Who's fault is the Recession?

1. 60

   erickazosoposted 15 years ago

   I'm curious what others think, in my opinion, the current recession we're in is simply the fault of the people that wanted a house and either couldn't afford their loans or didn't educate themselves properly on the loan they were getting into.

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      onthewritesideposted 15 years agoin reply to this

      I was going to answer this but it would take a whole Hub to do it correctly and I have to crash right about now.  Suffice it to say that people going out to buy homes that couldn't afford them was a contributing factor, but that in itself was merely an affect of much more disturbing underlying factors that go back decades.  It's not a Republican or a Democratic thing...but rather the "powers that really are"...and that is basically the money guys.  I could expound and prove my point, but I don't have the time right now.
      
      Try Googling the Bears Sterns bailout and see what you get.  you'll be amazed how many officers of that company are affiliated with the GOV, and what it is doing right now regarding business...

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      Mark Knowlesposted 15 years agoin reply to this

      Ah - you are obviously unaware of the interesting "investment vehicles," that leveraged these loans.
      
      You could have paid off every sub-prime mortgage in the country and we still would have crashed and burned.
      
      Wait until the commercial borrowers who wanted an office block and couldn't afford their loans or didn't educate themselves properly have finished defaulting - around about 2012.

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         ledefensetechposted 15 years agoin reply to this

         Give it a month or two when the Alt-A loans reset.  There's some thought that all the banks in the US will become insolvent due to this.  That's why some outside the banking industry think the banks are hoarding the TARP money, or doing what Goldman Sachs did: take it from AIG's TARP money that way they can hold it, don't have to pay it back and aren't beholden to Congress. 
         
         As for who was responsible?  The loose credit policy of the Fed, which started about 1993 is the real culprit.

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            Eric Graudinsposted 15 years agoin reply to this

            I'd go back a bit further back than that. 1971, when the requirement to have gold backing for the US currency was removed.
            
            Also, the "miracle" of fractional reserve banking, where the banks can create $100 of money to lend out of thin air for about every $10 that is deposited with them.
            
            Nations all over the world are pumping money into the population to stumulate the economy. Is this money being used to fund productive enterprises which will return dividends in future? No - It's being used to give people money to buy consumer goods, and to prop up banks and a crooked financial system that should be allowed to fail.
            
            And as for the recession being at an end?
            Hold that thought for 12 months, and let me know if that's still what you think.
            
            I reckon that in the years to come, the hardship that is being experienced now will be fondly remembered as the "Good Old Days".

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               ledefensetechposted 15 years agoin reply to this

               Oh we could go further back than that, to Bretton Woods in 1945 or back to the BoE's decision to go off the gold standard.  It's interesting to read what people thought back then, most people were adrift when the BoE did that, it was like a foundation of their world had just gone away.  We could go back further to the Great War or the establishment of the Fed in 1913.  Heck we could go back to the assignats of the First French Republic for that matter.  This sort of thing has happened time and time again, but, as usual, people don't get the lesson involved.

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               1. 61

                  Eric Graudinsposted 15 years agoin reply to this

                  I couldn't agree more.
                  
                  It's as though the financial "kings" are continually reliving their own version of "Groundhog Day", and us poor suckers have  little option but to go along for the ride.

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      2. 60

         Ron Montgomeryposted 15 years agoin reply to this

         December of 2012? hmmmmm

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            dohn121posted 15 years agoin reply to this

            

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            manlypoetrymanposted 15 years agoin reply to this

            how's that for timing!

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   3. 64

      Mishaposted 15 years agoin reply to this

      It's likely to be just a manifestation of natural trends in collective mood, retracing a hundred year long or so uptrend.

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   4. 68

      apekshaposted 15 years agoin reply to this

      software industry as they offerd much more salary so bulk came in the industry..so when recession bad condition....came in picture..as 1000000000000000000 people and 10000 projects...
      ha ha

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2. 73

   HubChiefposted 15 years ago

   Just posted this from one of the popular real estate preachers: I found it informative.
   
   What’s going on right now in america with so many homes going into foreclosure is due to outrageous loans made to almost anyone who could cause a mirror to fog up. In different parts of the country, many lenders even committed fraud by placing a higher value on homes than they were worth, simply so they could inflate the amount of the loan needed by the homeowner, and boost their own profits.
   
   The fears over the U.S. subprime mortgage market have triggered a global credit crunch playing havoc with Wall Street stock portfolios, and dragging down global markets.
   
   In case you’re not familiar with the term, subprime loans are offered at high interest rates, and usually on adjustable terms, to Americans who have a poor credit rating, and might otherwise be denied loans. But as interest rates have risen, so have those adjustable payments, leaving many homeowners stretched beyond their means.

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3. 62

   BrianFanslauposted 15 years ago

   The Penguins

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      Lisa HWposted 15 years agoin reply to this

      and the Freemasons.   

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4. 60

   oscillationatendposted 15 years ago

   Well, the banks primarily. But they got help from the Gov'ment. Started passing laws to give everyone a "piece of the American pie," A.K.A. a house.
   
   The banks were told to sell riskier and riskier loans because everyone deserves a chance at owning land...
   
   ...and then the banks yanked it out from underneath when the time was right.
   
   Thanks Goldmann-Sachs, we love you too.
   
   (I've got your investment instrument right here!)

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5. 60

   erickazosoposted 15 years ago

   interesting points, anyone else want to throw anything out there?  I'm trying to post a financial blog a couple times a week, throwing a new perspective out there, come by and check it out, leave your opinions too, i am curious what people have to say.

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   1. 72

      earnestshubposted 15 years agoin reply to this

      Eric, you may want to get the free Australian online financial paper called "The Daily Reckoning."  It is diverse with many fresh opinions you will not find elsewhere easily.Another one is "Money Morning"

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         ledefensetechposted 15 years agoin reply to this

         It's not Australian Earnest, it's written by a guy from Baltimore who has his company offices in Paris, France of all places.

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6. 67

   lrohnerposted 15 years ago

   Guys, guys, guys. You are seriously depressing me. I'm still trying to reconcile all of the newscasts that say that the housing market is getting better vs foreclosure rates won't stabilize until mid-2010 or later.
   
   All I know is that from my eensy, weensy corner of the world, lenders are starting to lend and people are starting to spend. Don't go bringing me down from that high!
   
   

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      earnestshubposted 15 years agoin reply to this

      Well acording to our Government in Australia, we are over it and in the clear! Not a chance in hell, this is just the calm before hyper inflation.

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         bgamallposted 15 years agoin reply to this

         Ernest, hyperinflation is a possibility but we are not out of a deflation danger yet. There are a lot of deflationary things happening, including high unemployment, lower wages, less hours, lower house prices, more foreclosures, the credit card crisis, the need for banks to write off untradeable assets and the commercial real estate crisis, whew!

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            earnestshubposted 15 years agoin reply to this

            bgmall that was great, I have not put any effort in to the Australian economy for a while, so thanks for the big picture. Like a lot of Australian business people, I watch America as much as I can, because historically, when they trip, we fall all the way down the stairs with them on top of us!

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            1. 59

               beautyroseposted 15 years agoin reply to this

               I think people keeps barking on obama. Haven't you ask former president bush where did he spent the money since he spend a lot much expense on war like in Iraq. Probably some funds in other department have been used up. And hidden mismanagement of credit and debt maybe which resulted to economic crisis which affected most the top state of the pyramid all over the world.

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      Mishaposted 15 years agoin reply to this

      It's called a "dead cat bounce"

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7. 54

   wrenfrost56posted 15 years ago

   For sure the banks, they just whopped me with a £38 bank charge for a missed item payment of £3.25! Even though they didn't pay it and the money was in there the next day and did get paid! They call it unathorised borrowing! Yet they just robbed the tax payers blind and are now giving out £100,000 bonuses again! Sorry this issue really hacks me off!

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8. 63

   bgamallposted 15 years ago

   The Bank of International Settlements and their satellite central banks allowed off balance sheet banking at Basel 2. This shadow hidden banking ended up allowing liar loans and the like. So the Fed, who failed to regulate and the BIS, who allowed the shadow banking, were at fault for the severe recession. Had they just allowed an ordinary recession after the dot com crash we would be at less risk.

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9. 60

   erickazosoposted 15 years ago

   i appreciate the recommended reading and will look into it.  hope aussies down there are turning around, i'm hoping the market here in the usa is finally heading in the right direction, but i have a feeling we're going to see one more good dip before we're in the clear.

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10. 73

    HubChiefposted 15 years ago

    beauty, the use of word "barking" is little strong for people who are genunely being critiques in constructive sense so that we all can come out of the recession.
    
    Bush is not president today as people do not like him. Obama is and people have right to ask right questions and provide constructive critisism that would help president obama and his team.
    
    Hope you understand than being defensive.

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    1. 59

       beautyroseposted 15 years agoin reply to this

       is rallying in front obama's office not offensive? I think it is. I used barking term just point out or emphasize that people expect obama to become a magic worker to restore economic crisis within his few months of term and that is next to impossible lols

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11. 73

    HubChiefposted 15 years ago

    Well, peace rallying is a human right. just to show that there is problem. Could be more in politicians mind but not in mine.
    
    If you have seen "Milk" (not related at all but just the way that gay leader is shown to prove his point, I am not gay fan at all and think that his point was against human anatomy) However, I would still give him a chance to speak and explain his likings are abnormal than using strong words.
    
    I understand the context now still why use hard words here? Better provide viewpoint and it is more than welcome. It is ok to cheer his side however not ok to write hard. May offend some others who are asking questions.
    
    By the way, I think the job done so far is not bad at all. the stock prices and recovering housing markets are metrics of his success in my mind. aren't they? I also invited users to write more in another forum "Obama again" so as to read more mature thoughts.

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       beautyroseposted 15 years agoin reply to this

       why you so onion skin about my word are you not used in politics oh c'mon.

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       beautyroseposted 15 years agoin reply to this

       why you so onion skin about my word are you not used in politics oh c'mon. There are even worse commentary in the people's mouth than a mere barking word. You looks like you were just born yesterday huh

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12. 0

    pgrundyposted 15 years ago

    What recession? The front page of the newspaper here said just this week that the jobless recovery has begun. We're all better now.

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    1. 72

       earnestshubposted 15 years agoin reply to this

       Jeez Pam, and I thought we were unique in Oz. We got exactly the same schmooze yesterday from our Prime Minister! I wonder if anyone bought it?

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          pgrundyposted 15 years agoin reply to this

          It's such crap. I can't stand to watch the news anymore. Lies and damned lies.

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          1. 72

             earnestshubposted 15 years agoin reply to this

             Our Australian Pollys don't lie, they statisticize!

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13. 72

    earnestshubposted 15 years ago

    If we follow the usual pattern it could be twelve years before we recover too!

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    1. 61

       Eric Graudinsposted 15 years agoin reply to this

       You're such an incurable optimist Earnest

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       1. 72

          earnestshubposted 15 years agoin reply to this

          Eric I have to laugh otherwise I'd cry! We are in good hands, if American bankers are good hands eh?

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14. 66

    world of the wiseposted 15 years ago

    In my country, the recession did not hit at all
    Sorry to you guys who were effected. But i think it was your banks

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    1. 63

       bgamallposted 15 years agoin reply to this

       It is all about the banks. And there is more pain coming: http://business.theatlantic.com/2009/07 … geance.php
       
       This link should make Pam Grundy jump for glee. Apparently FASB, who was so late in adding M2M that it did more harm than good, wants derivatives written off that are off the balance sheets but owned by the big banks. Interesting to see which big banks will fail with this.
       
       BTW FASB could have cleared up the off balance scam that their parent in crime, the Bank of international settlements in Basel, allowed in 1998. They could have implemented M2M in 2004 when the bubble was young. But they let it fester and didn't apply M2M until 2007, when it was too late.

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15. 0

    pgrundyposted 15 years ago

    "Nations all over the world are pumping money into the population to stimulate the economy. Is this money being used to fund productive enterprises which will return dividends in future? No - It's being used to give people money to buy consumer goods, and to prop up banks and a crooked financial system that should be allowed to fail."
    
    Yes, the stock market has come complete unmoored from any kind of reality. It's all just smoke and mirrors at this point.

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16. 61

    Eric Graudinsposted 15 years ago

    When reading financial news (spin), I always sing a line from Jimmy Buffett:
    
    "If we weren't all crazy, we'd just go insane"
    
    Ying Tong Iddle I Po. I'm a teapot, I'm a teapot Whoo! Chuff Chuff

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17. 63

    Bredaviesposted 15 years ago

    I have no clue.
    
    But I can say no matter how much i dislike Bush (this is just MY opinion)I'm not goin blame him for the down fall of the economy. Someone was obviously pulling the strings.

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18. 60

    erickazosoposted 15 years ago

    this is a great forum we have going so far, lots of different views and information

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