Is this an economic recession, depression or just a finance crisis? Well the early signs were property prices nose diving. Anybody with a home loan bigger than the sale price of their property really knows what this economic crisis is about. Home foreclosures are soaring. If you have been foreclosed then you probably couldn’t care less about the stock market crisis. People who wish to buy a house or apartment can’t get the money because the banks and savings & loans are in a finance crisis of risk aversion over borrowers defaulting on repayments. Realtors having properties listed for longer and selling for less and they really know what an economic crisis this is too. And so any business or individual in hock beyond their income are seeing the finance crisis up close and personal.
So whose fault is it?
Well it started with all those ‘sub-primers’ so they must have brought the banks and stock market down. I bet they don’t feel themselves to be ‘sub-prime’ though. They took on those home loans through Citigroup and Bank of America in good faith that they would make the repayments. They never intended to default, nor did they want to. Poor personal finance is not yet a crime but we all have to take responsibility for our economic decisions.
So it must be the fault of all those carpet-bagging mortgage dealers? They knew and didn’t care, when pushing buyers to sign the mortgage contracts, that there was small chance of meeting the repayments all through the loan term. Were they blinded by their commissions? Did they cause the finance crisis by pushing those introductory offers? Surely the organization guidelines had to be followed and the risks of default looked at, and the loans guaranteed.
So the banks are at fault for the crisis of finance? It is they who do the foreclosing and they who take the losses by selling assets at a few cents on the dollar while simultaneously charging each other impossible levels of interest for credit. These actions are dragging the crisis of finance out. They are all in the same boat and rowing in opposite directions.
But let’s get personal and blame all the managers at all those banks and Fanny Mae or Freddie Mac. They must have cut the economic risk levels and standards at which loans were made. But how can it be? Surely someone was watching this situation develop.
Is it the hedge fund managers and finance brokers who brought the stock market down? Those city slickers have made up some very complicated, and bewildering finance products. These ‘derivatives’ are all based on securitized assets such as home loans all bundled up together. Our tax dollar bailouts have bought us such things as ‘plain vanilla instruments’, ‘Caps/Floors’, Swaptions, and ‘Commodity Swaps’. It all sounds like pyramid selling Madoff and Ponzi style. Certainly Bear Stearns (remember them?) went too far on this type of speculation.
All those smart guys at the Federal Reserve Commission must hold some responsibility for the economic crisis. Where was their ‘big picture’ view when we needed it? Are they to blame for not holding back the stock market bubble before it burst? Far from cooling things down the ‘Fed’ have kept the price of money way too low for way too long. They’ve pumped up the economy with cheap personal and corporate credit.
The bottom line of this economic crisis is written in bold red and it is that we are ALL at fault for ignoring some economic facts of finance life. We cannot go on living and spending today while paying tomorrow. We have to live within our means. Investment has to be for the long term in real things and speculation for a quick buck is just blowing bubbles.
So whose fault is it?
Well it started with all those ‘sub-primers’ so they must have brought the banks and stock market down. I bet they don’t feel themselves to be ‘sub-prime’ though. They took on those home loans through Citigroup and Bank of America in good faith that they would make the repayments. They never intended to default, nor did they want to. Poor personal finance is not yet a crime but we all have to take responsibility for our economic decisions.
So it must be the fault of all those carpet-bagging mortgage dealers? They knew and didn’t care, when pushing buyers to sign the mortgage contracts, that there was small chance of meeting the repayments all through the loan term. Were they blinded by their commissions? Did they cause the finance crisis by pushing those introductory offers? Surely the organization guidelines had to be followed and the risks of default looked at, and the loans guaranteed.
So the banks are at fault for the crisis of finance? It is they who do the foreclosing and they who take the losses by selling assets at a few cents on the dollar while simultaneously charging each other impossible levels of interest for credit. These actions are dragging the crisis of finance out. They are all in the same boat and rowing in opposite directions.
But let’s get personal and blame all the managers at all those banks and Fanny Mae or Freddie Mac. They must have cut the economic risk levels and standards at which loans were made. But how can it be? Surely someone was watching this situation develop.
Is it the hedge fund managers and finance brokers who brought the stock market down? Those city slickers have made up some very complicated, and bewildering finance products. These ‘derivatives’ are all based on securitized assets such as home loans all bundled up together. Our tax dollar bailouts have bought us such things as ‘plain vanilla instruments’, ‘Caps/Floors’, Swaptions, and ‘Commodity Swaps’. It all sounds like pyramid selling Madoff and Ponzi style. Certainly Bear Stearns (remember them?) went too far on this type of speculation.
All those smart guys at the Federal Reserve Commission must hold some responsibility for the economic crisis. Where was their ‘big picture’ view when we needed it? Are they to blame for not holding back the stock market bubble before it burst? Far from cooling things down the ‘Fed’ have kept the price of money way too low for way too long. They’ve pumped up the economy with cheap personal and corporate credit.
The bottom line of this economic crisis is written in bold red and it is that we are ALL at fault for ignoring some economic facts of finance life. We cannot go on living and spending today while paying tomorrow. We have to live within our means. Investment has to be for the long term in real things and speculation for a quick buck is just blowing bubbles.
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