My Thoughts On The Global Meltdown (blame the banks and the internet!)

Their are a lot of predatory lending practices going on. This is what brought down the banks, even among themselves they packaged bad debts and were ripping one another off. Americans are sick and tired of it, many have refused to pay debts, refused to pay loans, stopped paying on their homes even. Remember this was picking up right around the time when they first started quickly making changes to the bankruptcy code and people lined up and ran to file bankruptcy to get in on it before it was too late! Banks are constantly taking advantage of consumers. High interest rates that practically double their overall amount paid back. If you don't pay on your car and have paid in and built up equity for 2-3 years and they repo it, you do not get that equity back. The same goes with a foreclosed house, they do not give you the equity you paid into it back. They keep the equity and turn around and sell it for the max they can get and if it comes short you take a hit to your credit for the difference! Even apartments, break the lease early and they charge you for the rest of the contract on your credit report, even if they rent the place out during the period! It's hard to fight things like that off your credit! This is very predatory, people don't care anymore, they are tired of it.

People are not buying things, there is a lack of interest in consumer items for sale. Many people already have what they want. Many things are now free on the internet through piracy like movies, music, information, entertainment, pornography, social interaction. These are all things that typically would drive people out their homes into malls or businesses to get. Once in malls they'd buy other things. I've had endless conversations with people since 2000 that have said they've stopped buying music. People don't buy movies anymore, they download them or they rent them and rip them. Even television shows, instead of buying HBO people are watching their favorite shows online or for free. There has been a dramatic change in consumerism behaviors and businesses have yet to catch up! There is a new consumer mentality, I am not saying it's good or bad, I'm just saying businesses are hurting. People who use to get out little before are getting out even less! All around the same time of the internet explosion!

Where has all this excess money been going then? FOOD and DRINKS. Yes folks are getting fatter. They are buying more smaller cheaper items. If you look in the past 10-20 years you will see an explosion in restaraunts. When you drive down the roads it's like wall to wall restaraunts as if all people have any desire for is eating! They all stay in business too! Even convenience stores across the street from convenience stores with full parking lots. WHY? Because people love their drinks, coffee, snacks, etc.

So combine new consumer behaviors, lack of respect for banks and debt, with people getting out less, and you got businesses losing money left and right. Layoffs. More people out of work equals even more people not going out spending money. MORE LAYOFFS follow. This snowballs into more layoffs. Eventually we get to a point where people are afraid to spend money if they do have a job. MORE LAYOFFS. So what does the government do? It infuses some capital into the system and spends! IT NEEDS PEOPLE TO HAVE JOBS, so it can get taxes. Some are also saying that the only reason we went through the Great Depression as long as we did was because the government didn't spend enough money fast enough to jumpstart the economy. So here we are and they are doing just that to spend our way out of another Great Depression.

It however never gets to the heart of the issue. Americans are tired of what the wall to wall fast food joints have done to us. We are tired of predatory bank lending practices and no protection! We are tired of having no control to truly fight things posted on our credit! We are tired of corporations abusing us!

In all seriousness folks, think about when you first discovered the internet and really spent a lot of time on it and how it changed your life. Before the internet I never readed as much! I never spent as much time on a computer when the connections were slow and the storage capacity was low. I played the occasional computer game but I had other systems to play games if wanted. The internet really wasn't even all that useful until it became more widespread in offices and schools for free. You had slow internet and suddenly the boom happened with fast internet at slow internet prices! If you can't afford it, you can always go to a library! I've been to a library and the waits are usually long to get on a computer. College campuses are flooded with people on the internet. Some college campuses have at least 3-5+ computer centers where you can get on the internet! Free wifi in certain places mean a dramatic influx of users.

Seriously, have you ever noticed anything more entertaining in your life than the internet? Many people don't even watch television anymore. I have a friend who doesn't even own a television because he has the internet and doesn't need it! Who needs a radio when you can listen to whatever you want instantly on the internet. Just search a song on youtube or elsewhere. Online games are very addictive, I've spent years playing them until I finally gave it up.

The internet has changed my life so dramatically, in many ways for the worse but it's changed who I am, my spending patterns, where I go and how I think dramatically!

People that use to buy a newspaper now can get their news on the internet much faster and sorted with the most interesting topics by category. If you really break down how it's changed people's habits, you'd be shocked!

[edit on 30-10-2009 by Colopatiron]

Me personally, I don't want any loans especially for money to buy expensive things that I don't really need...even if that 60inch plasma tv would look great in my living room, or that new lexus I series ect ect. The banks just prayed on the weak minded and the people with a false sense of security, thats why you would see $50,000 car in the driveways of $100,000 homes and the families household income was maybe 75k at best maybe even lower, but then...bam! ARM rate increased and you know the rest.

It's not *just* predatory lending practices. You couldn't do that without willing victims. The US has a culture of get it now and pay it off later, which is dangerous. Most of our economy was based on future payments of debts. That's imaginary money.

What often happens is that some lender who has lots of loans out (people owing them money) then tries to borrow money for its own business. It uses its outstanding loans as "collateral". We've got tons of money, all those people are going to pay off their loans, we'll have plenty of money to pay you back. So they get the loan. And so on. If all goes well, the people pay their loans back, the lender pays its loans back, and everyone lives happily ever after.

Unfortunately, in life, seldom does all go well. There are always snags and unforeseen problems, unexpected job losses, unexpected expenses, and so on. When lots of people can't pay back their loans, the lenders get into trouble. Then they can't pay back *their* loans, and the companies that lent the lenders the money can't pay back *their* loans, and so on. Everyone's waiting to get paid back for money they lent out, but no one has any money, so we're all screwed.

To compound matters, we've got a complex and fictitious system of stocks, bonds, and other such transactions. You buy a stock, hope it goes up, and if it does, great. Sell, get out, and take your money. Individuals can become quite wealthy doing that. Unfortunately, many, many people are using the stock market as a sort of "retirement fund", hoping that the money they invest will grow more quickly than it would in a safer instrument. That's great. It usually does. People invest in X fund. They tell their friends that the value of the stock went up, so others invest, which drives the price up even further. Great! Everyone's rich!! When many people all buy a stock within a short time, the price tends to go up.

Except, what's going to happen is, everyone's going to retire and try to cash out their money within a short period of time. When many people try to sell their stock within a short time, the price plummets. Again, the large amount of money that seems to exist in the stock market is imaginary. It's fine on paper, but when everyone wants to cash in, the value drops and suddenly it's almost worthless. That's mainly because the value was always imaginary, not based on the actual worth of a product or service, but on the eagerness of others to buy it.

Don't blame the Internet for the meltdown. It's greedy people trying to get something for nothing, and being sadly disappointed when it doesn't happen. A few get rich. The rest wind up giving those people their retirement funds.

I agree.

Nobody forced these STUPID GREEDY PEOPLE to take out these loans.

You reap what you sow.

And it is now almost harvest time.

reply to post by Silver Shadow


Stupid maybe, but not always greedy. A lot of people bought these option ARM loans because they thought it was a way to home ownership. House prices were rocketing and they were sold on the promise that they could refinance in a few years using the increased equity to get better terms. The brokers KNEW these people could never support a 'normal' loan payment on their income - anything above 36% DTI (debt to income) is unsustainable - but they didn't care because they got their commission on each loan they wrote. The banks KNEW the same thing but they didn't care either because they bundled all those loans and sold them off to investors as mortgage backed *cough* securities. The investors didn't care because they bought credit default swaps on the *haha* securities. All along the way there were HUGE profits made by the brokers, bankers and investors. Until it all blew up.

But the average homeowner never wanted anything more than an affordable home.

Like all money making schemes it was the greedy preying on the needy, and the bankers are NEVER the needy.