Big Slap in the Face for Free Markets
I'm looking at this economic situation from a different perspective. I have intimate exposure to the real estate, stock, and mortgage markets through the Fairway Preserve case. What I see is a breakdown in morals.
1) The condo/real estate market was artificially inflated. Everyone was propagandized into believing that real estate has no downside.
2) Mortgages were made available without regard to the ability to pay
3) CYA replaced accountability (This is the key element - as there is no one who takes responsibility, not the lender, not the borrower, not the financial advisor, not me, not you, and not the mailman.
There is no amount of money that will cure the problem until there is a recognition that rules and common sense have to be a criterion. Just yesterday in the height to the hullabaloo a client sold her home and produced a contract wherein the purchaser - a Nigerian immigrant - had a mortgage contingency of 99.6 % of the purchase price. Purchase price $350,000.00 mortgage $349,000.00. Naturally I read the newspapers and know that it is impossible to get a mortgage with good credit and 20% down. Right! The Nigerian got the loan. What do you want to bet that he will default on the loan in the first six months!
Who bears the responsibility! Look in the mirror. Our elective representatives are going to toss a trillion dollars at the problem so that the financial institutions can engage incompetents to ruin their businesses and reap zillion dollar compensation for cultivating and nurturing the culture where the Chief Operation Officer of the company does not have clue as to the operation of the business and gets paid for reducing a billion dollar going enterprise to a stagnant million dollar operation on the verge of Bankruptcy. We are going to affirm the judgment of the elective representations in bankrupting theUSA
As they say = the ' coupe' de grace is that we will not learn from the disaster until it is too late. Unfortunately I have no solutions. I am as much in the dark as every other idiot. I do not see a need to 'jump' at a solution for solution sake. If the investors panic, they will lose their money - so be it! I frankly do not care if the presidential candidates are hurt politically by the crisis or not. All I know is one of the candidates thought it is more important to campaign for the office of president than to do the job that he was elected to do. That is exactly the attitude that is one of the 'root causes' of this problem.
The 'high holidays' are on the horizon. This may be the year to really and honestly pray for the deliverance of our beloved country. Our chickens are coming home to roast.
1) The condo/real estate market was artificially inflated. Everyone was propagandized into believing that real estate has no downside.
2) Mortgages were made available without regard to the ability to pay
3) CYA replaced accountability (This is the key element - as there is no one who takes responsibility, not the lender, not the borrower, not the financial advisor, not me, not you, and not the mailman.
There is no amount of money that will cure the problem until there is a recognition that rules and common sense have to be a criterion. Just yesterday in the height to the hullabaloo a client sold her home and produced a contract wherein the purchaser - a Nigerian immigrant - had a mortgage contingency of 99.6 % of the purchase price. Purchase price $350,000.00 mortgage $349,000.00. Naturally I read the newspapers and know that it is impossible to get a mortgage with good credit and 20% down. Right! The Nigerian got the loan. What do you want to bet that he will default on the loan in the first six months!
Who bears the responsibility! Look in the mirror. Our elective representatives are going to toss a trillion dollars at the problem so that the financial institutions can engage incompetents to ruin their businesses and reap zillion dollar compensation for cultivating and nurturing the culture where the Chief Operation Officer of the company does not have clue as to the operation of the business and gets paid for reducing a billion dollar going enterprise to a stagnant million dollar operation on the verge of Bankruptcy. We are going to affirm the judgment of the elective representations in bankrupting the
As they say = the ' coupe' de grace is that we will not learn from the disaster until it is too late. Unfortunately I have no solutions. I am as much in the dark as every other idiot. I do not see a need to 'jump' at a solution for solution sake. If the investors panic, they will lose their money - so be it! I frankly do not care if the presidential candidates are hurt politically by the crisis or not. All I know is one of the candidates thought it is more important to campaign for the office of president than to do the job that he was elected to do. That is exactly the attitude that is one of the 'root causes' of this problem.
The 'high holidays' are on the horizon. This may be the year to really and honestly pray for the deliverance of our beloved country. Our chickens are coming home to roast.
You can't possibly have hidden yourself from the news of the $700-billion planned bailout that's working through Congress this week. And I won't mince words — I consider it a big slap in the face for the free market system.
Henry Paulson repeated over and over again exactly how agitated, disgusted, annoyed, infuriated, angered, embarrassed, and irritated he felt about asking for this amount of money, or any money at all. Sounds sincere if you stop it right there.
But apparently those feelings weren't enough to reinvigorate his free-market spirit, abolish potential bailout plans, do away with unnecessary regulation and let those who deserve to suffer, suffer.
How Free Markets Are SUPPOSED to Work...
Availability of credit allows money to flow between savers and borrowers.
Resources and funds are allocated to various projects or investments during a boom phase.
Eventually borrowing becomes excessive and leads to mal-investment, thanks to the suppression of the real rate of interest by our illustrious Federal Reserve Banking system.
At this stage, adherence to free market theory would allow for an efficient cleansing period and a healthy recovery period. How? Irresponsible and unprofitable businesses fail. Bad debts get liquidated. Excess resources go on sale, flow into more stable ventures and pool together with more profitable resources controlled by healthy corporations or entities.
Sure, pain is felt by certain parties who can't keep things going. But the moving parts become more efficient and stronger. Healthier, more efficient businesses emerge.
As the Austrian School
That's important, because thanks to the massive manufacturing and sale of derivatives, there has never been a boom supported to such a large degree by thin air. And since the laws of gravity haven't been outlawed yet, what goes up must come down.
I'm against the $85,000,000,000.00 bailout of AIG.
Makes sense to me. The problem is that if something so sensible were to be done, the people who got us into the mess would lose control. No more paying great sums of money for screwing up a company, no more creating jobs so relatives can mess up our lives like they did their own. We would not need either Obama or McCain to lecture us on how they are going to make our lives better, nor Joe Biden to tell us how Roosevelt after the 1929 stock market crash immediately got on television to reassure us. (Hoover Columbia
Hear as much of the 'debate' as I could stand. God help us! McCain is going to love us to death, and Obama kill us with one liners. It is no wonder that the world is laughing at us. However while the laugh they envy our lives - only theHollywood types profess to want to live in another country
Hear as much of the 'debate' as I could stand. God help us! McCain is going to love us to death, and Obama kill us with one liners. It is no wonder that the world is laughing at us. However while the laugh they envy our lives - only the
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