More bad economic news

Originally posted by Tha C-Master
Many of them lived in apartments and had no business buying a home, and then they lied on stated income loans. People do business elsewhere because the cost of doing business is too high in one area, people don't just want to up and move their operations if they didn't have a reason to. Employees are expensive. Ask the automotive industry.

And many banks gave those loans knowing they were extremely risky. They were assuming continual apprecialtion of the housing market which didn't happen. It's not just houses. Before the credit crunch banks were giving almost anybody credit cards often with very high limits knowing those people made very little and then they lob bied hard to make the bankruptcy laws change furthering their goal of economic slavery of the masses by keeping them in debt.

As for employees being expensive, that's the best way to run our society. Right now too much wealth is being pushed towards the top, a trend that has been going on for 30 years. The solution is to eliminate foreign cheap labor by not allowing their products in the country. Yes it will make things more expensive, but it will also increase wages. Where there will be a negative shift is at the top. I really don't care if Bill Gates loses half his fortune...hell, he'd still be worth $25 BILLION.

its not just that they were risky

its that banks had spent millions/billions in lobbying such that they could pass off the losses from their loans to other companies. In this environment, there was no reason to even check to see if people could pay back their loans.

In a nation with real bank regulation, there is no way these people would have gotten these loans.

Banks do need to be watched closer, and people should have tighter restrictions getting those loans.

Originally posted by inimalist
also, how could you possibly think that link supports your point?

Let's pretend the:
People didn't live beyond their means.
Didn't lie on loans.
Saved money.
Invested money.
Put money away for retirement.
Didn't spend so much.
Didn't re-default.

Do you think the economy would be better here? Do you think we'd have so many different forms of debt crisis, do you think the responsible people would have to pay for the irresponsible?

Everybody played a part in it. All sides were greedy, not just one.

Originally posted by The Dark Cloud
And many banks gave those loans knowing they were extremely risky. They were assuming continual apprecialtion of the housing market which didn't happen. It's not just houses. Before the credit crunch banks were giving almost anybody credit cards often with very high limits knowing those people made very little and then they lob bied hard to make the bankruptcy laws change furthering their goal of economic slavery of the masses by keeping them in debt.

As for employees being expensive, that's the best way to run our society. Right now too much wealth is being pushed towards the top, a trend that has been going on for 30 years. The solution is to eliminate foreign cheap labor by not allowing their products in the country. Yes it will make things more expensive, but it will also increase wages. Where there will be a negative shift is at the top. I really don't care if Bill Gates loses half his fortune...hell, he'd still be worth $25 BILLION.

He made the 25 billion by innovating and providing a service that is used worldwide. Wealth is simply a number that shows what you contribute, and your value in terms of services and what you provide. Bill Gates has given numerous people jobs, has provided services that people have wanted. There aren't many people who have the talent and ability to create businesses like Bill Gates, Rockerfeller, Carnegie, etc. That's why they made so much money.

A worker that comes in and checks groceries out at Wal-Mart and punches out does not deserve that much because they are too easy to replace. People who solve problems and advance life in some way (automobiles, quicker and cheaper resources, internet) are the ones who create lots of value.

Raising the costs of running business is very bad. Workers here cost too much and provide too little, many are lazy and want everything handed to them, they don't have the hunger they once did.

And btw simply raising the pay of everybody is going to make the cost of everything else go up as well. Supply and demand. People want these cheap prices for things they buy, but they want to be paid top dollar. They simply can't understand the correlation. Being American and all. *sigh*

American automobile makers had "legacy costs" in their vehicle to cover the costs of paying for and covering workers into their grave, even if they were no longer providing anything to the company. Foreign cars moved in and had cheaper vehicles that were of superior quality. The consumers don't find it worth it to pay more for what they're getting. Same with companies that choose to go overseas. They vote with their feet.

Not only that but it also helps people around the world. Most people aren't worried about business, they're worried about themselves. People are self centered by nature. Business wants profits, workers want money, and consumers want low prices. Other people less fortunate will benefit from the jobs and tech that business will provide.

We can't compete with the rest of the world with our high costs of doing business. Globalization is inevitable, the best thing to do is to be ready for it, and see what opportunities will await in the future.

Originally posted by Tha C-Master
Just pointing out that people do lie on the loans, it is no secret, it's done all of the time. Just on as wide as a scale.

Let's pretend the:
People didn't live beyond their means.
Didn't lie on loans.
Saved money.
Invested money.
Put money away for retirement.
Didn't spend so much.
Didn't re-default.

Do you think the economy would be better here? Do you think we'd have so many different forms of debt crisis, do you think the responsible people would have to pay for the irresponsible?

Everybody played a part in it. All sides were greedy, not just one.

sure, everyone is greedy...

but no, I still think there would be a huge recession even if people lived within their means.

The fact is, bank were predatory in their lending and entirely unaccountable for the money they were loaning. It doesn't really matter what people did to get those loans, the system itself was corrupt

like, if all you want to say is people get loans when they should just try to save, well, bravo...

that is so unrelated to why there is such a huge recession right now. Guess what, people take stupid loans in Canada too, but our banks didn't fail

Originally posted by inimalist
like, if all you want to say is people get loans when they should just try to save, well, bravo...

to add a non-glib sort of extension to this

like, back as far as 2004-5 (probably earlier, but that is sort of when I started paying attention) you had issues like, if the Central Bank of Canada raised interest rates even like half a percent, some huge portion of people would have to declare bankruptcy.

I get where you are coming from, but if you think these sort of personal irresponsibility issues were at the core of the recession, I don't think that is really true.

the economy worked fine when people lived paycheque to paycheque, it was only when these sort of toxic loan and mortgage issues started to compile, and people who had invested in what they thought were triple A stock lost all their investments, did we see the banks and the economy start to crumble.

Originally posted by inimalist
from 2007, before the recession...

so, people lying on their loans wasn't a big deal until the recession, when it became prudent to blame anyone but the banks.

also, this says nothing about people not being able to afford the loans they are being given. Clearly some percentage of those 1/3 are people who lied just to make their application look better, as opposed to people who lied to qualify for something they couldn't pay.

this appears to be a report about employees doctoring stuff to get people to qualify, such that they would sell more cars. Essentially exactly what I have been talking about.

hmmmm, when the police behave that way, it is called entrapment... I don't see how this reduces the culpability of banks at all, if anything, it is proof positive of the illegal practices I have been talking about

Let me put it like this:

Lets pretend that:

- Banks haven't lobbied and funded politicians for 30+ years to get massive deregulation unheard of in other first world nations

- The mantra of the republican party and academics (who made money from banks) didn't become "deregulate for deregulation sake"

- The state hasn't stopped any legal investigation into banks

- Banks didn't participate in widespread fraud against their customers

- Banks were responsible for their loans, rather than selling their loans to third parties

- banks hadn't corrupted the stock system such that they could get toxic stocks labeled as triple A

etc

etc

etc

pretend all of that is fixed. That you have a reasonable banking system that isn't surrounded by a culture of fraud and illegality. How many poor people does it take, who are deliberately coming in and deceiving these banks, to sink the economy? Remember, banks are now accountable for their loans, so they aren't just going to rubber stamp anything.

Or:

pretend the banking system was a corrupt as it really was, but, for a thought experiment, pretend no poor people came in and lied to the banks. Would you argue that the recession would have never happened. LOL, would you think the recession would be any better? LOL, do you think any fewer people would have lost their homes?

I mean seriously...

OHHHH! I see, now. You were assuming that I was trying to blame shift from the banks?

Not the case. I think the banks ENCOURAGED the people to lie so they could get "a sale." It was the "popular" thing to do because, hey!, everyone is buying our poisonous notes!

I think that many people lie on stuff like applications for loans or jobs.

Now, they get really fancy with checks. The make it to where you have to prove yourself 100% for sure or you get rejected. Meaning, previous 2 years W2, two recent pay stubs, etc. (Etc includes lots of stuff. Trust me, I just bought a home.)

Before the collapse, it was in the bank's best interest to move as many loans as possible and sell the mortgages as soon as possible. Getting their customer's to round up on their income to "fly" under the radar does not seem implausible. In fact, it seems like part of the problem.

I think that the blame is with all parties: the banks that gave out the loans, the financial and investor organizations that moved the loans all over the place, and the customers that applied when they could not afford it.

Some of the liberals like to say emotional things like, "those poor people. They had no idea and were illiterate. Those predator bankers preyed on them."

That's definitely true for some, but I'd say for the majority, they were average people. Definitely smart enough to know not to get something you could not pay for. Definitely smart enough to ask questions or read the documents they were signing. I think the "poor dumb person" was few and far between. It was the willfully ignorant and the stupidly hopeful that were the majority.

So, yes, I believe the people getting the loans are partially at fault.

I believe I said in the other thread, last year, that it was 90-10. 90% the applicants, 10% predatory lending practices.

I need to amend.

I want to say it was 40% the applicants, 10% lending practices, and 50% "mortgage movers."

but like, it isn't reasonable for an average person to understand a mortgage that even the regulators themselves said were impossible to understand.

Sure, maybe you say, "well, if you don't understand, don't sign", but what if you need a home for a child, etc. Or even worse, what about when the bank is saying, "oh ya, its ok, you will be able to afford it". Its really not unreasonable for a person to take the word of someone who should be knowledgeable. Like, in what other type of business are you allowed to outright lie to your customers? As I said above, if police officers acted in the way these bankers did, it would be called entrapment. The courts don't say, "gee, you should have known better", they say "the police officer abused their power and therefore you are not legally responsible for the crime you committed"

and like I was saying before, how big of an impact do you think this, compared to the culture of corruption within large financial institutions and no oversight whatsoever, had in the financial collapse. Like, cool, you have a good point, people shouldn't spend above their means, but thats not why your banks collapsed.

Originally posted by inimalist
sure, everyone is greedy...

but no, I still think there would be a huge recession even if people lived within their means.

The fact is, bank were predatory in their lending and entirely unaccountable for the money they were loaning. It doesn't really matter what people did to get those loans, the system itself was corrupt

like, if all you want to say is people get loans when they should just try to save, well, bravo...

that is so unrelated to why there is such a huge recession right now. Guess what, people take stupid loans in Canada too, but our banks didn't fail

Huge amounts of debts and bankruptcies force others to pay for them. It definitely plays a part in it. The banks didn't just loan it to themselves.

Same people who took out those loans jacked up the prices of housing before it inevitably burst. Much like college is doing. Going up and up.

so, let me just make sure I'm clear, you are saying the recession is the fault of consumers not being educated enough about the financial markets?

Originally posted by Tha C-Master
Recessions are natural, but people had to take out those loans or nothing would have happened. They played their role too. Financial education is more of a cure for these things, and less greed.

Huge amounts of debts and bankruptcies force others to pay for them. It definitely plays a part in it. The banks didn't just loan it to themselves.

Kinda like the government using taxpayer money to bail out big banks and corporations. Most of the greed is at the top. Banks loaned out enormous amounts of money they didn't even have, their investors took a risk and management screwed them over. It shouldn't be up to the taxpayer or consumer to make up the difference.

Originally posted by inimalist
the government isn't responsible for investigating crimes?

Originally posted by Quark_666
Well I'd obviously feel pretty silly if that's what I said, but since contextually I was referring to the government's regulations and not their investigations, I simply feel, well, taken out of context.

lol

rephrase:

don't you think it is the responsibility of the government to either pass regulation or enforce the ones that are in place?

🙄

Originally posted by inimalist
lol

rephrase:

don't you think it is the responsibility of the government to either pass regulation or enforce the ones that are in place?

🙄

Originally posted by inimalist
so, let me just make sure I'm clear, you are saying the recession is the fault of consumers not being educated enough about the financial markets?

Originally posted by The Dark Cloud
Kinda like the government using taxpayer money to bail out big banks and corporations. Most of the greed is at the top. Banks loaned out enormous amounts of money they didn't even have, their investors took a risk and management screwed them over. It shouldn't be up to the taxpayer or consumer to make up the difference.

People on the lowest end are some of the greediest people. They live beyond their means and buy things they can't afford. They do the most gambling and buy the most lottery tickets. People on the lower end want something for nothing too. People on the higher end can be greedy, but they understand they must provide a service.

People lying on loans and not paying back debt on credit cards is greedy, immoral, and dishonest. Most Americans owe more than they have, the reason is because they're greedy. They live a lifestyle better than just about any other country and yet they want more. It is a consumer society. People will ultimately do what is in their own best interest. The government should step in when it is harmful to other people.

Originally posted by Quark_666
That's been my position since before the 2008 crisis, so yeah, but my point was that it was a "sin of omission."

a sin of omission which the banks payed millions for in political and campaign donations? a sin of omission that involves quashing any criminal investigation into the financial sector? a sin of omission that involves systematically deregulating what other first world nations feel are essential controls on finance, and taking the teeth out of any regulatory commission that tries to enforce what weak regulations do exist?

I can't say I agree with your assessment. I certainly don't think the government did this with malicious intent, but I can't possibly fathom how you can see as an omission. the government has deliberately sought the financial environment that exists today, largely at the behest of financial interests.

Originally posted by Tha C-Master
They played a part. You know as well as I that I said numerous times that many people played a part in it on all sides. The banks didn't just lend the money into the air. I don't believe in bailing out people on any level. It should correct itself.

People on the lowest end are some of the greediest people. They live beyond their means and buy things they can't afford. They do the most gambling and buy the most lottery tickets. People on the lower end want something for nothing too. People on the higher end can be greedy, but they understand they must provide a service.

People lying on loans and not paying back debt on credit cards is greedy, immoral, and dishonest. Most Americans owe more than they have, the reason is because they're greedy. They live a lifestyle better than just about any other country and yet they want more. It is a consumer society. People will ultimately do what is in their own best interest. The government should step in when it is harmful to other people.

You really have a chip on your shoulder. Why do you think we are a consumer driven society? There needs to be a correction, from all sides...but because those at the top have stolen the most they should now pay the most.

Originally posted by Tha C-Master
They played a part. You know as well as I that I said numerous times that many people played a part in it on all sides. The banks didn't just lend the money into the air.

let me try a different approach

do you think entrapment is a valid legal defense?

Originally posted by inimalist
let me try a different approach

do you think entrapment is a valid legal defense?

Don't bother. I've met people who believe outright fraud should be legal because consumers "know the risks".

Originally posted by inimalist
a sin of omission which the banks payed millions for in political and campaign donations? a sin of omission that involves quashing any criminal investigation into the financial sector? a sin of omission that involves systematically deregulating what other first world nations feel are essential controls on finance, and taking the teeth out of any regulatory commission that tries to enforce what weak regulations do exist?

I can't say I agree with your assessment. I certainly don't think the government did this with malicious intent, but I can't possibly fathom how you can see as an omission. the government has deliberately sought the financial environment that exists today, largely at the behest of financial interests.

Originally posted by Quark_666
Thinkin I should watch that video....

You Sir, have 666 in your UserName!