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Author Topic: World Economics Fully Explained At Last  (Read 15273 times)

RSL

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Re: World Economics Fully Explained At Last
« Reply #60 on: June 15, 2013, 01:04:25 pm »

Tony, a major factor of the collapse of the banks in the USA was that they were giving mortgages - essentially a loan - to people with little or no money who weren't in the least "successful", hence there (sic) downfall.

The rest of the story: The reason the banks were handing out substandard loans was that Congress insisted they do so, and through Fanny Mae and Freddy Mac guaranteed that the lenders would be able to keep any profit but that taxpayers would shoulder any loss. If you were a banker, Stamper, what would you do?
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Rob C

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Re: World Economics Fully Explained At Last
« Reply #61 on: June 15, 2013, 02:42:02 pm »

Quote Rob Reply #57

Tony, forget it.

That mindset is endemic in the West of Scotland, one of the reasons I left it.

Unquote

Rob your tendency to personalize things once again comes to the fore. I take it is ingrained in your personality? A shame because you have in general an intellectual ability that is sometimes engaging but is marred by statements such as the one above. ::)




So, you have never noti¡ced the famous West of Scotland ethic at work? You must have led a more sheltered life than I ever imagined. I raise my hat to you: you never, ever, heard of Rangers and Celtic, never sat on a bus going home at night, scared out of your head that you weren't going to make it... no, probably not: you'd might have thought it normal, and that anyone shocked by it was being 'personal' again, or simply didn't understand what was going on...

stamper, I was an apprentice when the infamous apprentices strike swept over the West of Scotland like a dose of diptheria. Of the hundreds of apprentices in our factory, maybe eight of us gave the lot of them the middle finger and carried on working as normal. We had no reason to strike; but that meant nothing. Big red brother had said out, and that was what the friggin' sheep felt that they had to do. It was an early lesson on the power of unions and of the crass stupidity of many of those who buy into the idea.

It's what drives socialism: the refusal to think for one's self.

Intellect. The only rush of it that I remember well was the flight out of Glasgow after we'd sold the house. There was for the first time in my life the knowledge that I had finally done something momentously right. But thanks for the suggestion that I might still have some left over.

Have you ever asked yourself why the South of England is full of Scots?

Rob C

Tony Jay

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Re: World Economics Fully Explained At Last
« Reply #62 on: June 15, 2013, 06:19:28 pm »

The rest of the story: The reason the banks were handing out substandard loans was that Congress insisted they do so, and through Fanny Mae and Freddy Mac guaranteed that the lenders would be able to keep any profit but that taxpayers would shoulder any loss. If you were a banker, Stamper, what would you do?
Yes.
To enlarge on this further it was the brainchild of Bill Clinton and a great example of utopian socialist economics.
Clinton guaranteed, apparently, that the taxpayer would shoulder the risk of sub-prime mortgage loans.
But before this there was the thought that this would not be a problem since anyone in mortgage stress in the USA is allowed to hand the keys back with no further financial obligation on the loan.
Everyone thought that this was great - many people with no means signed up because the initial terms of these loans provided for miniscule repayments.
Later on though the repayments ramp up to become much more than normal mortgage loans.
At this point people began handing back the keys to the banks.
The banks began putting these houses back onto the market.
According to the theory the banks would not lose since they would just resell the house to recoup.
However supply soon began to outstrip demand and house prices fell.
More and more people found themselves paying off houses worth a fraction of the costs of the (non-subprime) mortgages they were holding.
They handed the keys back to the bank.
House prices continued falling.
The banks could not meet their costs as a result.
Financial armageddon loomed.
All the banks began calling in their loans between themselves and other financial institutions....
We all know what happened after that!

So much for Bill Clinton's utopian socialist view of the world.
So Stamper this is the result of your desire for government meddling in economics to 'level the playing field'.

Tony Jay
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stamper

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Re: World Economics Fully Explained At Last
« Reply #63 on: June 16, 2013, 04:05:41 am »

If my memory is correct there was a financial surplus when Bill was in power. The deficit was wiped out. I am sure I will be corrected If I am wrong? Then George Bush came to power and the surplus vanished. I don't think Bill was a socialist, at least not in the conventional sense of the word. In the UK he would be described as a Conservative. Bill being the person blamed for the banking crisis is something I will have to look up. I don't think he was in power when the banks failed?? If he did what you claimed and it was bad then why did George not reverse the decision when he came to power, or was he in favour?

Tony Jay

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Re: World Economics Fully Explained At Last
« Reply #64 on: June 16, 2013, 04:48:31 am »

Stamper there is nothing original in my post - all this stuff is already on the record.
Fannie Mae and Freddie Mac were two building society-type federal institutions directly established as a result of Clinton's policy although any banking institution was also able to offer subprime mortgage loans.
The fact that so many Amrican banks did so and that so many banks form around the world offered those American banks loans for the subprime mortgage market beggars belief.
It is interesting that no Australian or South African bank participated in the subprime market in the USA.
They obviously foresaw what the result of the fairy-tale approach would lead to.
As for why no one in the American government stopped it is due to the fact that by the time it was obvious trouble was coming it was far too late - ten plus years from institution of the policy to disaster spanning three presidential terms.

All this aided and abetted by highly irresponsible (criminal) banking practices by some of the major players in US financial circles.
Paradoxically, Bernie Madoff might well have been buried a fantastically rich and successful banker were it not for the GFC. As it is he is a penniless jailbird.

Stamper I reckon it is time you did some reading for yourself on this topic - it will show how stupidity and criminality managed to trash the planets economy.

Tony Jay
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stamper

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Re: World Economics Fully Explained At Last
« Reply #65 on: June 16, 2013, 05:52:14 am »

Quote Rob Reply #61

So, you have never noti¡ced the famous West of Scotland ethic at work? You must have led a more sheltered life than I ever imagined. I raise my hat to you: you never, ever, heard of Rangers and Celtic, never sat on a bus going home at night, scared out of your head that you weren't going to make it... no, probably not: you'd might have thought it normal, and that anyone shocked by it was being 'personal' again, or simply didn't understand what was going on...

Unquote

Rob I have noticed it but I have learned to avoid it and have avoided leaving the country just to get away form it. Every major City in the UK with more than one football team suffers from the problem of hooliganism. As to the personal bit then I thought the statement was aimed at me. Maybe I got it wrong?

Tony, forget it.

That mindset is endemic in the West of Scotland, one of the reasons I left it.

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