Posted on 10/27/2008 5:48:28 PM PDT by prolifefirst
Btw, our credit was excellent hence the offers of much more than we wanted to spend. Actually, I don't get that either. If someone tells you they aren't comfortable spending that much money, why push it? If they default, aren't there consequences?!
The basic pattern is that the bubble will continue to rise in the face of an increasing number of facts that show that it will eventually pop.
The fault is not with posters like exTexan who accurately described that it was a bubble, why it was a bubble, and that it would eventually pop. The fault is with the average human being that bought into the hype and continued to inflate the bubble even with all the evidence.
You fault exTexan for accurately describing every rational aspect of the bubble, but for failing to accurately calculate the irrational exuberance that went on for a few more years before the whole thing started to collapse.
What we should be doing here is not carping at those who correctly predicted that there was a bubble but failed to guess at the popping date, or to carp at those who were still cheerleading the bubble while claiming it was not a bubble but a paradigm shift.
Instead we should be working on a formula that can accurately calculate the time between when the first seeds of a bubble are sowed and when, after a suitable amount of time for obfuscation and irrational exuberance, to expect the whole thing to blow up.
What we probably have is some sort of underdamped system. If we could determine the time constants then we can all ride the train to the top and jump off before it sails over the cliff!
Welcome to an econ thread, grasshopper. As far as I can gather so far (and I'm studying the issue and it will take a while), Alan Greenspan made available "free money" (just work with me) to the banks. The banks themselves found themselves under pressure to make loans (so they could profit) by their shareholders (who like profits) and Congress (that decided, in its infinite wisdom, that poor people need to live in homes).
Meanwhile, the people whose job it was to assess risk dropped the ball. Thank you, that was 1rudeboy's guide to the credit crisis in thirty words.
I have heard some interesting theories in the last few days on talk radio. The two that ring truest to me:
1. That the big-money liberals are manipulating the market. The “proof” is the late-day falls (like today). Reporters talked up the higher market all day, then at the tail end, the market fell again... The idea being to make sure the economy looks so bad that folks will be desperate for Obama’s “Change”....
2. That the markets are pre-adjusting for the doom of an impending Obama presidency - and the major losses in revenue from higher taxes and loss of business.
Thanks. I know about CRA and the havoc caused by loans given to welfare recipients. But I didn’t get pushing average people above their comfort zone. Thanks again.
If it appears a person is a credit risk, why would they court them?
Because, overall the cc companies never take a loss. If one card does prove a loss, the interest on performing cards goes up to cover it.
If they default, aren't there consequences?!
Apparently not.
The fact of the matter is, if you plan on donning the 20-20 glasses and looking backwards, then credibility becomes an issue. Someone who posts from Marxist Monthly has none.
Having been temporarily convinced 4 or 5 times we had reached a bottom this year, I can no longer believe there will be a happy ending to this unending nightmare.
Thanks!
Someone may have occasionally thrown in a rant or two from some socialist or Marxist rag, but much of the reporting was much better than we were getting from either the MSM, WSJ, or business journals in general; much of which was just cheerleading.
Just because most Americans weren't listening to the truth, or knew the truth but were trying to be the next-to-the-last sucker, doesn't mean that the reporting on FR was all wrong.
It just means that we haven't yet figured out the time constants that determine how long it takes for a bubble to burst, or that those who have are keeping them to themselves for their own financial gains.
My own opinion is that it would be best to publicize this information as it might act to counteract the bubbles.
I would rather people made fortunes from designing, building, marketing, and selling things; rather than off the non-productive speculation on productive these activities.
I disagree with nothing in your last comment. I simply harbor a grudge to people who let Google do their thinking for them.
That’s a thankless job.
The national economy is really many regional economies. Nobody really studies regional economics in college but that is the most important subject books do not cover. California may be booming while Indiana is fading. I believe the bubble has already burst is sections of California. But, then what do I know?
My best buddy is moving to Nevada and will buy near Lake Tahoe. He was working for the holding company that owns Coldwell Banker and Century 21 and was running the entire western region of eleven states for them: Take the hint folks.
7 posted on Tuesday, October 07, 2003 3:58:13 AM by ex-Texan
He didn't say it was going to burst, in 2003 he said it was bursting. Did prices rise for 3 more years after that? Or was it 4?
FWIW, I just said that I enjoyed his threads. I had no dog in that hunt. I own outright, I’m gonna die here. I have/had no financial interest in the bubble. I just found the threads to be interesting. Do not involve me in your private war.
I didn't predict anything. I notified FReepers that the Dow had completed a technical action called a "Gatekeeper" top, wherein there is a top, a "first thrust" drop, and then a lower top which stops at the 78% fibonacci line. This is technical analysis. Looking at the weekly chart I said the next major resistance was 7200-7500, corresponding to the 2002 Dow lows. This was last November 15. I think that is a bit more specific than "the condo market will tank".
I wasn’t speaking of you, and the phenomenon I’m describing is illustrated in my comment #25.
FWIW, I was just showing one of his old threads.
Greenspan was pushing risky, exotic loans to pump up real estate prices. Just like the angry mortgage shills who still post here, and still toss insults my way. At the time I pointed the truth out on FR. What happened? I was attacked and vilified again and again by greedy crooks. The profiteers even attacked me with thousands of illegal hacking attacks.
IMPO They are all liars and crooks and ought to be locked away behind bars. Greenspan ought to be investigated to determine what 'gifts' he accepted, if any, to push these very risky mortgages. Americans ought to know the truth. How much did he profit personally from the credit hype ________ ?
But to make matters worse:
Evil Wall Street Exports Boomed With `Fools' Born to Buy Debt ! !
Crooks should be locked away.
Greenspan still attempts to worm his way out of any responsibility for looking the other way while his good friends got excessively wealthy — as they bankrupted the nation and the world.
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