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Financial Crises - a rant

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wormwoodathletics

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So the US is going to shit in a major way and the Govt has refused to bail out the greedy fucks of organisations that are in part responsible for allowing it to happen - the majority of the blame has to reside of course with the idiots who borrowed WAY above their means. Especially in the US where foreclosure is the easy option in a system basically unregulated for all intents and purposes. I also quietly chuckle to myself about all these people in a blind panic about the share market collapsing, because my philosophy is: never invest in something that relies completely on human confidence. If you've got the spare cash (and I mean spare i.e. have other money safe elsewhere) then speculate on the market. Otherwise I reckon you're already gambling your superannuation with these idiots so why give them more money?

Anyhoo, all sorts of statements are being thrown around here in the merry old land of Oz. Rhe one that pisses me off the most came up tonight from one of the Macquarie Bank dickheads, saying that the Reserve Bank should slash interest rates. This fucks me right off because I saw this storm coming when we had rate increases last year and the sub-prime rumblings started to make themselves known. I fixed my interest at a fairly good rate for a few years on the majority of our loan. Now, because there are millions of dickheads out there who borrowed above their means, I have to pay? Get fucked! People wanted the big house/car/tv when capitalism was sucking their sausage and now they're getting bent over with no KY or a reach-around they want to be socialists and get the Reserve Bank to lower their grief.

What also pisses me off is the CEOs of these companies - and the boards of directors and all the other senior people responsible - are going to walk away from this with a shitload of dosh despite them knowing it was all poor policy. The US government has a bailout plan and while I don't 100% agree with governments shoring up private enterprise in this way, I can see their point; no need for another 1987. Also, if it keeps people in the housing market so they can face up to their responsibilities over there, it will help us stay stable here so that we DON'T have interest rate cuts and we can learn to deal with the issue instead of having lower rates let a few people off the hook to get another credit card, or another lease/personal loan etc.

I hope the banks here tighten their shit right up on the lending front and prepare their shareholders for a few lean years so that we can adjust our ridiculous real estate market and, in a sense, hit the "reset" button. That way we all win.

Rant over.

This was a very interesting "rant"...It's good to have a good opinion but it does sound a bit like it's based on what you've been told by the media. The issue is much deeper that people simply borrowing more than they could afford...much much deeper. If it were that simple then we wouldn't have a crisis. I'll leave you with one tidbit of info. Did you know that the so called sub prime foreclosure crisis in the US is base on only 10% of sub prime loans? Yes.... 90 % of the people that you're criticizing are actually paying their mortgages. So ask yourself, can 10% of a market devastate and ruin the other 90%?... The media is focusing on the 10% and using it as a scape goat for the bigger problems... As I said... it's a much deeper issue...look behind the propaganda and maybe you'll rant a different tune.
 

Joe Mac

Arch Winning (36)
The politicians were more to blame than the bankers. They know they can shift all the blame to the bankers because the bankers are an easy target and the bankers don't care what the public thinks of them.

In reality, the bankers creating the products weren't the ones issuing the sub-prime loans. The US system is very different to ours. They were done by mortgage broking businesses which are largely unregulated and S&L banks (savings and loans). These guys knew they could sell on the mortgage to the investment banks and did not care if the people they were issuing the mortgage to could pay it back.

The investment bankers dealing with the structuring had no say in the creditworthiness of the mortgages. It's not part of their job to check this. They expect the companies issuing them originally were doing their own due diligence. This is how it has been done since the early 80's so you cant exactly blame to 25 year old kid structuring the product for the quality of loans issued by another company.

3 or 4 times this went to parliament, to create more regulation but due to the lobbying of these dodgy mortgage brokers, the politicians chose to ignore the need for tighter regulation. By the height of the crisis, you had guys straight out of jail issuing 100's of millions of dollars worth of debt...

The other thing that annoys me is the people, who knew they couldn't afford to pay their mortgages take no personal responsibility for their actions and get on the bank bashing wagon as well! They are the real villains here.

Im not saying the investment banks are blameless but in reality, they were just doing their job. The problems originated down the line long before they got the mortgages to package.

Enough with the bank bashing. Banks are on the pinnacle of capitalism which means people make their money as a percentage of how much money they make for the company. (employees- not the execs) We should applaud the highest paid people in society. They are obviously very good at what they do and should be role models to what we can achieve in life, just like top flight athletes.
 

Jnor

Peter Fenwicke (45)
I agree that the politicians had a pretty big share of the blame here through their own instinct for self-preservation, and I also agree that the idiots who sign up to shithouse mortgages and loans without reading the fine print are to blame as well.

But, and it's a big but (so to speak), the average person has no real idea what these things mean for them and the banks know this and exploit this by deliberately being obtuse and indirect in the wording of contracts etc. Bankers make a lot of money, they are good at their jobs; good luck to them.

Don't you have a problem with lauding people who use a system that exploits those with the least wherewithal to see past the bullshit simply to make the biggest and quickest personal gain?

Yes, they may just 'use the system' to their best advantage, but that doesn't make what they were (and are) doing right or admirable.
 
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