reply to post by rusethorcain
You're observations align with mine, purely a neat trick to gouge anyone 'stupid' enough to believe you're instrument was was an AAA security -
because you said it was, and the ratings agencies said it was. "Fools!" Ya - that's called fraud.
It was basically a con game - and now the conned have to pay up - and the fraudsters? Well - they get paid - jail? No - no - they own the legal and
political systems - no chance of that.
The idea that foreclosure is 'bullish' for the economy leaves out one significant detail - the obliteration of wealth that was contained in
Most people would have paid a deposit - many had probably paid a significant sums, and had built real equity - in other words they had used their
equity as a savings account.
With the destruction of that value - those savings have disappeared. In the short term that might forcibly stimulate people to spend more, so maybe
you could say its 'bullish' for the economy. However in the longer term - that money that was 'saved' in the mortgage equity is gone forever - it
cannot be spent at a later date, it cannot be found anywhere - its vaporized.
So, is foreclosure bullish - perhaps in a very short time frame - however, in the longer term it means that people will have less money overall - they
might have retired and gone on holidays, bought an RV - or boat - but now those things are gone.
In the short term - there might be increased spending as people have to reorganize their lives to deal with foreclosure - but afterwards - they have
simply lost that extra money that would have been spent into the economy later.
Overall - the housing collapse represents a destruction of personal wealth - declining conditions force lenders to tighten credit, and those once
freely spending will be considering ways to save - once bitten, twice shy.
The logic that it is in general bullish, overlooks the fundamental destruction of a large proportion of consumer wealth - money that can no longer be
spent - ever.
PS: It is also ghoulish to separate the 'economy' from the impact of personal losses.
What is more and more prevalent is the underlying truth being revealed - that the economy is the corporate economy, and the 'slave class' are simply
to be used to energize it.
Even if the economy was growing and doing great - if everyone is living in poverty, then it is nothing to cheer about.
It doesn't matter what the economy does - it is no longer relevant to the working class - corporate profits often reflect goods manufactured by
foreign labor, and sold outside of the nation. What benefit is it to the average person if such corporations make millions?
Investment banks were apparently responsible for 40% of US GDP before 2008, how many people do they employ - and what benefit is that to the average
person? It was a shell game that produced no goods - it was simply the illusion of wealth created by shuffling worthless paper to and fro.
The economy is no longer a useful measure of the average Joe's prosperity - a new measure is needed - one that ignores corporate profit, and focuses
on standard of living.
[edit on 30-11-2009 by Amagnon]