The Housing Bubble

The box contained all the evils of the world. And hope. But mostly evil.

How many times must this “unsustainable” economic model prove to be sustainable before it can be considered sustainable?
Is the fact that anything can fail reason enough to predict it will?

An economic model is a very simplified abstraction. Economies are far too big and complicated for theorists and statisticians to deal with otherwise. The model compared to the economy is like comparing a stick figure of a man with the real thing.

If some model is doing inexplicable things, like recovering, then maybe we overlooked some vital component when we put the model together.

oops.. misplaced the post.

i dunno how that happened.. this post was in reply to Blue Skye’s which is (at this time) directly below it.

How many times must this “unsustainable” economic model prove to be sustainable before it can be considered sustainable?

I’m starting to wonder too. How bad can debt be when it’s paid back in fiat money? Cheney said deficits don’t matter Bush and Obama seem to agree.

If we’re going to be in so much debt, let’s spread the wealth and go to a tax based universal health insurance, damn the cost. Take some money from CEO’s and give Americans raises.

Give us a raise, insure us all and let God sort it out.

..spread the wealth..
Spreading the wealth too thin has already proven to be an unsustainable model.

Spreading any given thing too thin also tends to result in the destruction of a certain portion of said thing.

You’re both fighting the last war that the rich won but are wrong.

Spreading the wealth does not destroy wealth. Brazil has added 35 million people to the middle-class in 15 years and the Rich are still as rich as they were, unlike USA where the rich got way richer and everybody else got soaked.

There is now PROOF America’s system failed the middle-class and other countries systems grew the middle-class.

It’s not just an academic debate anymore.

Give us a raise, insure us all and let God sort it out.

I understand people (Tea Baggers, et al) being upset about the government blowing tax money on wasteful endeavors.

What I don’t understand is why these people are so incensed over health care, when we have two unnecessary, fruitless, expensive wars going on.

If I was going to protest, threaten politicians and carry signs at rallies, it would be to end these stupid wars first.

Hell, I’d even consider it a fantastic bargain to end the wars and use the money saved to fund health care, if that’s the best I could get.

im searching for an example.. paint? no.. butter on my toast? no.

But spreading the money supply requires taking some from people who produce it and giving it to people who don’t.

This really annoys the money producers and, since it will be taken from them anyway, they eventually stop producing… and then there’s nothing left to spread.. except poverty.

You’re both fighting the last war that the rich won but are wrong.

It’s not just an academic debate anymore.

Without looking into the details of Brazil:
- Generally when we’re talking about spreading the wealth, we’re not talking about to the middle class, but rather to the lower classes.
- The U.S. is actually a good case study in why attempts to spread the wealth are bad. The whole housing bubble was created under the premise of extending affordable housing to the lower classes, and by creating the means to do so - e.g. lower interest rates, CRA, etc. However the end result was exactly the opposite - the poor got poorer, and actual home ownership has shrunk very rapidly.

RioAmericanInBrasil .. i dunno where exactly you are in Rio, but it’s hard to believe you’re not within sight of a shanty town.

What I don’t understand is why these people are so incensed over health care, when we have two unnecessary, fruitless, expensive wars going on.

Just because there are greater injustices in the world doesn’t mean one shouldn’t raise issues with minor injustices, ya know?

Healthcare is the current topic. So when it comes up, those of us who have an issue with it will object. And then we’ll go back to talking about the war.

Do you really think that people who are against the size of the federal government, or wasteful spending, should not say anything about healthcare and instead talk ONLY about the wars?

Do you really think that people who are against the size of the federal government, or wasteful spending, should not say anything about healthcare and instead talk ONLY about the wars?

I have yet to see people showing up anywhere in numbers to protest the wars.

To me, that makes me think that these people (Tea Baggers, most Republicans, etc) consider using tax money to give health care to losers is somehow horrifically worse than using tax money to bomb the shit out of women and children.

That’s all.

I’m not saying that the health care plan is not a waste of money. I’m saying that, as wastes of money go, bombing innocent civilians (somewhere around 100,000 in Iraq at last count) is stratospherically worse and yet not a peep.

i dunno where exactly you are in Rio, but it’s hard to believe you’re not within sight of a shanty town.

That is one of the most telling sentences you’ve ever written Joey.

I could write an essay about your simple statement’s irony, ignorance and destructiveness to your constant and often feeble cause of defending banks, Wall Street and crony-capitalism.

You see Joey, there are MANY mulit-millionaires, even richer than your bosses who live within sight of a shanty town in Rio. Google earth Ipanema and Leblon, Rio’s richest neighborhoods and look at the slums climbing up the mountains around them. This is what happens when the rich end up owning everything as is happening to America.

You don’t even come close to understanding what a lot of your outdated and discredited PR drivel is fighting for but if you take a look at those slums on the mountains of Rio, you’ll have a better idea.

sorry Rio.. just seemed like you were bragging about how wonderful Brazil was and how it’s economic model made life better for everyone.. middle class growth, etc.

If expanding slums are creeping up the sides of the mountains, i guess the poor population cannot be the source of your new middle class. Might it be the rich?

lavi d.. Did it occur to you that most of us might think our involvement in the mid east is justified? And that’s why there is little protest?

Vietnam was a whole other ball of wax. It’s unreasonable to expect that level of public protest every time we go to war.

from people who produce

Thank you joey, that’s all i need to know.

A Golden Sacks exec makes at least 2 mil per year. My UPS driver makes probably $50K. You’re going to tell me that the exec “produces” 40 times as much work as the UPS driver?

The U.S. is actually a good case study in why attempts to spread the wealth are bad.

US Corporations have been spreading the job wealth to Chindia for the past 20 years. Why wasn’t Joe the Plumber yelling back then?

lavi d.. Did it occur to you that most of us might think our involvement in the mid east is justified? And that’s why there is little protest?

You mean like Saddam’s WMDs and “Al Qaida in Iraq”?

Those justifications?

Meanwhile, Iran thumbs their nose at us while thanking us for eliminating their biggest enemy, Iraq.

Heckuva job there.

oxide
You’re going to tell me that the exec “produces” 40 times as much work as the UPS driver?..

I might tell you that the GS exec produces far more than 40 times as much economic activity as the UPS guy.. and by that activity perhaps produces 10,000 times as much wealth as that driver does.

Oh some thoughts here.

Joey, I’d love to respond to your post but since it wasn’t directed to me I will respond Oxide who was talking to someone else about something else.

I think the problem with our unsustainable model is that it requires and exponentially increasing level of debt. Eventually a hyperinflationary event. That is real economic activity plummets because you can’t keep up with the cost spiral.

It is oddly similar to a deflationary spiral where there isn’t any money to spend. You have money that isn’t worth anything in inflation.

There is always a lag between costs to produce goods and ability to pay in a deflationary event. Wages are too high or assets used to produce goods are too encumbered with debt to be used at a profit.

Inflation eventually ends up with goods that cost too much for anyone to buy them.

Neither siutation is good. Moderate amounts of debt and inflation seem to be just fine though.

You also have to be careful with picking winners and losers like the govt has been doing. Get into that spiral and you have peverse incentives in the markets and govt.

It is interesting to think of it this way: deflation means no one has money. Inflation means no one has money either. At least that is worth anything. OK?

We are developing a lot of wealth distribution problems in the ole USA. I blame the large scale outsourcing of manufacturing and excess debt levels. Now the government could have just printed money and spent it and had no debt what so ever. Instead they printed treasuries which are the assets in the wealth distribution. So all that wealh distribution problem is all that debt we created. The reason you get elietes, be they liberal or conservative, all excited about bank failures and assets crashing in value is they are the holders of the debt. The rich.

We could get a bunch of deflation and end up with a better wealth distribution. or. More inflation with debt means more likely to keep the status quo. I’m guessing the PTB are going to keep running up more debt.

I’d note some other things in here. Debt is like temporary inflation. While your running up debt it feels good. It spends just like money. When you are paying it off, it’s deflation and feels like hell.

Other rambling… after watching all the mudslides whipe people out you really have to think about how well things are going in Brazil. How much is substandard construction that is going to be whiped out in the first earthquake. How much worse is poverty in Brazil, socialized medicine and all, than the USA? Are those reports on how good the system works down there manipulated by the MSM socialists while the true condition of healthcare for the poor is far far worse?

Much to ponder. Personally wondering how many paid hacks are on this board to troll for political purposes. Its been noted that is a paid job now. I suspect Rio, Exeter and Alpha. At least one of them.

Back to wealth distribution… perhaps that calculation only says something about how over valued the debt holdings are, at least as I considered to them to be. I suspect in the end we will just tax the money back out of the rich folks so that is kind of a closed loop.

Iran/Iraq/intervention… Oh hell, we were having a normal couple of monday’s when some nut job decided to fly a plane into some office buildings. The other nut job decided it was a good idea to annex an oil producing neighboor. Then he thought it would be funny to make all sorts of moves to pretend he had WMDS. Part of enforcement of treaties in the international area is we do things like cut missles in half and leave them out in plain sight. The russians and US do flyovers and take pictures along with the russians selling us warheads to use as fuel. They have people over here monitoring us grinding down our warheads and their own. Sadam, he thought it would be funny to thumb his nose at us and play games. Then we didn’t listen to the inspectors when they told us he was just f-ing with us. Wrong time to f with us,eh?

Iran… ah we’d like to do something… but it’s kind of hard to keep wearing the white hat when you go all premptive on stuff. They say a lot of bad stuff but haven’t really done anything.

“Vietnam was a whole other ball of wax. It’s unreasonable to expect that level of public protest every time we go to war.”

The Draft, bodybags and non-embedded news reporters on the 5 o’clock news plus common sense had a lot about those Vietnam youth protests. No one wanted to be the next or last man to die in that stupid quagmire of a lost cause.

The US Army went “volunteer” in 1972 and the war and the college age draft protesters rode into the into history and the sunset…tired but satisfied.

Other rambling… after watching all the mudslides whipe people out you really have to think about how well things are going in Brazil. How much is substandard construction that is going to be whiped out in the first earthquake. How much worse is poverty in Brazil, socialized medicine and all, than the USA? Are those reports on how good the system works down there manipulated by the MSM socialists while the true condition of healthcare for the poor is far far worse?

A lot of your post was good and shows more objective thinking than Joey’s but now you are talking about something you’re not familiar with. Those houses on the hills in Rio are substandard and they are built on unstable hillsides. They were built by broke people with no codes mostly years ago. This is what happens to poor people’s lives. Poor people’s lives can suck beyond what we understand but we will understand soon if we don’t change directions.

This was a tragedy with 200-300 deaths of men women and children mostly because they were poor. Not lazy, not dumb, not socialists, but born poor in a country that didn’t give a damn about them because they were poor. God bless them and pray for them if you pray.

This is what happens in a country where the rich owned everything in the past. This is what’s happening to the USA now and some people are too propagandized to realize it because they are brainwashed by the propaganda machine that spouts lines like Joey repeats. But at least you are more objective than Joey who I’m sure has an agenda. This “America is a free market” lie plays in to the hand of those who want America to become a banana republic where the rich own everything.

LOL, If you think I’m paid for any of my opinions on this blog that’s kinda funny but you are wrong. I am not paid by anybody for my opinion but I wish I was because I believe in everything I say, and I’m stoked I’m effective enough to rattle the cage of those holding rigid, failed, dogma.

I’m pro-gun ownership, a Christian, a political independent, have voted Dem and Repub in my life and my type is way more patriotic than right wing nutballs. And I know darn well Joey’s failed Dogma is leading us to become a Brazil of the past even at the same time that Brazil is becoming more like the USA of the past.

In other words, Brazil is increasing it’s middle-class while USA is shrinking ours. And it’s the right AND left free market fakers who are making it happen by getting fools to think it’s socialism. What a joke.

Yea, rich getting way richer, middle-class getting poorer, bailing out corporations, gutting our jobs, sending jobs overseas, cutting safety nets, declining wages, crap health insurance, prison nation and constant wars is Socialism? Yea man, we live in a real Denmark. What a joke. Hey people, there are books out there and stuff.

How much worse is the poverty in Brazil? It’s way worse. It’s Brazil not Ohio. But here’s the deal. Brazil’s poverty is getting a little better and America’s is getting lot’s worse.

It’s all about the trend and the trend is your friend unless your a middle-class American.

I get paid for other stuff. My counterparts are paid consultants assigned to internet forums.

Well Rio the debates are too charged in so many ways to figure things out.

As for the paid hacks on the various boards, saw some MSM notes about it. A lot of the antiwar people disappeared after the election too.

Be interesting to see how much of this stuff is posted by political henchmen. Also means the blogs will end up getting too polluted.

Not sure about the tea party people either. Given the hostility by Ex and company, the democrats might see them as a threat. Republicans probably see them as a new base they can capture. Me, I just hope enough of a grass roots base can build up to upset the current status quo. I would think any serious liberal or conservative would hope that.

In the ole funny notes in history… the real conservatives, we libertarian types are the real progressives. The progressives are old school european social welfare types. Welfare is an old policy. Excess government is an old policy. The real radical thinkers were the framers. So radical that the original framing is something the timid masses move away from in favor of mother govt. People are afraid of freedom.

Interesting revisionist history. Nothing more to see here.

..this distribution of wealth is not a normal distribution in any way (meaning it is not subject to natural forces…

Evidently your definition of “natural forces” doesn’t include the nature of man, a nature which demonstrates an almost insatiable desire for wealth.
We’ll even stoop so low as to try to take it from others, be it by political means or even by force (as if there’s a difference).

The founders thought it best not to guaranteed anyone a piece of the pie. Some people don’t enjoy pie. They felt freedom to pursue happiness was enough to cover everybody, and individuals could then define happiness however one wished to define it.

So, we have the freedom to seek as much wealth (or whatever) as we please. And as is true of any human endeavor most people will fail, some will be moderately successful and a very few will achieve greatness. It’s perfectly natural.

Evidently your definition of “natural forces” doesn’t include the nature of man, a nature which demonstrates an almost insatiable desire for wealth.

I didn’t write it, a poster on Ron Paul’s page did. But I agree with his thinking and logic way more than yours or Rush HanBeck’s.

Joey, you think the wealth is spread too thin in the USA?

Not at all. The model referred to which proved over and over again to be a failure is not ours… not yet anyway

Set me straight..
Estimate how much of Brazil’s new middle class came from it’s formerly upper class, thanks to the redistribution of their wealth.

And you seem to contradict yourself. Above, you posted:

“…Google.. Rio’s richest neighborhoods and look at the slums climbing up the mountains around them. This is what happens when the rich end up owning everything as is happening to America.”

Now you post: “Brazil’s slums on the hills are shrinking.”

“Climbing” is movement.. so i assume the slums are expanding upward… unless the lower potions are disappearing.. but that can’t be.

Estimate how much of Brazil’s new middle class came from it’s formerly upper class, thanks to the redistribution of their wealth.

If the entire nation got stronger and richer, who cares if Brazil’s super rich took a hit? I couldn’t care less. But they didn’t! Don’t cry for Brazil’s rich. They’re doin’ alright and they’d never cry for you just as the American super-rich don’t cry for you either.

“Brazil, India, and China proved to be powerhouses of wealth production in 2007. India saw a 23 percent increase in the number of high net worth individuals - in other words, millionaires. China and Brazil were not far behind, with increases of 20 percent and 19 percent, respectively.” WorldBank

Party on!

Now you post: “Brazil’s slums on the hills are shrinking.”

I wrote “shrinking OR IMPROVING”

Hey? What kinda propaganda you pushin’ that you can’t finish my quotes?

I don’t know if they are climbing anymore as in movement but I know the living conditions are improving as the poor gain some wealth. It’s also a factor of there’s no more space in Rio. Even some lower middle-class are living in those slums now. The cops are taking them over too. The points were, in countries with great wealth inequality, the poor (even though they might be doing better) live next to the rich. AND Brazil is increasing it’s middle class. However, the USA is shrinking our middle class because of the types of policies you lobby for.

If you think any of this is a contradiction…I’d say it’s more complicated than it is a contradiction.

The socialist Pres. Lula spent a lota money makin’ the poor richer and the rich got richer too. Go figure. Maybe that’s not a contradiction after all?

Nothing that happens is a contradiction. Discovering the reasons is just a matter of gathering more data.

Everyone got richer? The Brazilian oil rush might have something to do with it.

Nothing that happens is a contradiction.

I would say 90% of Brazilians would disagree with you. You don’t get out much and see other cultures do ya?

Everyone got richer? The Brazilian oil rush might have something to do with it.

LOL, the big oil rush has not even begun yet. Those big discoveries will come on line in about 5 years. Brazil has achieve most of it’s energy independence so far through government programs of ethanol, hydro power, conservation, high gas prices and an efficient nationalized/and privatized Petrobras.

I hope the USA finds new oil fields like the Brazilians did.

Just because oil is in the ground doesn’t mean you can’t spend the money.. It’s like equity in a house. Borrow off it.. and Brazil’s external debt is way up there.

OK.. so maybe it’s not the oil. Maybe the new and improved economy benefited from chopping down 50,000 square miles of Amazon rain forest (that’s “jungle” to you oldsters) .. roughly an area the size of Arkansas.. and planting soy beans.

If everyone got richer, the economy grew. Whatever the reason may be for that economic growth, when one finds it any apparent contradiction (i.e. how both rich and poor get richer) disappears.

Maybe Gollum Sucks could improve their reputation by a name change?

Worked for the consulting arm of Author-Andersen.

Also worked for Phillip-Morris.

A mean dog is cheaper. Go to the pound and find a pit with scars on his head. Worked for me.

Aim Surplus has Romanian 8mm. wwwdotaimsurplusdotcom

I think that great surplus Turkish 8mm ammo has finally been sold off.

“Jeez, all I wanted was an affordable house with a low monthly payment.”

And how is Gollum Sucks supposed to make money off of that?!

A mean dog is cheaper. Go to the pound and find a pit with scars on his head. Worked for me.

That’s horrible. First of all, American Pit Bull Terriers, American Staffordshire Terriers, and Staffordshire Bull Terriers are bred to be FRIENDLY towards humans, not aggressive. It’s in their genes to like people. They are horrible guard dogs if they haven’t already been abused/mistreated.

Secondly, any dog with scars on its head has likely been abused. Such a dog needs and deserves a loving home, not to be misused/abused all over again.

Maybe so, but it works.

From a previous comment:

First of all, American Pit Bull Terriers, American Staffordshire Terriers, and Staffordshire Bull Terriers are bred to be FRIENDLY towards humans, not aggressive. It’s in their genes to like people. They are horrible guard dogs if they haven’t already been abused/mistreated.

To which I say:

I beg to disagree. There are numerous cases in which the above dogs have attacked, and in some cases killed, people, pets, and livestock, even though they were never mistreated. The sad truth is, these dogs were bred to be fighters, not family pets.

For more info, see this recently published report on U.S. Dog Bite Fatalities.

awwww but he’s a good widdle doggie…he wouldn’t hurt nobody…this never happened before! wahhhhh

awwww but he’s a good widdle doggie…he wouldn’t hurt nobody…this never happened before! wahhhhh

The latest case in point.

I beg to disagree. There are numerous cases in which the above dogs have attacked, and in some cases killed, people, pets, and livestock, even though they were never mistreated

Slim, I’m not saying that “pits” don’t attack, ever. They do. So do other breeds.

My point stands, and is a fact easily backed up. Those breeds were BRED to be friendly towards humans. Sure, some people have tried to breed more aggressive animals of late. That doesn’t change the history of the breed up until about 10 years ago. Note that I’ve only talked about their attitude towards humans, not other animals. They’re terriers, and have high prey drives by design.

(and, btw, I have a scar on my hand from 4 stitches due to a bite from a pittie. I know there are dogs out there with issues - I had to euthanize one of them after failing to rehabilitate her. I simply object to unfair characterization of the breed as being human-aggressive by default. That’s the furthest from the truth).

How come I’m not surprised that the owner of the pitbull and mother of the child who it attacked, is overweight and sporting a bare midriff? The whole thing is disgusting beyond words.

Slim, I’m not saying that “pits” don’t attack, ever. They do. So do other breeds.

I once heard that Pomeranian was the breed with the highest incident of biting.

I’ve been a Rottweiler person and so know first hand how breed-specific bigotry affects dogs and their owners.

I agree that pits have been badly bred since they became the gansta’s choice - but remember how Rotties used to be in the news all the time, and before that, dobermans?

Every breed has it’s share of aggressive dogs, but when people start breeding them to fight, it really does change the breed. And when it comes to big, strong jaws (esp. terriers with their prey drive) it has been a disaster waiting to happen.

That said, I LOVE pitbulls. They are the sweetest, cuddliest, most loyal dogs. My next dog will be a pit, for sure. I am just going to make sure I know it’s background, it’s parents, etc., just like I’ve done with the rotties I’ve raised.

This IS housing related, really. As a rottie-person, and a renter, we are basically screwed if our landlord wants us to leave. No one wants to rent to people with Rotts or pits (some insurance companies won’t even give you house insurance if you have a so-called “aggressive breed”).

Pits make lousy guard dogs, IMHO. But my rott won’t let anyone in the house unless I say it’s ok.

I want my own home so I can have as many dogs as I want.

I think the difference is a Pomeranian can’t do much damage. A Pit or Rottie or doberman have very large very powerful jaws and once in attack mode can do much damage before they can be stopped.

I thought the purpose of pit bulls was to fight them?

Pit bull jaws are strong enough to crush bones.

Personally, I now have a 100# akita. A great dog. I tell my little kids, if the bad guys come and you need to hide, hide in the dog house, he’ll take care of you.

He kills his own food.

are not Poms single serving size and microwavable?

“I’m not dead yet.”

– Monty Python –

+1, except I substitute the word “death” in place of “retirement.”

Far be it from me to actually root for someone’s death - but the death of the boomers will actually be a fiscally good thing, not bad. This I agree with PB - their retirement will be what’s the problem.

That being said, I will also say this - the retirement of the BB generation will be postponed. There is *lots* of talk now for instance of raising the SS age thresholds.

This I agree… -> Thus I agree…

Well, the death of the BB’s may come in handy for some folks, but I don’t plan to be part of it for another 30 years. Someone can have my job then, I guess. If the SS age thresholds go up, then certainly a lot of energetic BB’s will continue working, thus clogging up the jobs market for the younger…

Main Entry: thresh·old
Pronunciation: \ˈthresh-ˌhōld, ˈthre-ˌshōld\
Function: noun
Etymology: Middle English thresshold, from Old English threscwald; akin to Old Norse threskjǫldr threshold, Old English threscan to thresh
Date: before 12th century
1 : the plank, stone, or piece of timber that lies under a door : sill
2 a : gate, door b (1) : end, boundary; specifically : the end of a runway (2) : the place or point of entering or beginning : outset
3 a : the point at which a physiological or psychological effect begins to be produced b : a level, point, or value above which something is true or will take place and below which it is not or will not

Yeah, make up my mind. Am I in the way or what? I’ve got 5 years to full retirement. I could put it off until 70, but I’m still keeping some younger person out of a job, right?

Maybe that’s why the Japanese busted their execs down to doormen at age 55.

I’m not “rooting” for anyone’s death. It is simply my opinion that this thing will limp along until the effects of the largest generation play themselves out (adding the other qualifier that this will take longer than two decades, I probably would have clarified that). And even then, I think the richest have enough money to pass along to their spawn to complicate things even longer.

The real thing I’m “rooting” for is that I’m wrong, that some black swan event makes the laws of economics whole again. And soon. Within 5 years or so.

And as far as their death being a good thing fiscally, that was my point. No true bottom or recovery until then. Our debt structure changes, our housing becomes more affordable.

Sleepless,

You puppies do realize that this baby boomer plans to Live Forever or Die in the Attempt…while having as much Fun as he can in the meantime.

More than one fool tried to punch my ticket and I’m still alive and kicking. I plan to be sitting on my coffin smoking a cigarette with the Devil the when the Grim Reaper stops by and he better have the Jack Daniels and some girls with him or there be hell to play.

Ya gotta Catch Me before you can Plant Me…and Good Luck with That !

Ha ha ha Love ya,

mikey

Agreed.

This ticks me off. I see this all the time around here; ancient Baby Boomers who refuse to retire, yet who are plenty wealthy (paid-off house, vacation house, boats, etc.) and who expect my generation to pay a stupid high price for everything so they can get even wealthier. Meanwhile, they spend most of their time here grumbling about their pension not being large enough to my generation who won’t be getting a pension (or affordable housing, or the higher ranking positions until they leave, etc.)

My mother is 73 and STILL working full-time.

She was ready to retire 2 years ago and then the recession hit. She has enough money to retire (paid off house, etc.) but she has picked up on all the financial worry out there that now she thinks she should keep working.

Given the damage that many larger banks have done to the economy, we’d probably be better off without them, IMHO.

Yes, way better.

The preditorial, monopolistic, crony-corporatists should have been allowed to fail just as if they were capitalists.

What damage was done by large banks and not by any small banks?
Big ones can and did do more of everything, but what other difference was there?

but what other difference was there?

Many weren’t as involved in the shenanigans.

They weren’t too big to fail.

moveyourmoney.info explains a lot.

Many weren’t as involved? Is that some fundamental difference attributable only to size? Obviously, no.

Many weren’t as involved? Is that some fundamental difference attributable only to size? Obviously, no.

Not only to size but in most cases, obviously yes because it obviously was.

Many weren’t as involved? Is that some fundamental difference attributable only to size? Obviously, no.

Actually yes, there very much is. Larger banks, since they were deemed TBTF, had lower borrowing costs, and thus a competitive advantage. There have been several articles as such recently.

This is a very important point that people need to understand. It’s why bailouts are fundamentally just wrong. They are by their very nature monopolistic.

Being bailed out after the fact doesn’t change the facts. Fact is banks, big and small, participated to the degree they were able to. The will to participate was evenly spread. Bank size had nothing to do with it.

btw, how small must a failed bank be before it, or a group of them cannot damage the economy? Shouldn’t we determine a size limit before just dumping all those that are “too big”?

Bailouts is another subject..
They may be fundamentally “wrong”, but they are just another fact of economic life of life.. Perhaps an unexpected fact, but one we can expect in the future, and they should be included in future economic models for the sake of accuracy and reliability..

Big banks willingly participated. They got bailed out because they were allowed to grow large enough to take the economy hostage.

Small banks willingly partcipated. They fail every Friday.

Seems to me that bank size had EVERYTHING to do with it. So quit trying to wiggle out of this with a philosphical discussion on semantics.

As for “being included in future economic models..” the HELL. The bailouts were included in the present economic model, in smoke-filled rooms of Golden Sacks and Morgan Stanley, and Fannie and Freddie. They knew it. They counted on it. They planned for it. The bought Senators to ensure it.

I want my country back… from THEM.

Smoke filled rooms are not going away. All I’m saying is it might be prudent to expect future bailouts.

.Small banks willingly partcipated. They fail every Friday..

In our future economic world of small banksters, will they participate in bubbles, and will they fail when bubbles collapse?

If they do participate and fail in large numbers, will it threaten the economy.. and will that group then require a bail out in the opinion of government?

I won’t go into the reasons a small bank is far less stable than a large one due to the difference in size.. i mean..why pile on?

A large bank is more stable because it’s too big to fail. And when it becomes too big to fail, it’s REALLY stable because the gov has to bail them out.

Your argument is so circular that I could use it to calculate π.

You won’t be satisfied until there are only three companies left: MiniTru, MiniPlenti, and MiniLuv. And you’re in the Inner Party.

bail outs have nothing to do with why a big bank is more stable.

The big bank has very deep pockets.. big means they are widely diversified.. they have huge assets to sell off to cover losses.. Lots of employees to cut and branches to shut down to lower costs.. Big means they can weather most storms or hibernate forever if need be.

The small bank runs out of resources quickly and is easily washed away.

Of course if the weather is bad enough even the big banks might go under and might require a bail out.. but bail outs are immaterial unless conditions get exceptionally bad, as occurred recently.

The big bank has very deep pockets.. big means they are widely diversified.. they have huge assets to sell off to cover losses.. Lots of employees to cut and branches to shut down to lower costs.. Big means they can weather most storms or hibernate forever if need be.

Then why the F did they need to be bailed out!?!?!?

Joey said:
bail outs have nothing to do with why a big bank is more stable.

The big bank has very deep pockets.

Joey, Of course the big banks have very deep pockets. It’s because Big Banks are Stealing our taxpayer money from the bailouts. Their deep pockets are the taxpayer’s money.

The big banks are socialist crybabies who can’t even manage their own business without crying to big-brother for public money they think they are entitled to.

The big banks live in a Socialist Utopia where profits are privatized and losses are socialized by stealing hard earned taxpayer money. The US taxpayer subsidizes their failure because they can’t compete in a capitalistic free market. It’s because they are lazy monopolies who are looking for a hand-out from the hard working American taxpayers.

jeeze.. the subject is why big banks are more stable than small, and the reasons are obvious.

You know it’s true but can’t just admit it, so prefer to gloss over all that and get back to your own topic.. bail outs.
—-

Bail outs are stealing.. they are socialist.. !

That they pulled the country’s economic ass out of the fire doesn’t matter. That you guys still have operational ISPs so you can get online, jobs to go to, money in the bank, stores with open doors in which to spend that money doesn’t matter.. because bail outs are just plain wrong.

Government assistance is OK for the little guy? Sure.. all day long. For the big guy? Never.

“That they pulled the country’s economic ass out of the fire doesn’t matter.”

That’s one man’s opinion.

I guess we can debate what happened until we all die, especially since we will never be able to figure out what would have happened if these banks had never been able to become TBTF, or if they had never failed but then been bailed out. You can only run history one time.

Little ones run faster. Better for the economy/recovery.

PB..
The US crisis could well have been averted but the bubble’s collapse has plenty of shock and awe yet to be deployed elsewhere.

If some foreign government is unwilling to adequately support it’s financial sector or if their best efforts prove inadequate, the debate can end.

Don’t tempt them…

Nah, I just imagine “enforced poverty” where basically most people are poor. The Baby Boomers will be the last generation where home ownership (real ownership, not flipping, taking on toxic loans, etc.) is common. My generation will be stuck with crumbling rentals, hopping around looking for vanishing jobs, etc. in an environment of ever-rising taxes and living expenses.

It’s easy to “fix” the economic problem of maintaining high asset prices in a declining wage environment once one stops caring what happens to most of the people. This is ‘merika - “I got mine, so *#*%& you.”

How does one “let” wages adjust upward in the face of high unemployment and rampant outsourcing/insourcing? Go socialist and put half the population in government jobs?
My guess is the administrative or official response is through green collar jobs - the real answer is closer to inflate currency and redistribute the wealth.

She sees the wisdom of renting during a period of ever-falling home prices. I am truly blessed to have a smart wife.

You are indeed.

I occasionally work with an account who was born in 1936. In Germany. She recalls spending four years in bomb shelters.

Americans are spoiled and wasteful. I am so sick of this consumer-driven economy. It has trashed the planet and it is environmentally unsustainable.

On a lighter (darker?) note, go spent a little time on people of walmart dot com. Makes me wanna laugh and cry at the same time.

Anyway ,what I thought was going to be a boring party turned out to be real nice and I left with the impression that these people were positive people who would never play the victim .

Gee, I’d love to go to a party like that.

It depends on how you define retirement…

Not having a regular day job is a lot different than not having
“work” that can be a true vocation.

Being able to do things you find personally interesting, rewarding (in monetary and non-monetary ways) and perhaps useful to society (volunteering, pursuing less lucrative but more personally challenging/satisfying things) is the ultimate form of leisure to me.

Since the land has already been subdivided, it no longer has any inherrent agricultural value.* So the land is only worth the value of a house built on it minus the cost of construction, to include the cost of razing whatever is on the land before. Even as the McMansion deterriorates, the cost of demolition would often make it cheaper to fix it rather than tear it down and start anew.

*Detroit is discovering that you can’t easily un-subdivide land and return it to farming or wilderness.

*Detroit is discovering that you can’t easily un-subdivide land and return it to farming or wilderness.

The land can’t easily be returned to farming in the short- or medium-term, but Detroit has plenty of neighborhoods returning to wilderness (or the urban version thereof). The greenspace is reclaiming the land itself.

Follow-up link.

I’m defining regulation though as being artificial influence against the natural flow of money. Thus money being expensive is not regulative, if the cause of that money being expensive is natural.

Take Greece for example - the cost of their debt is hugely high right now, but rightly so, because there’s a big chance of default. Thus even though the money is expensive - it is so because of free market principles, not because of regulation.

Regulation would be if the cost of their debt was lowered artificially, e.g. by some kind of central bank - like say a bailout from the ECB. That’s regulation. It’s promotive regulation vs. restrictive regulation - but regulation nonetheless.

Think about the root word of “regulation” - it means to make regular - i.e. to normalize. This can be done either by restrictive or by promotive means. E.g. you can regulate a plant’s growth by either pruning it or by adding fertilizer. This is counter to free market principles, which is to leave the plant alone and let it grow as much it pleases, or die if it isn’t strong enough.

Regulation would be if the cost of their debt was lowered artificially, e.g. by some kind of central bank - like say a bailout from the ECB. That’s regulation. It’s promotive regulation vs. restrictive regulation - but regulation nonetheless.

Your explanation is totally valid using those definitions of regulation which are some of its main definitions.

My point (better explained here I hope but also valid) is that lowering rates, itself a regulatory action actually deregulated the housing market.

My point is validated when we look at two meanings of the word “Regulate” source: freeonlinedictionary

3. Regulate: To adjust (a mechanism) for accurate and proper functioning.

4. To put or maintain in order: regulate one’s eating habits.

Higher rates would have “regulated” the housing market by definition #3. by providing an adjusting mechanism for accurate and proper functioning and definition #4. by maintaining order.

With higher rates, home prices would have been more accurate in their representation of the home’s true value. In addition, the housing market would have maintained order and functioned properly.

The housing market did NOT function properly with extreme low rates. Prices did not accurately reflect values with lower rates and order was definitely not maintained in the housing market.

Therefore by the above 2 definitions of regulate,in this context, lowering rates, itself a regulatory action, had the actual effect of deregulating the housing finance market and therefore, the housing market.

It seems to me that according to the definitions of the words, and considering the context and the result,

Sometimes regulations (by definition) can deregulate (by definition) markets.

That’s why I implied we were both correct. No?

I’m moving to Hawaii at the end of May, so it would have to be before that. Is there a reason why you picked June?

Aieeeee, that’s when ben was planning to come. Maybe a bye-bye bink mini-meet up?

Reminds me of the houses in Pompeii…

+1

“Would you really want to raise a couple of kids in LA, though?”

Hell no, but I don’t want to be among the droves of guys begging for C-Store jobs, either.

Hell no, but I don’t want to be among the droves of guys begging for C-Store jobs, either.

Gotcha.

“Let me know when you’re visiting!”

I will! It’ll probably be June — we just got a PFD for the littleman who had his first ride in grampy’s Skiff on Easter Sunday. He loved it. The rest of the day he kept saying, “On boat! Water! On Boat!”

No wmbz…. I’m right on.

You just described the entire social conservative movement. Whiney victims and their pseudo oppression.

“You just described the entire social conservative movement. Whiney victims and their pseudo oppression”.

No worries, Barry is going to teach the world to sing in perfect harmony. Keep the faith, it all be just fine, we’ll have complete unification any minute now.

No. The whiny bedwetting social conservatives don’t want harmony and unification. They only say and preach that they do.

Whiny Kids Make Conservative Adults. Really?

I’d guess most of those high-end numbers are the result of accruing massive overtime with no oversight.

Wage/bank slaves don’t have any money.