Great Depression Ii

[xssve]

Gee, XS, are you accusing me of being a bot, presumably created by some super-duper rent-seeking fast-finance house? I think I'm flattered. BTW, how do we know you're not a bot created by Franklin Raines and Fannie?

Well, probobly because Raines is moot, and has been since being replaced by Mudd and Syron, what? Four years ago?

The only reason to keep beating that horse is because Raines is superficially a democrat.

On the other hand, you're clearly all for bailing out what may possibly be the largest and most corrupt criminal enterprise in the world - what was the language there? 7% of GDP is "chickenfeed"?

You must work for some big fucking chickens.

 

[jomar]

Actually, the ladies thought it was quite racist.

Clear references to Little Black Sambo. I had the Little Golden Book version as a child, it was a nice story - kid outwitted tigers and got some nice butter and his clothes back. Too bad Sambo had become a racial slur. [/threadjack]

 

[cpk50]

If it wasn't an election year, I don''t think Bush would have acted..

 

[Roxanne Appleby]

ROXANNE

Apparently the ONE TRILLION aid doesnt begin to cover the TEN to FIFTEEN TRILLION debt that is leveraged by the ONE TRILLION.

It's not homeowners who are spooked; it's banks, business, and state local governments who have tons of money invested in stocks, bonds, mutual funds, money market accounts. That is, banks wont loan money to business or other banks, and people started a "run on the bank", so to speak. Government wants its money, anticipating that property taxes will take a major hit as real estate values deflate.

True! My home is now worth 1/3rd less on paper, but the local government uses the market value of my home for assessing property taxes. My 50K homestead exemption comes off the top of whatever the market price is. 33% deflation is serious business for the local government, and they cant get the money back by increasing the millage, since the state constitution puts a cap on millage rates. Local government did increase commercial property taxes 15%, and now business is screaming....because sales are down.

Florida is also clawing its way out from under a property insurance fiasco, to the tune of several hundred million dollars....every insurance policy in the state is assessed a small bite ($50) of that shit sandwich.

JBJ, your description of how financial panics can be contagious and lock up the entire system is accurate. THAT is what happened after 1929. Your conspriracy theory that today's RTC plan is all a plot to bail out local government property taxes is UFO anal-probe level stuff, though, and the rest of your post is filled with rather wild exagerations.

To begin with, even in the most over-heated real estate markets there is nothing like a 2/3 mark-down in the offing. I can imagine that in a handful of places it may be 50 percent, but even if your number is correct, such horror stories are limited to a tiny fraction of the tens of thousands of real estate markets all around the country. Outside of a few locations in Florida, Nevada, California and perhaps a couple more, in most of local real estate markets the "paper profits" were more like 15-25 percent, and very few people actually realized any of those - meaning few took the losses that are the other side of transaction.

Finally, that "$1 trillion leveraging $10-$15" is plausible but meaningless. As I said before, the actual losses in non-performing loans on bloated real estate values and loans is in the few hundred billion range - not chopped liver, but chickenfeed in an economy that produces $13 trillion in goods and services every year. I assume that when McCain said the economic fundamentals are sound that's what he was referring to - the ongoing productive enterprises that comprise our economy. They are all chugging along at a steady rate, thank you, and as long as Washington and the politicians don't do anything really stupid they will continue to do so. (I know - that qualification is pretty scary, but there's nothing new about it.)


Oh, and one more thing: The reason you Floridians are getting socked with insurance surcharges now is because you were getting a free ride for a long time. Hey Floridians - you live in a fricking hurricane zone! In an honest market you probably shouldn't be able to get any insurance, or at least have to pay a helluva lot more than you do. So suck it up and quit whining!

 

[JAMESBJOHNSON]

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[jomar]

ROXANNE

Apparently the ONE TRILLION aid doesnt begin to cover the TEN to FIFTEEN TRILLION debt that is leveraged by the ONE TRILLION.

It's not homeowners who are spooked; it's banks, business, and state local governments who have tons of money invested in stocks, bonds, mutual funds, money market accounts. That is, banks wont loan money to business or other banks, and people started a "run on the bank", so to speak. Government wants its money, anticipating that property taxes will take a major hit as real estate values deflate.

I'll bet you statutes will be passed that extend the time for reassessing market value and readjusting property taxes, because, well, all that work would cost money.

True! My home is now worth 1/3rd less on paper...

Run your address through Zillow. Supposed to give a market value price like a real estate agent would do if it's set up in your area.

 

[xssve]

By comparison, income taxes are between 7% and 8% of GDP, so that must be chickenfeed too. Glad to hear it, particularly since the federal debt was already over 60% of GDP, what's another 7%?

I guess I won't worry about that either, I'm sure it's all part of the plan...

 

[jomar]

Prediction: (to be proved instantly wrong gladly)

Within the next 10 years, repeal of two laws.

One. That naturalised Yanqui can become President.

Two. That communications companies can be owned by foreign investors.

The first will give you Arnie for President.

The second will give your economy to China. (they've got your money anyway)

Ahnohd is working on it as we post. Seriously. He really is.

I expect credit card junk mail from China any day now.

 

[Roxanne Appleby]

Well, probobly because Raines is moot, and has been since being replaced by Mudd and Syron, what? Four years ago?

The only reason to keep beating that horse is because Raines is superficially a democrat.

On the other hand, you're clearly all for bailing out what may possibly be the largest and most corrupt criminal enterprise in the world - what was the language there? 7% of GDP is "chickenfeed"?

You must work for some big fucking chickens.

No, I don't want to bail out anyone. I insist that the managers and investors in these things lose everything and have to get real jobs. I just don't want to see the entire financial system lock up and cause a worldwide Depression as a result. This isn't about bailing anyone out, it's about clearing bad loans and liquidating the underlying assets in an orderly manner, rather than in a panic-mode that causes a financial meltdown.

Yeah, the amount in the RTC pot (assuming JBJ's numbers are correct, and they are the right kind of numbers) is 7 percent of GDP, and of that, maybe 30 percent will evaporate. Which brings it down to a loss of 2-3 percent of GDP. Now wouldn't it be silly to lock up the financial system and cause a worldwide depression over such a piddly amount. Answer: Yes. That's why Wall Street and Main Street is so happy about this news - we're not all gonna die afterall.

 

[R. Richard]

The present scenario is the same as in 1929. Idiots inflated the price of stock until there wasnt any money or credit to buy it with. Then speculators manipulated a crash by short selling. Many of the stocks had good intrinsic value, just like all the foreclosed homes have good intrinsic value as shelter, but their prices were hyperinflated...creating hyper property taxes and hyper insurance costs, too. People couldnt handle the monthly payments.

In 1929 there were many, many stocks listed on even the New York Stock Exchange that were totally without value. In several case, bankruptcy auditors notified the Judge that the assets wouldn't even pay for the audit.

Then, there was the dust bowl that bankrupted many farmers, even those who never invested in the stock market.

After the depression, there were put in place laws to try to protect investor's against 1929 style fraud. Admittedly, the law doesn't always work. However, the laws do prevent the pervasive fraud that was a hallmark of the 1929 collapse.

 

[Selena_Kitt]

Clear references to Little Black Sambo. I had the Little Golden Book version as a child, it was a nice story - kid outwitted tigers and got some nice butter and his clothes back. Too bad Sambo had become a racial slur. [/threadjack]

I actually loved that book as a little girl... but you don't get racism when you're five.

As for the references on the waffles box... don't forget Aunt Jemima!

 

[R. Richard]

JOMAR

SAMBO is still in print.

Actually he isnt black, he's Indian. There are no tigers in Africa.

True, Sambo was a Caucasian. There are Caucasians in the South of India who are as dark as an Negro. However, the same racial type is of light olive complexion once you get into the foothills of the Himalayas.

Actually, there are tigers in Africa. In an attempt to preserve the South China Tiger, they have relocated several tigers to South Africa and are reintroducing them into the wild.

 

[Roxanne Appleby]

By comparison, income taxes are between 7% and 8% of GDP, so that must be chickenfeed too. Glad to hear it, particularly since the federal debt was already over 60% of GDP, what's another 7%?

I guess I won't worry about that either, I'm sure it's all part of the plan...

For discussion's sake I'll accept your numbers on income tax. You see, XS, people have to pay those every year, whereas this - which is likely to be a third as much if your figures and my estimates are correct - is a one-time event.

BTW, this from today's WSJ:

Exactly how such an entity might be structured isn't yet clear. The possible plan isn't expected to mirror the Resolution Trust Corp., which was used from 1989 to 1995 during the savings and loan crisis to hold and sell off the assets of failed banks. Rather, a new entity might purchase assets at a steep discount from solvent financial institutions and eventually sell them back into the market.

The program may look more like the Reconstruction Finance Corporation, a Depression-era relief program formed in 1932 by President Hoover that tried to inject liquidity into the market by giving loans to banks and other businesses.

The RTC was "cleaner" in terms of punishing the guilty S&L managers, because their institutions had to go belly-up before they got into it. In this case the bad paper is spread all over the place, including in many institutions that still have basically sound balance sheets. So it will be left up to the owners of those institutions - stockholders and investors - who will take a loss on the write-downs, to punish the managers based on how much bad paper they let in the door. Not so clean, but still better than a locked-up financial system and worldwide depression.

 

[jomar]

JOMAR

SAMBO is still in print.

Actually he isnt black, he's Indian. There are no tigers in Africa.

I know, that's the Golden Book version that I had. But Sambo still became a racial slur.

I actually loved that book as a little girl... but you don't get racism when you're five.

As for the references on the waffles box... don't forget Aunt Jemima!

Me too, true and that's right! So what do you think of Mrs. Butterworth being in a current Geico commercial.

 

[Selena_Kitt]

I know, that's the Golden Book version that I had. But Sambo still became a racial slur.



Me too, true and that's right! So what do you think of Mrs. Butterworth being in a current Geico commercial.

I think it's racist against reptiles.

 

[xssve]

For discussion's sake I'll accept your numbers on income tax. You see, XS, people have to pay those every year, whereas this - which is likely to be a third as much if your figures and my estimates are correct - is a one-time event.

What you mean is, a.) you can't dispute them, and b.) until the next bailout.

As for allowing the Chinese government to deal with the perpetrators, I'm all for it, we shoulda' shipped 'em off yesterday.

 

[jomar]

I think it's racist against reptiles.

Ha! ..

 

[Selena_Kitt]

Ha! ..

I think we're having more fun that X and Roxy over there...

 

[Roxanne Appleby]

I think it's racist against reptiles.

I think it's tigerist. How come no one ever speaks up for the tiger?

 

[Selena_Kitt]

I think it's tigerist. How come no one ever speaks up for the tiger?

Tigers and Gecko's Unite!

 

[jomar]

I think we're having more fun that X and Roxy over there...

I was thinking the same thing. But fun is relative.

 

[gauchecritic]

I was thinking the same thing. But fun is relative.

I don't have many fun relatives, their a set of right miserable bastards.

 

[JAMESBJOHNSON]

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[gauchecritic]

Thinking it doesnt make it so.

That's precisely what makes it so.

 

[JAMESBJOHNSON]

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