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RE: As Expected, Here it Comes - 1/16/2016 8:42:27 AM

DominantWrestler

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I was the one that used the word monetarism to characterize the current market, Termin8tor. Love that movie, but I believe the sequel is the best of them.

The collapse, which was caused by one of the effects that started the Great Depression, was a lack of leverage. Before the Great Depression, you could take a loan for 9 times your initial investment and place this money in stocks. Because the actual money invested was only 10%, the market bubbled. It then collapsed down to nine percent and change of its previous value which, not coincidentally, was just under the actual money invested. The money on paper that had been backed by banks was now worthless. Sound familiar?

What has been happening currently is based largely on the same concept as what cause the Great Depression, leverage. Financial firms have separated their profit margin with the success of those investing money. Like financial firms that help invest your savings with advice. They take money everytime you trade, but if at the end of the day your investments collapse, they still make money because they weren't similarly invested.

Banks did the same thing. They lent more money than they should knowing that the money would not be payed back. That's why the housing market swelled; you can only buy a house with as much money as you can be lent. Then the banks grouped huge numbers of these and sold portions of them. These are called derivatives. And the banks took their profits by being the middle man in these transactions even though the loans were worthless.

Same sort of thing happens if you had a crooked used car salesman. He knows the car is worth half of what you are paying and will not work in a year, but because the buyer doesn't know, the middleman make a large profit margin. What makes it criminal is the conflict of interests in the companies making loans and selling derivatives were often in cahoots with the companies that were evaluating the worth of these same investments.

< Message edited by DominantWrestler -- 1/16/2016 8:56:54 AM >

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RE: As Expected, Here it Comes - 1/16/2016 8:53:34 AM

DominantWrestler

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As for going off the gold standard, it was partially prompted through repaying our debts after the civil war but was heavily exasperated after WWI when Europe started paying us back with their currency which was not backed by gold. One of the other downfalls of the gold standard is that all coins must be made of one type of metal. Materials and monetary value are always fluctuating, so one thing that has destabilized using gold and silver coins is when a huge deposit of one or the other is found, making that metal worth less than it's pervious value

Simply put, if a gold coin was worth $20 today and a silver worth $1, finding a huge amount of silver would make that $1 coin not as valuable. This leads to one of two problems. If gold is the standard and silver coins are worth less than the actual value of the silver used to make them, people will melt down coins for profit. If they are worth less than the raw material used to make them, people will make counterfeit money. That is why the gold standard should have been based off of only gold, not gold and silver and copper

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RE: As Expected, Here it Comes - 1/16/2016 9:04:10 AM

DominantWrestler

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And economists are not evil, they are just a bunch of nerds analyzing stuff.

It's those that use the insight of economists to make profit at the expense of others who are evil

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RE: As Expected, Here it Comes - 1/16/2016 11:23:10 AM

MrRodgers

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quote:

ORIGINAL: Phydeaux

quote:

ORIGINAL: MrRodgers

SO no, the govt. didn't 'come along' and require and that's require anybody to make any loans. Yes, some people were defrauded thinking they had a fixed rate loan and when the lender had actually submitted application for an adjustable rate mortgage that were also around long before the recent housing bubble.

I provided quotes where under the CRA banks were required to issue 55% of mortage loans to LMI and MMI borrowers, and were encouraged to show flexibility and creativity in granting loans. 38% were required to be in redlined areas.

And I sincerely believe, with you, that banking establishments are more dangerous than standing armies; and that the principle of spending money to be paid by posterity, under the name of funding, is but swindling futurity on a large scale.

jefferson

Except that there was in fact, no enforcement mechanism. It was all 'encouragement' as a close friend in the mortgage business for over 40 years, (almost 50 now) has never...made a single CRA loan in that time. NOT one !! He has never heard from let alone received a visit from the feds. The only way any mortgage banking entity would suffer, was to possibly and only possibly be denied participation in a mega-merger.

Now, did some of these NINJA loans qualify by your criteria, as a CRA loan ? Yes. But that was just a bonus. The CRA mortgage regime was in no way an influencing factor in what was overwhelmingly a conventional loan meltdown. I.e., it was all shit paper that then received that coveted AAA rating once re-packaged into a MBS and the party was on.

Also, studies have shown that at most, 2+% of the 'shit' loans that failed were CRA loans and thus in terms of overall numbers, were basically an political escape mechanism.

I have used that Jefferson quote myself but my point in this case at least, was that the fed and its powers assumed vis-a-vis the issuance of currency, was irrelevant.

Now if you all will excuse me, time to go visit the GoldSheet.com...time is of the essence

< Message edited by MrRodgers -- 1/16/2016 11:47:47 AM >

_____________________________

You can be a murderous tyrant and the world will remember you fondly but fuck one horse and you will be a horse fucker for all eternity. Catherine the Great

Under capitalism, man exploits man. Under communism, it's just the opposite.
J K Galbraith

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RE: As Expected, Here it Comes - 1/16/2016 5:57:48 PM

MrRodgers

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quote:

ORIGINAL: DominantWrestler

I was the one that used the word monetarism to characterize the current market, Termin8tor. Love that movie, but I believe the sequel is the best of them.

The collapse, which was caused by one of the effects that started the Great Depression, was a lack of leverage. Before the Great Depression, you could take a loan for 9 times your initial investment and place this money in stocks. Because the actual money invested was only 10%, the market bubbled. It then collapsed down to nine percent and change of its previous value which, not coincidentally, was just under the actual money invested. The money on paper that had been backed by banks was now worthless. Sound familiar?

What has been happening currently is based largely on the same concept as what cause the Great Depression, leverage. Financial firms have separated their profit margin with the success of those investing money. Like financial firms that help invest your savings with advice. They take money everytime you trade, but if at the end of the day your investments collapse, they still make money because they weren't similarly invested.

Banks did the same thing. They lent more money than they should knowing that the money would not be payed back. That's why the housing market swelled; you can only buy a house with as much money as you can be lent. Then the banks grouped huge numbers of these and sold portions of them. These are called derivatives. And the banks took their profits by being the middle man in these transactions even though the loans were worthless.

Same sort of thing happens if you had a crooked used car salesman. He knows the car is worth half of what you are paying and will not work in a year, but because the buyer doesn't know, the middleman make a large profit margin. What makes it criminal is the conflict of interests in the companies making loans and selling derivatives were often in cahoots with the companies that were evaluating the worth of these same investments.

Actually the 'monetary' system was created while backed by gold at Bretton Woods in 1944 at the Bretton Woods Conference.

Then the US left that system, refused convertibility of dollars to gold under Nixon in 1971 rendering the dollar...fiat currency. This action, referred to as the Nixon shock, created the situation in which the US dollar became a reserve currency used by many states. At the same time, many fixed currencies (such as the pound sterling, for example) also became free-floating.

HERE

Also, in 1929, loans made at 10/1 to acquire stocks etc., were called and were to be paid in 24 hours. The whole 1929 fiasco was engineered by bankers who had since left the markets and knew just what they had wrought when they called their loans. Banks and businesses folded and were acquired for pennies on the dollar.

Then the fed which had allowed easy money until 10/29, now cut off capital which extended the depression and many will tell you, deliberately, to knock the remaining 16,000 private banks out of business essentially giving the fed a monopoly in US banking.

Also during that time, the vast majority of houses were paid for with cash and mortgaging them was very rare so there was no debt driven housing bubble.

< Message edited by MrRodgers -- 1/16/2016 6:15:19 PM >

_____________________________

You can be a murderous tyrant and the world will remember you fondly but fuck one horse and you will be a horse fucker for all eternity. Catherine the Great

Under capitalism, man exploits man. Under communism, it's just the opposite.
J K Galbraith

(in reply to DominantWrestler)

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RE: As Expected, Here it Comes - 1/16/2016 7:29:25 PM

Termyn8or

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"Sorry man but you further demonstrate a certain lack of knowledge in general, when you conflate that with having anything whatsoever to do with the issuance of currency. It does not. "

Wait a minute, when a bank can have one million in deposits and loan out ten million, that is the creation of money. This is the trick. This is why they called in the gold. This is why they are pushing the cashless society. You HAVE to trust them, yet they have been proven to be untrustworthy.

Fractional banking,. look it up. this is how easy credit ties into easy currency creation. They never print it, and never will unless everyone wants all their money out the banks, and on that day it will become worthless because of the way bankers set up economies.

Tell you a story. Car is in the shop not running right. Three guys in uniforms are around this big huge computer machine that is supposed to tell you what is wrong with the car. They cannot figure it out. Old hillbilly walks in and starts it up for two minutes and says "tear down for timing chain". They reply "This car has no timing chain, it has gears". Hillbilly tears down for timing chain and brings the TIMING CHAIN TENSIONER to the "engineers" with the "diplomas". Do they give back the diagnostic fee ? Nope.

They can read the computer but do not know how the car actually works. Do you understand ? Every time I hear someone say "Do not apply 'family', or small scale economics to macroeconomics" I want to shove a sledge hammer up their fucking ass and break it off. Those are the people who wrecked the fucking place and the faster we kill them off the better. They might know why your GPS is off by 10 feet, but if the car doesn't start you might as well give the fuck up. Because they no longer know how the damn thing actually works.

Here is how an economy works - you produce, you trade what you produce for things you want and need with people who want and need the things you produce. The key word here is PRODUCE.

When you do not PRODUCE enough that others want and need to trade for what you want and need you can do one of three things.

1. Without. this worked well for millenia.

2. Print money. this would have worked better but they would not do it because it would let the People know right away how much they stole.

3. Borrow. The People will never know how much.

Well then there is number four. Like Iraq, when they were pumping oil but "forgot" to put the meters on, Mali is next. They will never be able in court to prove how much the US and France stole from them during their "trying times", caused by guess who, who needs gold for Germany lest they lose world credibility. Like Nam, all the soldiers there who were doing the mining. I talked to some personally, they said "Why am I mining ? I thought I was sent here to kill". Shutup and dig boy. And then Milesovic = cadmium.

There will be another little crash, like 29 or whatever. Know why people jumped out of windows back then ? (other than foreseeing Bill Gates) It was not that they lost their money, they inappropriately used other people's money for their own gamblings on the stock market. It was all in the float, but they were collecting on the side from using your low risk capital on things that were higher risk and as long as you got that dividend check no questions were asked. So these goniffs were making money on your money. nobody knew, but when the shit hit the fan, they knew they would all be discovered. They were going to go to jail. They did what the banks did legally since fractional banking, but without the status to do it.

Now ask me for cites. Ask me for transcripts of court cases that never happened because the people were dead before they ever got charged. The people who jumped out of those windows were a bunch of crooks, it's just that some bigger crooks came along and blew their game.

T^T

< Message edited by Termyn8or -- 1/16/2016 7:34:21 PM >

(in reply to MrRodgers)

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RE: As Expected, Here it Comes - 1/16/2016 7:51:37 PM

Termyn8or

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"Also, in 1929, loans made at 10/1 to acquire stocks etc., were called and were to be paid in 24 hours."

Interesting tidbit there.

Called in by whom ?

What's more, was "Option To Accelerate At Will" extant at the time ? That is a really nasty clause n the UCC but I have looked for older and older versions and it seems to have been there alot longer then I thought. Years ago when I first started looking into this shit I thought it was 1991, then I looked back and it was there, looked back farther and it was there. I eventually gave up. Just when did they pass that fucking abomination ?

Anyway :

"Also during that time, the vast majority of houses were paid for with cash and mortgaging them was very rare so there was no debt driven housing bubble"

Yeah well if there never were banks, houses would be a hundred bucks. So would open heart surgery without insurance companies.

But yup, the guy who built my house (now sold) built one, sold it and used the money for materials to build the next one, and so on and so on. My Greatgrandfather built his own house. People used to do that shit and banks, well not everyone had a bank account. People hired security, carried guns because they were carrying the payroll for a company.

Now they force you into direct deposit. That should be illegal and in fact there is a test case in PA about that, of which I have lost track. I'll have to search for that. I am out of the loop. My skill allows me to demand cash, and that is what I get. But I am never going to pay a bank $300 for overdrafting by three cents, and shit like that HAS HAPPENED TO PEOPLE I KNOW. Fuck them, and fuck this governenment that allows them to breathe our air.

T^T

Sorry for the tirade but I just gotta once n a while.

ETA the letter"u" to some words.

< Message edited by Termyn8or -- 1/16/2016 7:53:43 PM >

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RE: As Expected, Here it Comes - 1/16/2016 7:56:54 PM

Greta75

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Fr

I got a question. Why are we worried about stock market crashes, those who have invested, hopefully in secure companies, when, every stock market goes through their up and down cycle. In the long term, it will be fine. It will go up again.

Unless people are gambling on short term bull runs and stuffs.

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RE: As Expected, Here it Comes - 1/16/2016 8:59:38 PM

thompsonx

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ORIGINAL: Greta75

Fr

I got a question. Why are we worried about stock market crashes,

We???Do you have a turd in your pocket?

those who have invested, hopefully in secure companies,

That would be the rub now wouldn't it? How does one know?

when, every stock market goes through their up and down cycle. In the long term, it will be fine. It will go up again.

In real dollars has the market recovered from the crash of '29'?

Unless people are gambling on short term bull runs and stuffs.

When has that ever happened????

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RE: As Expected, Here it Comes - 1/17/2016 5:55:45 PM

MrRodgers

Posts: 10542
Joined: 7/30/2005
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quote:

ORIGINAL: Termyn8or

"Also, in 1929, loans made at 10/1 to acquire stocks etc., were called and were to be paid in 24 hours."

Interesting tidbit there.

Called in by whom ?

What's more, was "Option To Accelerate At Will" extant at the time ? That is a really nasty clause n the UCC but I have looked for older and older versions and it seems to have been there alot longer then I thought. Years ago when I first started looking into this shit I thought it was 1991, then I looked back and it was there, looked back farther and it was there. I eventually gave up. Just when did they pass that fucking abomination ?

Anyway :

"Also during that time, the vast majority of houses were paid for with cash and mortgaging them was very rare so there was no debt driven housing bubble"

Yeah well if there never were banks, houses would be a hundred bucks. So would open heart surgery without insurance companies.

But yup, the guy who built my house (now sold) built one, sold it and used the money for materials to build the next one, and so on and so on. My Greatgrandfather built his own house. People used to do that shit and banks, well not everyone had a bank account. People hired security, carried guns because they were carrying the payroll for a company.

Now they force you into direct deposit. That should be illegal and in fact there is a test case in PA about that, of which I have lost track. I'll have to search for that. I am out of the loop. My skill allows me to demand cash, and that is what I get. But I am never going to pay a bank $300 for overdrafting by three cents, and shit like that HAS HAPPENED TO PEOPLE I KNOW. Fuck them, and fuck this governenment that allows them to breathe our air.

T^T

Sorry for the tirade but I just gotta once n a while.

ETA the letter"u" to some words.

Called in by the lenders, mostly brokers, some banks. Contractually, they had that power. As far as I can determine, Option to Accelerate at Will didn't appear until many years later.

Suburban Phil. 100,000 homes from 1865 to 1890, 'The Building and Loan Assoc. that did no building.' Scribner's Monthly hard back compilation. Typical 4 bedroom brick colonial...$1,500. Only a very few were 'mortgaged.'

Inside the city of Detroit, 1929 (from 74-39 years later) Typical 4 bedroom brick colonial, $1,500. My grandparents lost 4 of those houses during the depression. For the 70-80 year period post civil war, the vast majority of houses were paid for with cash.

As much as anything that causes inflation in residential housing, was govt. [It] stepping in with their help. That help ($$) only drove the restricted land, the prices of the house up and the govt. followed right along. The land owners, land developers and home builders built every benefit from govt. into buying of a house, into the price of actually getting land and building the house, including the mortgage tax deduction, which was always part of the interest tax deductions that were eliminated, that is...all but mortgages. There's your residential market.

< Message edited by MrRodgers -- 1/17/2016 6:02:49 PM >

_____________________________

You can be a murderous tyrant and the world will remember you fondly but fuck one horse and you will be a horse fucker for all eternity. Catherine the Great

Under capitalism, man exploits man. Under communism, it's just the opposite.
J K Galbraith

(in reply to Termyn8or)

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