what individuals should get loans, or what criteria should be applied. It simply prohibited banks from discriminating based upon refusing to lend in particular areas.
The problem has been however, that financial institutions have made credit too easy, in return for higher interest margins. This problem is not unique to the US, by the way. Basically, the problem has not been that they lend to poor people in poor areas. They have lent to poor people who aspire to middle income areas, and middle income people who aspire to high income areas. In other words, people borrowing beyond their means. Developers build ever more expensive properties, and if their customers cannot get bank loans, they direct them to institutions that will provide the money.
Now, this is greed with a two edged sword. Part of the blame lies with the borrowers, because surely they should have thought twice about borrowing beyond their means. However, in this society, status is measured by the house you live in, and the car you drive. So, who can blame them for wanting to get ahead? If you are poor, you want to be middle class. If you are middle class, you want to be rich class?
On the other hand, blame must also be shared by the lenders. These are commercial organisations, and they should have balanced shareholder expectations of profits, with shareholder expectations of security of funds. Obviously, this is covered when then property market is rising in value. They should have foreseen that this would not happen forever - I certainly did. And, no one pays me Directors fees. However, perhaps part of the problem is that their fees or salary are determined by short term profit gains.
Perhaps blame must also be shared by the government. They are the ones who can introduce rules and regulations. But, who likes rules and regulations? Introduce too many of those, and people start to vote against you. Because the rules and regulations mitigate against their short term profit motivation.
The problem is not limited to the US, it is just that when it happens in the US it impacts upon the world economy, so that it gets more noticed. In NZ, there have been no bank collapses, but there have been a string of finance company failures. You could buy a used car, basically with no deposit and no security! For goodness sake, some car dealers were even advertising these loans to beneficiaries! Factor in the car was being sold above market value, plus the credit fees, and the exhorbitant interest rates, people were paying say $18000 over three years for a car that you know perfectly well you could wrangle a deal for $6000 cash! Figure that! Of course the people attracted to these deals were people with no funds behind them. Despite no savings history, they were figuring they could pay a bit every pay day. Or, in some cases, figuring it would take six months for the finance company to track the car down to re-posses it.
Now the deeper problem is this. People are now crying because their "life savings" were tied up in these finance companies that have now failed. OK, you have to feel for them, but. But, they chose to invest in these finance companies. Why? Because they were offering say 2 to 3% more interest than banks. Now, it is no sin to want a higher interest rate, but could they not understand that the people they were lending money to were in turn lending it to people who could not get finance from banks. And why could they not get finance from banks? Because there was a higher risk that they could not repay it. So, why invest life savings in these companies?
The root of all this evil? Guess who nailed that on the head!
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RE: The man who saw the Financial Crisis coming - 11/8/2008 8:12:21 PM
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willfs
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Your welcome. I also appreciate when others on here give me sourced facts, even those that contradict my point of view, that might help me better understand an current issue.
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RE: The man who saw the Financial Crisis coming - 11/8/2008 11:17:32 PM
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Dancre
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Tony's right on the mark. Here's a 1999 New York Times article that actually predicted the fall of Fannie Mae and Freddie Mac:
http://query.nytimes.com/gst/fullpage.html?res=9c0de7db153ef933a0575ac0a96f958260&sec=&spon=&pagewanted=1
Notice the paragraph that stated if the loans aren't paid back, the gov will have to bail out the banks. Also notice the article states that the Clinton Administration pushed for the loans so everyone would have a house. Sorry, Libs, but Bush had nothing to do with this one. It was planted back in 1999, before he took office.
kim
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RE: The man who saw the Financial Crisis coming - 11/9/2008 6:00:26 PM
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tony.nz
Posts: 226
Joined: 7/6/2005
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I must admit that prior to their failure, I had not even heard about "Fannie May", and "Freddie Mac". The more I learn, the more troubling it becomes.
The banks must have LOVED these organisations. Basically, they could make a loan, profit from that, and then on sell it to one of the FM's. All profit - no risk. The FM would then repackage it and sell it as a "mortgage backed security" - with a repayment guarantee regardless of whether the original lended defaulted or not. It seems to me, that if there was any fundamental value in what FM or FM were doing, the banks would have done it themselves, and cut out the middleman.
Now, all this was set up following the 30's, in order to "encourage" home ownership amongst the poor, by "encouraging" banks to lend to them. Curiously, these organisations were "government sponsored", but "privately owned corporations". A curious combination of communism and capitalism! Surely, the "private shareholders" would then be in a position to resist regulatory intervention. But no, we have Directors appointed by the president no less, and other regulatory intervention. Seems to me, that the private shareholders have been duped, they have stumped up the money, but the government has maintained control. They are not too unhappy though - they are consoled by "record profits" - until the whole house of cards comes crashing down.
It all seems a bit like a pyramid scheme to me - those at the top are guaranteed big profits, the middle teir gets some return, and you know those at the bottom are going to lose out.
I am confused because this has happened in the icon of capitalism, and the rest of us have just got by without any such governmentally interferred-with secondary mortgage system.
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RE: The man who saw the Financial Crisis coming - 11/10/2008 11:04:28 AM
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P31W
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Larry Burkett warned us about this decades ago. You simply cannot violate God's financial principles. He gave them to us for "our good". Larry died in July 2003 but thank God he did this interview with James Dobson and we have it today.
http://listen.family.org/daily/A000001588.cfm
This was recorded back in the 80's. The book Larry wrote was written in the 70's.
< Message edited by P31W -- 11/10/2008 11:12:31 AM >
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