OT: Greenspan Calls U.S. Economy Worse Since End of WWll

[conversationpc]

When did this board become a goddamn watercooler?

It's always been one when there's nothing much else worth talking about in Journeyworld.

[Red13JoePa]

When did this board become a goddamn watercooler?

It's always been one when there's nothing much else worth talking about in Journeyworld.

Never this bad.

[ohsherrie]

The economy was sinking early in Bush's reign because the dot.com bubble was deflating. Tax cuts and corporate welfare were going to send the manufacturing and related jobs out of the country, so they had to have a way to make it look like the economy was still doing good even while living wage jobs were shipped out and replaced by minimum wage.

Two of the primary economic indicators, other than the stock market (but the tax cuts and corporate welfare were going to take care of that) are the housing market and the unemployment figures.

Building houses creates jobs, but there's not enough money in the real economy to support a housing boon, so what to do, what to do? Well, let's make it easy for people to get loans and let them worry about how to pay for it later. If we keep telling them how good the economy is and how many jobs we're creating, they'll feel confident that they'll be all right.

There ya go, automatic good economy.

Stock prices are going up because those corporations are making so much money with that cheap Chinese and Mexican labor.

The housing market is going strong because we made it so easy for people to spend money they didn't and never would have.

The unemployment figures are still acceptable because those construction and construction related jobs are helping the fast food and retail jobs keep the numbers down.

Nevermind that those jobs won't pay those mortgages, we'll worry about that later.

Many of the materials, fixtures, furnishings and household goods for those houses are being manufactured by many of those corporations, so that also helps the stock market numbers.

Damn, this economy is rolling.

Nevermind that those materials, fixtures, furnishing and household goods aren't being manufactured here to put money back into the real economy, we'll worry about that later.

It's later folks.



Yeah, it was all about greed, but that started at the top.

A lot of it was people trying to live beyond their means but not all. For many it was that almost everything was beyond their means. What were they supposed to live in anyway, a FEMA trailer? $100,000 doesn't buy a lot of house these days but it makes a hell a mortgage when you only make $30,000 a year.

All this shit you see on TV about how they help people save money or make the mortgage payments by cutting down on their visits to Starbucks, Bloomingdales, and Best Buy is about as representative of reality as Desperate Housewives.

Anybody who doesn't know better than to spend hundreds of dollars on a handbag or iphone when they're having trouble making their house payments deserves to lose it, but not that poor schmuck who thought his construction job in that booming economy was going to pay his mortgage.

[jrnychick]

The victims (in most cases) are the people losing their homes because their LENDER did not explain SPECIFICALLY how an ARM loan works over the life of the loan. Sad indeed!!

While I definitely agree with you that the current credit and housing crisis is "sad", I'm not willing to blame mortgage companies or politicians for the downfall of the housing market. It's clear from your later comments in this thread that you work in the industry, and have industry knowledge. I also have worked in the mortgage industry for years, and ran my own company for years. The bottom line for me is that the American home buyer MUST be held accountable. I simply don't and NEVER will buy into "Consumers weren't told what their loans were"! That is the most ridiculous excuse I've ever heard!

I've NEVER signed a single document, without understanding what it was I was signing (including before I got into the industry)! It is simply inexcusable for any homeowner to say they didn't know that their mortgage rate could adjust! The freakin term "ARM" acronymn has "Adjustable" right in there! Also, there isn't a state that I'm aware of that doesn't require both the lender and broker to have the borrower sign an adjustable rate disclosure with warning after warning after warning! They then have to sign an adjustable rate rider with the mortgage, at the closing! If the borrower chooses not to read what it is he or she is signing, they have nobody to blame, but themselves!

Most people in our industry knew the bottom was going to fall out, when banks were offering 100% financing to VERY marginal borrowers. Most people with an ounce of common sense also knew that eventually the price of real estate was going to start going the other way, and it finally has! I don't see the prices of real estate bouncing back any time soon. I also think the foreclosure rate is going to continue to climb over the next 12-18 months, because we are nowhere near the bottom of this disaster!


John from Boston

I agree with you 110%, John! People got into these mortgages of their own free will. If they didn't understand what they were getting into, they shouldn't have signed the papers or they should have kept asking questions until they DID understand and were OK with it. Nobody held a gun to their heads and told them they must make poor financial decisions. I sometimes have difficulty understanding the money aspect of the loans (my math sucks), but I'll keep asking questions until I understand it and I don't care who I piss off.

Honestly, Greenspan needs to shut his piehole. The markets are still affected by the things he says. I truly believe that we're just beginning to pay for all of the "feel good" mistakes that were made by companies, the fed, and the legislators in the late '90s and early '00s. What goes up must come down...

People do get into these mortgages of their own free will however, by maintaining responsibility on OUR end means our company may be here tomorrow to service your mortgage needs!!! We can blame the consumer all we want for their lack of knowledge and their inablility to make sound financial decisions, but we have to make sound financial decisions as well if we are going to remain in business~sometimes that means saying NO!!!! Look, it's as simple as this...do you want to go bankrupt or not? If you choose yes, go ahead make the loans and continue to call other people irresponsible because YOUR business went under.

I agree with you, too, Michigan Girl. These companies that are in financial ruin put themselves there by lending to people who really couldn't afford it. I remember when my husband bought his first house in the early '90s. He practically had to give his first born to get a loan. The next loan we got together, and that was still challenging because I didn't have much credit and we were keeping the first house as a rental. The two times we've moved since then have been a piece of cake. A few pay stubs, some tax returns, and we were good to go. They didn't even care the last time that we didn't have a tenant in our rental at closing time.

[jrnychick]

The economy was sinking early in Bush's reign because the dot.com bubble was deflating. Tax cuts and corporate welfare were going to send the manufacturing and related jobs out of the country, so they had to have a way to make it look like the economy was still doing good even while living wage jobs were shipped out and replaced by minimum wage.

Two of the primary economic indicators, other than the stock market (but the tax cuts and corporate welfare were going to take care of that) are the housing market and the unemployment figures.

Building houses creates jobs, but there's not enough money in the real economy to support a housing boon, so what to do, what to do? Well, let's make it easy for people to get loans and let them worry about how to pay for it later. If we keep telling them how good the economy is and how many jobs we're creating, they'll feel confident that they'll be all right.

There ya go, automatic good economy.

Stock prices are going up because those corporations are making so much money with that cheap Chinese and Mexican labor.

The housing market is going strong because we made it so easy for people to spend money they didn't and never would have.

The unemployment figures are still acceptable because those construction and construction related jobs are helping the fast food and retail jobs keep the numbers down.

Nevermind that those jobs won't pay those mortgages, we'll worry about that later.

Many of the materials, fixtures, furnishings and household goods for those houses are being manufactured by many of those corporations, so that also helps the stock market numbers.

Damn, this economy is rolling.

Nevermind that those materials, fixtures, furnishing and household goods aren't being manufactured here to put money back into the real economy, we'll worry about that later.

It's later folks.



Yeah, it was all about greed, but that started at the top.

A lot of it was people trying to live beyond their means but not all. For many it was that almost everything was beyond their means. What were they supposed to live in anyway, a FEMA trailer? $100,000 doesn't buy a lot of house these days but it makes a hell a mortgage when you only make $30,000 a year.

All this shit you see on TV about how they help people save money or make the mortgage payments by cutting down on their visits to Starbucks, Bloomingdales, and Best Buy is about as representative of reality as Desperate Housewives.

Anybody who doesn't know better than to spend hundreds of dollars on a handbag or iphone when they're having trouble making their house payments deserves to lose it, but not that poor schmuck who thought his construction job in that booming economy was going to pay his mortgage.

I agree with many of the things you have said here. I agree that there are many people who are just scraping by without spending any money on the extras. However, I think those are the people who should not have gotten in on the ARM loans. They should have saved their money and bought a house when they could legitimately afford it and get a fixed rate. Anyone who thinks the Good Ship Lollipop is going to continue sailing forever and doesn't plan for a rainy day is in trouble. If I lose my job tomorrow, my family will still be able to pay the bills for a while. We don't have credit card debt, we don't have car loans, and we are very good at only spending the money we have. Our tenants in our rental property are VERY nice people. We truly love having them. However, they don't have two extra pennies to rub together. Why? Because they have 6 kids! The last one was just born in 2007. They were in dire straits several years ago when we met them and they only had 4 kids. Why did they have 2 more, when they could not afford to feed and clothe the 4 they already had?

[RossValoryRocks]

The economy was sinking early in Bush's reign because the dot.com bubble was deflating. Tax cuts and corporate welfare were going to send the manufacturing and related jobs out of the country, so they had to have a way to make it look like the economy was still doing good even while living wage jobs were shipped out and replaced by minimum wage.

Two of the primary economic indicators, other than the stock market (but the tax cuts and corporate welfare were going to take care of that) are the housing market and the unemployment figures.

Building houses creates jobs, but there's not enough money in the real economy to support a housing boon, so what to do, what to do? Well, let's make it easy for people to get loans and let them worry about how to pay for it later. If we keep telling them how good the economy is and how many jobs we're creating, they'll feel confident that they'll be all right.

There ya go, automatic good economy.

Stock prices are going up because those corporations are making so much money with that cheap Chinese and Mexican labor.

The housing market is going strong because we made it so easy for people to spend money they didn't and never would have.

The unemployment figures are still acceptable because those construction and construction related jobs are helping the fast food and retail jobs keep the numbers down.

Nevermind that those jobs won't pay those mortgages, we'll worry about that later.

Many of the materials, fixtures, furnishings and household goods for those houses are being manufactured by many of those corporations, so that also helps the stock market numbers.

Damn, this economy is rolling.

Nevermind that those materials, fixtures, furnishing and household goods aren't being manufactured here to put money back into the real economy, we'll worry about that later.

It's later folks.



Yeah, it was all about greed, but that started at the top.

A lot of it was people trying to live beyond their means but not all. For many it was that almost everything was beyond their means. What were they supposed to live in anyway, a FEMA trailer? $100,000 doesn't buy a lot of house these days but it makes a hell a mortgage when you only make $30,000 a year.

All this shit you see on TV about how they help people save money or make the mortgage payments by cutting down on their visits to Starbucks, Bloomingdales, and Best Buy is about as representative of reality as Desperate Housewives.

Anybody who doesn't know better than to spend hundreds of dollars on a handbag or iphone when they're having trouble making their house payments deserves to lose it, but not that poor schmuck who thought his construction job in that booming economy was going to pay his mortgage.

The government did nothing of the sort. Your grasp of economic reality is so off it isn't funny. Tax cuts don't send jobs overseas: burdensome overregulation and increased tax load does. Corporate Welfare...well I agree with you to SOME extent here, like paying the big farming companies NOT to farm, completely nuts.

The rest of your rant toward the government is complete and utter bullshit. A basic economics class at your local community college would educate you on how things work. If you go I will pay for it, if for no other reason that to shut you up about how Bush and Co. did everything. The reality is the government has very little it can do to direct the economy in a free market such as we enjoy.

We live in a GLOBAL economy now and companies that cannot compete on the world stage fail on the global market (See GM, Chrysler and Ford). When that happens jobs are lost, permanently.

You cannot pay typical union wages and make an affordable product, so what is company supposed to do? Shut it's doors? Or find affordable labor somewhere elese?

I do agree with you on the people who can't afford a mortgage going and buying luxuries when they can't cover their basic needs.

On the whole though the problem here is NOT the government, it was the overly greedy and stupid people who gave out and signed such mortgages.

[RossValoryRocks]

Why did they have 2 more, when they could not afford to feed and clothe the 4 they already had?

Because procreation is the recreation for the poor.

It actually benefits them to have children, they can now sponge more money off the government that I am going to have to make up by paying more in taxes.

Oh and so are you and so is everyone else.

We need a license to drive a car, own a dog, go fishing even, we should have one to be able to reproduce. I say that only 1/2 in jest.

[ohsherrie]

I didn't say Bush had anything to do with the dot.com thing. I said it was coming down early in his reign.

http://www.harpers.org/archive/2008/02/0081908

[RossValoryRocks]

I didn't say Bush had anything to do with the dot.com thing. I said it was coming down early in his reign.

http://www.harpers.org/archive/2008/02/0081908

No you just implied it...then again we are just a bunch of stupid, inbred, wife beating conservatives...so what do we know?

[ohsherrie]

Stuart, shut the fuck up. You personify, indeed you even epitomize, everything that I've been accused of calling all conservatives. You set the standard for miltant ignorance.

[conversationpc]

Stuart, shut the fuck up. You personify, indeed you even epitomize, everything that I've been accused of calling all conservatives. You set the standard for miltant ignorance.

I've thought the same thing many a time about some of the things you post.

[Red13JoePa]

Stuart, shut the fuck up. You personify, indeed you even epitomize, everything that I've been accused of calling all conservatives. You set the standard for miltant ignorance.

He cornered you on trying sail the implication that Bush caused the dotcom crash by without challenge and you don't like it.

[Rockindeano]

This thread is awesome. Looks like someone is taking the piss.

[RossValoryRocks]

Stuart, shut the fuck up. You personify, indeed you even epitomize, everything that I've been accused of calling all conservatives. You set the standard for miltant ignorance.

And you are a communist pig. You have shown repeatedly, over and over, and have been shown over and over by me and everyone else that you know NOTHING but Bush hatred.

You have NO objectivity.

I am a HAPPY conservative torch bearer. At least I understand how the world works, you do not. You have lost grips with reality with your BSD.

I love the Militant Ignorance comment though.

[jrnychick]

Bush isn't responsible for the dot com crash any more than Bill Clinton is responsible for the dot com bubble. Things were ready to hit the fan before Clinton left office. The president really doesn't have THAT much control over the markets.

[Saint John]

The "economy." LOL. Once again, it all comes back to those that have chosen to educate themselves, save and plan ahead, and those that have not. The only "economy" I care about is mine, and it's doing great!!! I just can't figure out why some people blame the president because they're lazy. Education in this country is free, so unless you're openly admitting that you lacked the upbringing and/or intelligence capacity to work hard and maintain excellent grades, you really have no excuse.

[RossValoryRocks]

The "economy." LOL. Once again, it all comes back to those that have chosen to educate themselves, save and plan ahead, and those that have not. The only "economy" I care about is mine, and it's doing great!!! I just can't figure out why some people blame the president because they're lazy. Education in this country is free, so unless you're openly admitting that you lacked the upbringing and/or intelligence capacity to work hard and maintain excellent grades, you really have no excuse.

But but but...Bush is to blame because companies can't compete in the US due to high taxes, over regulation and high wage demands by Union employees. Don't you understand?????? Companies aren't supposed to turn a profit, they are only supposed to give people jobs!

[Saint John]

The "economy." LOL. Once again, it all comes back to those that have chosen to educate themselves, save and plan ahead, and those that have not. The only "economy" I care about is mine, and it's doing great!!! I just can't figure out why some people blame the president because they're lazy. Education in this country is free, so unless you're openly admitting that you lacked the upbringing and/or intelligence capacity to work hard and maintain excellent grades, you really have no excuse.

But but but...Bush is to blame because companies can't compete in the US due to high taxes, over regulation and high wage demands by Union employees. Don't you understand?????? Companies aren't supposed to turn a profit, they are only supposed to give people jobs!

Union employess, their insistance on ridiculously high $$$ per hour, and their laziness, destroyed the steel industry. They did the same thing with the auto industry. What's next? My guess is airlines.

[strangegrey]

Two of the primary economic indicators, other than the stock market (but the tax cuts and corporate welfare were going to take care of that) are the housing market and the unemployment figures.

Sher, one thing to remember here is that both housing and unemployment are *trailing* indicators. Unemployment seems to be the one 'indicator' that's used on news casts as pure determinants of the economy...which is sad, because not only is unemployment, as I said, a trailing indicator...but there are a few different types of unemployment (some of which are not indicators of a bad economy, but a good one).

Im not saying that the economy isnt bad right now...It's actually worse off than I think most people are willing to admit. However, unemployment seems to be the first thing that people look at...when in reality, it should be one of the last.

Stu touched upon something that rings hard. Turning debt into marketable securities. The concept has a very Enronesque ring to it...i.e. to take something that really shouldn't be traded, and find a way to repackage it as a tradable commodity. If that doesn't stink of shenanigans, I can't think of what would.

[RossValoryRocks]

Two of the primary economic indicators, other than the stock market (but the tax cuts and corporate welfare were going to take care of that) are the housing market and the unemployment figures.

Sher, one thing to remember here is that both housing and unemployment are *trailing* indicators. Unemployment seems to be the one 'indicator' that's used on news casts as pure determinants of the economy...which is sad, because not only is unemployment, as I said, a trailing indicator...but there are a few different types of unemployment (some of which are not indicators of a bad economy, but a good one).

Im not saying that the economy isnt bad right now...It's actually worse off than I think most people are willing to admit. However, unemployment seems to be the first thing that people look at...when in reality, it should be one of the last.

Stu touched upon something that rings hard. Turning debt into marketable securities. The concept has a very Enronesque ring to it...i.e. to take something that really shouldn't be traded, and find a way to repackage it as a tradable commodity. If that doesn't stink of shenanigans, I can't think of what would.

Yeah and trusting corporation to "self police" the whole thing is nuts too. This wasn't accounting issues though, this was people all across the board being too greedy for their own good from the consumer all the way to the CEOs of these companies. Now WE (as in the government, we the people and all that) will take the debt on to bail out the banks so we don't have a collapse like 1929 in the banking industry, and in the end we all pay for other stupidity.

[strangegrey]

I think there's some accounting that comes into play here, Stu. Marking up debt (that would likely go down) and trading it, depending on how its treated, violates conservatism. I'm sure there are a few accountants at the other end of this whole mess that are going "oh crap, what did we do?"

Regardless, There's more than enough blame to go around....

[RossValoryRocks]

I think there's some accounting that comes into play here, Stu. Marking up debt (that would likely go down) and trading it, depending on how its treated, violates conservatism. I'm sure there are a few accountants at the other end of this whole mess that are going "oh crap, what did we do?"

Regardless, There's more than enough blame to go around....

Agreed...I was pointing out Enron used accounting tricks to show they were making money, when the weren't...but I guess if they has accounting put together a projection showing some kind of unrealistic growth it would be the same thing.