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Politics : President Barack Obama -- Ignore unavailable to you. Want to Upgrade?

To: Little Joe who wrote (125489)	10/28/2012 1:23:47 PM
From: ChinuSFO	Respond to of 149317

This is the other half of your post. The housing recovery is under way here in the US. ================================ Fareed Zakaria Opinion Writer The U.S. economy is recovering well By Fareed Zakaria, Published: October 24 The International Monetary Fund’s latest World Economic Outlook makes for gloomy reading. Growth projections have been revised downward almost everywhere, especially in Europe and the big emerging markets such as China. And yet, when looking out over the next four years — the next presidential term — the IMF projects that the United States will be the strongest of the world’s rich economies. U.S. growth is forecast to average 3 percent, much stronger than that of Germany or France (1.2 percent) or even Canada (2.3 percent). Increasingly, the evidence suggests that the United States has come out of the financial crisis of 2008 in better shape than its peers — because of the actions of its government. Perhaps the most important cause of America’s relative health is the Federal Reserve. Ben Bernanke understood the depths of the problem early and responded energetically and creatively. The clearest vindication of his actions has been that the European Central Bank, after charting the opposite course for three years with disastrous results, has adopted policies similar to the Fed’s — and averted a potential Lehman-like collapse in Europe. (Mitt Romney’s two most prominent academic advisers, Glenn Hubbard and Gregory Mankiw, seem to recognize this, but Romney apparently doesn’t. As recently as August the Republican presidential nominee repeated his criticisms of the Fed and promised to replace Bernanke at its helm.) In addition to providing general liquidity, the Fed and the Treasury rescued the financial system but also forced it, through stress tests and new rules, to reform. The result is that U.S. banks are in much better shape than their European counterparts. Consumers have also been paying off debt, thanks to a series of tax cuts and other forms of relief. A McKinsey & Co. study of crises in recent decades found that the United States is mirroring the pattern of countries with the strongest recoveries. It noted that “Debt in the financial sector relative to GDP has fallen back to levels last seen in 2000, before the credit bubble. US households have reduced their debt relative to disposable income by 15 percentage points, more than in any other country; at this rate, they could reach sustainable debt levels in two years or so.” Kenneth Rogoff and Carmen Reinhart, the leading experts on financial crises, argue that the United States is performing better than most countries in similar circumstances. U.S. consumer confidence is at its highest levels since September 2007. Every recovery since World War II has been led by housing, except this one. But finally, housing is back. Two weeks ago, Jamie Dimon, the chief executive of JPMorgan Chase, declared that housing had turned the corner and predicted that, as a consequence, economic growth in 2013 would be so strong the Fed would have to raise interest rates. Given his firm’s vast mortgage portfolio, Dimon has a unique perspective on housing, and he is a smart man who knows that the Fed has promised to keep rates flat for three years. Last week, data on new housing starts confirmed Dimon’s optimism. U.S. corporations have also bounced back. Corporate profits are at an all-time high as a percentage of gross domestic product, and companies have $1.7 trillion in cash on their balance sheets. The key to long-term recoveries from recessions is reform and restructuring, and U.S. businesses have been quick to respond. Government intervention assisted this process with banks, auto companies and even in housing. Romney is correct to point out that the Obama administration supervised a managed bankruptcy in Detroit — forcing the kind of reform a private equity firm would have (though, crucially, providing the cash that a President Romney would not have). The Economist magazine, which initially opposed that bailout, reversed itself because of the manner in which General Motors and Chrysler were made to cut costs and become competitive. And then there is America’s energy revolution, which is also bringing back manufacturing. U.S. exports, which have climbed 45 percent in the past four years, are at their highest level ever as a percentage of GDP. All these good signs come with caveats. Europe continues to weaken. The fiscal cliff looms ominously. But the fact remains, compared with the rest of the industrialized world and the arc of previous post-bubble recoveries, the United States is ready for a robust revival. This is partly because of the dynamism of the U.S. economy but also because of the timely and intelligent actions of the Fed and the Obama administration. The next president will reap the rewards of work already done. So it would be the ultimate irony if, having strongly criticized almost every measure that contributed to these positive tends, Mitt Romney ends up presiding over what he would surely call “the Romney recovery.” washingtonpost.com

To: Little Joe who wrote (125489)	10/28/2012 1:39:40 PM
From: Sr K	Read Replies (1) \| Respond to of 149317

lj: You conveniently left out the fact that the CDO's were backed by mortgages which were worthless and there came a time when everyone realized this fact, which is what caused the crisis. Not true. If you wanted to make a fake point, you could have said they were trading at 6¢ or 20¢ on the Dollar. But those were times to buy. They recovered, in many cases to 60¢ on the Dollar. Or higher. The New York Fed made money on Maiden Lane I and II (i.e., they got them too cheap from Bear Stearns (JPM Chase) and AIG). 6¢ or 20¢ on the Dollar is not "worthless" and where a security trades is not the same as the fair value of the underlying securities or assets or business. Excessive fear and uncertainty brought derivative values below their fair value. That's why the banks wouldn't sell them for 20¢ or even 40¢ on the Dollar. Republicans and people short the S&P were hoping they would go to zero. They wanted the S&P to go to 600 and then to 400. Limbaugh wanted America to fail, whatever it would take to knock Obama out in 2012. I looked back to posts on the PfP thread from January 21, 2009, including some by you, and there was fear the banks would not survive. They eventually crashed to lows in February and the markets bottomed in March. But the fear of a banking crisis was palpable in January 2009. To deny that was the atmosphere Obama faced as he took office is typical of Republican rewriting history during this campaign season, including what Romney said he was for and against during the primaries.

To: Little Joe who wrote (125489)	10/28/2012 1:46:46 PM
From: koan	Read Replies (1) \| Respond to of 149317

<<You conveniently left out the fact that the CDO's were backed by mortgages which were worthless and there came a time when everyone realized this fact, which is what caused the crisis. >> Conveniently-lol? I said they were junk status. The banks were making a fortune selling the bogus loans. Then they made more selling them again as CDO's. Insurance companies (e.g. AIG) were making fortunes selling multiple CDS's on the same real estate property. House of cards. This all happened because Bush refused to regulate them! This is what happens in an unregulated market. Can't you follow my post previous post? I said that. The banks are responsible for the quality of the loans, not the person getting the loan. Ever hear of a credit check or a credit score? Good lord. Banks quit asking for them (because no one was regulating them!) to make more loans and commissions. They sold them and no worries.You don't know that? You paid for it. Banks are regulated now. But the multi trillion dollar derivatives market is not regulated. Just like under bush. Everyone on wall street was making a fortune ripping everyone else off with no regualtions. Making a fortune now. It was that simple. Unregulated capitalism is a bad joke. Wall street had 10 lobbyists for every person in congress. What do you think those guys do for a living?