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Not sure if he should open a psychic-hotline or if he's just paranoid. ****, it's probably a bit of both. But even if half of what he speaks about comes true I don't think all of us combined will have enough food/water/ammo. Besides, if the state really turned on the people it sure will hard to hide from predator drones...Originally Posted by NWPilgrim
-d
When you put it that way it make me think, why would anyone invest their money into this type of system! Its like investing all your money in baseball cards hoping you get that rookie card that worth thousands! Once you invest all your money you have no idea what the outcome will be
I know there is more to it than that, but I am not involved in stocks other than whatever my 401k is enrolled in
Speaking of hard to hide from the drones. Won't take much to turn this on American citizens...
http://www.cnn.com/2010/US/03/12/bor...ex.html?hpt=C2
-d
Skynet?
Bkb has it right. A huge portion of the value of the market never existed.
When the market dropped by (an average of) 30%, it came closer to reflecting reality is all.
This all started when the huge Government Sponsored Entities (GSEs) Fannie and Freddie started bundling worthless loans and selling them as "Mortgage Backed Securities."(MBS)
Now, in principle there is nothing really wrong with MBSs, as long as banks are allowed to operate in their own best interest.
But the Gov, in all it's infinite wisdom, decided that banks needed to loan more money to people that were not qualified (read:the poor and under privileged). Some even engaged in what are known as NINJa loans. That is, the borrowers had No Income/No Job.
Why did the banks start making these loans?
Because the Gov said they had to, under the Community Reinvestment Act.
But they were also told not to worry about it because the huge GSEs Fannie and Freddie would buy those loan contracts from the banks. Fannie and Freddie lowered their standards at the direction of the Clinton Admin and Congress.
You see, when a bank loans money to buy a house, they rarely hold on to that loan's paper (contract). They sell it, based on it's value. For years Freddie and Fannie wouldn't buy a loan from a bank if the borrower had an insufficient credit rating. But the CRA changed all that under Clinton.
He and those he appointed to run Fannie and Freddie, decided that more poor people, especially in inner cities, should be able to buy a house, even if it meant they paid higher interest rates. The American dream. So banks in general, and the GSEs began to bundle these "iffy" loans with other loans and sell them on the market as MBSs. In truth, these "Mortgage Backed Securities" were anything BUT SECURE!
As the market heated up, and housing started to sell faster (think "flip this house") and for bigger and bigger buck$, the MBSs were being traded fast and furiously. It was a seller's market. And the higher the risk involved in the loan the bigger the return, due to lower credit rating borrowers paying higher interest rates.
At one point the GSEs were running on a leverage to asset ratio of nearly 400:1. That is 400 dollars worth of "paper money" in the form of interest paying loans, for every "real" dollar they had on the books. It was about this time that various members of the Bush admin tried to warn Congress that things were overheated and the GSE's needed to be reigned in. They were ignored and even ridiculed by Congressional members like Barney Frank and Chris Dodd.
Then in 2007 Fannie and Freddie's leadership, the CFO, CEO, Financial Secretary etc. were called on the carpet, and lost their jobs due to taking huge risks with YOUR money (remember these are Government Sponsored [backed] Entities) and taking huge salaries for the high volume of trades they oversaw.
Then in 2008 the price of oil went through the roof and many homeowners were being severely squeezed (because they had borrowed to the hilt thinking the value of their homes would continue to rise and they'd roll it over and make $$$). So at this point many borrowers decided it was time to sell, even if early in their plan, and the volume of houses for sale skyrocketed.
In the buyer's market that ensued, prices plummeted.
Whenever the market for any thing is saturated the price goes down. This was unthinkable. The value of real estate had always gone up, never down in modern history (other than a few micro-markets).
Suddenly those MBSs were no longer secure (remember they are were bundled and sold as securities, much like stocks and bonds). This caused the house of cards to begin to crumble. The banks holding the largest percentage of MBSs, like Lehman, were suddenly sitting on a bunch of worthless paper. The borrowers of that money found themselves owing $250,000 on a house that was only worth $185-200,000, and they refused to pay and walked away from the house, the loan and the whole shebang. (this is what is meant by the term underwater, or upside down on a loan)
So now much of the MBSs were not only "iffy" they were junk. Unfortunately it wasn't just banks that bought these MBSs. Retirement fund plans, and other financial sectors were heavily invested in these.
So that is where "the money that never was" went. It didn't exist. EVER! It was all a hoax perpetrated by the people that scream the loudest about deregulation.
If the banks had been allowed to maintain their standards for borrowers this never would have happened.
I think 'staving off the problem' is what they did do, by throwing cash at the symptoms, rather than address the underlying issues. So we're left with a bigger problem that's going to hurt way more when it does finally come home to well and truly roost.
MrB
Drones already over the US...computers already profiling all emails, financinal records...cell phones givng web/sound and location in real time by merely logging on to Nextels website....
What we have going is that to make $ in this country, and that's what it's about, you need business and free enterprise.....it's the only real enconomic engine that works....
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