The National Forum   Donate   Your Account   On Line Opinion   Forum   Blogs   Polling   About   
The Forum - On Line Opinion's article discussion area



Syndicate
RSS/XML


RSS 2.0

Main Articles General

Sign In      Register

The Forum > Article Comments > Misconceived intervention to blame for US sub prime failure > Comments

Misconceived intervention to blame for US sub prime failure : Comments

By Leon Bertrand, published 9/12/2008

We all have to accept the fact that not everyone can realise the dream of owning their own home.

  1. Pages:
  2. 1
  3. Page 2
  4. All
Well I'm sure the millions of Americans living in poverty will be happy to know they are richer than the kings of old, although I suspect you might have trouble convincing them. Living in a trailer park with a 20 year old clapped-out Chrysler might beat Versailles in the eyes of some eccentrics but I don't think the sentiment would be widely shared.

The poor in the US might also wonder where all these 'handouts on a massive scale' are, and as they struggle to get even the most basic health care they might be puzzled at which bits of their quarter pounder meal are 'abundant foods from afar'. The melamine-enriched thickshake perhaps? That was a nice bit of free enterprise in action.

As usual from the truly deranged right, the argument is that any problems with capitalism only arise because IT'S NEVER BEEN ALLOWED TO WORK PROPERLY! Yes despite nearly 12 years of Howard's mob and 6 of Republican rule in the USA, the lunatic wingnuts would have us believe that Teh Left is still running things and if only they'd get out of the way and let pure capitalism work its magic, we'd enter the sunlit uplands of a glorious new era.

Really Diocletian do you ever go and look at the empirical evidence before writing such nonsense? Well the answer is obviously "No", you've clearly invented an alternative reality in your head and no minor inconveniences like facts are going to interfere with it.

If you think capitalism without regulation is a recipe for economic success go have a look at some of the South American countries, or the Republic of the Philippines.
Posted by Ken_L, Tuesday, 9 December 2008 10:32:08 PM
Find out more about this user Visit this user's webpage Recommend this comment for deletion Return to top of page Return to Forum Main Page Copy comment URL to clipboard
Diocletian,
re "The fact is, the financial crisis was caused by government's monopoly control of the supply of fiat money..."
Your views and the views of the author of this article are mainly wrong.
Governments, at the behest of bankers and the USA Republicans, largely gave up on controlling the money supply when the signed up to Basle.
In Australia the private banks have been creating money at the rate of 12-15% per annum compound for around 15 years. The USA was even more prolific in this activity because the USA was able, as their dollar is the reserve currency, to run massive government deficits to finance their demands for oil and other imports.
Australian banks sought exploitive profits, and found ways to borrow US dollars, to add both to their capital adequacy base and allow multiplier effects to increase the money supply by the %age mentioned above. This, and devising ways to shift the risk associated with loans to third parties was a certain recipe for the disaster which is now affecting everyone.
The policies followed by banks and governments since Basle have priced average people out of the housing market or saddled them with excessive loan repayments, all with the aim of keeping those of us with a few million bucks happy.
Posted by Foyle, Wednesday, 10 December 2008 9:59:29 AM
Find out more about this user Recommend this comment for deletion Return to top of page Return to Forum Main Page Copy comment URL to clipboard
Leon,

I agree wholeheartedly with one or two minor techinical corrections.
Neither Fannie Mae nor Freedie Mac issued mortgages. Their role is to buy mortgages from banks so they were not the initial impetus for the meltdown. They however did buy toxic mortgages from banks, parcelled them and on sold them as derivatives...mortgage backed securities? I think.

You are perfectly correct in saying Congressional members did encourage these activities of Fannie and Freddie ... both the buying of the mortgages and their on-selling.

The other responsibility of the Democratic Congressional members was to introduce penalty clauses into Carter's Community Re-investment Act. That was to punish Banks if they didn't lower their lending standards when lending to minorities and the poor. Yep you are right that was social engineering and was the root cause of the crisis.

Of course once the banks discovered Fannie and Freddie were embracing these mortgages they saw lots of profits through fees and commissions .. without risk... and went about the business with gusto.

I wrote of this situation sometime ago on online opinion. Here is the link:

http://www.onlineopinion.com.au/view.asp?article=8053

You know you are one of the few people who has actually identified the source of the crisis fairly accurately. Most of those who hold 'qualifications' have missed the boat completely or talk in jargon terms only. I like you hold no formal qualifications, think right outside the square and think the 'experts' solutions for dealing with the current crisis are likely to only worsen by prolonging and deepening the current situation...

I'm working on a project looking at suggesting alternative options. I admire your thinking and wouldn't mind co-operation, if you're interested, contact Sue for my e-mail.
Posted by keith, Wednesday, 10 December 2008 4:17:01 PM
Find out more about this user Recommend this comment for deletion Return to top of page Return to Forum Main Page Copy comment URL to clipboard
  1. Pages:
  2. 1
  3. Page 2
  4. All

About Us :: Search :: Discuss :: Feedback :: Legals :: Privacy