Two things. One, metaphor and mysticism are wholly different concepts. Second, you don't have a rational understanding of the world you're in, especially if "liberty for the cat is tyranny for the mouse" sounds like "the rain is God crying" to you.

dft explained his metaphor, though it took way more words to explain it prosaically than it did through a little metaphoric verse.

Let me put that metaphor into terminology from your religion. Liberty of the sort you often espouse includes the freedom to voluntarily surrender much of your freedom through contract. The smart can use this to usurp much from the trusting and clueless, legally.

In your mind, who is at fault with the subprime lending? The banks who knowingly gave loans to people who they knew wouldn't be able to afford it, or the home buyer who thought they were able to afford it, despite their circumstances? Who is at fault for misunderstanding ARM loans, the lender who failed to explain it clearly, or the home buyer who trusted what they were told verbally, and signed the contract not understanding it?

In other words, when a cat eats a mouse, do you smile to yourself and think "that was rightful and just, the mouse had it coming", or do you feel sad because the mouse never had a chance, and wonder what gives the cat the right to take the life of the mouse?

I understand how and why cats became what they are, and why mice are the way they are, but I think it's one of the everyday horrors that come from the true freedom of Darwinian evolution.

I'd rather not enshrine the predator-prey relationship in human society.

>> ^budzos:
This is a load of horseshit. What in the fuck does this animation have to do with the subprime crisis?


It shows the evolution of housing, and points out how people build bigger and bigger. While they might not afford it? The greed of homeowners coupled with the greed of bankers.

Anyways, it's the title given by the maker of the animation.

This is a load of horseshit. What in the fuck does this animation have to do with the subprime crisis?

Tags for this video have been changed from 'finance, economics, subprime, credit crisis, bankrupt, banks' to 'finance, financial, economics, subprime, mortgage, credit crisis, bankrupt, banks' - edited by calvados

AND ANOTHER DAMNED THING!! This doesn't cover ARMs or the interest only loans or the minimum payment loans. The videos "cute" little graphic makes it seem as if it was only the unwashed, working class purchasers of subprime mortgages (cigarette smokers, parents of multiple children; gee, why didn't they just shade them in to make them Black and/or Mexican??) who caused the problem, not the yuppie flippers or the innumerate (numbers equivalent of illiterate) middle class home-aspirants. Plenty of middle class folks have gone down the shitter through this arrangement, not just the "poor."

>>I don't get the whole 1 Trillion for killing Iraqis is fine, 1 Trillion for corrupt failing banks is fine, but 1 Trillion for rebuilding the infrastructure of the US or helping the National Parks is "Socialism"

Actually, the $1T for banks was socialism. As in state-run government, etc. Our government is now the biggest shareholder of Citibank, for example.

Don't confuse Bush and Paulson with standard conservative ideology.

The neo- part of neo-con meant they were big-government conservatives. I.e., liberal on expansion of government spending, conservative on things like defense.

In a weird twist of fate, it was the Republicans that tried to increase regulation on Fannie Mae and Freddie Mac, and Democrats (including Barney Frank, who was literally in bed with their leadership while chairing the house finance committee) that blocked it.

Obama sued banks to get them to increase subprime loans.

But something tells me all this will be cleverly rebutted by liberals by having them stuff their fingers in their ears and yelling loudly...

"This housing crisis didn't come out of nowhere. It was not a vague emanation of the evil Bush administration.

"It was a direct result of the political decision, back in the late 1990s, to loosen the rules of lending so that home loans would be more accessible to poor people. Fannie Mae and Freddie Mac were authorized to approve risky loans.

"What is a risky loan? It's a loan that the recipient is likely not to be able to repay.

"The goal of this rule change was to help the poor -- which especially would help members of minority groups. But how does it help these people to give them a loan that they can't repay? They get into a house, yes, but when they can't make the payments, they lose the house -- along with their credit rating.

They end up worse off than before.

"This was completely foreseeable and in fact many people did foresee it. One political party, in Congress and in the executive branch, tried repeatedly to tighten up the rules. The other party blocked every such attempt and tried to loosen them.

"Furthermore, Freddie Mac and Fannie Mae were making political contributions to the very members of Congress who were allowing them to make irresponsible loans. (Though why quasi-federal agencies were allowed to do so baffles me. It's as if the Pentagon were allowed to contribute to the political campaigns of congressmen who support increasing their budget.)

"Isn't there a story here? Doesn't journalism require that you who produce our daily paper tell the truth about who brought us to a position where the only way to keep confidence in our economy was a $700 billion bailout? Aren't you supposed to follow the money and see which politicians were benefiting personally from the deregulation of mortgage lending?

"I have no doubt that if these facts had pointed to the Republican Party or to John McCain as the guilty parties, you would be treating it as a vast scandal. "Housing-gate," no doubt. Or "Fannie-gate."

"Instead, it was Sen. Christopher Dodd and Congressman Barney Frank, both Democrats, who denied that there were any problems, who refused Bush administration requests to set up a regulatory agency to watch over Fannie Mae and Freddie Mac, and who were still pushing for these agencies to go even further in promoting subprime mortgage loans almost up to the minute they failed."

--Orson Scott Card

http://www.linearpublishing.com/orsonscottcard.html

Bill's hitting the talkshow circuit trying to drum up ratings, since MSNBC is beating him. BillO will go the way of subprime loans and cargo pants..an embarrassing reminder of a time we'd rather forget.

You say: Europe is choking to death from socialism.

No, they're deteriorating from it and on the path to serfdom. But as I said, they live within their means, and their lack of military spending and their lack of domestic oil reserves has resulted in better energy efficieny and policies, because they were spurred by high gas prices that we never had. You can HAVE a benevolent dictator that works to your advantage for a while, but the enablement of certain powers gaurantees inevitable costs that outweigh those benefits. You need to understand this, and why our forefathers bothered with a constitution limiting government from the get-go. They knew it, they lived it, they saw it happen, and as a result of this document, gold money, and unmitigated markets, we rose from nothing to the most powerful, affluent country in the world. Government was miniscule on the way up, it will be humongous on the way down.

It was 1913 the path to destruction began, the federal reserve and the income tax were passed in the same year. The Fed's inflation of the 20s caused the correction of 29, then turned into a long depression by Hoover and FDR's interventionist policies. The Smoot Hawley bill was a protectionist reaction resulting in retaliatory tariffs on American exports. Taxes then went from 20% to 63% under hoover, then 90% under FDR. Anyone with any money to hire people, sat on it. What revenue did come in from those taxrates, government used it to pay government workers to basically dig holes and fill them back up again. The policies always destroyed more wealth than they created, decreasing unemployment for the sake of it. You simply can't centrally direct the desires and wealth brought about by millions of diverse individuals freely transacting and trading with each other. They also ordered farmers to plow under fields and slaughter livestock to reduce the supply of food, because they believed falling prices would hurt the economy. This is also the same guy that confiscated people's gold (for which he should have been arrested), absolved the banks of having to pay people back despite their fraudulent lending, and allowed Pearl Harbor to be a massacre. It wasn't until he died and Europe was ransacked by a world war that we got out of it.

Europe is getting there. One thing you can always count on when you're putting your faith in benevolent dictators spending other people's money, is that it will invariably corrupt and cascade in on itself. Socialism has failed in every country that's tried it, including ours now. It fundamentally perverts the risk reward system of capitalism. Because if you're gauranteed the same share regardless of your contribution to the pool, why excel? Where's the incentive? If you're spending other people's money, why be thrifty? It's not like you're wasting something you worked hard for.

Fannie and Freddie were pseudo-government institutions in many democratic congressmen's campaign coffers, formed originally under the socialist ideal of making housing more affordable. Every one of their managers got golden parachutes. They accomplished exactly the opposite in the end, prices are now exorbitant, bid up by inflation equipped flippers, who left the banks with the mortgage after they realized that the appraisal price was phony and that legitimate buyers had been priced out of the market. Now the banks are stuck with the collateral, homes they loaned money out to buy at the appraisal price, well above what they can sell it back for. The market would have them decline in price, good for savers.

Or how about the Federal Reserve? Why self-regulate from a fear of bankruptcy when the government creates an arm to backstop it with inflation? If there's no risk of consequence, what is the disincentive to taking huge gambles with other people's money? Likewise, if you're a depositor, why not invest in the highly leveraged bank down the street offering a 5% yield by gambling on subprime? The government insures your deposit if they fail, so you have zero disincentive to give them your money with which to make those bets. If there was no FDIC, no one would be reckless enough to do it, thus that business model would have never existed.

If people don't start realizing how government policies change human behavior that create economic distortions and disruptions, we are gauranteed an inflationary depression.

I say: Check your facts again, Europe is excelling, and we're declining, and between the two, we're vastly closer to libertarian philosophy.

We are nowhere near being 90% capitalist. The majority of our GDP is controlled communally by the government, making us a socialist nation by definition. We are absolutely drowning in socialist failures and my list should have convinced you of that. Yet you sit here and tell me to vote for someone who just passed a trillion dollar bailout mortgaged on my children to reward someone else's bad behavior.

You say: Monopolies don't/can't exist.

I say: Google Enron and California.

Enron wasn't a self-sustaining one like government monopolies, it died a quick death, thank god (today, it would probably be bailed out by your money). It was a scam business enabled by ignorant employees and citizens who have been completely brainwashed into company directed 401k programs, as well as speculative, non-dividend paying investments. Enron never had to prove it was making money by paying a dividend because people allow themselves to be fooled by wall street valuations of stocks. If you're buying a stock without a dividend, you're purely speculating on the price going up or down. Just like the tech stocks of the 90s. People thought they were rich on paper, but when the stocks crashed, they had nothing. Because they didn't sell at those paper prices, they didn't complete the gamble by guessing the top like Mark Cuban did, who was one of the lucky ones. People illogically shirk responsibility on learning basic economics and stock principles and then flail helplessly for the government with which Enron was colluding to help them. It's idiotic. Rather than admit the mistake and educate others, they flip out emotionally, call on the government to recompensate their loss with their neighbor's money, and resign themselves to repeating the same mistake. It never would have been possible if they had taken twenty minutes to be skeptical and educate themselves.

Why don't you start listening to libertarian Ron Paul advisor Peter Schiff? The guy is brilliant in explaining this stuff, and predicted most of this mess years in advance while most economic types were dumb enough to confuse problems for strengths.

http://www.youtube.com/watch?v=rhJaVEWAG24
http://www.youtube.com/watch?v=LfascZSTU4o
http://www.youtube.com/watch?v=F-a_r4qx4WE


When's the last time you saw a small, independent grocery store?

Yesterday. I go to several. The big chains won't carry most of the organic and specialty items that I want. And I purchase my grass fed meat directly in bulk from a local cattle farmer, stuff's amazing.

You say: Regulation of banks with pesky laws is impossible, so let's get rid of them so that people are forced to police the banks themselves.

I say: Why stop there? Why not get rid of property laws too, and let people engineer their own way of defending their property from thieves?

That would actually be a good start because banks would start fearing failure again. But I want fraudulent fractional reserves banned. You can't currently take them to court for it, because it's federally sanctioned. See, politicians are big spenders with a symbiotic relationship with the inflationary banks. They don't want honest money, they don't want a system where they are limited to direct taxation, because taxes are overt appropriations that elicit a lot more resistance. The average citizens can SEE how much exactly he's being taxed. Not so with inflation, it's very confusing and has a lag effect. The trillions that the Fed is adding to the balance sheet over the next year is going to result in hyperinflation, not immediately, but down the road.

>> ^NetRunner:
If it's the "smear tactics", we've still got a long way to go before we match the right -- we're calling McCain old and angry, he's calling Obama a Muslim terrorist.
That's not equivalent. Technically they're both personal attacks, but what we're saying about McCain is pretty mild compared to what he's saying about Obama (never mind the fact that we're telling the truth, and he's making false implications).
Democrats aren't guiltless saints, but we weren't the ones who broke the country.


Cracka please. I'm no McCain fan, but to say the Dems' attacks are truthful therefore better is an hypocrisy. If Obama was McCain's age and McCain's camp was calling Obama old, the goddamn Dems would be playing the ageism card. For the record, I know Obama isn't a terrorist or affiliated with terrorists, so I think that right wind tactic is baseless and low. Shame on them. But isn't that Republican and Democrat politics as usual? To be baseless? To be opportunistic?

And don't sit there and act like Dems didn't play a role in this shit sandwich economic crisis. This is just more BS partisan hackery. You probably think the housing bubble popped because there wasn't enough government regulation, like so many delusional Dems, but the truth is this crisis didn't come from a deregulated market. No. We haven't seen a deregulated market in a long, long, long time, and chances are we never will with the current Neocons and Dems trading places so readily in the captain seat.

The housing market was falsely propped up and made to appear lucrative in order to keep costs high. I'm tired of hearing scapegoat politicians going after subprime lending practices, “predatory” mortgages and unscrupulous lenders who target poor people as if these were the only culprits. The market and capitalism wasn't to blame for this crisis. The Federal Reserve was for manipulating interests rates and creation of money out of thin air. Why? Because when you create that much money and create a false credit then banksters, investors and creditors and even the people investing think the market is booming when it's not.

>> ^jake:
Upvoting this because I agree that this is the primary cause for the subprime crisis.
It is ironic that people are proposing more regulation to correct this.
It seems to me, however, that this video tries to place blame in a very skewed way, especially given this comment from the CRA wikipedia article:
"In 2003, the Bush Administration recommended what the NY Times called "the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis a decade ago." [10] This change was to move governmental supervision of two of the primary agents guaranteeing subprime loans, Fannie Mae and Freddie Mac under a new agency created within the Department of the Treasury."
Isn't this exactly what the bill is going to achieve, along with a ton of other affected lenders?
The 2003 act didn't pass because there was no crisis then, so where does that leave us? Is it possible that the Bush administration knew what was going on from the outset, or did they have other intentions? Why would a pro "free market" republican administration want to regulate mortgage lenders in the first place?


I think I see what you're saying. The Bush-proposed agency was just more regulation of the economy? Well, that's true, but what they were attempting to do is regulate the regulations. They wanted to make sure Fannie and Freddie were maintaining some kind of integrity, which they obviously weren't. What they ought to have done is allowed the All-Powerful All-Knowing Free Market to do its thing.

What really chaps my hide is that in the VP debate Biden blamed McCain's deregulation policies for the crisis, and Palin didn't say A WORD to the contrary. Probably because she has no idea how the economy functions.

Why couldn't we have nominated some decent candidates? Does anyone want to hop into my time-machine with me?

I beg to differ on the "hard to ignore" bit of the description; I could only get through about half of it before turning it off. I agree with Farhad2000 on the content of the video though. One or my roomates works in the financial industry -- He showed me a Powerpoint presentation called "The Subprime Primer" that explains this mess, and it doesn't exactly agree with this video.

(Full disclosure: I've just sifted a reading of the powerpoint presentation)

BansheeX:Without defining what you think regulation is, I don't know how to respond.

I was being rather literal in my translation. I've basically gone through the whole video and restated what I believe Ron Paul is saying. I'm not really putting forward an opinion of my own.

I believe though that what Ron was alluding to ,and what I was calling 'regulation', was any kind of new or extra government intervention. The best thing the government can do is either nothing or ideally re-evaluate some of the fundamentals.

In reply to this comment by BansheeX:
>> ^FishBulb:
Okay this is my interpretation of what he is saying:


Without defining what you think regulation is, I don't know how to respond. Government can't direct or stabilize transactions between millions of people and industry, that was sort of the problem to begin with. The interventions that have inadvertently perverted capitalistic incentive and self-regulation are too numerous to list. It's hard for the common man to understand how it happened, it was a chain reaction from trying to prevent banks from ever going bankrupt because this is perceived as bad for the economy (just this sector, I know, it's hilarious). Let me give an example. If you're a big bank and the central bank via the approval your government friends you helped get elected says it will bail you out if you lose your risky bets on real estate, what action are you likely to take that you otherwise wouldn't have taken? Now that you don't have to worry so much about bankruptcy, you go ahead and hedge billions of dollars of other people's money on subprime and junk bonds when Wall Street was rating them triple A. This yields such a high return, you can offer 5% yields on savings account. Even though people are skeptical of returns this high, they can't pass it up because the Federal Government insures deposits up to $100,000 to dissuade runs on the fractional reserve system. As more depositors choose this bank for the high yield, other banks are forced to do the same thing to compete or lose all their business to this bank. Yeah, you see where this is going.

Here's something else that led to an abandonment of lending standards:

http://en.wikipedia.org/wiki/Community_reinvestment

Basically, in the name of social progress, a bored congress one day decided to pass a bill that forced banks to make loans to extremely low income people. Apparently, the government felt that banks were discriminating or something by having lending standards at all. You can't make this stuff up if you tried. This stuff has ALL of its roots in government backstops and interventions, not spontaneous evolution of man becoming more greedy.

But yes, they should certainly be enforcing laws against the infringement of rights (which derive from property) and providing courts. The constitution would be a good start. *ba-doom boom ching*

>> ^FishBulb:
Okay this is my interpretation of what he is saying:


Without defining what you think regulation is, I don't know how to respond. Government can't direct or stabilize transactions between millions of people and industry, that was sort of the problem to begin with. The interventions that have inadvertently perverted capitalistic incentive and self-regulation are too numerous to list. It's hard for the common man to understand how it happened, it was a chain reaction from trying to prevent banks from ever going bankrupt because this is perceived as bad for the economy (just this sector, I know, it's hilarious). Let me give an example. If you're a big bank and the central bank via the approval your government friends you helped get elected says it will bail you out if you lose your risky bets on real estate, what action are you likely to take that you otherwise wouldn't have taken? Now that you don't have to worry so much about bankruptcy, you go ahead and hedge billions of dollars of other people's money on subprime and junk bonds when Wall Street was rating them triple A. This yields such a high return, you can offer 5% yields on savings account. Even though people are skeptical of returns this high, they can't pass it up because the Federal Government insures deposits up to $100,000 to dissuade runs on the fractional reserve system. As more depositors choose this bank for the high yield, other banks are forced to do the same thing to compete or lose all their business to this bank. Yeah, you see where this is going.

Here's something else that led to an abandonment of lending standards:

http://en.wikipedia.org/wiki/Community_reinvestment

Basically, in the name of social progress, a bored congress one day decided to pass a bill that forced banks to make loans to extremely low income people. Apparently, the government felt that banks were discriminating or something by having lending standards at all. You can't make this stuff up if you tried. This stuff has ALL of its roots in government backstops and interventions, not spontaneous evolution of man becoming more greedy.

But yes, they should certainly be enforcing laws against the infringement of rights (which derive from property) and providing courts. The constitution would be a good start. *ba-doom boom ching*

Upvoting this because I agree that this is the primary cause for the subprime crisis.

It is ironic that people are proposing more regulation to correct this.

It seems to me, however, that this video tries to place blame in a very skewed way, especially given this comment from the CRA wikipedia article:

"In 2003, the Bush Administration recommended what the NY Times called "the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis a decade ago." [10] This change was to move governmental supervision of two of the primary agents guaranteeing subprime loans, Fannie Mae and Freddie Mac under a new agency created within the Department of the Treasury."

Isn't this exactly what the bill is going to achieve, along with a ton of other affected lenders?

The 2003 act didn't pass because there was no crisis then, so where does that leave us? Is it possible that the Bush administration knew what was going on from the outset, or did they have other intentions? Why would a pro "free market" republican administration want to regulate mortgage lenders in the first place?