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| The U.S. is Choking on Debt Financed Expansion | |
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| Tweet Topic Started: Mar 24 2008, 08:17 AM (53 Views) | |
| Zybch | Mar 24 2008, 08:17 AM Post #1 |
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RULER!!!
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Privatize the profits, Socialize the losses. Your tax dollars at work: trillions for the warcrime in Iraq, billions for the pillaging bankers who have destroyed the economy, and "fuck you" for the despoiled, bankrupted, people who pay for it all There is a marked difference between economic growth and debt-induced demand. Instead of letting the market take its medicine and enter recession in 2001, the powers that be injected fiscal and monetary drugs to dull the pain and induce stock gains. The Federal Reserve understands the market is the world's largest thermometer and the driver of a finance-based economy. On the back of the tech bubble, in the aftermath of 9/11, following the invasion of Iraq and into the election, they administered stimulants with hopes that a legitimate expansion would take root. Is this a conspiracy theory from tin-foil types sitting on a grassy knoll? The only difference between intervention and manipulation is communication, as we're apt to say, a fine line that's been all but erased in recent years. While government policy set the stage for the underlying imbalances, our immediate-gratification mindset exacerbated them. Consumers bought goods with no money down and financed those obligations at zero percent. Many used homes as collateral and flipped into adjustable-rate mortgages at the urging of Alan Greenspan. Total debt in this country rose to more than 400% of GDP as societal spending habits lost all semblance of consequence. As Americans raced to keep up with the Dow Joneses, seeds of discontent percolated under the seemingly calm financial surface. All the while, the cumulative imbalances grew as society chased the bigger, better thing. LINK |
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| werz | Mar 24 2008, 09:07 AM Post #2 |
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werz
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The shonky debt was then sold on to investors, pension funds and other US and overseas banks which have been sold the bundled property and loans as Triple A+, as safe as houses. The crooks at the bank were double dipping, and as long as property values kept rising they were getting richer, but it had to end sooner or later. The taxpayers will take over the debt from the banks and brokers that profited from this manipulation, letting them keep their stolen money and be bailed out when prices drop, which at the moment isn't happening as it should, because the gov't wants the prices held at present levels, prolonging the pain, as everyone knows they're to high and have to drop soon, as no ones lending or buying. Problems start to occur when people start to fudge the numbers. Federal investigators probing the business practices of Countrywide Financial Corp. are trying to figure out what Countrywide knew -- or in some cases didn't know -- about the incomes and assets of thousands of its borrowers. The investigators are finding that Countrywide's loan documents often were marked by dubious or erroneous information about its mortgage clients, according to people involved in the matter. The company packaged many of those mortgages into securities and sold them to investors, raising the additional question of whether Countrywide understated the risks such investments carried. Countrywide, long the No. 1 mortgage company in the U.S. in terms of dollar value of loan originations, also was considered among the most aggressive in finding ways to make home loans to consumers whose qualifications couldn't be proved or seemed questionable, mortgage industry executives and analysts said. The Federal Bureau of Investigation has begun looking into its practices in pursuing such business, according to people close to the matter. Now we're paying the price for these policies. And it's going to take awhile to work the problems out. |
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5:59 PM Jul 13