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Artificial Intelligence

Believe you me my friend, I do agree with you 100%.

According to what I know, and as you explained, because of the prosperity during Clinton administration, wall street rather than investing in manufacturing, they took the fast and easy way, which is housing market.

I personally dabbled in Las Vegas housing boom as well, but ease of credit created high demand for housing. With it came the hedge fund GIMMICK. Once the demand for housing sky rocketed, prices climbed without any limit. In some areas such as Boston, LA, Florida, Las Vegas and Upper states prices climbed so high that it became impossible for people to by houses.

To combat this, wall street charlatans came up with margin buying of the mortgages, and introduced what is known as negative amortization[same happened in late 70's and early 80's]. Negative amortization and margin buying allowed home buyers to get into mortgages that was beyond their means. and once payments started to balloon all sh!t hit the fan and people started to default.
This, in my humble opinion, was the main culprit in the disastrous fall of housing market. EASE OF CREDIT during times of inflation.

Now, to your last point, I am assuming you are republican at heart. I do not mean this as cheap shot, however, there are fundamental differences in the economic philosophies of democrats and republicans.

In one of my earlier posts, I have explained how republicans and democrat apply economic principles. It is not to say which one is right and which one is wrong, its two different way of looking at it.

Thanks for your time

capt_ayhab [-YT]

Dear Capt.

All I am saying is that your are putting to much emphasis on Greenspan's self admited mistake in keeping interest rates to low. It is not Greenspan who created this mess. This mess has been brewing since the early 90's. I am no Econ teacher but this problem that we have now is not just having low interest rates. There were many problems which together caused our mess. These problems include:

1) promoting lending without any rational basis which allowed people to invest in homes they had no business in investing...Making homwowners out of people who have no business in being home owvners...

2) Overbuilding (just look at Florida and Vegas)

3) 16 year steady rise in home prices.  The home that cost $230K by me in 1994 is now $1.2 Mil....low interest rate was not the only reason we had this rise...We had a great economy because of the internet boom, low unemployment rate and job creation in high income paying jobs

4) Creation of these mortgage securities that were not regulated. AIG, for example, is in deep shit because it insured these mortgage securities that it did not understand.

5) Unregulated Hedge funds that have to much power in controlling stock prices 

.....and the list goes on. 

By the way, I don't think this stimulus package will work because I don't consider it a stimulus. Half of it is BS and more government spending that will just be wasted.

Honestly

Anything in this package that has nothing to do with the financial markets, or infrastructure projects that bring jobs with it needs to go, be it condoms or anything else.

Kaveh

I'll give you that Family Protection plan. In all sincerety, I am opposed to it as well, but take a look at this article:

[So much for keeping the federal government from blowing millions in taxpayer money.

The Senate quietly stripped whistleblower protections from the final stimulus package Wednesday afternoon, as the bill's authors bragged of a bipartisan compromise. The removal is particularly significant
because of the bill's $789 billion price tag.

Despite the ugly record of federal spending in Iraq -- where auditors found problems with $88 million
in federal contracts, and couldn't account for 8.8 billion dollars --
senators quietly nixed the measure from the bill, without explanation.

Talking Points Memo, which cited a source close to the final bill, said
the provision was removed by Republican Sen. Susan Collins (R-ME), one
of the senators brokering the compromise.

"According to a person following the bill closely, Collins used today's
conference committee to drastically water down the measure, citing
national security concerns as the reason for her opposition," TPM's Zachary Roth wrote.
In the end, the protections were so weakened that House negotiators
balked, and the result was that the entire amendment was removed."

Some Republicans take umbrage with the idea of blanket whistleblower
protections, saying they could damage the US's ability to collect
intelligence. ]

Source: //rawstory.com/news/2008/Whisteblower_protect...

You tell me, what is it Republicans trying to hide? 

capt_ayhab [-YT]

Captain

Whether it's .1% or 100X more, it's unneeded. We both know it You disliked that statement because a Republican was the one who made it. I'm listening to the message, where you're focused on the messenger.

You do realize that Republicans have been in the clear minority in Washington for quite some time now, and in an environment that has grown increasingly partisan and and more hostile to the minority party than ever before. 

This stopped being about philospohical diffferences in political ideology a long time ago. The Democrats are looking for any way to sneak their junk through the back door on this package. Even Charlie Rangel, one of the biggest bleeding heart liberals out there said when this package was passed yesterday that he's ducking the announcement because no one in his own party knows what's in the package.

The money from TARP went the same place the money in this package is slated to go....it vanished into thin air. POOF!

This party is in charge in DC, and have been for several years. They're the ones who this country must look to and, not ask, but DEMAND accountability. They've blown so much smoke and sunshine up America's ass that it has both emphysema and a bad case of sunburn. They've mastered the art of the spin, by beating everyone over the head with the notion that they are like Robin Hood, here to save the day because they know what's good for you and the GOP is evil incarnate, standing in the way of progress, growth and lasting prosperity purely out of greed and spite. I'm sorry, dude, I don't subscribe to that.

and

I like you to know something Kaveh, trust me when I say I am as mad, or ever madder than you. Although we share totally opposite view of this stimulus package, but as a citizen i know that all these money has to be paid back at some time or another.

I assume you are much younger than I am, But I am sure for fact that my son, among millions of next generation has to pay for this fu@k up that past administrations have made. I do blame Clinton white house as well, however, Republican white house, and republican senate had 8 freaking years to see it coming.

I guess they were too busy falsifying the records in order to attack other countries.There is going to some serious investigation done into the crimes of GW Bush. Watch my word and check this out, you are gonna hate me for it ;-)

//iranian.com/main/news/2009/02/12/almost-40-...

Regards

capt_ayhab [-YT]

Kaveh

You say[John Boehner is 100% right. This stimulus package is supposed to be about stimulating the economy, and they set aside hundreds of millions of taxpayer dollars to buy condoms? Is this an economic emergency or a push for safe-sex and birth control?]

come on, you are way smarter than trying to recite this statement, and I don't mean that as an insult. 

In the original bill, there was some 120 million for Family Education, and to prevent unwanted pregnancy. NOT FOR CONDOMS, which by God some women need it any ways.

It is a mere 1/10 of one percent. Are you telling me this is what Republicans call PORK LADEN bill?

Where are THESE fiscally responsible Republicans to tell the nation how and to whom they OVER PAID $80,000,000,000 from the first TARP? That is a WHOPPING 23% OVER PAYMENT dude. And no body knows where it went.

Once you can provide the answer to this, then I will tell you why 120 million was NOT needed at this juncture.

I am awaiting your response.

capt_ayhab [-YT]

Captain

Actually, my remarks have been focused on the economic issue. As the current state of the economy is the result of (in)action by certain people in charge of policy (we differ on who the guilty parties are), there will be a bit of overlap. I've done as much as I could to minimize that overlap. Perhaps that just serves to underscore the Democrats' inherent tendency to undermine the natural occurrences in a free-market economy.

I agree that apologizing after the shit hit the fan is a day late and a dollar short. 

But I don't think that either Greenspan nor Bush should be apologizing for anything, except for perhaps not being more assertive, dare I say forceful, in trying to rein in the loose, carefree practices that are the cause of this mess. Bush and the GOP powers that be made it abundantly clear that the shit was going to hit the fan, sooner rather than later, and that the impact was going to be enormous.

Bush Administration officals raised red flags and concerns about the financial industry in April 2001.

Greenspan reiterated the urgency of taking action and warned Congress about the need for regulation in 2003!!

Meanwhile, Barney Frank was repeatedly stating that Fannie and Freddie were both fiscally sound. He called White House concerns about the financial markets "an exaggeration".

Maxine Waters said "there's no crisis at Fannie or Freddie".

Nancy Pelosi was speaking before the House this past Septemeber, lying to everyone in the room and those who were watching on C-SPAN that the GOP refused to regulate.

No one can grasp the magnitude of this because the dollar amounts being talked about here are simply incomprehensible, especially to the average guy who pays little attention to such matters, so long as they're OK themselves.

John Boehner is 100% right. This stimulus package is supposed to be about stimulating the economy, and they set aside hundreds of millions of taxpayer dollars to buy condoms? Is this an economic emergency or a push for safe-sex and birth control?

Plenty of work can be created. Plenty of work already exists. But if businesses cannot afford to hire anyone, there won't be any jobs. I know this firsthand. It costs a lot of money to hire workers. Business owners need to have all of the necessary licenses, permits, liability insurance, surety bonds, workers compensation policies in place before they can even hire the first person who applies for a job. Michael Steel is correct there.

How does buying new computers for federal agencies stimulate the U.S. economy? Computer components are manufactured overseas. That money won't stay here in the U.S, It will end up wired into a bank account in Hong Kong before you know it.

Buying green cars for government agencies? Every year in the federal budget, year in and year out, funds are already allocated for the timely replacement of government-owned motor vehicles, with natural gas or hybrid propulsion vehicles comprising a growing percentage of what's parked in Uncle Sam's garage. Government vehicle replacement is on a consistent schedule, and the government having standing orders for vehicles with GM, Ford and Chrysler. Earmarking stimulus money for cars is just another scam.

Personally, If I'm going to be robbed, I'd rather they put a gun to my head, instead of trying to jerk me around with this package full of hot air.

Kaveh

Back to our discussion, with apology for the delay on my part.

Privously, you had asked to only engage in Economical theories behind the plan, However, very quickly you turned your comments to pre-ellection comments, and current political issues. So here is my political take on this.

Points 1 -3 , as they say in Shahnameh: [Nooshdaro bad as marge Sohrab.]

As I explained to Artificial Intel, Admission of the mistake, either by Bush Admin, or by Greenspan, after the sh!t has hit the fan, and after stock market losing close to 40% of its value, after worst unemployment numbers for decades, and after millions losing their homes, jobs, businesses is basically an SLAP in the face of nation.

What is admitting to fault going to solve now??? You mean to tell me When Mr Bush says [opppps we made a mistake] or after Republican making such a huge mistake of NOT KNOWING where they spent 350 Billion, with over payments exceeding 80 billion. Just saying OPPPS we made a mistake, is going to make everything alright?

Kaveh jan, These people even can not grasp magnitude of their mistake, and that is the biggest concern. Take a look at some of the arguments they have been presenting in regards to the Stimulus Plan:

1. Some of these arguments are obvious cheap shots. John Boehner ... has already made headlines with one such shot:... he derided a minor provision that would expand Medicaid family-planning services — and called it a plan to “spend hundreds of millions of dollars on contraceptives.”

2. Some of the arguments are outright foolish and ignorant. Here is what new found HERO of GOP, Micheal Steel has said. According to MR Micheal Steel, Mr. Obamas stimulus plan does not create JOBS and it only creates WORK!!!! [I am dumbfounded at his intelligence, LACK OF IT] take a look at the clip please:

The gentlemen also beleives that there is no such a thing as GOVERNMENT JOB.........Jeeez this man is EXCEPTIONAL

3. Or another Republican Jewel Sen Jim DeMint( R-SC0 has compared the stimulus plan to passing of constitutional 16 amendment(Income Tax). What is with this guy? does he still live in 1913??????

Here is his Nobel Prize Winning! quote ["worst plan since the 16th Amendment paved the way for the income tax."] On his ABC interview past Sunday.

I wonder, Without Tax, who would have paid his salary? KKK?

Or Sen. Kay Bailey Hutchison (R-Texas) Said on NBC she wanted the bill to have more spending on infrastructure, but she wanted it to be on military infrastructure, even though much of that winds up as scrap metal in Iraq and Afghanistan, not bridges and schoolhouses in the United States.

She said she would strip from the bill all the "social spending that is not going to create jobs," but when pressed by Sen. John F. Kerry (D-Mass.), her on-air debating partner, she agreed to preserve some
social spending, such as unemployment benefits. The effect of this exchange was to leave Hutchison sounding as though she made up her position as she went along.

This isn't radical thinking. It's endorsed by, among others, Martin Feldstein, who was Ronald Reagan's chief economic adviser and is consistently voted by his peers as the Economist Least Likely to be Mistaken for a
Democrat. Feldstein opposes most of the tax cuts favored by the GOP, especially business tax cuts. To be fair, he isn't entirely enamored of President Obama's proposal -- he thinks it should spend more on programs that will produce more short-term employment and less on open-ended programs.

Yet the plan before the Senate includes hundreds of billions of dollars in near-term programs and projects.

There's $90 billion for school construction and renovation and educational grants and $79 billion for state educational programs,
most of which would be spent within two years. Of the $27 billion for highway construction, most would be spent within four years.

Republicans[including you] have been   arguing that the plan is full of PORK. House Republicans last week released a list of $19 billion in provisions they called "wasteful"
(i.e., 2% of the total package). But the list includes numerous projects that many Americans would support and that would plainly stimulate our limping construction and manufacturing sectors. For example, the purchase of new computers and [GREEN]vehicles for federal agencies, the building of fire stations and other public facilities, and the upgrade of rail lines.

That brings us to McConnell[Senate Minority Leader] and his problem with "honeybee insurance." It turns out that the Senate minority leader took his cue from Neil
Cavuto of Fox News, who has been carrying on about the topic for more than a week. Their campaign was joined Tuesday by Sen. David Vitter (R-La.), who stood on the floor of the chamber challenging "any member
to come and explain what that provision was."

Kaveh. It is such a shame that Fox NEWS, Rush Limbaugh, Hanitty Guy, and Bill O Guy have become LEADERS of Republican party.

capt_ayhab [-YT]

Artificial Intel

come on my friend, Greenspan's ADMITTANCE to his HUGE mistake  does not make the disaster go away. 

Being honest with you, there was time, early on in his tenure as Chairman of the Fed, I as an Econ Teacher was one of his avid supporters. It is unfair to say[exaggeration in my part aside]  that he did not know what he was doing.

As a matter of fact, there are several of his theories in banking that are thought and lectured about in schools all over the world.

With all those clarifications aside, at this juncture, there is nothing that federal reserve can do to ease up the credit market, because the prime rate is ZERO% for all practical purposes. Only option for the Fed Reserve would be to INJECT[print] money, which we all know would be a disastrous policy, because without increase in supply,  any additional cash in the market will only create inflation.

This will take us back to Stimulus plan[which passed] after getting bastardized by Republicans.

Respectfully

capt_ayhab [-YT]

Iran Y Beman

I did not ask you to name some countries.

I asked you one SIMPLE question. Your answer should be one of 2 things

1. either you don't know what socialism is, which in that case just say so. Don't just interject words, to pretend you know what you are talking about. 

2. IF you know the definition of the words you use, then define them.

so, look up your book, in the planet you live in and give me the answer.

I have one suggestion though, mind your manors when you comment about me.

capt_ayhab [-YT]

AI

Thanks for taking the time to read all of that. It's a lot of info to digest. I hope you read Captain Ayhab's posts too so that it's all put in the clearest context possible.

Kaveh

I agree with your analysis 100%. Nice job on outlining the problem. Greenspan has acknowledged his mistake but to blame him for all of this is just not rational. He was not the one lending all this money to people who had no business borrowing and he was not encouraging banks to lend, lend and lend.

Do nothing

Sometimes doing nothing causes the least damage. First Bush bails out all the thief’s of Wall Street without a single indictment! Then the community activist who has to no experience in anything except putting posters on the streets of Chicago proposes 1 trillion dollar in pork that he calls stimulus package. Printing 1 trillion dollars of worthless money will make dollar loose at least 30% of its value and it will cause inflation and possibility hyper inflation in few years. Basically if you are a young person they are mortgaging your future and you are going to end up living in banana republic with far far lower standard of living than now. If you are older, hang on to your money, live frugal otherwise by the time the liberal idiots are done you will be sharing your house with the less fortunate.I guess this is a case of change we can believe in.

Kadkhoda Ayhab

I don’t know what planet do u live on, but there are many ways that society are managing how to live their lives, there is one in Iran which is managed by Ideology, one in China which still struggling to stay as communism, there is Europe who is dominated by Socialism and we have what we call Capitalism in USA.If you stop insulting and start listening, those who are here either by choice or by default are living a great life of Capitalism, mostly came here to be free and to be able to become who ever they want to, a big example is our President, Mr. Obama, in no nation you will see such a free thought that you be able to elect whom you think it is right for you except USA and thanks to Capitalism we still have that luxury. No you ask your audience if they have a choice to live in the great nation of Capitalist USA or a Socialist Europe, which one would they choose? I have no doubt many who have free sprits choose to be in Capitalists side rather the other. Now what you do by insulting the opposite opinion is kind of dictatorship, I don’t get insulted by you comparing me to Rush Limbaugh and advise you to be wiser with your word my young Liberal friend. 

Iran Y Beman

Kaveh

With apologies, I am running to catch the class. Allow me and I shall read your comment carefully and reply this evening , or in the AM.

I do want you to know one thing, I appreciate your calculated, researched and civil comments. Rest assured I have tons to talk about.

Till then, Have a wonderful evening

Fishie,,,,, 3 Heisman winner from SAME SCHOOL.......... LOL I'll tell u about it later.

Cheers

capt_ayhab [-YT]

alas

clemson has not produced a heisman winner... :-(

but the hated gamecocks did give up george rogers. 

i'll be looking forward to your story.  :-)

may i also give you and kaveh big "kudos" for this exchange.  other than a little dig at republicans (sorry k.) i'd be the first to admit i know next to nothing about finances per se.  all i call about is the balance in my checking, savings, and retirement account which have all suffered greatly in the last few years.  this is extremely informative and i think less a matter of republican versus democrat than it is the result of fateful individual decisions and misconceptions.

Captain

1) Yes the election is over. I'm not rehashing that. Efforts to regulate Fannie and Freddie predate the election by a few years. As far back as 2003, if I'm not mistaken.

2) I'm not suggesting ACORN played any role in Greenspan's actions at the Fed. ACORN played a role in preventing regulation of the housing and mortgage markets by asserting their influence over the Democrats who in essence became whores for their ACORN pimps in order to score a few more votes.

3) Both officials in the Bush administration as well as Congressional Republicans expressed concern over the lack of regulation and how, if allowed to continue unregulated, it would be detrimental to the market. These concerns were ignored.

The Fed lowered interest rates after 9/11, and again after the accounting scandals in 2002. These moves were designed to rebuild corporate and consumer confidence, once after people lost their life savings and had to re-capitalize for retirement, and also when 300 million Americans were scared shitless by Arab hijackers.

Had Fannie and Freddie been properly and adequately regulated, as Dr. Greenspan and so many others practically begged for, do you believe that we would be experiencing what we are experiencing today?

Also, if Dr. Greenspan is solely to blame for this, how do you explain the high consumer confidence and overall prosperity that was enjoyed in this country while serving as Federal Reserve chairman under Bill Clinton?

Bottom line, I firmly believe that had the subprime segment of the mortgage industry been properly managed with competent oversight, it would be seen today in a positive light, as a useful tool to be used as a bridge that would help carry more people on the path to financial independence and security, as it was originally designed. There would be no more foreclosures than usual, and that would have prevented this freefall.

Instead, we have a scenario (actually a nightmare)that started with:

1) People with a FICO score of 500 getting a $400K mortgage with little or no documentation 3X faster than they could get a credit card at Sears, at an interest rate that was not even a quarter point higher than someone with a 720 FICO would qualify for at his/her local bank for a full documentation loan for a lower amount;

2) These people mismanaging their money, using their homes as ATMs as the equity grew until the well ran dry;

3) Confronted with an interest rate that reset from 6% to 11%, no equity, no savings, 3 SUVs, and a pile of debt, they go into foreclosure;

4) They can't sell the house as easily or as quickly as before, as a result of the naturally occurring cyclical nature of the market, so they lower the listing price, usually several times;

5) The house goes to auction, becomes an REO, with the bank contracting some douchebag of a realtor who can't sell water to a fish, dropping the listing price even more in a desperate attempt to unload the unperforming asset, which drives the overall property values of the entire neighborhood in a slow ripple effect.

6) The poor schmuck next door who has great credit, has to either put his house on the market because he just got a great job offer in Jock Itch, North Dakota, or refinance it at a lower interest rate and payment so that he can rent it out can't do either now, because of the values dropping at the rate of gravity from all the foreclosures on the homes of the people depicted in the beginning of this scenario;

7) Unable to pay for two mortgages or a mortgage and a rental in his new town, he lets the house he just moved out of fall into foreclosure, repeating the cycle and driving property values further into the Earth's crust, not to mention obliterating his credit;

8) Banks and other investors, both institutional and non-institutional, are forced to drive up the rates they charge to lend money to compensate for the losses they've suffered;

9) Borrowers who initially suck it up and borrow at the higher rates find it increasingly difficult to pay back the funds they borrowed per the original terms, propelling them into default. If they are businesses this is credit they rely on for purposes of purchasing and manufacturing, and payroll for employees;

10) When that credit runs dry, these businesses go under, putting their employees out of work, who then end up unable to pay their bills, losing their homes to foreclosure, repeating THAT cycle again. Vendors and suppliers for these businesses lose revenue, are probably owed outstanding money by the company that went under and left their employees jobless, so now the vendor or supplier has to try and borrow, but they can't, because their credit suffered when they lost revenue and couldn't pay their own bills. So they go under, and the cycle continues.

Oh, Captain, my Captain, the seeds of this very bitter harvest were sown long ago.

Fishie

Thanks a lot dear, and have a great evening, Next time, I'll share with you my auto graph story from 3 Heisman winners ;-)

capt_ayhab [-YT]

ok... this is soooo gonna

get lost in translation but i'll try anyway since it's a subject near and dear to my heart.  :-)

i can't even remember how it started but i think during a blog a long time ago, kaveh had mentioned he had lived in maryland... from there it went to the ACC (atlantic coast conference) which is a college conference in the south east of which the university of maryland is a member.  also a member is clemson university... GO TIGERS.  i'm a fan.  i went to a girls school and we sorta kinda had to go one way or the other... clemson university or university of south carolina (this is a major south carolina rivalry).  GAMECOCKS SUCK.

anyhoo... danny ford was a football coach for clemson during the years in which they won the NCAA National Championship (1981)... GO TIGERS.  he was the second coming (after frank howard of course for whom Howard's Rock is named) for all tiger fans.  GO TIGERS.

it was the highlight of my life... my eyes are tearing at the memory... to meet Sir Ford (even if the Queen doesn't recognize him officially, we do) and get his autograph... a happy birthday wish to my son who is also a tiger fan.  GO TIGERS.

be still my heart.

it is and always will be among my most sacred treasures.  along with a signed jim o'leary Waterford bowl.  i am materialistic after all.  :-)

mr. nouraee made a clever (in his deluded mind of course...:-) comment and compared HIS autograph as also worthy of framing!!!!

it was sacrilege.  no less than profane sacrilege.  i have since forgiven him his transgression.

i thank you for this opportunitiy to expound on the virtues of college sports and it's many wonderful traditions.  GO TIGERS.

god.  this is almost arousing.  i love college sports.  it is pure sportsmanship at its best.  and given a chance to talk about clemson on iranian.com?  GO TIGERS.  bless you YT.

azizadelaam... i'm on my way home.  :-0

Anonymous fish

You know very well that I am new kid in the blog, I have seen you several times referring to this [danny ford] autograph, and I am yet to figure out what you are referring to.

could you hold my hand to figure this out? ;-)

Much obliged

capt_ayhab [-YT]

Iran Y Beman

My good man, before you place your foot in your mouth by repeating and reciting RUSH LIMBAUGH, define and elaborate Socialism.

Once you do that I shall rebuttal your comment

Thanks

capt_ayhab [-YT]

kaveh

Here is how interest rates gave way to inflated housing market. take a look at this HOT article from Bloomberg's Jan 10th edition:

Hailed as perhaps the greatest central banker who ever lived when he left the Federal Reserve in 2006, Greenspan is under attack from critics ranging from the New York Times to economists at the American Enterprise Institute for his handling of the 2000-2005 housing boom. The former Fed chairman has taken
to the media to defend himself, writing in the Wall Street Journal and appearing on network television.

``He's had a bubble reputation that derived from the growth of U.S. household wealth,'' said Edward Chancellor, author of
``Devil Take the Hindmost: A History of Financial Speculation.'' ``As that goes down, his standing as a superstar will suffer.''

At stake is not only Greenspan's legacy but also the future of policies he espoused during 18-1/2 years atop the central bank. Critics blame his aversion to regulation and reluctance to use interest rates to puncture asset bubbles for the boom in mortgage lending and house prices that has since gone bust, threatening to throw the economy into recession.

//www.bloomberg.com/apps/news?pid=20601109&re...

Kaveh, Greenspan, perhaps single handedly is responsible for this global economic meltdown. And the disastrous part of the problem is that BUSH and his criminal goons let it happen SIR.

Master Kaveh, if you indulge me, I rather not re-live the election and the FAILED campaign that Republicans ran. Instead I am 100% open for any dialogue on PURE economic side of the problem.

As I explained in my prior post, school of the thought by which Republicans operate, because of lack of expert people, and because of disastrous monetary policies of Greenspan, and administrations TOTAL lack of foresight has caused this mess. Administration FAILED miserably in Economic arena as they did after Katherina.

I shall look forward to your response on ECONOMIC ground. 

capt_ayhab [-YT]

WTF????

why double post???????????

capt_ayhab [-YT]

Kaveh

I categorically disagree with you on several ground:

1. the election is over, in another word lets set aside propaganda that was spewed by Republicans regarding the Fanny and Freddy.

2. Acorn has nothing to do with Greenspan's screw up in lowering the interest rate during the times of inflation. Unless you want to claim that Bush's administration was so weak that Acorn caused the recession.

3. Democrat have contributed to this problem, that is for sure. Problem in this case is not Democrats per se, but it is the Bush administration INABILITY to see what was happening in the market.

Here is how interest rates gave way to inflated housing market. take a look at this HOT article from Bloomberg's Jan 10th edition:

Hailed as perhaps the greatest central banker who ever lived when he left the Federal Reserve in 2006, Greenspan is under attack from critics ranging from the New York Times to economists at the American Enterprise Institute for his handling of the 2000-2005 housing boom. The former Fed chairman has taken
to the media to defend himself, writing in the Wall Street Journal and appearing on network television.

``He's had a bubble reputation that derived from the growth of U.S. household wealth,'' said Edward Chancellor, author of
``Devil Take the Hindmost: A History of Financial Speculation.'' ``As that goes down, his standing as a superstar will suffer.''

At stake is not only Greenspan's legacy but also the future of policies he espoused during 18-1/2 years atop the central bank. Critics blame his aversion to regulation and reluctance to use interest rates to puncture asset bubbles for the boom in mortgage lending and house prices that has since gone bust, threatening to throw the economy into recession. 

//www.bloomberg.com/apps/news?pid=20601109&re...

Kaveh, Greenspan, perhaps single handedly is responsible for this global economic meltdown. And the disastrous part of the problem is that BUSH and his  goons let it happen SIR.Republicans , in past 8 years were too busy pissing on the constitution, rather than doing their jobs SIR.

Master Kaveh, if you indulge me, I rather not re-live the election and the FAILED campaign that Republicans ran. Instead I am 100% open for any dialogue on PURE economic side of the problem.

As I explained in my prior post, school of the thought by which Republicans operate, because of lack of expert people, and because of disastrous monetary policies of Greenspan, and administrations TOTAL lack of foresight has caused this mess. Administration FAILED miserably in Economic arena as they did after Katherina.

I shall look forward to your response on ECONOMIC ground.

Respectfully

capt_ayhab [-YT]

Captain

Alan Greenspan's policy of rate cuts plays a role, but not by itself. The policies set forth by the Community Reinvestment Act that essentially forced lenders to loosen lending guidelines so that people with FICO scores that were literally in the gutter who honestly had no business getting a loan obtained credit with greater ease and less accountability than people with 720+ FICO scores. This was yet another one of the Democrats little social experiments that has blown up in everyone's face.

The Federal Housing Enterprises Financial Safety and Soundness Act of 1992: Another Democratic baby, mandating specific quotas for affordable housing, without adequately addressing issues of either regulatory guidelines or long-term economic effects.

ACORN: Their influence (and culpability) cannot be ignored or otherwise overlooked. They asserted overwhelming political influence among Democratic politcians, pushing them to implement these poorly regulated or unregulated policies and programs which over time helped to create these policies that allowed loose lending. In return, ACORN, an its supporters have supported Democratic campaigns only.

Had the subprime situation cultvated by these loose lending practices these liberals pushed for with the "long-term be damned" mentality been properly addressed as the GOP wanted, we might not be having this discussion.

You have yet to acknowledge that the policies of the Democrats, which allowed low-income, low FICO borrowers to get a mortgage at a rate equal to or even LOWER than the traditional "A-paper" borrower is probably the single biggest factor or cause of this economic disaster. All in the interest of establishing, cultivating and growing a voter base. A voter base of people who probably are not so sophisticated to be able to understand all of the nuances and intricacies of politics, finance, and so forth. All these Democrats care about is that they are just able to recognize  and vote for the name with the big "D" in parentheses at the polls come election day.

While you're accusing the GOP of having their heads in their asses, you fail to recognize the fact that Democrats have been f**king us in ours.

whoo hoo!

this is gonna be a fun ride.  forget all the republican/democrat bashing nonsense that still continues.  this is a battle between two individuals who KNOW what they're talking about.  for every video you have of hannity or o'reilly, there's one from the our side as well.  it's getting old.  but a real discussion?  this is what i'm talkin' about. 

teapot.  please post that on every thread you go to.  we just can't see it often enough.  in fact, i'm going to print it and post it next to my danny ford autograph. 

k.  you need to resend yours, it got wet when i spewed diet dr. pepper... sorry :(

Master Kaveh

Thanks for your well thought and insightful response, and sorry for delay in my response.

No I am not looking at the issue from pure political point of view. Allow me to share with you some of what I know and teach for living. That is Economics.

Simply put, there are two main schools of thought. One school of thought[without getting into details] concentrates on business[supply] side of economy. Arguments are, by facilitating the expansion of business, revenue will [TRICKLE DOWN] the layers of economy[Regan trickle down economy]. They argue that IF a business is allowed to expand[via tax cuts, investment tax credit], they will eventually[hopefull thinking] start hiring employees, pay more taxes, purchase more raw materials, equipments & etc. This expansion and increase in supply should lead to more purchasing power in the middle class, hence lend itself to further expansion of the business, and economy as a whole.

Historically This model has been economic policy of the Republicans.

Second school of thought concentrates on DEMAND side of the market[Trickle UP]. With the argument that IF more disposable income and purchasing power is facilitated among the consumers, then demand will go up. With increase in demand, supply side will correspond by expanding the facilities, hiring additional employees, purchasing more fo raw material and services. Once the economy starts its upward swing, more tax revenues are generated for the government and so on and so forth.

This model, historically is used by Democrats to stimulate the economy.

Stabilizing powers that government has at his disposal are A) Interest rate, B) Government expenditure.

Interest rate is used by national banks[federal reserve] to achieve two main goals. 

One is to SLOW down the economy WHEN market starts to show signs of inflation. The opposite occurs when the deflation or recession starts to slow down the economy. During recession, Federal Reserve reduces the interest rates, allowing the companies to borrow at cheaper rate, as a result stimulate production and increase in Inventory.

At this point Interest rates are near ZERO. so adjusting the rates has lost its use.

Second tool government has at its disposal is [GOVERNMENT EXPENDITURE].

Here is how it works. Governments are the biggest consumers in every economy. By initiating the government expenditure, through investment is infra structure projects such as roads, airports, schools, and so on and so forth, government creates what is known as [shovel ready projects]. These projects injects money into the economy by CREATING JOBS. by creating JOB, you create additional tax revenue.

The most important effect of job creation is STIMULATING DEMAND[Consumer expenditure]. Once this model is mixed with proper amount of tax relief for BOTH consumers and business result will be to stabilizing the economy and reversing the recession.

Jobs in the market increase the consumer confidence,  increases the demand,  and generates additional tax revenue. Increase in tax revenue, will enable the government to pay its bills and pay back loans, which was acquired to start the infra structure projects.

Now my dear friend, lets look at it from political view point. Economists agree that Republican economic policies has created the deep recession we are in. If you recall senate hearing which was held shortly before President Obama taking office, in regards to Federal Reserve chairman's[Allen Greenspan] TOTAL F@@k up in continuous and constant rate cuts during Bush Administration.

Allen Greenspan admitted in the hearing that HE reduced the interest rate during the times of inflation, as a result causing GLUT in credit market. This GLUT in credit market, resulted fictitious upward swing in HOUSING market, which led to hedge fund DISASTER. And we all know the hedge fund disaster is what caused this mess we are in.

Now if honorable leaders of Republican part, Rush Limbaugh, Sara Palin, Joe the Plumber pull their heads out of their rear ends they will see that NOW is not the time for partisan bickering. They just need to SHUT the F up and let the educated and intelligent staff do the work.

Respectfully

capt_ayhab [-YT]

Captain

In addition to focusing on what the Republicans dislike about this package, have you given any thought or consideration to what it is that has the Democrats so fired up to slam this through?

It appears that you are looking at this purely from the standpoint of political ideology, rather than the actual merits or shortcomings. There are indeed some very positive aspects of this package, at least as they are outlined on paper. But there are some portions that are nothing more than a pile of crap.

This continuance of placing blame on the Republicans when they are in the clear minority on Capitol Hill is a joke. There are simply no more excuses. If this fails, it's all on the Democrats. It's not even on Obama. At least you are discussing this using various reports and statistics.

In the matter of tax cuts, you and I are clearly more qualified to spend that dollar properly compared to bureaucrats. If there's any question of that, I refer you to TARP #1. When you and I as taxpayers have that dollar, we instinctively do our best to ensure we get the full value of that dollar. In public spending, bureaucrats have proven to be so blatantly reckless, if 20 cents of that dollar's value is realized, it would be a bloody miracle. If the US Government were a publicly traded, SEC regulated corporate entity, 3 out of 4 on Capitol Hill would be locked up for embezzlement and fraud. The remainder would probably plead to a lesser charge in exchange for testifying against the rest.

The primary focus of any stimulus, or bailout or anything else anyone chooses to call this, should have focused on the residential real estate and mortgage issues from the beginning. But very little of this package actually addresses this. It was the mortgage fiasco that started this even greater fiasco. The House Financial Services Committee, led by Barney Frank, and the others I mentioned, steadfastly shot down any effort made by the Bush administration to place Fannie Mae and Freddie Mac under the oversight of a separate regulatory entity. Had there been the regulation that was sought been implemented, even if a reversal and contraction of the real estate market was unavoidable, the impact and its scope would certainly be a fracton of what it is now.

Don't you find it odd that the Democrat-led committee refused to regulate the primary engine of the mortgage industry (Fannie & Freddie) back then but all of a sudden they are demanding oversight of the bailout money NOW? Fannie and Freddie are GSEs and they didn't want them regulated, but now they want to regulate every other corporation involved in financial services. Does that make sense to you?

You have a couple of supporters here who are so blinded by their narrow-minded ideology they can't or won't see that the money "thrown at banks and corporations without asking for accountability" was sought and approved by the Democrats.

For your review, I've attached some videos that clearly show the culpability of Democrats in this catastrophe.

The evidence speaks for itself.

//www.youtube.com/watch?v=hxMInSfanqg

//www.youtube.com/watch?v=_MGT_cSi7Rs&feature=related

//www.youtube.com/watch?v=cMnSp4qEXNM&feature=related

My dear young Liberals

As Churchill says it the best, " If you are about 25 and you are not liberal you have no heart and by the time you are thirty and have not become conservative, you have no brain."

 Let me take your attention to two deferent historical events, one back in 1976 when Jimmy Carter won the Presidency on a change platform and by the time he left the office there were the highest rate of inflation, interest rates, unemployment and income tax rate, and the second event was 1979, which a Mad mullah also promised change and the result as we see after thirty years is disasters.

It is so easy to blame for our own shortcoming but put the blames when it should stand, just before Democrats take over Congress and Senate over 2 years ago, every thing with economy seemed OK, it is them that we should blame for lack of leadership and transparency, it is again them who are going to take this great nation to Socialism, I promise you, the man who you love so much as your savior would become obsolete before his third year in the office, I also predict, republicans get all the lost seat back in the senate and house and put a cap on Liberal spending, we will again enjoy Capitalism for which we are here for once again, till then enjoy your measurable pathetic it is all Bush's fault kind of life and we will go to work and make this country great again.

Iran Y Beman