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  1. #14
    Well then to all
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    FEN

  2. #15
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    Quote Originally Posted by ga-hvac-tech View Post
    Good to see you understand this part!

    I preached the reality of govt printing presses causing inflation for 5 years here at ARP... it is just in this year folks are listening.

    No, I do not think we will go into hyper-inflation. Reason is the bond markets. Bonds will collapse, which will raise interest rates (no, the FED does not control all interest rates... they only set a few). When interest rates go flying upward... it will cause another recession. Problem is... inflating the money supply will not help in that kind of environment.

    There is a play-book of sorts if one studies the economy of the USA from around the mid 1970's to the end of the 1980's... and IMO we will see a lot of repetition... with a few twists of difference. Main difference will be moving faster and wilder swings... mostly IMO due to how FAST information flies around the internet.

    There it is again... history repeats itself... because history is based on what humans do... and human nature is almost predictable.
    I don't think bonds will necessarily "collapse". It's important to separate the hyperbole from legitimate reasoned expectations although with our latest credit downgrade US bonds might not look so appealing to those who are trying to protect their money.

    Also the collapse of US treasuries and State and local bonds is a far more disastrous economic scenario than high inflation. Selling of US bonds is how our government pays for everything from SS payouts to our soldiers paychecks and in between. Millions of high wage earner losing hundreds of billions on their bond investments would cause a sustained depression like never seen.

    Bonds "HOLD" the wealth of our Country and secure it rather than have trillions floating around in an unstable market. They in fact stabilize the ,arket to a degree. We lose bonds and its all over except for the crying.

    No I'm not advocating the printing of money. This was Obamas Keynesian approach that led this Country into this fiscal nightmare.

    Inflation is already and has been double digit but Obama's tweaking of the formula that determines the percentage has kept lower. In short they don't include food and fool anymore.

    Interest rates of course are going to rise eventually. It's just another edition to the comedy of errors of the Obama-nomics plan for a long suffering American population. He despises this Country. Thinks it achieved its superpower status through illegal actions.

    Plus raising interest rates is one of the ways you get all of that worthless money out of circulation.

    One more thing with the Euro on the edge and the socialist policies in Europe demanding mass taxation from " the rich" there will only be a few options left for the wealthy Europeans when it comes to protecting their wealth. God forbid they start buying US treasuries along with Qe3.

    An acute mass influx of currency into our markets right now would be a perfect storm for long term devaluation of the dollar. The dollar loses that much value and every thing from fuel to bread will be all but unaffordable.

  3. #16
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    Quote Originally Posted by Six View Post
    I don't think bonds will necessarily "collapse". It's important to separate the hyperbole from legitimate reasoned expectations although with our latest credit downgrade US bonds might not look so appealing to those who are trying to protect their money.

    Also the collapse of US treasuries and State and local bonds is a far more disastrous economic scenario than high inflation. Selling of US bonds is how our government pays for everything from SS payouts to our soldiers paychecks and in between. Millions of high wage earner losing hundreds of billions on their bond investments would cause a sustained depression like never seen.

    Bonds "HOLD" the wealth of our Country and secure it rather than have trillions floating around in an unstable market. They in fact stabilize the ,arket to a degree. We lose bonds and its all over except for the crying.

    No I'm not advocating the printing of money. This was Obamas Keynesian approach that led this Country into this fiscal nightmare.

    Inflation is already and has been double digit but Obama's tweaking of the formula that determines the percentage has kept lower. In short they don't include food and fool anymore.

    Interest rates of course are going to rise eventually. It's just another edition to the comedy of errors of the Obama-nomics plan for a long suffering American population. He despises this Country. Thinks it achieved its superpower status through illegal actions.

    Plus raising interest rates is one of the ways you get all of that worthless money out of circulation.

    One more thing with the Euro on the edge and the socialist policies in Europe demanding mass taxation from " the rich" there will only be a few options left for the wealthy Europeans when it comes to protecting their wealth. God forbid they start buying US treasuries along with Qe3.

    An acute mass influx of currency into our markets right now would be a perfect storm for long term devaluation of the dollar. The dollar loses that much value and every thing from fuel to bread will be all but unaffordable.
    I am not at liberty to quote the source... however the comment I made was from a respected newsletter writer.
    GA-HVAC-Tech

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  4. #17
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    Quote Originally Posted by ga-hvac-tech View Post
    While I disagree on higher interest rates... I fully agree with taking away the safety nets. Seems to me if the banks did not have the guarantee of govt bailouts... this mess would never of happened (mortgage loans to folks who could not repay would never of been made).

    Now for a question: Is there a relationship between a bank which will not loan $$$ unless the interest rates are 'acceptable' (meaning banksters get to make the profits they want); and govt safety nets for banks 'too big to fail' (personally, taking away the 'too big to fail' safety net would IMO do a HUGE amount to get the economy on a solid foot)?
    I'm not sure if I would call it a relationship but I can describe the two difference situation cause by them.
    The safety nets encouraged banks to over extend by making loans to people who had no chance of repaying solely on the idea that if they did repay they would make money and that if they didn't the government would bail them out the risk of bad investments was eliminated.

    Low interest rates make even good investments unattractive, there is not enough return on investments. It's why I'm probably going to get rid of my savings account. I'm not making any money with it there do to the low interest rates.

    So we currently have lots of people in debt, destroying their ability to buy produces, and no money flowing around due to lack of savings, and banks not lending do to not making any money on the loans.

    I hate this whole debt based system.

  5. #18
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    Quote Originally Posted by Elfshadow View Post
    Higher interest rates would have meant more reason for banks to take risks and loan out money. We are currently in s situation with low saving. The majority of people are swamped in debt, until we eliminate that situation we will not recover. The problem is that unless you get some of the money actually moving in the economy, aka loans, people won't have the money to pay off their debts. I hate debt driven economics. This is the main difference between 70-80's and now. People had saving then, we don't now. It's what makes this period more like the depression, where everyone was credit happy.

    I want to take away the safety nets, for everyone, including banks a business's. Capitilism basics are founded on the idea of self interest tempered by risks, the govenrment has removed the risks that used to keep banks, and corporations, and people inline. It has given us a nation of people who don't fear being in debt, and banks and corporations that have no fear of making stupid decisions, because they are to big to fail and the government will step into fix it for them.

    When I hear people go after the banks I'm reminded of how little people understand the true origins of the 2008 economic collapse. TARP wasn't about " saving the banks". It was about fending off a economic collapse that was the result of government policies that enabled easy credit and the bad decisions of millions of Americans.

    First derivatives are nothing new. They have been traded for hundreds of years and are a pretty secure investment because of the built in safe guards for the consumer.

    People ignorantly hear that word and think " banks are evil " without understanding the entirety of the Government interventions that started and perpetuated the 2008 collapse.

    The Community Reinvestment Act and more importantly Barney Franks Affordable Housing Act instructed Fannie Mae and Freddie Mac to start buying high risk mortgages mainly from minority home buyers. Certain Democrat Politicians needed to appear they cared for their minority constituents. Fannie Mae and Freddie Mac have been buying Mortgages and selling them off as investments to Investments Banks since the 30's.

    You have to ask yourself what changed ? By the middle of Clintons term around the mid nineties over half of mortgages bought by Fannie and Freddie HAD TO BE HIGH RISK.

    Well in order for there to be money for the secondary subprime market there had to be buyers of those mortgage backed Securities. They had to have a false value and the Government strong armed banks to buy bundled MBS's and then trade them as derivatives.

    People took advantage of the easy credit and stupidly got into loans that had no down payment, were over leveraged and has ARM'S. The massive influx of home sales caused a economic bubble and and a caused a equity bubble. The same people that blame the banks took advantage of their " instant equity " and borrowed against it to buy crap, remodel their homes and all the while being motivated by the "solid investment " that was their home.

    Well bubbles burst and that value disappeared into thin air. The market reset, it corrected.

    Read the below link for a description of a economic bubble.
    http://en.wikipedia.org/wiki/Tulip_mania

    So the banks were coerced through govt threats and regulations. Regulations that required Investment Banks to counter risky investment with capital. Well that much money doesn't exist. So the bought from AIG mainly something called credit default swaps. Insurance. It's why AIG was going down with the ship.

    TARP wasn't about saving the banks. It was about averting a catastrophic meltdown of society. I've read accounts where their plan B was Martial Law that following Monday in October 2008. Doesn't sound reasonable ??

    Imagine, with out TARP thousands of Banks world wide declaring massive losses all on the same day. Imagine what would happen if you got up and your bank card, credit card, gas card didn't work. You couldn't buy gas, food, medication. Your bank closed and no access to your money. Imagine hundreds of millions of people realizing that all at the same time. Do you think there would be a grocery store or even a gas station that wasn't looted and burning by twelve o-clock noon ??

    And this goes back to not the evil banks, they were coerced, forced by the govt to buy bundled toxic MBS to fund a corrupted secondary sub-prime market that was destined to fail but to programs like the Community Investment Act and The Affordable Housing Act. Banks have been buying mortgages for decades. Where was the criticism of banks in the 70's ?

    People are so susceptible to media influence and there is no excuse for it in this day and age. We have instant access to more information than ever before but people chose the information that suites their agenda instead of letting truth form their agenda.

  6. #19
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    Quote Originally Posted by Elfshadow View Post
    I'm not sure if I would call it a relationship but I can describe the two difference situation cause by them.
    The safety nets encouraged banks to over extend by making loans to people who had no chance of repaying solely on the idea that if they did repay they would make money and that if they didn't the government would bail them out the risk of bad investments was eliminated.

    Low interest rates make even good investments unattractive, there is not enough return on investments. It's why I'm probably going to get rid of my savings account. I'm not making any money with it there do to the low interest rates.

    So we currently have lots of people in debt, destroying their ability to buy produces, and no money flowing around due to lack of savings, and banks not lending do to not making any money on the loans.

    I hate this whole debt based system.
    So tell me:

    Take each of your statements and explain how they would change if the business (banker, manufacturer, retailer), and the consumer (any end purchaser) BOTH understood clearly they were totally on their own? What I mean is: Make a mistake with the $$$, and you loose... no safety nets.
    GA-HVAC-Tech

    Quality work at a fair price with excellent customer service!

    Romans Ch's 5-6-7-8

    2 Chronicles 7:14

  7. #20
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    Quote Originally Posted by Six View Post
    When I hear people go after the banks I'm reminded of how little people understand the true origins of the 2008 economic collapse. TARP wasn't about " saving the banks". It was about fending off a economic collapse that was the result of government policies that enabled easy credit and the bad decisions of millions of Americans.

    First derivatives are nothing new. They have been traded for hundreds of years and are a pretty secure investment because of the built in safe guards for the consumer.

    People ignorantly hear that word and think " banks are evil " without understanding the entirety of the Government interventions that started and perpetuated the 2008 collapse.

    The Community Reinvestment Act and more importantly Barney Franks Affordable Housing Act instructed Fannie Mae and Freddie Mac to start buying high risk mortgages mainly from minority home buyers. Certain Democrat Politicians needed to appear they cared for their minority constituents. Fannie Mae and Freddie Mac have been buying Mortgages and selling them off as investments to Investments Banks since the 30's.

    You have to ask yourself what changed ? By the middle of Clintons term around the mid nineties over half of mortgages bought by Fannie and Freddie HAD TO BE HIGH RISK.

    Well in order for there to be money for the secondary subprime market there had to be buyers of those mortgage backed Securities. They had to have a false value and the Government strong armed banks to buy bundled MBS's and then trade them as derivatives.

    People took advantage of the easy credit and stupidly got into loans that had no down payment, were over leveraged and has ARM'S. The massive influx of home sales caused a economic bubble and and a caused a equity bubble. The same people that blame the banks took advantage of their " instant equity " and borrowed against it to buy crap, remodel their homes and all the while being motivated by the "solid investment " that was their home.

    Well bubbles burst and that value disappeared into thin air. The market reset, it corrected.

    Read the below link for a description of a economic bubble.
    http://en.wikipedia.org/wiki/Tulip_mania

    So the banks were coerced through govt threats and regulations. Regulations that required Investment Banks to counter risky investment with capital. Well that much money doesn't exist. So the bought from AIG mainly something called credit default swaps. Insurance. It's why AIG was going down with the ship.

    TARP wasn't about saving the banks. It was about averting a catastrophic meltdown of society. I've read accounts where their plan B was Martial Law that following Monday in October 2008. Doesn't sound reasonable ??

    Imagine, with out TARP thousands of Banks world wide declaring massive losses all on the same day. Imagine what would happen if you got up and your bank card, credit card, gas card didn't work. You couldn't buy gas, food, medication. Your bank closed and no access to your money. Imagine hundreds of millions of people realizing that all at the same time. Do you think there would be a grocery store or even a gas station that wasn't looted and burning by twelve o-clock noon ??

    And this goes back to not the evil banks, they were coerced, forced by the govt to buy bundled toxic MBS to fund a corrupted secondary sub-prime market that was destined to fail but to programs like the Community Investment Act and The Affordable Housing Act. Banks have been buying mortgages for decades. Where was the criticism of banks in the 70's ?

    People are so susceptible to media influence and there is no excuse for it in this day and age. We have instant access to more information than ever before but people chose the information that suites their agenda instead of letting truth form their agenda.
    Believe me, I thoroughly understand what Slick Willie and his cohorts did in the mid 1990's with mortgages. To watch folks deny it is IMO to watch folks say they do not care about anything other than entitlement mentalities. Good if you are on the receiving side... not so good if you are on the paying side.

    Couple of thoughts:

    One: When the LOCAL folks make the mortgage loan, and CARRY it through its life, the loans are a lot more stable... than if they are bundled and sold. IMO the bundling and selling is not the best system.

    Two: Derivatives, while they are basically counter-risk paper, tend to be 'layered'. When too many layers of derivatives pile up... and the underlying security goes wrong... too many dominoes fall at once, causing a shock-wave in markets. Again, IMO not a good idea to build these piles.

    The end message is: Leverage, while it can make $$$... can also crash markets. Is the risk worth the reward? Take away govt safety nets and then lets talk risk and reward... In other words: Make the bankers responsible for their actions.
    GA-HVAC-Tech

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    Romans Ch's 5-6-7-8

    2 Chronicles 7:14

  8. #21
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    Quote Originally Posted by Six View Post
    When I hear people go after the banks I'm reminded of how little people understand the true origins of the 2008 economic collapse. TARP wasn't about " saving the banks". It was about fending off a economic collapse that was the result of government policies that enabled easy credit and the bad decisions of millions of Americans.

    First derivatives are nothing new. They have been traded for hundreds of years and are a pretty secure investment because of the built in safe guards for the consumer.

    People ignorantly hear that word and think " banks are evil " without understanding the entirety of the Government interventions that started and perpetuated the 2008 collapse.

    The Community Reinvestment Act and more importantly Barney Franks Affordable Housing Act instructed Fannie Mae and Freddie Mac to start buying high risk mortgages mainly from minority home buyers. Certain Democrat Politicians needed to appear they cared for their minority constituents. Fannie Mae and Freddie Mac have been buying Mortgages and selling them off as investments to Investments Banks since the 30's.

    You have to ask yourself what changed ? By the middle of Clintons term around the mid nineties over half of mortgages bought by Fannie and Freddie HAD TO BE HIGH RISK.

    Well in order for there to be money for the secondary subprime market there had to be buyers of those mortgage backed Securities. They had to have a false value and the Government strong armed banks to buy bundled MBS's and then trade them as derivatives.

    People took advantage of the easy credit and stupidly got into loans that had no down payment, were over leveraged and has ARM'S. The massive influx of home sales caused a economic bubble and and a caused a equity bubble. The same people that blame the banks took advantage of their " instant equity " and borrowed against it to buy crap, remodel their homes and all the while being motivated by the "solid investment " that was their home.

    Well bubbles burst and that value disappeared into thin air. The market reset, it corrected.

    Read the below link for a description of a economic bubble.
    http://en.wikipedia.org/wiki/Tulip_mania

    So the banks were coerced through govt threats and regulations. Regulations that required Investment Banks to counter risky investment with capital. Well that much money doesn't exist. So the bought from AIG mainly something called credit default swaps. Insurance. It's why AIG was going down with the ship.

    TARP wasn't about saving the banks. It was about averting a catastrophic meltdown of society. I've read accounts where their plan B was Martial Law that following Monday in October 2008. Doesn't sound reasonable ??

    Imagine, with out TARP thousands of Banks world wide declaring massive losses all on the same day. Imagine what would happen if you got up and your bank card, credit card, gas card didn't work. You couldn't buy gas, food, medication. Your bank closed and no access to your money. Imagine hundreds of millions of people realizing that all at the same time. Do you think there would be a grocery store or even a gas station that wasn't looted and burning by twelve o-clock noon ??

    And this goes back to not the evil banks, they were coerced, forced by the govt to buy bundled toxic MBS to fund a corrupted secondary sub-prime market that was destined to fail but to programs like the Community Investment Act and The Affordable Housing Act. Banks have been buying mortgages for decades. Where was the criticism of banks in the 70's ?

    People are so susceptible to media influence and there is no excuse for it in this day and age. We have instant access to more information than ever before but people chose the information that suites their agenda instead of letting truth form their agenda.

    Six, I don't blame the banks, I blame the government regulations that forced the situation and the safety nets that encouraged it. You had a carrot and stick approach that forced us into it. I don't think Tarp was a good idea but your right in what would have happened had we let them collapse. The only problem I see is that I think we delayed it, not stopped it. We created a long term problem from a short term catastrophic. Please stop assuming that I have not educated myself on these subjects just because I disagree with you on a number of issues. Disagreeing does not mean stupid or ignorant. It just means that I come to a different conclusion based on the same evidence.

  9. #22
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    Quote Originally Posted by ga-hvac-tech View Post
    So tell me:

    Take each of your statements and explain how they would change if the business (banker, manufacturer, retailer), and the consumer (any end purchaser) BOTH understood clearly they were totally on their own? What I mean is: Make a mistake with the $$$, and you loose... no safety nets.
    People and business would save money and capital for bad periods. They would be their own safety nets. Much like they where when you where younger.

  10. #23
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    Quote Originally Posted by Elfshadow View Post
    People and business would save money and capital for bad periods. They would be their own safety nets. Much like they where when you where younger.
    True, yet with one more feature (if that is the right word): Folks would be VERY CAREFUL before they spent any $$$ or took on a business venture. The advent of govt safety nets allows irresponsible handling of $$$... Take the nets away and folks will be very cautious.

    There is a form of conspiracy theory that suggests the modern job of govt is to deliver the consumers into the hands of the business interests who finance the campaigns... whomever is elected OWES the consumers to the financiers of their successful election. Imagine what would happen if this were understood by the masses....
    GA-HVAC-Tech

    Quality work at a fair price with excellent customer service!

    Romans Ch's 5-6-7-8

    2 Chronicles 7:14

  11. #24
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    Quote Originally Posted by Elfshadow;1420
    0251
    Six, I don't blame the banks, I blame the government regulations that forced the situation and the safety nets that encouraged it. You had a carrot and stick approach that forced us into it. I don't think Tarp was a good idea but your right in what would have happened had we let them collapse. The only problem I see is that I think we delayed it, not stopped it. We created a long term problem from a short term catastrophic. Please stop assuming that I have not educated myself on these subjects just because I disagree with you on a number of issues. Disagreeing does not mean stupid or ignorant. It just means that I come to a different conclusion based on the same evidence.
    I hear you but when I start a thread ( BTW this is the second thread on Qe3 ) I am posting with knowlwdge thats gained from years of studying every thing from the 2008 economic collapse to the Fed to how our monetary policy affecty ours and world markets in terms of growth and future trends that may afffect our Country.

    Its one of my weird interest along with everything WW1 and WW2 and of course Commercial and Industrial HVAC. I am meticulous and dont refer back to google when posting or post from outside rescources unless challenged and I need a link to prove my point.

    Add to that I'm opinionated (obviously) have a sucky bed side manner and am rarely wrong about my conclusions. So I understand that we all have access to the same data ( most of mine is from literarure thats stocked behind me on a bookshelf and various financial publications) and come to our own conclusions.

    One of my favoriteidioms is from the bible ( Ecclesiastes 1:9 ). " There is nothing new under the sun...". Its out of context sure but its something I consider when confronted with situations that have not run their course. No our economy is probably never going to completely collapse, or are we going to be sharing inflationary percentages with the likes of Zimbabwe.

    The reality usually falls inbetween the 2 opposing most hyperbolic scenarios.

    I visit other forums that are exclusively on politics and one that is financial in nature. Ive been at it for 10 years so I know how to acccept to a degree opposing beliefs.

    Ill keep in mind or try to that we disseminate information differently.

    I make an effort to study anything objectively leaving out any of my Conservative views. But it is an effort.

  12. #25
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    There is one more reason to understand as to why the USA and world economies will not be destroyed (well not unless those idiots who worship the Koran get away with it): The economy of developed nations (especially the USA) is a HUGE cash cow... the problem is the power brokers are arguing over how to divvy up the money.

    To destroy the cow would be just foolish... however at the same time motivating the serfs to continue to believe they will gain by working their butts off... well that is the grand game of control the polecats operate.
    GA-HVAC-Tech

    Quality work at a fair price with excellent customer service!

    Romans Ch's 5-6-7-8

    2 Chronicles 7:14

  13. #26
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    "The American Republic will endure until the day Congress discovers it can bribe the public with the public's own money.
    - Alexis de Toqueville, 1835

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