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I'm afraid it is you who has it backward.So, I have realized that since the Occupy movement, quite a few people do not understand capitalism. OWS was convinced that capitalism was the cause of their problems and personal failures. Unfortunately, they succumbed to mistaking capitalism for corporatism. If you do not know the difference, please google it. If you think corporatism is capitalism, you will seek government intervention in a way that surpasses corporatism, and that is socialism. These OWSers have it backwards, as do many of Americans.
Capitalism is not the problem, it is the solution. Capitalism has not existed for a century. How about we give it another shot? Get government out of the subsidy game, get government out of anything involving business. Government's only job is to regulate currency and they can't even get that right (see article 1 section 8).
Corporatism is not capitalism...and socialism is not the answer. Get the government out. Restore capitalism.
Thank you.
Unrestrained (laissez-faire) capitalism leads directly and unavoidably to corporatism, which naturally evolves as fascism. The ideal system is that which prevailed in the U.S. from the 40s through to the 80s, which was capitalism held in check by socialist regulations. Our most destructive economic problems began when Ronald Reagan, the man from General Electric, began de-regulating our system which immediately led to the Savings and Loan debacle -- which didn't stop him, or Bill Clinton, or George W. Bush from continuing to de-regulate. As the removal of socialist regulations continued, the natural consequences followed, and we are now seeing and feeling the ultimate effects.
If you wish to learn more about the destructive effects of switching from demand-side economics to the supply-side version, which is precisely how Pinochet commenced the destruction of the Chilean economy and the drift toward fascism via unrestrained capitalism, read Naomi Klein's supremely informative book, The Shock Doctrine. And if you want to top off the education obtain a copy of Inside Job, a two hour video documentary which clearly explains exactly how unregulated capitalism nearly collapsed our economy and tells you who did what to bring it about.
And if that brief but substantive course of study doesn't change your mind about capitalism, do some research into why Denmark, a socialist nation, is considered the happiest country in the world.
Bottom line: Greed is the engine of un-regulated capitalism. And greed is a personality disorder which is recognized and denounced by all major religions.
The notion that Fannie/Freddie were forcing banks to make subprime loans is simply not accurate..... it doesn't even make sense.
For instance, as George Mason University economist Russ Roberts explains in his paper Gambling with Other Peoples Money:
Fannie and Freddie bought 25.2% of the record $272.81 billion in subprime MBS [mortgage-backed securities] sold in the first half of 2006, according to Inside Mortgage Finance Publications, a Bethesda, MD-based publisher that covers the home loan industry.
In 2005, Fannie and Freddie purchased 35.3% of all subprime MBS, the publication estimated. The year before, the two purchased almost 44% of all subprime MBS sold.
In addition, lawmakers in both parties enacted policies directed at increasing home ownership rates, resulting in lower mortgage underwriting standards for Fannie and Freddie. Roberts notes that from 2000 on, Fannie and Freddie bought loans with low FICO scores, loans with very low down payments, and loans with little or no documentation
2. The Dow futures were up 70 points from 12,650 in early trading to 12,720. Then the GDP data came out.
3. The Dow futures had reversed it's 70 point rise, dropped 110 points from there by the time the market opened & continued down another 50 points from there. It was a sudden 160 point reversal on that GDP mis news.
4. The current administration & it's minions.
Fair value assessments value your home at the price that similar homes sold for recently. Historical cost assessments value your home based on past sales and expected increases in value.What would that accomplish? Spell it out. What is "historical valuations"? And why are they helpful?
No doubt Freddie/Fannie were big into subprimes. Law makers in both parties enacted policies directed at increasing how ownership rates, resulting in lower mortgate underwriting standards for all lenders.
Fannie and Freddie were still privately held corporations whose ownership was almost exclusively large lenders. Fannie and Freddie didn't start the subprime craze. They jumped into it head first largely for the same reason everyone else did..... it was profitable.
All houses were overvalued - not just those typically purchased by the subprimers.
In a move that could help increase home ownership rates among minorities and low-income consumers, the Fannie Mae Corporation is easing the credit requirements on loans that it will purchase from banks and other lenders.
The action, which will begin as a pilot program involving 24 banks in 15 markets -- including the New York metropolitan region -- will encourage those banks to extend home mortgages to individuals whose credit is generally not good enough to qualify for conventional loans. Fannie Mae officials say they hope to make it a nationwide program by next spring.
Fannie Mae, the nation's biggest underwriter of home mortgages, has been under increasing pressure from the Clinton Administration to expand mortgage loans among low and moderate income people and felt pressure from stock holders to maintain its phenomenal growth in profits...
...In moving, even tentatively, into this new area of lending, Fannie Mae is taking on significantly more risk, which may not pose any difficulties during flush economic times. But the government-subsidized corporation may run into trouble in an economic downturn, prompting a government rescue similar to that of the savings and loan industry in the 1980's.
''From the perspective of many people, including me, this is another thrift industry growing up around us,'' said Peter Wallison a resident fellow at the American Enterprise Institute. ''If they fail, the government will have to step up and bail them out the way it stepped up and bailed out the thrift industry.''
Fannie Mae, the nation's biggest underwriter of home mortgages, does not lend money directly to consumers. Instead, it purchases loans that banks make on what is called the secondary market. By expanding the type of loans that it will buy, Fannie Mae is hoping to spur banks to make more loans to people with less-than-stellar credit ratings.
America Before President Obama Took Office and Now
Enough Said!!!!!!!!!!!
Fair value assessments value your home at the price that similar homes sold for recently. Historical cost assessments value your home based on past sales and expected increases in value.What would that accomplish? Spell it out. What is "historical valuations"? And why are they helpful?
Neither needs to dictate the actual dollar figure that your home will fetch on the open market - only the amount that the bank is willing to lend and to keep on its books as an asset value.
Fannie Mae, the nation's biggest underwriter of home mortgages, has been under increasing pressure from the Clinton Administration to expand mortgage loans among low and moderate income people and felt pressure from stock holders to maintain its phenomenal growth in profits...
Because fair value financed the bubble and it is failing to finance a recovery.I could come up with times when either would be bad.
So why is your better than fair value?
Are you smoking drugs? Honestly, I'm wondering? I'm wondering not because I want to argue with you about whether the economy is "pure shit" or not, but because I'm wondering how you arrive at the conclusion that:
1. The GDP number was a "huge miss". It was a little disappointing but it was still the largest growth of the year.
2. The DOW was "way up". How do you define "way up" exactly?
3. Then there was a "huge reversal". Huge? Says who?
4. "They" have been lying.... they who?
Are you just smoking doobs and posting pure bullshit? Cool enough if you are.... I'm just trying to make some sense.
Krugman is a liberal more than an economist. He uses what he knows about economics only to deceptively promote liberalism.
Unrestrained (laissez-faire) capitalism leads directly and unavoidably to corporatism, which naturally evolves as fascism.
Unrestrained (laissez-faire) capitalism leads directly and unavoidably to corporatism, which naturally evolves as fascism.
This of course is logically stupid since capitalism is about freedom from government while corporatist fascism is all dependence on liberal governemnt.
Obama, for example, wants corporatist fascist health care while capitalists want..... free market capitalism.
Liberalism leads directly to corporatist fascism while conservatism leads to small government capitalism.
Unrestrained (laissez-faire) capitalism leads directly and unavoidably to corporatism, which naturally evolves as fascism.
This of course is logically stupid since capitalism is about freedom from government while corporatist fascism is all dependence on liberal governemnt.
Obama, for example, wants corporatist fascist health care while capitalists want..... free market capitalism.
Liberalism leads directly to corporatist fascism while conservatism leads to small government capitalism.
Are we better off now than we were five ( 5 ) TRILLION dollars ago?? Let us get back to the free market economy and JOBS for millions of people who would pay federal income taxes and restore prosperity to our country. You can't spend your way there, Mr. President.
... they succumbed to mistaking capitalism for corporatism. ... please google it. ...Corporatism is not capitalism...
The reported GDP is the highest number all year, but not the highest reported. In the 1st quarter, 2.8% was also the initial report - only to be "adjusted" down after the political impact was exhausted. There is every reason to believe that the current numbers are likewise inflated and will slide a half-percent
I read this as "Obama needs good numbers, so good numbers are reported, real numbers to follow after November."
....
Initial GDP numbers are simply not to be trusted.
... they succumbed to mistaking capitalism for corporatism. ... please google it. ...Corporatism is not capitalism...
So I googled it.
"Corporatist types of community and social interaction are common to many ideologies, including: ... capitalism... fascism... socialism."
So, capitalism, fascism, and socialism are are all types of corporatism.
So this guy makes up his own definition of "corporatism" and "capitalism". He doesn't bother to look it up, but insists other do.
Idiot, take your own advice.
I don't see why the banks have a right to knowingly misrepresent the values of the homes that they lend us money to buy.
I am not exactly sure what experience you are refering to but;
banks do not set the value of the property.
The value of the property is set by supply and demand and determined by an appraiser.
Private companies and individuals that work for those companies, call appraisers, determine the property value by examining the price of similar properties. They examine the price that other similar properties sold for.
Theoretically, it is a statistical process that is well defined in which all relevant attributes are determined and used to set up a model in the form of an equation. A linear regression is evaluated to determine the effect that each attribute, like the number of toilets, has on the total price. This then is used to determine the "value" of your property.
In practice, the appraiser makes a sort of educated "regression" by looking at other properties and comparing them to yours. He doesn't do it the way it should be done.
When I had my house appraised, I suggested things to the appraiser and was successful in getting the appraised value a bit higher than he might have otherwise done.
The final value of the property is what someone else willingly pays for it. Depending on how property taxes are done, it may be reappraised by the tax assessors office using the same techniques detailed above.
I am pretty sure that this is standard across the U.S. Mortgage companies, mortgage brokers, real estate agents, appraisers, the termite inspector, home owners, home buyers, and property managers are all part of the real estate market but are also separate autonomous agents. They act upon their experience of each other and out of their own personal motivations.
Like I said, I am not sure what experience you are referring to. If we are to me smart, we need to understand the details, identify the players and their specific motives and behaviors, what they do affect, and have our language correct. I just don't see "the banks have a right to knowingly misrepresent the values of the homes" as being as accurate and specific as you can do.
The issue that was a big factor in the Great Recession included the 'flipping" or speculation of houses by individuals purchasing their third and fourth property. This created incredible demand that drove prices up. There is a research paper that was done by a team at the Federal Reserve Bank of St. Louise that examined data which illuminated this. It was these 'flippers', recognizing that the market had flattened out, that began the cascade of defaults which led to the collapse in demand across all of the markets.
