RE: Congress 3 USA 0

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BKSir -> RE: Congress 3 USA 0 (9/30/2008 7:30:06 PM)
quote: ORIGINAL: kittinSol Sure. It's a done deal: go ahead with whatever your plans were. I'll write you an IOU. I knew it! You're actually a spy working for the U.S. government! [:D]

Musicmystery -> RE: Congress 3 USA 0 (9/30/2008 7:32:14 PM)
[was responding, but the matter is settled, so deleted]

BKSir -> RE: Congress 3 USA 0 (9/30/2008 7:34:56 PM)
Yeah, I'm explaining it to him. Totally my fault for screwing up where the decimal point was. Mislaying it, then picking it up and putting it back in the wrong place. By the way, Musicmystery, meet kittinz, my partner of 13+ years. He may just hate McCain more than you do. [;)] <---- EDIT: Awesome! I finally got my paddle!

kittinSol -> RE: Congress 3 USA 0 (9/30/2008 7:35:28 PM)
quote: ORIGINAL: BKSir quote: ORIGINAL: kittinSol Sure. It's a done deal: go ahead with whatever your plans were. I'll write you an IOU. I knew it! You're actually a spy working for the U.S. government! [:D] Chance would be a fine thing [&:] . ~ Mata Hari.

TheUtopian -> RE: Congress 3 USA 0 (9/30/2008 7:37:10 PM)
quote: Congress 3 USA 0 And so the Presidents proposal, the thoughtful words of Paulson, take second place to a Congress insuring that it continues to strengthen it's power. The result of "polls" is how our once great nation is being manged by our cowardly representatives. All this political bull about "protecting the taxpayer"..sounds good, but anyone who has reached the age of reason knows that "protecting Congress, protecting the power of their party and their re-election (democrats and republicans share in this disaster) is really at the heart of the watered down program that might have had a chance to save our fragile financial system. This was never the "bailout", a word that fits nicely on the boob tube, it was to "save our financial system". This program was never made understandable to the public. No offense bra......but I've been participating in these forums for going on close to four years now.....and you are easily the most submissive poster with regard to governmental authority I've ever read. And I find it very disheartening. Ever since Nixon took the country off Bretton Woods, there's been a slow but steady march to the graveyard. As managers--and that's what they are---these people have been fucking pathetic.....And now, finally, the people make some noise and speak up, voicing their extreme opposition in regards to unitary privileges and their future tax payer dollars being delivered up to a finance oligarchy who's responsible for this mess, and guys like you want to completely hand over the last bale of straw. I say let Milton Friedman and Friedrich von Hayek continue to sleep, and let economic Darwinism, ala the free-market, run its natual free-flowing course. - R

Musicmystery -> RE: Congress 3 USA 0 (9/30/2008 7:41:47 PM)
Actually, this is one of the smart things Nixon did. Bretton Woods set arbitrary values, and moving to a floating (albeit a managed float) is a much more realistic plan. Yes, the dollar went nuts for a bit, but settled into real value. I wish China would do something similar. The problem is that we ignore our trade deficit, pretend budget deficits don't matter, and have no savings. But if we still propped up the dollar, we'd just set ourselves up for another financial crisis. Fundamentals matter---at least in the long run. Friedman was right---there's no such thing as a free lunch, and open markets have real consequences.

TheUtopian -> RE: Congress 3 USA 0 (9/30/2008 8:49:13 PM)
quote: Actually, this is one of the smart things Nixon did. Bretton Woods set arbitrary values, and moving to a floating (albeit a managed float) is a much more realistic plan. Yes, the dollar went nuts for a bit, but settled into real value. I wish China would do something similar. You're insane. From a position of debt I might agree with you. But without parity/fixed-values between currencies you end with a uni-polar mentality and built-in trade imbalances where every denomination is trying trump the other. That's the first thing I'd change if I were in charge of monetary policy. Bretton Woods oversaw the greatest period of economic growth ever witnessed---- as well as the achievement of the greatest creditor nation-state. The floating rate scheme is the father of instability.... By the way......my alluding to Friedman and Von Hayek is of a mocking nature---not one of reverence [;)] - R

Musicmystery -> RE: Congress 3 USA 0 (9/30/2008 8:54:39 PM)
And the other nations quickly followed Nixon's lead. Fixing to something arbitrary like gold pretends that a nations' economic balance never changes--when in fact it changes constantly. Because of that arbitrarily fixed value, arbitragers were able to exploit the difference between official value and true value of the Pound in the 1960s, threatening to bring the Bank of England to its knees. Speculators started a similar strategy against U.S. currency in the 1970s, and had Nixon insisted on maintaining the gold standard, the dollar would have fallen under a similar crisis. People like the gold standard because it appears----appears----to make everything simple. Alas, everything is not simple, pretense or not.

corysub -> RE: Congress 3 USA 0 (9/30/2008 11:09:08 PM)
quote: ORIGINAL: TheUtopian quote: Congress 3 USA 0 And so the Presidents proposal, the thoughtful words of Paulson, take second place to a Congress insuring that it continues to strengthen it's power. The result of "polls" is how our once great nation is being manged by our cowardly representatives. All this political bull about "protecting the taxpayer"..sounds good, but anyone who has reached the age of reason knows that "protecting Congress, protecting the power of their party and their re-election (democrats and republicans share in this disaster) is really at the heart of the watered down program that might have had a chance to save our fragile financial system. This was never the "bailout", a word that fits nicely on the boob tube, it was to "save our financial system". This program was never made understandable to the public. No offense bra......but I've been participating in these forums for going on close to four years now.....and you are easily the most submissive poster with regard to governmental authority I've ever read. And I find it very disheartening. Ever since Nixon took the country off Bretton Woods, there's been a slow but steady march to the graveyard. As managers--and that's what they are---these people have been fucking pathetic.....And now, finally, the people make some noise and speak up, voicing their extreme opposition in regards to unitary privileges and their future tax payer dollars being delivered up to a finance oligarchy who's responsible for this mess, and guys like you want to completely hand over the last bale of straw. I say let Milton Friedman and Friedrich von Hayek continue to sleep, and let economic Darwinism, ala the free-market, run its natual free-flowing course. - R We can discuss all the reasons as to how we arrived at this juncture in the economic life of the USA. Or, we can do something to save what we have, and than take the time to review and debate. If your neighbors house is on fire because he has been a reckless idiot and smoked in bed, you don't point fingers...you point your hose at his house so his disaster doesn't also become YOUR disaster. You want to go back to Bretton Woods...some would go back to the "New Deal" and Keynes....but how does that solve anything. Of course, we can let the financial system of the country disintergrate as we point fingers of blame. Please explain how that is going to help the hard working, taxpaying citizen when his credit card line is frozen, when he can't get a loan, or buy a house, or lease a car or, maybe even, lose his job because the financial markets are frozen and credit on all levels is unavailable. Libor at 7% plus is at a record level...but some institutions are not lending to others because of counterparty concerns. No...it's not a question of being "submissive" on the economy for me... other areas of my life yes...but not when it comes to business....not when it comes to economic survival. It was "cute" however, you using submissive in terms of my attitude towards government....sounds like one of my assistant professors quite a few years ago. He's still on campus pontificating to teenagers and writing essays waiting for the Soviet Union to be resurected. He is a real "alpha male" when it comes to government. Gimme a break!

TheUtopian -> RE: Congress 3 USA 0 (10/1/2008 12:42:11 AM)
quote: Because of that arbitrarily fixed value, arbitragers were able to exploit the difference between official value and true value of the Pound in the 1960s, threatening to bring the Bank of England to its knees. Speculators started a similar strategy against U.S. currency in the 1970s, and had Nixon insisted on maintaining the gold standard, the dollar would have fallen under a similar crisis. Heh....the only thing arbitrary with regard to fixed-values ala Bretton Woods, was the non-adherence to the genesis of the system--- non-speculation and the expanse of capital. Like I mentioned in my first post back to you, without an agreement of parity, you're left with competitive-devaluation one-upsmanship. And the very evidence of that is in our current relationship with China. And I think you would agree there's not a chance we could go back to gold - But parity with regard to the Yuan, Yen, Rubble, Euro, Dollar, etc, backed by 15-30 percent silver, would surely shore-up/stabilize the inconsistencies as far as global trade. - R

TheUtopian -> RE: Congress 3 USA 0 (10/1/2008 1:30:39 AM)
quote: Please explain how that is going to help the hard working, taxpaying citizen when his credit card line is frozen, when he can't get a loan, or buy a house, or lease a car or, maybe even, lose his job because the financial markets are frozen and credit on all levels is unavailable. Libor at 7% plus is at a record level...but some institutions are not lending to others because of counterparty concerns It's my feeling that a healthy populace should be weaned off the use credit for the purpose of consumption. What ever happened to owning/driving a five-hundred-dollar car until you can afford to purchase a five-thousand-dollar one completely outright? I consider credit for the purpose of individual consumption to be a completely false reality. Credit for the purpose of accumulating/purchasing capital assets that generate income over and above the servicing of debt is highly important and needs to be readily preserved. But I see no evidence of such credit freezing up - only brazen fear mongering designed to seize upon emotion so an oligarchy can take care of its friends. And besides, with an over-quadrillion dollar derivatives black hole, the infusion of 700 billion is not a fix at all, but instead just a very small band-aid meant to cover a gaping wound. My honest feeling : You have been severely compromised by scare tactics from finance capital. If the system is destined to crash, let it crash now, before they can formulate a new false-bubble that further impacts the crater. - R

Musicmystery -> RE: Congress 3 USA 0 (10/1/2008 6:08:27 AM)
quote: ORIGINAL: TheUtopian quote: Because of that arbitrarily fixed value, arbitragers were able to exploit the difference between official value and true value of the Pound in the 1960s, threatening to bring the Bank of England to its knees. Speculators started a similar strategy against U.S. currency in the 1970s, and had Nixon insisted on maintaining the gold standard, the dollar would have fallen under a similar crisis. Heh....the only thing arbitrary with regard to fixed-values ala Bretton Woods, was the non-adherence to the genesis of the system--- non-speculation and the expanse of capital. Like I mentioned in my first post back to you, without an agreement of parity, you're left with competitive-devaluation one-upsmanship. And the very evidence of that is in our current relationship with China. And I think you would agree there's not a chance we could go back to gold - But parity with regard to the Yuan, Yen, Rubble, Euro, Dollar, etc, backed by 15-30 percent silver, would surely shore-up/stabilize the inconsistencies as far as global trade. - R No, not at all. Under Bretton Woods--or any fixed system--a nation agrees to maintain a fixed value for its currency. As the economy is constantly changing, so does the true value of its currency, so that fixed value is maintained by the government's central bank buying and selling its own currency on then open market. Currency arbitragers then take advantage of this split. They buy cheaper dollars on the open market, then sell then to the Fed, which would be forced under its obligations to pay the arbitrary fixed price. This further devalues the currency, so arbitragers invest their profits in more dollars at the true lower value, selling them to the Fed at the fixed higher price, etc. etc., pumping more and more money out of the government under the value of the dollar becomes so out of whack that the Fed would be forced to devalue the currency----and then the cycle starts again, until the currency is almost worthless, and inflation is rampant. Floating currency mirrors the true market value. Any currency, after all, is only truly backed by the security and revenue-raising ability of a government, and its currency valued by the money supply (controlled by the central bank) and the balance of trade. Fixed systems simply do not work. And---the economy is global. It has been for a long time---we just keep trying to act as if it weren't true. quote: It's my feeling that a healthy populace should be weaned off the use credit for the purpose of consumption. What ever happened to owning/driving a five-hundred-dollar car until you can afford to purchase a five-thousand-dollar one completely outright? I consider credit for the purpose of individual consumption to be a completely false reality. Credit for the purpose of accumulating/purchasing capital assets that generate income over and above the servicing of debt is highly important and needs to be readily preserved. But I see no evidence of such credit freezing up - only brazen fear mongering designed to seize upon emotion so an oligarchy can take care of its friends. And besides, with an over-quadrillion dollar derivatives black hole, the infusion of 700 billion is not a fix at all, but instead just a very small band-aid meant to cover a gaping wound. Well, first you'd have to get Americans to save. In fact, our savings rate is negative. Second, you'd have to get business to stop selling on credit. Good luck with that! And of course, that would shrink the economy, making savings difficult. The evidence of credit markets freezing is already there---banks are reluctant to lend to each other, so they are unable to continue their day to day business as usual, and must hold their assets (hurting profits, incidentally) instead of participating in the money market. Should this continue, banks may be reluctant to lend to business and consumers too, and banks unable to meet cash flow demands will cease to exist, obviously never loaning again. The fear mongering is great, yes, but the problem does essentially exist. Yes, the bill sucks, is a band-aid, and manipulates the situation for the benefit of the wealthy elite. That's why I'm glad it failed in the House. But realistically, something will need to be done---preferably more at the consumer end. We'll see what "they" propose next.

Musicmystery -> RE: Congress 3 USA 0 (10/1/2008 6:21:20 AM)
quote: ORIGINAL: TheUtopian quote: Because of that arbitrarily fixed value, arbitragers were able to exploit the difference between official value and true value of the Pound in the 1960s, threatening to bring the Bank of England to its knees. Speculators started a similar strategy against U.S. currency in the 1970s, and had Nixon insisted on maintaining the gold standard, the dollar would have fallen under a similar crisis. Heh....the only thing arbitrary with regard to fixed-values ala Bretton Woods, was the non-adherence to the genesis of the system--- non-speculation and the expanse of capital. Like I mentioned in my first post back to you, without an agreement of parity, you're left with competitive-devaluation one-upsmanship. And the very evidence of that is in our current relationship with China. And I think you would agree there's not a chance we could go back to gold - But parity with regard to the Yuan, Yen, Rubble, Euro, Dollar, etc, backed by 15-30 percent silver, would surely shore-up/stabilize the inconsistencies as far as global trade. - R No, not at all. Under Bretton Woods--or any fixed system--a nation agrees to maintain a fixed value for its currency. As the economy is constantly changing, so does the true value of its currency, so that fixed value is maintained by the government's central bank buying and selling its own currency on then open market. Currency arbitragers then take advantage of this split. They buy cheaper dollars on the open market, then sell then to the Fed, which would be forced under its obligations to pay the arbitrary fixed price. This further devalues the currency, so arbitragers invest their profits in more dollars at the true lower value, selling them to the Fed at the fixed higher price, etc. etc., pumping more and more money out of the government under the value of the dollar becomes so out of whack that the Fed would be forced to devalue the currency----and then the cycle starts again, until the currency is almost worthless, and inflation is rampant. Floating currency mirrors the true market value. Any currency, after all, is only truly backed by the security and revenue-raising ability of a government, and its currency valued by the money supply (controlled by the central bank) and the balance of trade. Fixed systems simply do not work. And---the economy is global. It has been for a long time---we just keep trying to act as if it weren't true. quote: It's my feeling that a healthy populace should be weaned off the use credit for the purpose of consumption. What ever happened to owning/driving a five-hundred-dollar car until you can afford to purchase a five-thousand-dollar one completely outright? I consider credit for the purpose of individual consumption to be a completely false reality. Credit for the purpose of accumulating/purchasing capital assets that generate income over and above the servicing of debt is highly important and needs to be readily preserved. But I see no evidence of such credit freezing up - only brazen fear mongering designed to seize upon emotion so an oligarchy can take care of its friends. And besides, with an over-quadrillion dollar derivatives black hole, the infusion of 700 billion is not a fix at all, but instead just a very small band-aid meant to cover a gaping wound. Well, first you'd have to get Americans to save. In fact, our savings rate is negative. Second, you'd have to get business to stop selling on credit. Good luck with that! And of course, that would shrink the economy, making savings difficult. The evidence of credit markets freezing is already there---banks are reluctant to lend to each other, so they are unable to continue their day to day business as usual, and must hold their assets (hurting profits, incidentally) instead of participating in the money market. Should this continue, banks may be reluctant to lend to business and consumers too, and banks unable to meet cash flow demands will cease to exist, obviously never loaning again. The fear mongering is great, yes, but the problem does essentially exist. Yes, the bill sucks, is a band-aid, and manipulates the situation for the benefit of the wealthy elite. That's why I'm glad it failed in the House. But realistically, something will need to be done---preferably more at the consumer end. We'll see what "they" propose next. We also need much tighter regulation of the financial system. The sub-prime mortgage debacle should have been illegal.

corysub -> RE: Congress 3 USA 0 (10/1/2008 11:14:29 AM)
quote: ORIGINAL: Musicmystery quote: ORIGINAL: TheUtopian quote: Because of that arbitrarily fixed value, arbitragers were able to exploit the difference between official value and true value of the Pound in the 1960s, threatening to bring the Bank of England to its knees. Speculators started a similar strategy against U.S. currency in the 1970s, and had Nixon insisted on maintaining the gold standard, the dollar would have fallen under a similar crisis. Heh....the only thing arbitrary with regard to fixed-values ala Bretton Woods, was the non-adherence to the genesis of the system--- non-speculation and the expanse of capital. Like I mentioned in my first post back to you, without an agreement of parity, you're left with competitive-devaluation one-upsmanship. And the very evidence of that is in our current relationship with China. And I think you would agree there's not a chance we could go back to gold - But parity with regard to the Yuan, Yen, Rubble, Euro, Dollar, etc, backed by 15-30 percent silver, would surely shore-up/stabilize the inconsistencies as far as global trade. - R No, not at all. Under Bretton Woods--or any fixed system--a nation agrees to maintain a fixed value for its currency. As the economy is constantly changing, so does the true value of its currency, so that fixed value is maintained by the government's central bank buying and selling its own currency on then open market. Currency arbitragers then take advantage of this split. They buy cheaper dollars on the open market, then sell then to the Fed, which would be forced under its obligations to pay the arbitrary fixed price. This further devalues the currency, so arbitragers invest their profits in more dollars at the true lower value, selling them to the Fed at the fixed higher price, etc. etc., pumping more and more money out of the government under the value of the dollar becomes so out of whack that the Fed would be forced to devalue the currency----and then the cycle starts again, until the currency is almost worthless, and inflation is rampant. Floating currency mirrors the true market value. Any currency, after all, is only truly backed by the security and revenue-raising ability of a government, and its currency valued by the money supply (controlled by the central bank) and the balance of trade. Fixed systems simply do not work. And---the economy is global. It has been for a long time---we just keep trying to act as if it weren't true. quote: It's my feeling that a healthy populace should be weaned off the use credit for the purpose of consumption. What ever happened to owning/driving a five-hundred-dollar car until you can afford to purchase a five-thousand-dollar one completely outright? I consider credit for the purpose of individual consumption to be a completely false reality. Credit for the purpose of accumulating/purchasing capital assets that generate income over and above the servicing of debt is highly important and needs to be readily preserved. But I see no evidence of such credit freezing up - only brazen fear mongering designed to seize upon emotion so an oligarchy can take care of its friends. And besides, with an over-quadrillion dollar derivatives black hole, the infusion of 700 billion is not a fix at all, but instead just a very small band-aid meant to cover a gaping wound. Well, first you'd have to get Americans to save. In fact, our savings rate is negative. Second, you'd have to get business to stop selling on credit. Good luck with that! And of course, that would shrink the economy, making savings difficult. The evidence of credit markets freezing is already there---banks are reluctant to lend to each other, so they are unable to continue their day to day business as usual, and must hold their assets (hurting profits, incidentally) instead of participating in the money market. Should this continue, banks may be reluctant to lend to business and consumers too, and banks unable to meet cash flow demands will cease to exist, obviously never loaning again. The fear mongering is great, yes, but the problem does essentially exist. Yes, the bill sucks, is a band-aid, and manipulates the situation for the benefit of the wealthy elite. That's why I'm glad it failed in the House. But realistically, something will need to be done---preferably more at the consumer end. We'll see what "they" propose next. We also need much tighter regulation of the financial system. The sub-prime mortgage debacle should have been illegal. I'm scratching my head here trying to figure out what the hell Bretton Woods has with the issue of the day...we are on the brink of something...and no one here, starting with me, knows what it is! I'm not really much in favor of giving unelected officials control over my destiny as Bretton Woods gives to unelected Ministers of Finance and the head of the Federal Reserve. In the meantime the public is looking for "order"...for simple solutions...as they did in the early days of the depression and late 1920's when the media was full of praise for the great job Muslolini did increasing the productivity of productsion in Italy, and the communist party in the USA was extolling the virtues of Stalin's first "Five Year Plan". The headline of the day was..."America's choice...Communism, Fascism, or democracy?'. With the "popularity poll" of the government, all three branches, at all time lows, we might be looking at these "friendly chat" jabberings as innocent times when we have taken up sides and start shooting at each other to protect what each of believes is the truth of America. As far as "weaning the public off the use of credit"...my God man...what is next??... why not wean consumers off having more than one child in a marriage, go to the government for our healthcare, re-negotiate the mortgages for the losers of America who overstepped their income and bought homes they could not afford ( Yea...maybe there was fraud and those criminals should be prosecuted) the idiots in California trading houses as if it was a monopoly game, or in Florida and Nevada trading condo's to flip even before they were built...and people taking "interest only mortgages that reset in three years at prevailing rates. Lets just continue to reward not the least among us..but the most stupid among us. Lets give benefits to people illegal in the country that are destroying the healthcare system in California and other states, while taxpayers can't get treatment until they show their healthcare card or medicare card. Lets give a free college education to everyone...lets forgive all student loans...Why should kids who should be learning how to fix a car, or build a house be denied four years of vacation on the public dole...ELECT OBAMA...He is the answer..he is our HOPE..he is the WAY, he is God! No that might be over the top... not God...but maybe "Gabriel at the White House"....circa 1932....all over again...in real life!

celticlord2112 -> RE: Congress 3 USA 0 (10/1/2008 11:43:04 AM)
quote: We also need much tighter regulation of the financial system. The sub-prime mortgage debacle should have been illegal. http://www.nytimes.com/2008/08/04/business/04lend.html One interesting fact about the sub-prime mortgage "debacle"....less than 20% of subprime mortgages are 90 days in arrears. 16% of subprime mortgages taken out in 2007 are in arrears, while 8.4% of such mortgages taken out in 2005 are in arrears (data from referenced article, and is as of June of this year). So far, the vast majority of even subprime mortgages are being paid in a timely fashion. The 16% figure is higher than the 12.8% default rate on high-yield (junk) corporate bonds during the last recession in 2001-2002, but not egregiously so. Where is the "debacle"? The default rates are high, but not alarmingly so. Regarding the shuffling of mortgage-backed paper that is at the heart of this credit crisis, if one bad mortgage were bundled with four good mortgages, one would have a securities bundle that arguably would be worth roughly 80% of the mortgages combined face value. Securities markets have weathered larger price drops than 20%. While a good deal of subprime lending was foolishly and recklessly done (by both lender and borrower), the real debacle is not the subprime lending itself, but the mountain of derivative paper spawned from it. Exotic derivatives have caused financial turmoil before, and will likely do so in the future.....because not only do many not understand what a derivative actually is, but because even with technical understanding, derivatives lack the transparency necessary for sound buy-hold-sell decisions. Some tightening of subprime lending is in order, because even a default rate of 16% is too high to let stand. However, the greater focus needs to be on either eliminating derivative securities (my hope), or regulating them so as to maximize their transparency.

Musicmystery -> RE: Congress 3 USA 0 (10/1/2008 11:47:09 AM)
quote: 'm scratching my head here trying to figure out what the hell Bretton Woods has with the issue of the day Someone else brought it up. Just responding to that misunderstanding.

slvemike4u -> RE: Congress 3 USA 0 (10/1/2008 11:47:35 AM)
What is truly amazing is you have found a way to bring a conversation concerning bailing out the self styled "Masters of the Universe" on Wall Street to illegal aliens.What would we do without these scapegoats amongst us,who would we blame for all our ills.Perhaps we could take a page from history and blame the Jews?

Musicmystery -> RE: Congress 3 USA 0 (10/1/2008 11:48:46 AM)
quote: Where is the "debacle"? The default rates are high, but not alarmingly so. Regarding the shuffling of mortgage-backed paper that is at the heart of this credit crisis, if one bad mortgage were bundled with four good mortgages, one would have a securities bundle that arguably would be worth roughly 80% of the mortgages combined face value. Securities markets have weathered larger price drops than 20%. While a good deal of subprime lending was foolishly and recklessly done (by both lender and borrower), the real debacle is not the subprime lending itself, but the mountain of derivative paper spawned from it. Exotic derivatives have caused financial turmoil before, and will likely do so in the future.....because not only do many not understand what a derivative actually is, but because even with technical understanding, derivatives lack the transparency necessary for sound buy-hold-sell decisions. Some tightening of subprime lending is in order, because even a default rate of 16% is too high to let stand. However, the greater focus needs to be on either eliminating derivative securities (my hope), or regulating them so as to maximize their transparency. You've just answered your own question.

celticlord2112 -> RE: Congress 3 USA 0 (10/1/2008 12:04:05 PM)
quote: ORIGINAL: Musicmystery quote: Where is the "debacle"? The default rates are high, but not alarmingly so. Regarding the shuffling of mortgage-backed paper that is at the heart of this credit crisis, if one bad mortgage were bundled with four good mortgages, one would have a securities bundle that arguably would be worth roughly 80% of the mortgages combined face value. Securities markets have weathered larger price drops than 20%. While a good deal of subprime lending was foolishly and recklessly done (by both lender and borrower), the real debacle is not the subprime lending itself, but the mountain of derivative paper spawned from it. Exotic derivatives have caused financial turmoil before, and will likely do so in the future.....because not only do many not understand what a derivative actually is, but because even with technical understanding, derivatives lack the transparency necessary for sound buy-hold-sell decisions. Some tightening of subprime lending is in order, because even a default rate of 16% is too high to let stand. However, the greater focus needs to be on either eliminating derivative securities (my hope), or regulating them so as to maximize their transparency. You've just answered your own question. I took your statement to mean that subprime mortgages themselves should be illegal....when the mortgages themselves are not the problem.

corysub -> RE: Congress 3 USA 0 (10/1/2008 12:08:01 PM)
quote: ORIGINAL: Musicmystery quote: 'm scratching my head here trying to figure out what the hell Bretton Woods has with the issue of the day Someone else brought it up. Just responding to that misunderstanding. Gotcha.....Brought back some pleasant memories...It's a wonderful place to visit in New Hampshire....Haven't been up that way for ten years and the Hotel needed a lot of work. Hope they fixed it up.was really a "grand old dame".

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