Originally posted by reasoner

Hi reasoner. First, thank you for the fantastic dialog. This is the kind of thing that gets people discussing the actual problem. Although i don't think I'll have time to respond to each of your responses today, I'll start with this one.

snip .. interesting. Do you really think that or are you just arguing?

I do. I feel that government is the problem and the criminal at this point. That what we are seeing is deliberate by those in power. Actions over the past 20-30 years have gotten us into this mess, and today is no exception. Not particularly caused by one administration or party. Remember, Obama too went along with the No Banker Left Bonusless act and has budgeted v2.0 of it already.

Leverage ratios play a huge party in this mess. Obama COULD be pushing or have pushed in the past for reinstatement of the Glass-Stegall act. Did he? FDR perceived the problem of confidence, and nailed it on the head. FDR treated the cause, not the symptoms. We need transparency in the markets right now, as no one knows what things are worth.

How can you separate spending and providing employment as if they were disparate?

Difference here is that WW2 created tangible goods. Steel, tanks, ammo, guns, airplanes, munitions, shipping, etc. Remolding offices, creating new govt positions, or 1 single bullet train isn't the same. With WW2, we became a huge export nation of said goods to allies, and hence subsequent recovery.

It's also arguable that Hoover came up with the huge spending policies before he left office. FDR had the right idea with bank confidence, however in an effort to 'do something just to do it', he adopted forms of Hoovers spending policies.

space.as discrediting rather than supporting the spend-to-break-the-spiral thesis.

Kicking the can down the road and creating more and more debt does not solve the problem. Japan proved this in the 90's, and had the lost decade. It's also arguable, that FDR's spending prolonged the depression. The economy did try to recovery a few times. FDR implemented taxes and other actions at these times which immediately killed such recovery.

The debt has to be paid for eventually. This is why using a credit card to pay off a maxed credit card never works. FDR had brand new plastic with little debt. Today we have a maxed credit card. We're spending money we do not have, borrowing over 50% from other nations. Bond market dislocation will be the final result and spending will finally be forced to stop. We already have a cup and handle forming in the treasury market.

probably unethical but may not have broken the laws on the books at the time).

Title 12, Sec. 1831o for starters. Selling mortgage backed securities as "AAA" when said mortgages were already in default is a hard sell as being legal.

Is this something you advocate only because it's right and just in your view, or do you think such prosecution would somehow help the economy?

Both reasoner. If you're an investor, and you can see rampant fraud running throughout the economy -- are you going to invest your money in it? What assurances do you have you'll get it back? How many Madoffs are their in the market? Theres no confidence period, and the administration is doing nothing to address said confidence. How about the policy flip flops on a daily basis? Right now you can't invest in the market longer than a day. It's day by day on to the closing bell hinging on what the Government will do/will not do -- so that is where Obama who selected TaxCheat Timmy is to blame.

That's a real question, please do think about it before answering

Great question. I would hope that calls for such hearings would bring the people and government together and address the CAUSE of such mess. Flush out the fraud, and those in government as a part of the fraud it, and enforce the rules.

What this tells us is that if you bought a house in 2006, you should sell it now, even if you have to take a modest loss. Rent for a couple more years, wait for the bottom, and then buy a new house at a price 17% lower than the current market value.

This plan of stabilizing housing prices is just another bank bailout in disguise. Paying "for the deadbeat down the street, or the guy who lost his job" to stay in his home is equivalent to giving money to the banks that made irresponsible loans.

If we let the bubble deflate, and let prices return to 1997 levels, then people will lose their houses, but these same people will be able to buy houses at reasonable levels in a few years time -- especially given the fact that credit ratings, as we know them, would lose most of their meaning.

This "we have to keep American's in their homes" thing isn't the favour that it's made out to be.

This is a lot easier to stomach if you come to terms with the fact that the President works for the Banking system, and so does everybody else.

A partially biased video of Beck's creation, no doubt.

Lets consider real dollars in the dotted line region....

...Where one would be likely thinking in current dollars and not in future 'adjusted for inflation dollars'.

The end of the chart dotted line area implies housing prices dropping back to the 100k$ ('adjusted for inflation' to some unrepresented point of reference) range, where all houses are worth 'the parity value'.

But at the end, one must reconsider the value of that dollar, and that the real dollar purchase of an 'average' 200k$ home, may cost in real dollars around 300k$ or more.


A heavily biased chart for a shamefully obvious politically motivated presentation.








[edit on 26-3-2009 by smirkley]