corysub
Posts: 1492
Joined: 1/1/2004 Status: offline
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quote:
ORIGINAL: MadAxeman Idealism does not directly equate to socialism. Lack of proper control has brought the world to the brink of financial collapse. How this is still denied, I find somewhat baffling. Actually there is control..it's called the free market, it's called the economic cycle. The economy goes up, as it did through most of the Bush administration, people get to caught up in the upswing and excess develops. The excess in the US mortgage market pre-dates Bush to the 1990s when banks were forced by regulatioon to take sub-prime loan, no credit check loans, etc in the interest of providing homes to all americans regardless of ability to pay, and than the banks sold the mortgages to FannieMae or FreddieMac, or to investment bankers who packaged them into tidy little MBS. Everyone took their piece along the way...and the public loved it...people in California bought homes it seems to me to trade...not to live in...Some sucker was gonna come along and by your house for $100M or $200M more in a couple of years, and you would repeat the cycle. We have had these economic cycles in the past and the depression of the 1930's did almost result in the change of the political system in the U.S. Things are nowhere near that bad these days (25% unemployment v 6%' It still remains to be seen just how fearful people are when they get in the voting booth Tuesday. People tend to get too exuberant when an investment is working...and overpay..gold, silver, stocks, oil, flowers! As far as panics, none is more famous than the Tulip panic in Holland in the 1600's when the price of bulbs was bid up to rediculous prices, with one bulb making a man rich!.. At least with real estate...it's still there and can't be replaced. We will get out of this mess in time..with pain..but we will get out of it.. http://www.businessweek.com/2000/00_17/b3678084.htm
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