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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Unalakleet who wrote (111711)	5/17/2010 10:13:33 PM
From: Hawkmoon	3 Recommendations Respond to of 116555

No argument regarding the excesses involved in the populist pursuit of the "good life". But let's not forget that on the other side of every loan made to a borrower was a bank loan officer lending out the savings of depositors. Didn't matter if the borrower couldn't document your income and in some case couldn't even document their citizenship (though the lack of English skills should have been a clue.. ;0). And of course, so they could lend more money, they sold those mortgages off to Investment Banks and cleared their loan book. Then they took that money and originated another loan. And the IB's who bought these mortgages packaged them up, paid a Rating's Agency to rubber stamp them as AAA, and then violated "representations and warranties" (lied) to the Monoline insurers so they could get an insurance wrapper. Then they found a "greater fool" onto which to off-load this toxic debt. Where was all this money coming from, we might ask? Well, we had Chinese manufacturers selling us tons of stuff, but Bejing didn't want to repatriot the profits back to China because of inflation fears. And they couldn't buy 30 year Gov't bonds, because we had stopped selling them. So they bought the mortgage stuff. Well.. I hear a lot of blame being cast upon the borrowers of these loans, but I don't hear a lot of disdain for the foreign investors who bought the SECURITIZED ASSET (which is treated differently than outright debt). And people say that no one forced people to buy houses. But when folks were looking at paying rents that were comparable to a mortgage payment, it didn't make sense to just throw that monthly payment into the pocket of a landlord. And when a huge percentage of homes being sold are to illegal aliens via sub-prime loans, this additional demand drove up prices even more. Yeah.. values have changed. Of that there is no doubt. But those values were instilled into the population by those who sought to reap great profit and leave others holding the bag. HOWEVER, we CANNOT EXONERATE the Banking community that ABDICATED their responsibility to safeguard depositor's money and lend responsibly. Bottom line.. a whole lot of blame to go around in the making of this mess... And now we have a bunch of Naked CDS speculators trying to make a fortune of a lifetime by burning the global economy down and transferring all that wealth out of the hands of sovereign nations and their taxpayers, and into their greedy overpaid pockets. Hawk

To: Unalakleet who wrote (111711)	5/17/2010 10:30:04 PM
From: Unalakleet	1 Recommendation Respond to of 116555

Hawkmoon, somebody once said that if you have to get your calculator out to understand your investment, then you probably should be investing elsewhere. That's kind of the way I feel about CDS. I hate to say "I don't understand CDS" because that's what everyone says. But I don't understand them. .

To: Unalakleet who wrote (111711)	5/18/2010 12:39:04 AM
From: NOW	Read Replies (2) \| Respond to of 116555

are the junkie and the pusher equally to blame?

To: Unalakleet who wrote (111711)	5/18/2010 12:25:14 PM
From: Steve Lokness	3 Recommendations Read Replies (3) \| Respond to of 116555

Unalakeet; Wow! I think you have me mixed up with someone else. I don't believe in conspiracy theories and have ABSOLUTELY nothing in common with "rogue". I agree with Mish in that at the bottom of our mess is the easy money by the fed. But even with easy money if our country was led with a morality and a sense of right and wrong America wouldn't have found itself in the mess it did. Did the cause include the American people - well of course it did. and we are all responsible. Responsible for living beyond our means and responsible for electing the wrong people to lead us. So I'm in complete agreement with you - BUT that doesn't excuse those who turned the housing bubble into the derivatives bubble - which is really what brought the economic collapse to a head. You and Mish want to blame unions for this, but by all accounts the disparity between working peoples wages and those at the top have never been further apart. I'm not condoning union mischief for sure - but without a healthy middle class what will America become? Sure clean up the unions overreach where they occur - but don't denigrate the worker. We can't all be bankers and speculators. You want to blame Americans for being wild eyed and buying more of a house than they could afford - well yes, but people are stupid and lived the bubble expecting houses to rise forever. But SOME PEOPLE KNEW what was happening and they kept lending. They kept lending and pushing this crap out the door knowing full well it was going to cause a mess of an economic meltdown. If they had any kind of moral compass they wouldn't have done this and we wouldn't have had to shovel money into the hands and pocket books of bankers. Its not about a conspiracy - unless you think of envy of bankers for each other as a conspiracy.