I Hate You America

[Gagglegnash]

Hi

Yeah. All those billionaire banker middle-Americans, who have paid themselves billions of dollars in bonuses for getting our chest hairs stuck in a wringer, and golden-parachuted Wall Street Leech middle Americans, who have sucked billions of dollars worth of equity out of the market by the simple expedient of EBITDA bookkeeping, pimping out unprofitable loans to low-income middle-Americans, predicated on a nearly asymptotic growth rate in the real-estate market, so that they could continue making profitable loans to real-estate day-trading middle-Americans.

Yeah. It's all the fault of the middle-Americans.

 

[DC]

Greed is Multinational.

 

[Louisthe13th]

Hi

Yeah. All those billionaire banker middle-Americans >snippity<
Yeah. It's all the fault of the middle-Americans.

Gaggle: You make a good point, and I don't entirely blame "middle america". I certianly am comfortable laying responsibility where it should go, I guess I was just venting a little...

Thanks for the nudge...

 

[Dancing David]

Dear Middle America,

Your greedy and irresponsible acquisition of home loans you cannot afford, your insistence on living outside your means, and your support of an unjustified and costly war has caused your economy to stutter on the brink of collapse.

Interesting! Um, the credit default swaps, the bundling and sale of sub-prime loans. That is the real issue.

But know, that in your selfishness and your greed, in your support of global conquest by the American corporations that provide you your cheap and tacky material belongings, you have dragged the rest of the world down with you.

Hey I vote, but not for GWB!

As of tomorrow I abandon my brief blossoming career, my dream of 11 years, because your recession has pushed the cost of living here beyond the reach of what I can achieve.

Tomorrow I begin looking for a low-wage job I will almost certainly despise, because I have to.

That is why they pay you for it, if it was fun, you would pay for it!

I hate you, America.

Sincerely,
A foreigner.

***

Comments?

Hey I certainly don't always approve of what people do either.

 

[Dancing David]

Then it was "unfair" to require people to pay on time...

Then it was "unfair" to foreclose for non-payment...

Would have been much easier just to not loan people money who couldn't really afford to pay it back...but we had to be "fair".

Wow, if Rush Luimbaigh says it, it must be true.

Wildcat was never able to demonstrate it.

Credit default swaps and bundling of mortages are not the fault of the CRA or the FHA.

 

[The Central Scrutinizer]

Dear A. Foreigner,

Get back to work. I need a new flat screen TV.

Sincerely,

A. M. American

 

[Pardalis]

You don't need to abandon your dreams, this may be temporary, and don't blame "America" for everything, it sounds like you are looking for a scapegoat.

 

[quarky]

Jesus will forgive us our debts.

 

[Beerina]

Dear Middle America,

Your greedy and irresponsible acquisition of home loans you cannot afford, your insistence on living outside your means, and your support of an unjustified and costly war has caused your economy to stutter on the brink of collapse.

Well.


The war's only $80 billion a year or so. Apparently that's not really much money anymore.


If anyone looks back on George Bush fondly, and gives him the blessing of the historian, it will be big government types for raising the ability of bloated government to spend by an order of magnitude.

 

[Francesca R]

The bankers have got off astonishingly lightly in gumboot's rant. I think it needs more work.

 

[Quad4_72]

So basically gumboot, you are blaming your failures on other people and not taking responsibility for your own actions...

 

[ElMondoHummus]

The bankers have got off astonishingly lightly in gumboot's rant. I think it needs more work.

From what I understand - and keep in mind that my last exposure to economics was waaaaay back in high school - your statement is really the heart of things. From having read a few sites (only one of which I'm able to remember: MaxedOutMama's "How did we get here?" post), so many of the problems were based on a deterioration of capital reserves as well as a degredation of appraisal standards leading to a higher degree of risk than what was immediately apparent to anyone but underwriters. So anyway, I have a layman's take on what the problems are, and I've noticed that you're considerably more versed in economics than I am, so I'm running these impressions by you to see if they're accurate:

1. The problem of course originates with mortgage defaults. However, the problem is exacerbated because the risks were magnified by practicies in ways not immediately apparent to investors.
2. Part of the problem is that the banks above the immediate lending institutions did not have the capital margin to absorb losses, and the reason for this is agitation on the part of politicians (both Democrats and Republicans, so don't anyone else reading this think I'm singling out only one party) loosening the standards and allowing less reserves.
3. Another part of the problem is that bad appraisal practices led to overvaluation of many properties, and allowed the bubble to propogate.
4. And yet another part of the problem is that all of above problems were snowballing - defaults were rising, reserve capital was being eaten in to, yet appraisals were rising and loans were still flowing out - and they just came to a head last year.
5. And above everything else, the reason that the problem turned global is because, ironically, the risks were spread out among many different institutions who had bought the "tranches". So while distribution of risk is normally a good thing, it backfired this one time specifically because it was so spread out and affected so many different investment institutions.

So sure, defaulting loan customers is the base of the problem, but it's sort of like a snowballing effect: The problem starting the issue is actually not uncontainable, but circumstances happened to amplify (magnify, multiple, whatever term you want to apply) the problem, and instead of having a few mortgages fail and depress some individual areas of hyperfast real estate growth, the problem went all the way up to the base of lending, and those big institutions guaranteeing loans (AIG, Lehman Bros., etc.) got shakey, which forced other banks to dry up credit to other lenders (I'm talking way at the top here, about banks lending to other banks) to protect their own resources. And this ended up affecting everybody.

Have I got that right? Again, layman here, so I don't know how close I am to understanding this, presuming I'm close at all.

 

[odorousrex]

It upsets me that people pick one cause based on their political affiliations or beliefs.

Yes - middle americans going for loans they couldn't afford is a factor. Who wouldn't take a little bit of money extra???
ACORN/Dems also have responsibility, as due the greedy bankers/wall street and even the repubs for their blindness to it and out of control spending.

And now everybody is getting bailed out - again. Except those of us with no debt - who realized we couldn't afford a mortgage and house prices were insane.

We're screwed.

 

[Thunder]

I hate you foreigners who hate America until the last second when they desperately need our help.

I wonder what Europe would look like today if the USA had not stationed troops in Germany during the Cold War.

Can you say "da..Kommrad"???

 

[jhunter1163]

Mrs. Jhunter1163 and I were lucky not to lose our house, not because we were delinquent (we weren't) or bought more house than we could afford (we didn't) but because we couldn't find anyone to refinance our loan, even though we both have 700+ FICO scores.

Irrational exuberance at one end of the bubble, irrational panic at the other.

 

[ElMondoHummus]

Let me add an addendum to my above post: I think I see a fundamental misunderstanding of the problem, but folks better versed in economics can correct me if I'm wrong. Here it goes: My impression is that people are improperly centering blame on subprime loans for this current economic downturn. They're part of the problem, but the reality (as I think I understand it) is that overvaluation and tight reserves among lenders were the magnifying issues here that caused this to become big news instead of obscure financial issues. In other words, subprime defaults would normally not be an issue if the overvaluation (leading towards a contraction of real estate prices) and thin reserves weren't also present.

As I understand it - and again, I'm seeking correction if I'm wrong - the idea of subprime loans is not actually a bad one as long as enough reserves are kept to cover losses. They can actually be beneficial because they can encourage capital growth amongst a class of consumer who normally would be unable to contribute much towards their nation's capital growth. But a snowballing of failures in addition to a contraction of prices in addition to a sudden tightening of credit in addition to a thinning of reserves to cover defaults are what combined to birth a perfect storm of economic crisis.

Do I have this right?

 

[DC]

I hate you foreigners who hate America until the last second when they desperately need our help.

I wonder what Europe would look like today if the USA had not stationed troops in Germany during the Cold War.

Can you say "da..Kommrad"???

first, i dont belive gumboot ment it.

second, i dont belive that it can be blamed on a nation.

making it a national fingerpointing contest is totaly wrong and will not bring a solution, it only helps distracting from the causes.

but its also stupid to bring up some military dominance.
yes it saved our asses some decades ago. but do we have to blindly folow everyting you do now?

 

[ElMondoHummus]

Mrs. Jhunter1163 and I were lucky not to lose our house, not because we were delinquent (we weren't) or bought more house than we could afford (we didn't) but because we couldn't find anyone to refinance our loan, even though we both have 700+ FICO scores.

Irrational exuberance at one end of the bubble, irrational panic at the other.

Do you all have an adjustable rate mortgage? I ended up deciding against one not because I saw this crunch coming, but because I thought "Well, even though I think I'm only going to be in there for 3 years, I can't predict the future, so I'd better take the additional percent of interest just in case". Turned out to be the best damn call I've ever made financially by a huge margin, especially because I was this close (holds two fingers close together) to getting an ARM based on the now defunct assumption that I would be moving in just 3 years.

Saved my own a** big time.

As an off topic aside: Health issues okay now? I'm glad to see you continue to post, man.

 

[linusrichard]

I hate you foreigners who hate America until the last second when they desperately need our help.

I wonder what Europe would look like today if the USA had not stationed troops in Germany during the Cold War.

Can you say "da..Kommrad"???

"Kommrad"?

"Comrade" is an English word, ultimately from Latin. The Russian word is "tovarisch" (Товарищ). Anyway, isn't Gumboot a Kiwi? So would this even apply to him?

 

[slingblade]

Yesterday, we saw a commercial for a car dealership that screamed "Bad credit? No credit? No problem!"

Hubby and I looked at each other, aghast. No problem? Hello?? Why are you begging to loan money to people who have proven to either not have any, or to be poor at handling what they do have? Have you seen the mess we're in today, Mr. Car Salesman?

It's not just the consumers to blame in this.