Letters to the Editor
-
Credit Meltdown
Robert Reich's pessimistic analysis of the credit crisis is unfortunately, probably correct. For all the economic data crunched by the Fed, the extent of financial's exposure is unknowable, therefore our economy's resilience to it is also a big question mark- we are in unknown territory now. Any market analyst/pundit/politician who says otherwise is blowing smoke. And I'm not hearing much leadership coming from Washington on either side. Who has heard calls from any presidential candidate for regulation to curb lenders' ability to make shaky loans? It was hedge fund's unholy alliance with lenders to buy, repackage and resell all that subprime debt that brought us to this point. If there is any question where the money went - look at the hedge fund managers.
-
The politics of an economic nightmare
In your article, you said "nobody on Wall Street has any idea how many bad loans are out there." and yet later on you said "But now several million Americans may lose their homes". My question for you is this, does anyone in the US knows exactly how many homes are purchaed using subprime mortgages? If not why not? What are the total values of these mortgages? How many are vulnerable to defaults? How many are speculative purchases? etc etc. Without those numbers, no one, including you, should not speculate how many people will loose their homes, by saying so will create "FEAR" in people's minds, which is exactly what is happening at this moment.
I have not read any real true numbers in the news and it is a sorry state of the banking industry if they can not come up with these number quickly. Because of this lack of information, it creates the turmoil in the credit market.
My personal belief is that, the actual loss due to mortgage crisis is small relative to the size of the US enconomy and should not result in any recession. As Mr. Greenspan pointed in a recent article, the crisis will play out when all the backlog of new houses are sold. There is no need for any action by the government with regard to the credit crisis. Just let the bankrupt banks be absorpt by the others to clean up the mess.
This whole mess is created due to lack of information and people speculate resulting FEAR in the market. All the economic fundamental(employment rate, inflation, growth and interest rate) are sound in all developed and developing countries.
jack tom
-
Wall Street Fears
I admit this came from "A Daily Show." but he was showing clips of actual financial news programs.
Ummmm .... Wall Street denizens fear a Democrat in the White House more than they fear another terrorist attack.
After the clown we've had running the show this decade? After Enron, Tyco and all the other implosions? After the housing bubble and the sub-prime loan crappola? And after the crazy week we had, which is creating consensus that we're headed for a Depression, not just a recession? A Democrat in the White House is what wakes them in a cold sweat?
Now I know what scares me: Wall Street denizens.
-
The American dream has turned into a nightmare
For decades folks have been chasing the so-called American Dream: a house with a front lawn and a backyard, a car in the garage/drive way, vacations, knick knacks and appliances. The dreaming kicked in big-time after the end of the Second World War, but take a look at the ads in old issues of the National Geographic and you'll see that The Faithful Consumer was already being created in the late 1920s - before the most recent severe depression. But thankgod for Germany and Japan: the war brought America out of the depression due to the huge amount of manufacturing taking place and when it was over the parents of the baby boomers became the new consumers, always trying to keep up with the neighbors.
The middle class became larger which meant even more loyal consumers. Buy buy buy! was the constant mantra from Madison Avenue and Washington and people followed the Pied Piper. Yet no one seemed to be happy despite all their stuff. Women felt trapped, the men were clueless modern hunters and gatherers, divorces became more and more common, kids felt alienated. These kids grew a little older and got all hip for a while until they married, got jobs and became part of the problem. Their kids ended up becoming even bigger consumers than their parents. The idea of paying with cash was seen as masochistic and outdated - credit was the way to get the things that you wanted even if they didn't make you happy. Booze, drugs, sex and shopping: none of it seemed to help.
Watergate had destroyed the public's trust in the presidency and in politics for good. The Vietnam War became a nightmare. The oil crisis hit in 1973 but folks kept driving gas guzzlers. The worse things got, the more people self-medicated. The Reagan Years aka the Greedy Years set the stage for McMansions and SUVs. The 1990s brought us Lewinsky Gate and even more distrust and disgust with the Presidency and politicians. Then in 2000 came the Current Occupant (to quote Garrison Keillor) in the White House and things started going to Hell in a handbasket. Then 911, "the War on Terror", an invasion and occupation of a country which, hmmm, just happens to have oil galore.
Now folks were really miserable and angry, but they had bills to pay and shopping to do and jobs to drag themselves to every morning - it was easier to sit down at night and watch TV or read celeb gossip.
Folks with no credit or poor credit and little or no money were told they could buy houses like previous generations - except the prices had skyrocketed and wages had stagnated. But the American Dream was still alive and strong and so folks didn't bother and maybe also weren't told to read the small print and bought a house. Soon they started borrowing to make ends meet - anything to hold on to the Dream. Blacks and Latinos wanted in on the Dream too after years of seeing Whites getting ahead - they were heavily targeted by the "loan sharks". Buy buy buy!
Thus many factors are at play as to why we are in the current mess. Elected officials, bankers, credit card companies, Wall Street, Madison Avenue all had a hand in it. And personal responsibility and restraint? That went out the window long ago - the Dream was more important. A mixture of human greed and vanity coupled with some clever people taking advantage of those made for a time bomb which is now about to blow up.
We have been "exporting" the American Dream for years now: many countries in Asia are now even more consumer driven than the US and China and India are following suit. The world cannot sustain more societies of the American Dream variety with single family houses, cars, a lawn, and loads of stuff in every room and in the garage and the extras in self-storage.
And the poor? White, Black, Latino, Asian: they have been forgotten: on welfare, in jail, or part of a huge immigrant neo-slave class.
The top 1 % aka the very rich? They will do well for a while, but since everything is ultimately connected on this lovely Planet, they will eventually run out of luck and money.