Who Caused the Recession?

[Chris]

I'm not a regular reader of the book, but my son subscribes to Rolling Stone. Last night I picked up the latest issue and read a brief story bt Matt Taibbi about Goldman Sachs. It's an amazing indictment of the company as well as some of their contemporaries. The article outlines the company's influences on the financial markets dating back to before the Great Depression. The real eye-opener is just how far their influence reaches into our government and how many key people past and present are Goldman alumni. What surprised me most is the glaring indictment of the Clinton administration and the direct relationship between their deregulation efforts and the fleecing of trillions from average Americans.

This article should be required reading for every American. It should wallpaper the offices of every elected official and there should be some public hangings on the Washington Mall.

 

[cigdaze]

The most resounding part in this whole mess is that Arthur Levitt, Clinton’s SEC chairman, the guy who helped create and pass in the Financial Services Modernization Act (repealing Glass-Steagall) and the Commodity Futures Modernization Act (deregulating derivatives), is now going to work for Goldman Sachs.

 

[Chris]

After reading that article, I want to kill a few people with my bare hands.

If you read how their most recent escapades in driving oil through the roof while demand was low and inventories were at record levels AND how they rigged the '09 fed bailouts, you'll be truly sick. Their next scam- carbon credits. It's sickening.

 

[2112]

I just started reading "increasing you financial IQ" by the author of rich dad/ poor dad.

He points a finger at the removal of the gold backed currency in 1971, which on the one hand allowed more growth of GDP (primarily through inflation) which benefits primarily the money changers (Wall Street), not America as a whole.

It was also the start of a ticking time bomb as it allowed the unbridled growth of the government via it's ability to print money when needed. Now our currency is backed by faith in the debt of America.

Of course, this recession may grow worse and I would then blame the opening of the federal spigot, bailing out failed Wall Street firms and bad mortgages rather than letting them fail.

I need to look up the Rolling Stone article.

 

[cigdaze]

Foreshadowing the next great bubble; how poignant:

http://news.yahoo.com/s/ap/20090626/ap_on_go_co/us_climate_bill

 

[cigdaze]

The R.S. article is one of the best summations I've read yet regarding this financial meltdown. It's worth the read; as Chris said mandatory comes to mind.

You can find the article in its entirety here;
http://www.scribd.com/doc/16763183/TaibbiGoldmanSachs

 

[DonziGirl]

Damn I did not want to see that energy bill passed. Too much of a raise in taxes, too much gov't control in an area where I don't think they have any business and I think it's going to put too much strain on companies when they have to compete with over seas companies that do not have such restrictions. I think we'll see more good made off shore after this.

 

[Warlock28SXT]

It may be good to know who caused it, giving a place to direct anger and frustration. The better thing to know,in my opinion, is who is going to fix it?

 

[clayinaustin]

Trying to blaim one group or one political party for all of this is just crazy. If you are looking for one word, that word is GREED! There were greedy bank, greedy borrowers, greedy people every step of the way.

Here are some simple videos explaining what happened.

http://www.youtube.com/watch?v=wGxmgwUWNr0

http://www.youtube.com/watch?v=q8hjUei-Nwo

 

[clayinaustin]

Basically the banks assumed that housing prices would always rise. This gave them the confidence to give "sub prime" loans to risky people. If and when the borrower defaulted, the bank would reposess a house that was worth more than the loan, and they could easily resell.

This allowed many more people to buy houses, which cause demand for houses to rise, which caused home prices to rise. It was a cycle that kept feeding on itself, until...

Eventually, the housing bubble reached it peak, homes began to be worth less than the value of the mortgage. People with high mortgage payments and little or no money just stopped paying. The banks were overwhemed with defaults. Soon the bank was more concerned with saving itself, and it had no time or resources to foreclose on the defaulted mortgages. The bad debtors got to live in big expensive homes and were paying nothing. They still are!

Meanwhile, the responsible people have seen their home values drop and their stock market investments cut in half!

I am 51 years old, and I am a finanically responsible person. But, Obama and his Democrats will make me pay for the greed of others. It's just not right!

 

[Wrinkleface]

It may be good to know who caused it, giving a place to direct anger and frustration. The better thing to know,in my opinion, is who is going to fix it?

:iagree::iagree::iagree::iagree:

 

[cigdaze]

Clay, given the topic article, there is no blame on any one single party, rather it blames both equally.

Agreeably, the greed to which you've referred, points me to some memorable quotes:

"Western democratic capitalism, which never foresaw that in a society governed passively by free markets and free elections, organized greed always defeats disorganized democracy."

It's also noted that "[Goldman-Sachs] executives were trained to adopt the firm's mantra, "long-term greedy""

The current state of affairs can be traced back to more than just the housing bubble, the apex was reached through a series of out-of-control circumstances which leads us to today:
#1 TECH STOCKS (www.bullsh!t.com)
#2 THE HOUSING CRAZE
#3 $4 A GALLON
#4 RIGGING THE BAILOUT

 

[TCEd]

Trying to blaim one group or one political party for all of this is just crazy. If you are looking for one word, that word is GREED! There were greedy bank, greedy borrowers, greedy people every step of the way.

Here are some simple videos explaining what happened.

http://www.youtube.com/watch?v=wGxmgwUWNr0

http://www.youtube.com/watch?v=q8hjUei-Nwo

MBA's with three piece suits and no ethical training started it back in the mid-80's. Think the movie Wall Street was fiction ?

 

[Ratickle]

The only question to me,

Is it too late to fix it?????

One of two things seems to have to happen. (Sooner or later they will for sure)

Quit printing money.
Hyper inflation.

Which and when? Or am I wrong????

 

[Chris]

The article is now attached to my first post.

Can it be fixed? Sure. If everyone in the U.S. demanded accountability from GS and those in the biz and forced the governmental agencies that have allowd this to happen to actually do their jobs, it could end tomorrow.

And we don't have to do anything dramatic and no one needs to get hurt. All we need to do is clamp down on the crooks that are creating these schemes that fleece all the outsiders. Problem is, the people we put into office are all beholden to these SOB's.

 

[phragle]

Obama's championing the green bubble, I predicted it well over a year ago. the techology isn't there to create a viable and sustainable green economy, the return just isn't there. investment has to be balanced with return. the oil bubble burst when we cut back/return diminished, the housing bubble burst when qualified buyers exceeded demand (they tried to string that one along)/return evaporated, the dot com bubble burst when people realized that having a website was not going to magically transform thier mom and pop buisness into an instant internet fortune 500 company...

go green!! carbon credits!! energy credits!! bah!! some may save a few bucks but to be viable it needs to MAKE money , not save a few dollars here and there. very few will make money. A lot will lose money

 

[Ratickle]

Obama's championing the green bubble, I predicted it well over a year ago. the techology isn't there to create a viable and sustainable green economy, the return just isn't there. investment has to be balanced with return. the oil bubble burst when we cut back/return diminished, the housing bubble burst when qualified buyers exceeded demand (they tried to string that one along)/return evaporated, the dot com bubble burst when people realized that having a website was not going to magically transform thier mom and pop buisness into an instant internet fortune 500 company...

go green!! carbon credits!! energy credits!! bah!! some may save a few bucks but to be viable it needs to MAKE money , not save a few dollars here and there. very few will make money. A lot will lose money

One of the most interesting facts I've read. Over 25% of all pollution in California comes across the Pacific from China on the trade winds. And with the new Obama tax on emissions in this country, they expect manufacturing to increase even more in China and the pollution in California to increase, not lessen.

 

[phragle]

Rat...if you only knew what california is like.. they are enviro-nazi's far beyond anything the federal govt can dream up... the front door to every hospital in california has to have a big sign that says "this facility uses chemicals known by the state of california to cause cancer".......

 

[jayboat]

Tabbi is one of my favorite journalists- he will call bullsh!t in a heartbeat, as anyone who watches Bill Maher knows.

When I first heard this story a month or so ago, I felt just like Chris did. It was like a final nail in the coffin for me- a billboard shouting: THE GAME IS RIGGED AND THERE IS NOTHING YOU CAN DO ABOUT IT, and I sold all my stocks and mutual funds the next day.

People should hang for this sh!t.

 

[phragle]

Jay, there was a time you didn't believe the game was rigged??

*edit* meant as everyone knows the game is rigged........