Occupy Wall Street

[mg_]

I'm just going to cave in to you and Mitch and say that perhaps my views are far too harsh. It's hard for me to step outside my own shoes and see what the normal person sees looking at these situations. I spent years in business school and practice as a professional in the feild. Please don't take this as me being arrogant. It's simply that the way I see things, the questions I would ask, the mistakes I see, may not be what someone else is even aware exists as an issue. Perhaps I significantly over estimate what the average person doesn't know---or isn't even aware that they don't know.

I don't think a lot of people with mortgages are dumb. But when you need an advanced degree in mathematics to figure out how these investments are working, that's unfair. It is categorically unfair. The one thing law makes sense of is you need to comprehend or be able to reasonably comprehend what you're investing in.

The biggest problem that I have right now with people saying "OOOOOOOOOOH, they just asked unethically, not illegally!" is it is patently untrue. We don't know because the SEC doesn't have the man power to investigate what happened. What we do keep finding out is, time and time again, the mortgages this all rested upon were shoddy at best, or non-existent at worst.

Buying a house is viewed, generally, as a lifetime investment. And I'll grant you, America treated it frivolously. Lots of people loved to tune into "Flip this House" and those garbage shows on E!; however, I don't think most people in the U.S. really thought about going out and buying property like that. The law isn't doing what it is supposed to be doing, and that is protecting the right people.

Bank of America, Wells Fargo, Citi Group, etc. all have an advantageous position when making mortgages with people. They have the capital. Responsible lending says you don't give it to bad investments. However, when these same banks are in a high risk/high yield investment banking scheme, then shit gets ugly.

I'm not above caving to the little guy simply because I want him to win. I'm about saying we should stop hosing him simply because X company has way more money and can buy the political swagger to go along with it. I will never look at a group like MoveOn.org or any other special interest group that represents people broadly with the same derision as I do industry. Companies exist by the pure grace of our legal fiction. Have limited liability corporations strictly because it adds efficacy to our business. They don't exist naturally. They're not you or I. What has become a problem over the last 30 years is the awkward contempt Americans have for disinterested government oversight and fear of government mismanagement, but somehow believing the people who work in business will always be right.

It blows my mind when I hear how government "can't do nuthin' right" and then hear about how Business is the Holy Grail.

My mother and father are both pretty business savvy. I'm pretty keen on securities. I should be able to look at where my money goes and figure out how it will make me money. The current system of derivative markets makes it impossible to figure it out. At some point, we'll either fix it or just watch the world burn.






By the way - I'm assuming you're ThatsRight.

[kirk]

By the way - I'm assuming you're ThatsRight.

[squatta_leader]

By the way - I'm assuming you're ThatsRight.

[dane]

This thread is glorious. Misinformation is awesome, keep thinking it was people walking out on their mortgage payments that caused the financial meltdown.

[BrentMusburger]

This thread is glorious. Misinformation is awesome, keep thinking it was people walking out on their mortgage payments that caused the financial meltdown.

I did not solely blame the American public. They are a peice of the puzzle and I don't think there's any denying it. Just like any business or engineering failure, it's never just one or two things that weaken the system and collapse it. It's the combined weight of several factors pushing at the same time that lead to spectacular collapse that was never even envisioned---let alone planned for.

Oh, and I know far more about what caused the financial meltdown than you think. The mortgage crisis is only a symptom of a much larger problem.

http://www.spiegel.de/international/0,1 ... 54,00.html

Does no one see that the tension between the dream and the reality is increasing and that this tension will snap, leading to suffering for millions?

Of course they see it! Investors can see what is happening. They wonder about it and shake their heads. It even scares them a little, sending chills down their spine. But they keep buying dollars as though possessed. The greater their doubts, the more greedily they order dollars. Indeed, that's exactly what is so crazy about these investors and their behavior: The client isn't just a client. He creates the security he's purchasing by the very act of purchasing it. If he were to stop buying dollars tomorrow, suspicion about the currency would spread and insecurity would grow. Then the dream would end. The dollar would start to falter and all the wealth held in dollars would lose its value.

The only way to fight a weak dollar is to strengthen it. Many people no longer care whether the US currency still justifies the faith people seem to have in it. The new game, which amounts to playing with fire, works exactly the other way around: The dollar deserves the faith it gets because otherwise it loses that faith. Dollars are bought so they don't have to be sold. The dollar is strong because that's the only thing that can prevent it from growing weak. Reality is ignored because only by ignoring it can the dream come true. Or, to put it still more clearly: Behaving irrationally has become rational behavior.

The faith investors have in the figure has actually helped create it. After all, the purchasing price of a government bond feeds almost directly into state consumption, just as the purchasing price of a share makes companies more inclined to consume. It also extends the credit basis of millions of private households -- which in turn boosts consumption. In this way, the expectations of investors -- including the expectation that the United States will continue to grow -- transform into certainties almost all by themselves.

In other words, the capital of trust creates the very growth rates it needs in order to justify itself. The rise in consumption isn't based on an expansion of production, a rise in wages or even an increase in exports. To a large extent, it's based on the growing debt. But why do banks keep issuing credit? Because they accept the ever-increasing prices of stocks and real estate as a kind of collateral. A closed circuit of miraculous money minting has been created.


Financial investors aren't tax collectors or accountants: Their job isn't that of a meticulous overseer. They love excess, and they regularly cause markets to overheat. After all, speculation is the business they're in, and being in that business involves living with the risk of going too far. Their professional attitude resembles that of race car drivers whose goal is victory and not avoiding accidents at all costs. What remains unclear is just how dramatic the crash will be. Experts have often forecast the effects of a dollar meltdown. If the downward trend were to begin, the dollar crisis would spread from the world of currencies to the real world of factories, businesses and household accounts within days.

Major and minor private investments yield lower returns. People would start to save, the economy would falter and eventually shrink. The first mass layoffs would arrive soon afterwards. US citizens would have to once more drastically reduce their level of consumption, as unemployment and waves of bankruptcy would shake up the country. Millions of households would become unable to pay back their bank loans. Then real estate prices and share values would begin to drop, having been overpriced for years and used as mortgages for consumer credit. When the real estate bubble bursts, consumption inevitably dwindles even further. The hunger for imports would fade, causing problems for exporting countries as well. It would only be a matter of days before newspapers would once more feature a term that seemed to have disappeared decades ago: world economic crisis.

Steroids for the giant

Last century, the United States already suffered from one deep economic crisis that gradually spread to the rest of the world. The Great Depression lasted 10 years and brought mass unemployment and starvation to the United States.

Today's investors face a difficult choice, one they're not to be envied for. They can see the relative weakness of the US economy and they're registering the tectonic shifts in the world economy. They know that a great statistical effort is being made to prolong the American dream.

The United States is an economic giant on steroids -- doped so its decline in performance doesn't become too apparent.


Weaker than they say

These days, the dollar is making a lot of people uncomfortable. One morning many dollar-owners will wake up and look at the facts about the US economy without their rose-colored glasses -- just as private investors woke up one day and took an unflinching look at the New Economy, only to see companies whose market value couldn't be justified by even the most dramatic of profit increases.

Much the same fate is in store for the dollar and for dollar loans. The United States has sold more security than it has to offer. The expectations traded will turn out to be valueless because they can't be met.

Biologists have observed similar phenomena in plants contaminated by toxins. Before they wither, they produce one last batch of healthy shoots -- to the point that they can hardly be distinguished from healthy plants. Some speak of a panic bloom.

Right now, everyone is watching everyone else closely. Everyone knows the dream of the stable economic superpower has ended, but everyone is keeping his eyes shut just a little longer.

So who will be the first to destroy the dollar illusion? Aren't all investors bound together by an invisible link, since every attack on the key currency would lead to a loss of value for them, perhaps even destroying a large part of their financial assets? Why should the central banks of Japan or Beijing throw their dollars onto the market? What could make US pension funds wilfully destroy their wealth, held in dollars? What sense would it make to send the United States into a deep crisis when that crisis could drag all the other states along?

The underlying motive is the same as the one that once prompted investors to buy dollars -- fear. This time it is fear that someone else may be faster, fear that the dollar's strength won't last, fear that every day spent waiting may be one day too long. It's fear that the herd instinct of global financial markets will set in and overtake those who can't keep up.

The dependence of foreign central banks on the dollar will defer its crash, but it won't prevent it. Today's snowdrift will become tomorrow's avalanche. The masses of snow are already **** at breathtaking speed. The avalanche could happen tomorrow, in a few months or years from now. Much of what people today think is immortal will be buried by the global currency crisis -- perhaps even the leadership role of the United States.

Incidentally, the commission that former US President Bill Clinton created to investigate the negative balance of trade concluded in clear terms that the government has to do whatever it can to put an end to the growing disparity between imports and exports. It demanded that the public give up its optimism and return to realism, that people start saving again and that the state reduce its imports in order to prevent too hard a crash landing.

None of that has been done. In fact, what is being done is the opposite of everything the experts recommended. Debt is growing, imports are increasing and an optimism now lacking every basis in reality has become official state policy. Lester Thurow, a member of Clinton's commission, draws the sober conclusion that no one will believe the US balance of trade could produce a crisis "until it happens."

[dane]

oil at 147$/barrel had a lot to do with it, but hey, let's bail out the banks who caused the crisis by over leveraging themselves in the nymex and OTC commodities market and **** up when they got it wrong, seems like sound business.

[BrentMusburger]

ending the wars in iraq and afghanistan! oh wait...

How could we possibly even suggest to end those wars that have helped secure our freedom?

WASHINGTON (AP) — Defense Secretary Leon Panetta is telling Congress that deeper defense cuts would force the Pentagon to cut back ship and construction projects, furlough civilian workers and leave the military with the smallest force since 1940.

Panetta described the implications if a special congressional supercommittee fails to come up with a deficit-cutting plan by Nov. 23. On top of some $450 billion in defense cuts already under way, the Pentagon would face another $500 billion in reductions.

Can you imagine the horror? How could anyone suggest that we cut back on defense? Don't they support our wonderful troops?

Sure we spend more than China, Russia, France, Japan, Germany, United Kingdom, Brazil, India, Italy, Spain, Australia, Saudi Arabia, Israel, United Arab Emirates, and South Korea COMBINED, but how do we know when we're really safe from these so called "allies"?

Of course this paltry appropriation, just under $750 billion (1000 Million...750 times) for defense excludes the entire department of homeland security, Veteran's affairs funding included in the Department of Veteran Affairs, Foreign military Aid covered in the State Department Budget, the funding for nuclear weapons that's under the department of Energy, and the CIA budget.

http://www.youtube.com/watch?v=A_II0H7X ... re=related

To be honest, I cannot figure out why the domestic economy isn't doing well. If we would finally grow the nerve to slash education, social security, teachers, welfare, unemployment benefits, medicare, infrustructure, and NASA; maybe we could get this ship righted.

[lowcarb]

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[CharlieGiteau]

Quite funny from both sides. I'm surprised the guy didn't end up getting beat up by some hippies who have nothing to do with the protest, but rather pitch tents, not work and smell other peoples' girlfriends feet while they're sleeping(read about that one).

[BrentMusburger]

Quite funny from both sides. I'm surprised the guy didn't end up getting beat up by some hippies who have nothing to do with the protest, but rather pitch tents, not work and smell other peoples' girlfriends feet while they're sleeping(read about that one).

Peter Schiff is a brilliant man. Then, you have some idiot yelling who offers no rational argument. It's not funny to me at all. It's actually sad how ignorant someone like her is. She confuses being loud with being right.

The rich don't pay their fair share? I'm pretty sure the bottom half or so of the income tax bracket doesn't PAY ANYTHING. They TAKE OUT money on net.

"What kind of car do you drive? THEY DON'T EVEN HAVE A CAR. THEY'RE ON FOODSTAMPS"

In what fantasy land is someone entitled to a car? In what country and time was anyone ever entitled to ANYTHING, let alone a car? They should consider themselves lucky to even able to have access to public trasnportation or even a bike. What does it matter what he worked for to be able to drive?

Peter
"I employ 150 people. How many do you employ?"
*Silence*
"I pay more taxes than the entire group of you around me"
*Silence*


Those people don't want fair. They want what is already tilted in their advantage to be tilted even further. As they said, the avg tax rate payed is 17%, well the top bracket pays more than that in most cases 35-50%+. Far above average.

My father makes $100,000 in the midwest--hardly rich. He works from Jan until May as a slave basically (40k taken in taxes). Fair? What about the section 8 people laying on their ass every day soaking up every form of assistance imagineable. Fair?