One critical area is that of the politicans, of both parties, corrupted by the need for huge amounts of campaign monies yet still get votes from the masses. Influenced by corporate leaders campaign contributions allowed the deregulation, lack of needed new regulations, looser credit standards allowing more higher risk persons to get credit, holding down mortgage interest rates and so on combined with natural human greed. The combo of less regulation and easier access to credit meant both mass voters and corporate leaders both gained, but to eventually be brought down by the excesses such policies caused.

Quoting Wardialer (Reply 47): I know what caused the US to sink in the first place....I can tell you that. And the answer is......OUTSOURCING. Can come up of other ideas on why our nation has around 650,000 people unemployed???

Popular myth for electioneering, but essentially a paper tiger. BMW, for instance manufactures is Z-line sports cars and SUVs in South Carolina and exports them to the rest of the world. Reverse outsourcing?

Quoting NAV20 (Reply 49): He was the guy who (once Keynes was dead and Galbraith had retired) set himself up as 'world's leading economist.' He successfully sold most world governments - and most world economists - the idea that all you needed to do to 'regulate' an economy was to fiddle around with interest rates.

Scattological piece of information. Keynes and Hayek (the precursor if you like of Friedman) while at daggers drawn over economics were great friends and Keynes invited Hayek to his college during WWII. They did air raid warden duty together on the roof of King's College chapel. Pity Keynes did not use the time to get Hayek to pass on some Keynesian concepts to Hayek's acolytes to be. So perhaps the blame has to go to Galbraith for not knocking more sense into the Friedmanites.

Quoting NAV20 (Reply 49): This time, we have governments actually trying to counter a credit-driven crash by lowering rates, and giving the banks money to cover their losses in the hope that they'll go on lending......

I was rather amused at the kerfuffle of another 0.4% (or whatever it really was) on the unemployment rate in Aus today when the week before a higher number of pensioners had received the same treatment when the Reserve Bank dropped its rates another 0.5%. That was headlined as relief, whereas it was effectively about the same as unemployment for a swag of pensioners.

Strange times. I suppose one blessing is that the petrol to pour on the fires is rather less expensive this year than it would have been last year. So it might be a lousy policy, but this year it IS cheaper!!

Quoting September11 (Thread starter): I can't quite put my finger on what caused current world economic woes. Can you?

It was the mexicans.

http://www.topgear.com/uk/jeremy-clarkson/clarkson-finance-2008-12-01

Well at least according to J Clarckson...   

Quoting Baroque (Reply 48): Quoting N174UA (Reply 45): Whew. Time for bed. Quoting Yellowstone (Reply 46): The Evolution of the Credit Default Swap Formidable you two. First a detailed explanation of what they are and then the timing of how the bastards evolved.

I never expected so much detail. Thanks a lot for sharing your financial knowledge with us.   

Quoting Yellowstone (Reply 46): Copied and pasted from a post on DailyKos:

I like my own analysis of credit default swaps with apologies to Peter Finley Dunne.

Let's say that Gallagher the bricklayer and O'Mara the carter are sharing a draught at Mr. O'Malley's saloon. It is Friday.

Says Gallagher to O'Mara "Let's have us a sporting proposition. You, O'Mara, will give me a bit of y'r paycheck every Friday before the little woman gets her hands on it. For my part, I will take your money and do nothing for it, but if O'Malley stops paying Schmitt the brewer for the suds and Goldberg the butcher for the corned beef that gets served out here at O'Malley's establishment, then you, O'Mara, get the keys to my pickup truck in fee simple absolute. Are you in?"

Quote: "Long-term interest rates--the ones most relevant to the borrowing and spending decisions of households and firms--have been held down by easy monetary policy and the expectation that short-term rates will remain low for some time. And these low rates in turn have boosted the prices of houses and the value of corporate equity."

Quote: In the absence of any substantial distortions in asset prices and debt levels, households and businesses, on average, have not likely been engaging in misguided decisions that they, or the central bank, will come to regret.

Federal Reserve Governor Donald L. Kohn, April 1, 2004


Quite a few interesting quotes in that piece. Recommended reading.

[Edited 2009-03-12 11:07:36]

Quoting NAV20 (Reply 49): Trouble is, 'Friedmanism' is still very much with us. Governments worldwide are faced with a situation where people have borrowed and spent far too much money. The obvious (virtually the only) way to reduce excessive borrowing would be to make money more 'expensive' - that is, to raise rates.

That will kill any of the spending that is happening right now and that will basically stop everything worse than it is. However the banks in the US and the UK are not lending anyways so because of this this has already happened they might as well hike rates but they won't. Its not good I feel at this time because people that are just getting by right now might have ADR mortgages that are coming up for an adjustment and hiking the rates could potentially make the housing crisis worse because a once affordable mortgage may not be.

Hiking interest rates is usually needed to curb very fast economic growth and inflation which usually comes as a pair but times like the early 1980's interest rates needed to be the levels they were during a recession because of high inflation at the time. When this turns around inflation likely will be an issue and then interest rates will have to go up at some point to rebound devalued currencies.

Quoting NAV20 (Reply 49): So what are the world's central banks doing, egged on by their respective governments? Lowering discount rates practically to zero. Because Milton Friedman (the last economist they ever listened to) said that that was all you needed to do to 'revive an economy.'

Milton Friedman was the purest free marketer that there has been to date and he believes that the free market could control basically everything. Where his viewpoint is heavily discredited is Japan's economy in the 90's where they lowered rates to basically 0% and it failed to stimulate their economy and when you do that there is really nothing you can do besides government stimulus to get an economy going.

The biggest difference between Japan and the US and most of the western industrialized nations is that they are a saving culture and we are a big spending one so they had nest eggs where we on a whole do not.

Quoting Us330 (Reply 44): I don't see how population growth has anything to do with this. Yes it has grown so much. But more people are also better off now in 2009 than they were in 1750. Population growth might have other negative side effects--see increased pollution for one--but it cannot be blamed for this crisis. What is your reasoning behind this?

The demand for resources are one, pollution is another. Even if the baking owens and production of ingredients are much better today, there´s more people whom are going to share the bread. People compare the US in 1930ies with today, which got 2,5 times the population
on the same area.
Where I live population has grown a few paltry % during the last 70 years, the worlds population has trippled!

Quoting StarAC17 (Reply 57): Quoting NAV20 (Reply 49):

An increase in interest rates would also help rebuild savings rates.

Quoting StarAC17 (Reply 57): Milton Friedman was the purest free marketer that there has been to date

In general, yes, but not in a crucial way: money and banking. Monetarism is a type of government monetary policy which, of course, requires a government to implement it.

Friedrich von Hayek was much better in this regard IMO.

[Edited 2009-03-12 14:08:57]

Quoting N174UA (Reply 45):

You might like this:

http://crisisofcredit.com/

A bit over-simplified perhaps and might not cover everything, but pretty neat.

[Edited 2009-03-12 14:37:12]

Quoting StarAC17 (Reply 57): However the banks in the US and the UK are not lending anyways so because of this this has already happened they might as well hike rates but they won't. Its not good I feel at this time because people that are just getting by right now might have ADR mortgages that are coming up for an adjustment and hiking the rates could potentially make the housing crisis worse because a once affordable mortgage may not be.

I think you're absolutely right that governments are concentrating almost entirely on providing 'painkillers' (in the form of lower interest rates and, here at least, even cash payments) for the 'property-owning democracy' on whose votes they depend, StarAC17. But that's a bit like giving someone with a broken leg a slug of whisky. He'll feel less pain for a while but it won't cure the problem!  

Unfortunately every downturn has to 'hit bottom' before there can be any hope of a recovery. 'We,' collectively, have not just been spending money we couldn't afford to repay, we've been using 'wealth' that did not exist - that had been 'created' not by economic growth but by the selling and reselling of debt........paid for with borrowed money......and now governments are paying out yet more money that doesn't exist.........  

Sure, a lot of people are going to suffer hardship - but that is inevitable. All governments are doing at the moment is putting off the evil day for a few more months. And frittering away money that should, by rights, be reserved for the welfare programmes that will be sorely needed later.

Quoting PPVRA (Reply 59): An increase in interest rates would also help rebuild savings rates.

Absolutely right. The only way out of this is for people to start saving and investing again - creating real wealth. And that won't happen with interest rates at rock bottom.........

Quoting NAV20 (Reply 61): Unfortunately every downturn has to 'hit bottom' before there can be any hope of a recovery. 'We,' collectively, have not just been spending money we couldn't afford to repay, we've been using 'wealth' that did not exist - that had been 'created' not by economic growth but by the selling and reselling of debt........paid for with borrowed money......and now governments are paying out yet more money that doesn't exist.........

That's what seems so crazy about this NAV20, I agree with that concept and wonder to what extent economy has become a game of the mind: to make people think that they have the power to buy when they do not. Make them commit themselves to debt they can't pay, to keep the "virtual money" flowing along.

Then reality comes crashing down one day and what's the advise to solve it? Make them believe again! I'm afraid we do have to hit bottom, bang our heads against the wall    until we get tired of the squishy sound, then through the pain get to see reality: whatever you have, spend less.

Quoting Alessandro (Reply 58): Where I live population has grown a few paltry % during the last 70 years, the worlds population has trippled!

Where I live the population has stayed relatively stable in the last 100 years. Some places here have lost population over the last hundred years.

It's no sign of virtue, regardless of how you spin it. Safe to say, Mr. Malthus, you and I won't be able to avoid the effects of overpopulation in mesne places by interposing artificial creations such as national borders-as we see day by day here in the states. The jet airliner, the container ship and the unattended railcar have seen to that.

Quoting Wardialer (Reply 47): Can come up of other ideas on why our nation has around 650,000 people unemployed??? Its because most companies our being sent to Eastern European countries. Thats the reason. Thats why countries like Hungary are doing so well financially and I can you that Hungary now has its unemployement rate DROPPED around 50 percent or more. Thats why the US economy has sunk thanks to countries like these.

Wrong. Very wrong. The eastern European countries are in VERY deep trouble.

http://www.telegraph.co.uk/finance/f...-as-fears-of-debt-crisis-grow.html

Quoting Dougloid (Reply 63): It's no sign of virtue, regardless of how you spin it. Safe to say, Mr. Malthus, you and I won't be able to avoid the effects of overpopulation in mesne places by interposing artificial creations such as national borders-as we see day by day here in the states. The jet airliner, the container ship and the unattended railcar have seen to that.

True, but not letting the Christian right (or Islamic right for that matter) hijack responses to countries that do make attempts to control their populations would be a good idea. Noting that when Indonesia lost Suharto, they also lost a "two children is enough policy" would be a good place to start. Just one of the idiocies about the Indonesia transmigrasi policy is the assumption of the dominantly Jawanese bureaucrats that the soils of Kalimantan and Irian would support the same population densities as the amazingly rich volcanic soils of Jawa.

At least Obama has allowed aid to be used for birth control as is the Aus govt rather belatedly.

I don't think it helps a great deal to call a member Mr Malthus, although I will quite happily wear the label if you insist on applying it. In the end Mr Malthus is going to be right, unless maths has suddenly developed a whole bunch of new rules. You might not like it, although for the life of me I cannot see why. Not liking simplified inferences from Malthus, OK, but I cannot see how you can disagree with the basic thesis.

On the other hand population growth is great for capitalism - until the system bursts. By and large the last thing that needs reinforcement is the concept of unlimited growth at a time when bubbles were thought to be sustainable. What is the difference between assuming that population can grow indefinitely and thinking that house prices would rise indefinitely? Not a great deal in terms of the basic concept.

Quoting 757GB (Reply 62): I agree with that concept and wonder to what extent economy has become a game of the mind: to make people think that they have the power to buy when they do not. Make them commit themselves to debt they can't pay, to keep the "virtual money" flowing along.

I think that that's the entire size of it, 757GB. The politicians are scared stiff of the consumer getting 'sensible' for once........

But it'll happen, no doubt about it. In fact, it already HAS happened round here. They'll just have to 'adapt to the new reality.'

Quoting Baroque (Reply 65): On the other hand population growth is great for capitalism - until the system bursts. By and large the last thing that needs reinforcement is the concept of unlimited growth at a time when bubbles were thought to be sustainable. What is the difference between assuming that population can grow indefinitely and thinking that house prices would rise indefinitely? Not a great deal in terms of the basic concept.

You know me....that was a gentle push to get the brother to do a little reading and get grounded in reality: "Who the heck IS this Malthus fellow, anyway?! Must google him!" That's the teacher in me.

He was edging toward making a virtue out of an accident-something that's distressingly popular in the age of internet, where everyone's got a voice but there's no warranty of fitness for a particular purpose, in god we trust all others pay cash.

I am far more interested in worrying about things that will happen in my lifetime, my neighborhood, and my country. I am remarkably unconcerned about climate change and population growth, neither of which seems to be amenable to a quick solution despite what Al Gore thinks-and parenthetically, all the solutions being promoted are subject to the law of unintended consequences, as we see what has happened with the One Child policy in China.

One thing's for sure Al, there is a heckuva lot of morning-after style hard thinking and tough choices being made these days, and maybe that's ultimately going to be a good thing for all of us. A lot of people are getting back to sound economic fundamentals at the family and individual level, either because they lived modest lives and paid their bills, or because they're being stripped of assets they never could afford by the sheriff and his men.

The ones who lived modest lives and paid their bills are now in a position to reap the benefit of all this in the form of reduced prices for them what has the brass to pay for it, as Inspector Morse's sidekick Detective Inspector Lewis would say.

In change there is opportunity for those bold enough to grab the electrodes.

A boiler's a good metaphor. When it overheats, the safety valve opens up until things get back to safe levels. Sometimes, when the water level declines far enough and the crown sheet's exposed, the blowout plugs do their job and melt, dumping all the pressure.
Then, we have to shut everything down, let it cool off until someone can climb inside and see what the hell went wrong and repair things.
Then, a sign goes up that says "The next idiot who lets the water level get too low will be fired on the spot!" The paper sign eventually deteriorates and one day it falls off and is swept up by the janitor. The reason for it is forgotten, and people move on until the cycle repeats itself.

Quoting Baroque (Reply 65): On the other hand population growth is great for capitalism - until the system bursts. By and large the last thing that needs reinforcement is the concept of unlimited growth at a time when bubbles were thought to be sustainable.

You nailed that one Baroque. Ardent capitalists have never been able to deal with the fact that without growth, capitalism dies. When that bangs up against something finite, the only question to be answered is timing. Malthus wasn't wrong, he just underestimated technology. I doubt that we're underestimating it today, and my worry is we're overestimating its future potential.

Quoting Dougloid (Reply 67): One thing's for sure Al, there is a heckuva lot of morning-after style hard thinking and tough choices being made these days, and maybe that's ultimately going to be a good thing for all of us. A lot of people are getting back to sound economic fundamentals at the family and individual level, either because they lived modest lives and paid their bills, or because they're being stripped of assets they never could afford by the sheriff and his men.

  

And not a moment too soon. A sudden drop back to reality is going to be very tough for the generation(s) that got used to living perpetually on credit. Those of us who remember the days before credit cards, when banks were open from 10 am to 2 pm, Monday through Friday, and when you didn't buy anything (other than a house) that you couldn't pay for with cash -- we'll re-adapt to this quite nicely. Sure glad I paid off my mortgage, though.

Quoting Dougloid (Reply 67): I am far more interested in worrying about things that will happen in my lifetime, my neighborhood, and my country. I am remarkably unconcerned about climate change and population growth, neither of which seems to be amenable to a quick solution despite what Al Gore thinks-and parenthetically, all the solutions being promoted are subject to the law of unintended consequences, as we see what has happened with the One Child policy in China.

Mmmm, but I can see a few of these things getting unpleasant during your most likely lifetime.

Just this time around, while western countries are agonizing at going backwards by 1 to 5 % (although Japan might get to double figures) many less developed countries are likely to go back 2 or 3% too but added to that will be 2%+ population growth (OMG Afghanistan was 4.77% in 2005!!) so the overall effect will be well over 5% backwards. For folk who are already poor for the most part that really starts to hurt. And that is going to fuel unrest and so on. I am sure I don't need to draw a picture. Actually the US is lucky with its largest neighbour with Mexico at 1.17 and Cuba - well you all ought to look up Cuba. Amazing!!!
http://www.photius.com/rankings/popu...population_growth_rate_2005_0.html

Quoting Arrow (Reply 68): A sudden drop back to reality is going to be very tough for the generation(s) that got used to living perpetually on credit. Those of us who remember the days before credit cards, when banks were open from 10 am to 2 pm, Monday through Friday, and when you didn't buy anything (other than a house) that you couldn't pay for with cash -

   We have the astonishing situation at present where our Fed govt gave a close to 10 billion handout last year and the opposition is complaining that most of it has been saved, when presumably that particular action would be the best way to get out of our current debt fix. Then again, the leader of the Opposition was a merchant banker in a previous life - old habits must be dying hard!

What really worries me about the banks is the tellers being paid on how many "products" they sell. Which offends me in two ways, they are not products and what sort of distortions is that going to stir in to the system?

Quoting Arrow (Reply 68): And not a moment too soon. A sudden drop back to reality is going to be very tough for the generation(s) that got used to living perpetually on credit. Those of us who remember the days before credit cards, when banks were open from 10 am to 2 pm, Monday through Friday, and when you didn't buy anything (other than a house) that you couldn't pay for with cash -- we'll re-adapt to this quite nicely. Sure glad I paid off my mortgage, though.

There is a great leveling going on. As my mother used to say "Lo! How the mighty have fallen."

Bernie Made-off's in jail.

The stripping and downvaluing of unsustainable assets of every size and description proceeds apace.

We will hit bottom sooner or later, and that sooner or later will be when the unsustainable assets reach their real value point between the supply and the demand of people able to pay.

And that's the key, I think. Credit increases demand to artificial levels that are unsupportable over time, and easy credit fuels demand like methamphetamine. Doesn't matter if it's on ultimately ruinous terms, either.

Of course if it's residential housing in Las Vegas we're talking of, all bets are off.

Credit's like booze-a little bit is good for you, so 'tis said, more means you end up in bed with people you do not recognize and contract social diseases of a personal nature, and a lot will kill you.

I've got a mortgage-s'no worse than paying rent-and student loans that'll never be paid off.

But aside from that it's all paid for.

But you're right about people who got used to living on credit, rather than seeing it as a useful but dangerous tool.

Dougy, impressive since US has gone from 92 million to 305 million during the same period.
Cars are the most common transportation still.

Quoting September11 (Thread starter): I can't quite put my finger on what caused current world economic woes. Can you?

Greed and lack of control, which blinded the experts and managers, and also some politicians responsible. And like in 1929 its mainly US made.
What could prevent it? Laws or at least strict control against the successful recipe "The more you have, the more you get". The most greedy people are the ones who already have more than enough. Such a law is a dream, as many of the lawmakers belong to or decend from that "group" such a law should act against first.

Quoting PPVRA (Reply 60): You might like this: http://crisisofcredit.com/

Thanks for sharing PPVRA. I've shared it with friends as well as it is very clear.

Regards,
GB

Quoting Na (Reply 72): Quoting September11 (Thread starter): I can't quite put my finger on what caused current world economic woes. Can you? Greed and lack of control, which blinded the experts and managers,

I'd tend to say 'ignorance,' first and foremost.

Even after a professional lifetime spent in 'town development' - 'property,' in shorthand - I simply cannot understand people choosing to - or even being ALLOWED to - buy up mortgages without knowing what the property was worth and what 'means' the buyer had to pay the mortgage off. Even just twenty years ago, such negligence would have been inexcusable.

As far as I can tell, the dealers didn't bother to analyse the individual deals. They just relied on the 'assessments' of rating agencies as to the worth of the debts........

The thing about 'real property' deals is, worldwide, they are always fully documented. All you have to do is read the documents........

No-one will ever get convicted of negligence on THAT sort of scale. Doing what amounted to property deals without even reading the available documentation.

They can just plead insanity...........  

Quoting Na (Reply 72): Greed and lack of control, which blinded the experts and managers, and also some politicians responsible. And like in 1929 its mainly US made.

And ratified by everyone else just like last time, because who among you said "Nope! I ain't gonna play in that market and make all the money I can where everyone's cashing in because of my moral scruples!"

Malarkey.

Your bankers wallowed in this pigpen as much as any of our home grown types. Otherwise, why are half the foreclosure notices in the paper every day listing Deutsche Bank as the plaintiff?

So....who has more moral guilt? The bartender who sells booze to a lush, or the lush who's intent on spending the rent money and will not be denied?

If you want to play the national moral blame game, we can have some real fun here that will probably get me banned for six months.

Quoting Dougloid (Reply 75): If you want to play the national moral blame game

I doubt if any nation will turn out to have clean paws, or perhaps I should say trotters.

Different laws make for different manifestations of the malaise. In Aus, if you take out a mortgage and default, you are liable for the difference between the proceeds of the distress sale and what you owe. So not so much walking away here. Also meant less incentive for unemployed persons in a string vest to be given a mortgage or to accept one.

However, while that was much better, our engineers of the financial kind were leveraging away merrily even or especially with super funds. And the private equity firms were running games that have run out of puff as price deflation took over from price inflation. Turns out their "business" model only worked for the latter. And our banks have managed to get their hands on some of that choice dung being turned out by Wall St!

So I doubt if any country will be all that innocent, perhaps some like Iceland worse than others, or are they just among the early birds to be caught?

What someone should be doing is going round collecting the various laws to come up with a more bullet proof combination - if the financial engineers will agree to them being implemented!

Disclaimer. I know your engineering background Dougloid and as the disclaimer on films says, no similarity ............................... to any real engineers is intended or should be assumed.

Quoting Baroque (Reply 76): I doubt if any nation will turn out to have clean paws, or perhaps I should say trotters.

I was speaking in very general, geopolitical, looking over the last 125 years terms. I get awfully tired of the moral superiority noises emanating from beyond the Rhine particularly when you read the foreclosure notices in the paper and Deutsche Bank is the plaintiff on half of them. Dodgy mortgages, indeed. Pigs in a sty all right.

dead pigs

[Edited 2009-03-16 09:53:43]

Here's a recent example of what has caused a major depression in a modern economy, and what happened afterwards.

www.hi.is/files/skjol/THE_FINNISH_GREAT_DEPRESSION_IN_THE_1990S.ppt

(A PowerPoint presentation, consider MS Powerpoint Viewer for viewing if you do not have MS Office or similar.)

Quoting Dougloid (Reply 77): I get awfully tired of the moral superiority noises emanating from beyond the Rhine particularly when you read the foreclosure notices in the paper and Deutsche Bank is the plaintiff on half of them.

Two company names that often appear on Iowa foreclosures - Deutsche Bank and Mortgage Electronic Registration System, or MERS - can be even more puzzling to borrowers. Deutsche Bank, a global financial services firm with headquarters in Germany, may be listed as a loan's owner of record, but it likely doesn't have an actual stake in foreclosure proceedings. The firm acts as a trustee for investors holding mortgage-backed securities.

http://www.maxbankruptcybootcamp.com/pdfs/04_20_08_des.pdf

(Des Moines Register, Apr 20, 2008)

Quoting AverageUser (Reply 79): (Des Moines Register, Apr 20, 2008)

They're not strangers, though.

They're either the real party in interest or the stalking horse for people who bought those gilt edged mortgage backed securities from those nice fellows at Deutsche Bank.

You know what Will Rogers said? "All I know is what I read in the newspapers."

All I know is whose name is on the lawsuit, because they're the ones who are beating up my clients and they're the ones I gotta go through.

http://timesofindia.indiatimes.com/C...-are-worse/articleshow/4265611.cms


Excellent article above as to what the G20 really has to work out next month.

It also goes towards my biggest argument that Offshoring and Free Trade are very real causes of the current crisis, and are only going to make things worse.


Free Trade is a redistribution of wealth from richer to poorer areas. This would be fine if all the people had the same values and goals.

However they don't.

Almost all third world/develpping countries are looking to be producers and net exporters.

They expect the US and Western Europe to be net importers.


The US and Western Europe can't be net importers if they can't produce anything with wich to bulid wealth to be net importers with.

With Europe and the US on the ropes due to the current crisis with Credit, the rest of the world is on the ropes due to the loss of wealth in the US and Europe with which to consume comes from.


Now the US and Europe still have companies offshoring jobs, even with a surplus of labor, and the farce that Free Trade is, is being exposed.

Thier is a global tailspin that only protectionism, or rapid deflation of the Euro and Dollar can fix.


The Credit Crisis would have been lessened if the US and Euro countries culd build wealth, but due to offshoring and free trade this is no longer possible.

Even with the Credit Crisis getting resolved and banks becoming solvent, who in the US or Europe will have any money to spend, as the ranks of the Unemployed goes up?

If you can blame one person for this mess, Robert Rubin would be your man.

Do some googling and you'll soon understand why he once changed banking regulations, only to switch over to Citigroup and allow the economy to blow up.

Quoting Dougloid (Reply 80): All I know is whose name is on the lawsuit, because they're the ones who are beating up my clients and they're the ones I gotta go through.

In the interests of not making any issues of national pride that you were referring to any worse, we should be happy that the German bank is only acting as a trustee. In securitization, that's the interface reserved for the foreclosure and such related issues.

I found a very clear description of the setup here: (also links to the original U.S. House Committee testimony)

http://foreclosingcleveland.wordpres...tsche-bank-thing-all-about-anyway/

Quoting AverageUser (Reply 83): In the interests of not making any issues of national pride that you were referring to any worse, we should be happy that the German bank is only acting as a trustee. In securitization, that's the interface reserved for the foreclosure and such related issues.

That's a very interesting blog and I have bookmarked it.

I have also heard of foreclosures being dismissed because the alleged plaintiff could not produce the actual mortgage. That is a variation on the same theme when secondary collection operations allegedly buy a debt-lots of times they can't actually demonstrate they have any interest in it.

Quoting Dougloid (Reply 84): Quoting AverageUser (Reply 83): In the interests of not making any issues of national pride that you were referring to any worse, we should be happy that the German bank is only acting as a trustee. In securitization, that's the interface reserved for the foreclosure and such related issues. That's a very interesting blog and I have bookmarked it. I have also heard of foreclosures being dismissed because the alleged plaintiff could not produce the actual mortgage. That is a variation on the same theme when secondary collection operations allegedly buy a debt-lots of times they can't actually demonstrate they have any interest in it.

Bloody hell, it IS just as Bird and Fortune said! What a mess. It is like pass the parcel on a dark night in a fog.

Quoting Baroque (Reply 85): Bloody hell, it IS just as Bird and Fortune said! What a mess. It is like pass the parcel on a dark night in a fog.

It is.

It stands to reason that if a fellow wants to sue you, he ought to be able to produce the instrument he alleges is how you became indebted to him.

And not a mere email or something but the actual mortgage or contract.

If he can't show the court how you became indebted to him, then he should take nothing.

Or, as my old crew chief used to say "Yeah. F**k 'em if they can't take a joke. Right in the a**!"

Quoting CasInterest (Reply 81): The US and Western Europe can't be net importers if they can't produce anything with wich to bulid wealth to be net importers with. With Europe and the US on the ropes due to the current crisis with Credit, the rest of the world is on the ropes due to the loss of wealth in the US and Europe with which to consume comes from. Now the US and Europe still have companies offshoring jobs, even with a surplus of labor, and the farce that Free Trade is, is being exposed. Thier is a global tailspin that only protectionism, or rapid deflation of the Euro and Dollar can fix. The Credit Crisis would have been lessened if the US and Euro countries culd build wealth, but due to offshoring and free trade this is no longer possible. Even with the Credit Crisis getting resolved and banks becoming solvent, who in the US or Europe will have any money to spend, as the ranks of the Unemployed goes up?

The problem is not that there is a lack of wealth; rather it was the squandering and over-leveraging of wealth by the U.S. and Euro financial institutions. CRA opened new doors to greed. Rapid deflation of the dollar and protectionism will not fix our problems. The financial markets must stabilize, new regulation on lending practices enacted, and the U.S. needs to focus on quality manufacturing. Once the present recession is over, the Fed needs to inch interest rates upward to strengthen the dollar. A strong dollar/euro currency will help keep prices down and the economy humming along.

Industries like auto manufacturing could also create enormous wealth by raising the quality of their products and getting back on the cutting edge (which they finally appear to be doing). The new Fusion, Taurus, Malibu, and the upcoming Volt are on par or better than their Asian competition.

Enacting trade barriers will only kick-off trade wars which nobody wants or needs right now. The government should instead offer tax breaks to companies that don't outsource jobs.

Quoting UAL777 (Reply 87): Enacting trade barriers will only kick-off trade wars which nobody wants or needs right now. The government should instead offer tax breaks to companies that don't outsource jobs.

The US is only loosing in the trade because with a strong dollar everyone wants to export to the US. The US can't produce on it's own because it is too expensive.


Even with Solvent Banks, the US will never be able to over leverage as it did in the past.

Their needs to be trade barrier for unfair labor, environmental, and constitutional protection.

It is not fair to American citizens to loose their jobs to Communist citizens that don't have the same standard of living.

Say what you want about protectionism, but without it what good is it to have a Country, currency, or constitution in the first place?

Greed on the part of executives of the banks and products which didn't require deposits which would have been fine if the properties value increased.

In many ways a bit like people who assume because all the seats on a plane are filled that the flight is profitable .

The banks were ultimately their own worst enemies by going for market share. Some of the British banks expanded abroad and moved into the sub prime market in the US. The business model of one bank proved flawed as it did most of business in mortgages and had to borrow money from other banks rather than savers. Unfortunately when the banks stopped lending to one another it nearly caused the bank to collapse.


The thing that I find strange is some of the banks most effected by the credit crunch is none of their most senior executives had banking qualifications.

Here is another interesting take on the crisis that derives the current ills from the fall of the Berlin wall.

http://money.cnn.com/2009/03/17/news...e/index.htm?postversion=2009031713

It is by David Smick and points out quite a few areas where the world markets have gone so extremely out of whack that every country needs to pay attention.


Protectionism, may be a good short term solution, with slow rollbacks to gradually allow everyone to appropriately enter the world arena of global trade.

A tiny piece of 'good news':-

"Richard John Macphillamy is the first person to be banned by the Australian Securities and Investments Commission under “rumourtrage” laws.

"The 32-year-old broker has been barred from providing financial services for 18 months as a result of his spreading false information about Macquarie while working for Linwar Securities.

"Lehman Brothers collapsed on September 15 after the Federal Reserve refused to rescue the investment bank, deepening the global financial crisis.

-------------

"This type of conduct can be a criminal offence and carries a maximum penalty of five years imprisonment and/or a fine of $220,000, ASIC said."

http://www.theaustralian.news.com.au...story/0,28124,25228717-643,00.html

This guy has escaped being charged with a criminal offence. Hopefully this is simply because the lawyers advised that there was insufficient evidence to justify prosecution.

But I'll lay a bet that this has been the 'night of the long email deletes' for all the 'rumourtrage' brokers who have been virtually running the share markets worldwide for at least the last five years.......

Quoting NAV20 (Reply 91): But I'll lay a bet that this has been the 'night of the long email deletes' for all the 'rumourtrage' brokers who have been virtually running the share markets worldwide for at least the last five years.

True but as Mr K said of a former financial person, so far the exercise is all tip and no iceberg.