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The U.S. Economic Collapse Top 20 Countdown
The Economic Collapse ^ | May 31st, 2010

Posted on 05/31/2010 9:13:19 PM PDT by george76

So just how bad is the U.S. economy? Well, the truth is that sometimes it is hard to put into words.

We have squandered the great wealth left to us by our forefathers, we have almost totally dismantled the world's greatest manufacturing base, we have shipped millions of good jobs overseas and we have piled up the biggest mountain of debt in the history of mankind.

We have taken the greatest free enterprise economy that was ever created and have turned it into a gigantic house of cards delicately balanced on a never-ending spiral of paper money and debt. For decades, all of this paper money and debt has enabled us to enjoy the greatest party in the history of the world, but now the bills are coming due and the party is nearly over.

20 - Gallup's measure of underemployment hit 20.0% on March 15th. That was up from 19.7% two weeks earlier and ...

17 - The FDIC's list of problem banks recently hit a 17-year high.

3 - Decent three bedroom homes in the city of Detroit can be bought for $10,000, but no one wants to buy them.

2 - A massive "second wave" of adjustable rate mortgages is scheduled to reset over the next two to three years. If this second wave is anything like the first wave, the U.S. housing market is about to be absolutely crushed.

(Excerpt) Read more at theeconomiccollapseblog.com ...


TOPICS: Business/Economy; Politics
KEYWORDS: economiccollapse; economy; underemployment

1 posted on 05/31/2010 9:13:19 PM PDT by george76
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To: george76

20 indicators that the economy is not headed in the right direction. All caused by government intervention in the economy.


2 posted on 05/31/2010 9:17:10 PM PDT by mlocher (USA is a sovereign nation)
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To: mlocher

Business greed played a role also. President Clinton was one of the most devious POTUS. He realized he could not raise taxes to support liberal programs, so he reinvented it by partnering with private industry and allowed them to make a lucrative profit in government entitlements. This way he can support liberal programs without raising taxes, and the GOP will avoid vilification for cutting the programs. Wall Street was very intimately involved with Freddie Mac and Fannie Mae. Instead of taking cheap Fed money and have strong loan application practices, they went for liar loans as well as subprime loans, as well as qualifying people for ARM at minimum qualifications just to collect the large fees and points. They just did not care what could happen to the loan applicant after he lies or barely meets qualifications at the ARM teaser rates. As far as the banks are concern, once the applicant signs the paperwork that is his problem, and after six months the faulty mortgage note is sold off, that is the investors problem. Boy did the banks love this government/banker arrangement as they wrote loan after loan and collecting fees and points. Well the scheme finally burst and instead of the bankers taking a haircut for bad decision/greed, Wall Street used their position of too big to fail to coerce the government for a bailout. After all, if all the five major banks declare bankruptcy, the US economy will collapse and suffer from a financial meltdown. In other words after the banks pumped the economy into a bubble, they threaten and blackmailed their nation into a bailout. I remember listening on the radio when one of the wives of the Wall Street technical managers lament that their husbands work long hard hours and they deserve bonuses, and they did nothing wrong. Well the staff at concentration camps also worked hard and did nothing wrong. They still ended up facing prison and firing squad.


3 posted on 05/31/2010 9:39:05 PM PDT by Fee (Peace, prosperity, jobs and common sense)
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To: Fee

Well if you don’t like a business don’t do business with it. Nobody is holding a gun to your head. You don’t have to patronize that ‘greedy’ company or bank.

With government however you have no such choice.


4 posted on 05/31/2010 9:44:39 PM PDT by ChinaGotTheGoodsOnClinton (To those who believe the world was safer with Saddam, get treatment for that!)
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To: Fee

Business greed? What about government greed! When AIG, GM, and Fannie Mae are allowed to go out of business, let me know.


5 posted on 05/31/2010 9:47:53 PM PDT by Hoodat (.For the weapons of our warfare are mighty in God for pulling down strongholds.)
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To: ChinaGotTheGoodsOnClinton

I don’t think the gov told banks to do liar loans. Show me where the Feds, FMFM, HUD, etc told banks to do that. Where did gov tell Moody to take mortgage backed securities riddled with liar loans or no data at all and come up with a AAA rating when they were worth junk. CRA encouraged loans for poor people who could not pay the loan, a program I do not agree with, however the liar loans and fraudulent ratings of MBS are another story. Like I said to one freeper who claimed the gov encouraged liar loans, “tell that to the judge after the CRA gov rep point out that no where in the CRA policy were applicants encouraged to lie about their incomes, or banks were encouraged to make up credit scores to qualify the applicant for the loan”. The stories that leak out are only the tip of the iceberg of what went on in the mortgage business, banks who sold them off and the rating companies who assigned AAA ratings for the MBS. I recommend you look up on YouTube the testimony of William Black, the fed regulator who took down Lincoln S&L which involved the Keating Five. He damned gov regulators, the Obama administration and the bankers for all this mess. The best testimony of all that appeared in Congress on this matter. Cheap money and laid back gov regulators are not a license for business to lie and cheat.


6 posted on 05/31/2010 10:16:54 PM PDT by Fee (Peace, prosperity, jobs and common sense)
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To: Fee
What you said happened, but was not the cause of the problem. It was the result of the environment cast by a government that severely intervened in the market. If the government had not "backstopped" banks, then more prudent business decisions would have been made because the banks would have had to absorb the downside of the risk equation. But solving that pales in comparison as the cause when compared to the CRA, which forced banks to make loans to people who could not afford them by law.

The Obama administration is not interested in solving the problem caused by the government. They want to demonize the banks that made money because of the government intervention. Sadly, the MSM is echoing these lies and many in the population, who should know better, are taking the bait. This in turn has emboldened the dems to push the financial reform bill, which, in the Senate version, is a major step towards the eventual government take over of the banking industry. So to fix problems caused by government intervention, we will end up with more government intervention.

All because we do not understand the causes of problems and hold our elected officials accountable for actually solving them.

7 posted on 05/31/2010 10:25:20 PM PDT by mlocher (USA is a sovereign nation)
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To: Fee

“I don’t think the gov told banks to do liar loans”

You are correct. These loans are “Stated Income, Stated Asset” loans and they were created by private lenders who were using them to build CDOs and related derivatives. There were huge profits to be made off of liar loans, no government persuasion was needed to get lenders to make them.


8 posted on 05/31/2010 10:29:53 PM PDT by Pelham (without Deporting 20 million illegals, border control is meaningless.)
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To: mlocher

Greenspan summed it up very well. He assumed the discipline of the markets would prevent CEO’s from doing reckless things. The fear of bankrupting a company under one’s watch would prevent reckless behavior. That was one of the theoretical safeguards that private industry will self police themselves. It failed because the new generation of CEO’s are short term thinkers who have no loyalty to country or care about future generations stuck with the mess and cleanup.
Loral sold guidance systems to China in order to develop cheap accurate rockets to launch their commo satellite and help them get a head start to dominate the satellite business. Nowhere in Loral’s CEO thinking what the military implications would be for the US of more accurate Chinese missiles. That was left to future generations to deal with while Loral execs were dreaming about the huge profits they would make with cheap Chinese satellite launchers.
The same with the bankers who did liar loans, Who cares if the scheme blew up in the future, that is a problem for the next CEO to deal with after the one who made the bad decision retires with his bonus. Better yet being too big to fail they can coerce the fed gov and politicians to vote for a bailout or face social chaos. Hate to say this the heroes of our free market global capitalism have gamed this out from the openning moves to checkmate. We are stuck with the bills and they laugh all the way to the bank.
Even worst it gave ammunition for the socialist left to expand the power of government and discredit free markets.


9 posted on 05/31/2010 11:11:58 PM PDT by Fee (Peace, prosperity, jobs and common sense)
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To: Fee

Wrong again. The government used the carrot and stick. The CRA was the stick and Fanny/Freddy were the carrot.

Make bad loans or we’ll hall you in front of Congress.

Once you make the bad loans, you can pawn them off on Freddy and Fanny.

No banker would make a loan to people who can’t pay it back UNLESS the government made them to it.

That much is common sense.


10 posted on 05/31/2010 11:40:56 PM PDT by ChinaGotTheGoodsOnClinton (To those who believe the world was safer with Saddam, get treatment for that!)
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To: ChinaGotTheGoodsOnClinton

And the Banks could have made good loans, but since they do not have to keep them for more than a month and quickly sell them off to F/F, they decided to generate their profits from fees and points and not the interest on the life of the loan. WaMu and many banks urged their loan officers to get as many loan applications as possible in the largest amounts possible so they can earn huge profits from fees and points. Who cares if the applicant has bad credit scores and low income, make the numbers up and get the loan closed to collect the fees and points, and within six months the mortgage note will be sold off. No docs, no verification loans, alt ARM for people who did not even have the income to qualify or nonexistant credit history. The story of this scam is yet to be told because our gov (Obama listening to the Fed and Treasury) and Congress (donations/lobbyists) is brought off or misled to take serious action, but all scams will eventually come out.
In the last Savings and Loans crisis, over 1000 bankers, accountants and staffers eventually went to jail or were fined (kudos to Bush 41 and the RTC). After a global meltdown in Sep 2008, has any bankers been investigated yet????


11 posted on 05/31/2010 11:56:18 PM PDT by Fee (Peace, prosperity, jobs and common sense)
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To: Fee

No they had to keep a certain percent of ‘high risk’ loans or risk running afoul of CRA, which would also close GLBA options to them.

But again it is human nature to take advantage if there are no consequences. If people set own salary at taxpayer expense, very few people would be making under 10 million a year after a couple of years. So to say that a certain industry is greedy is quite absurd.


12 posted on 06/01/2010 10:19:18 AM PDT by ChinaGotTheGoodsOnClinton (To those who believe the world was safer with Saddam, get treatment for that!)
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