A Public Apology To The American Economy

[sam fisher]

I used to like to point out the Pound was extremely strong compared to the Dollar. However, thanks to the fact that 90% of our countries money seemed to be in Iceland (or something like this) the Pound is worth a measily 1.59 Dollars. This is leading to me having to pay more for things, buying less and hence the entire enonomy collapsing.

Now a question. Who is to blame for the credit crunch as I wish to go complain to them.

 

[Squidge]

I'd say a large part of it is banks lending money to people who can't afford to pay it back. I remember not too long ago that banks were offering 125% mortgages on property, which was fine until property value came down, interest rates when up and then the people who borrowed the money couldn't afford the repayments. Bank takes back the house, but only got 70% of the money back.

The rest has been delved into quite nicely by the news.

 

[sam fisher]

I'd say a large part of it is banks lending money to people who can't afford to pay it back. I remember not too long ago that banks were offering 125% mortgages on property, which was fine until property value came down, interest rates when up and then the people who borrowed the money couldn't afford the repayments. Bank takes back the house, but only got 70% of the money back.

The rest has been delved into quite nicely by the news.

Us students.... we're good for it.... honest! :unsure:

 

[peelie]

people seem to have short memories, this present crisis and past ones (albeit not in western countries) are all part of the nature of the beast (capitalism) you want to have peace of mind - kill the beast

/edit/ hmm not sure what happened there wanted to reply to this thread http://www.gp32x.de/board/index.php?showtopic=44953

mods please join to above thread, thanks

 

[pcklee123]

Us students.... we're good for it.... honest! :unsure:

It was not that difficult to convince bankers to lend you money. That's because people are greedy. The more money a bank lends, the bigger the potential profit. If I were a bank manager/president/CEO, the larger the loan/no.of loans, the larger my bonus. Even if people don't pay back, It would still be be profitable to me, cause by taking back the house, I would suddenly increase the banks asset (As long as I don't sell it at 70% of the price, it would still be on records as worth 125% of what it was mortgaged for-maybe even more - since it is a well known "fact" that the price on average always increases) which would also lead to a bigger bonus for me as well. There are also other things which increases my bonus e.g. convincing customers to buy investment linked deposits etc.. So just for a very small gain(in terms of the amount the bank handles) in my performance bonus (which I don't need since my salary is huge anyway) , I encourage these fake practices. If you think about it, there is no difference, in principle, between the financial scandal and the melamine scandal.
In both cases, stuff is added/done which should not be there/done in the 1st place to make small gains. Futhermore the dangers are not recognised by the industry. Even when the danger is recognised, the governmental authorities help the perpetrators instead of punishing them.

 

[quasist]

I wish someone just could load the game and build more tanks...

 

[Pickle]

people seem to have short memories, this present crisis and past ones (albeit not in western countries) are all part of the nature of the beast (capitalism) you want to have peace of mind - kill the beast

Great idea! we can all take on socialism and all be poor, so if something bad happens we dont have anything to lose since we dont have anything in the first place.
If capitalism had been followed the people getting the loans shouldnt have gotten them in the first place. Instead we had fannie and freddie handing them out like candy.

Squidges comments hit on the problem pretty well. People that couldnt pay back the loans they were given when the interest rates rose. Now theres a lack of cash in the system so large institutions are liquidifying thier assets in the market causing the drop in price.
Things should start to go back up, here in the US foreclosers are starting to slow down.

 

[nickspoon]

If capitalism had been followed the people getting the loans shouldnt have gotten them in the first place. Instead we had fannie and freddie handing them out like candy.

Actually, the decision (whilst incredibly short-sighted and stupid) was based on the fundamentals of capitalism. The banks wanted to make more money; the more loans banks give out, the more money they make. The mistake here was to assume that the housing bubble would continue to rise. When it burst, the banks had no means of recouping their losses. According to capitalism, then, all the banks now going bankrupt should be left to die, which will obviously mean that millions of people lose their savings, trust in the value of the currency of that country falls, the stock markets collapse and people lose their jobs. Not a good situation.

 

[daclassicgamingmaster]

We need to bail out more institutions like AIG so employees can have huge vacation bashes and go snorkeling in Aruba.

We need more regulation, one way or another. Then this won't be happening.

 

[peelie]

If capitalism had been followed the people getting the loans shouldnt have gotten them in the first place. Instead we had fannie and freddie handing them out like candy.

Actually, the decision (whilst incredibly short-sighted and stupid) was based on the fundamentals of capitalism. The banks wanted to make more money; the more loans banks give out, the more money they make.


yes and it is not us who will be paying but our children - future taxpayers

this has to be one of the biggest transfers of wealth from the majority to the minority whichever way you look at it;

interesting to note that when the great depression happened some people described the 'New Deal' as having fascist characteristics in contrast to what some people describe the action of states in this crisis i.e. having elements of socialism

more of that interesting historical tidbit here in chomsky interview
http://www.bbc.co.uk/worldservice/programm...interview.shtml

 

[closetwam]

Blame the banks, blame all the entire credit industry. Blame ourselves for wanting to buy everything now and pay for it later. Blame ourselves for living outside our means. Don't bother blaming the government. We vote them in with our words. But words are cheap. The vote that really counts is the one you make with money.

 

[nickspoon]

The vote that really counts is the one you make with money.

What is money but words given value?

 

[pcklee123]

If I tell my retired parents that I will invest their money for them. They give it to me willingly. I gamble it and lose it all. Whose fault is it?
That I will loose the money gambling is not surprising. How would the casinos survive otherwise.
That the housing bubble would burst is not surprising it burst in Asia just a few years ago.

 

[TaG]

Blame the banks, blame all the entire credit industry. Blame ourselves for wanting to buy everything now and pay for it later. Blame ourselves for living outside our means.

That the housing bubble would burst is not surprising it burst in Asia just a few years ago.

That pretty much sums it up.

I think the UK could suffer particularly badly because:

• average personal debt is massive, so retail etc could be severely hit;
• many have borrowed against their houses and spent the proceeds, now house prices are falling and they can't borrow more;
• we don't make anything - the economy is based on financial services and retail, both of which are screwed.

 

[namco]

Personally, being a UK resident, the banks *should* die. They've called the shots for far too long. I'm sick of having to pay overbloated charges on direct debits and overdrafts. The problem is that the banks aren't learning much since they are trying to press the government for a better deal (there was a headline in The Guardian last week but I can't find it). Even so Barclays, reportly, spent ~1bn on some new logo - clever move.... :angry:

So, what do we have to look forward to next??

QUOTE

Don't bother blaming the government.



Yeah, since anyone who you* vote in fucks something up. Not that I'm saying its entirely your fault.

*I've never voted in 10 years. Why?? So I can't be held responsible for voting in some lying POS MP. Yeah, I'm hearing the usual bollocks now:

You haven't voted therefore you have no say:

The sheer irony is that neither have you anymore. Want to demonstrate?? Not outside Parliament you can't (Thanks to big ears showboat T.Blair) - a right you voters had. You can't even challenge politicians anymore - there's a case where one protester was put on anti-terrorism charges for doing so. So as you can see, your voting rights are being stripped by the moron's in power.

Your non-vote will go to someone else:

Pure bull! - where is the evidence??
The reason why this is suggested is that parties get power by being voted in. If more people don't vote, that means they have no electoral power (a scary thought for any politician). I'd love for people to actually have voting apathy to see the reprocussions - I've been told that if noone voted the Queen would have to elect a party temporarily and an investigation would be launched to find out why noone voted.

People died to give you the right to vote:

A better arguement but one that I find a discrace to those people who died. Mainly due to my reluctance to vote any lying scumbag in power and the powerless right I would have as a voter to change things that have been set in motion.

QUOTE

Blame ourselves for wanting to buy everything now and pay for it later


That could have worked IF it was implemented better, but thanks to corporate greed (an unfortunate and resulting consequence of capitalism) we are now paying the price. This also means that all the CEO's that still get employed, whether they ran their last company down into the ground or not, exasperated the problem.

QUOTE

we can all take on socialism and all be poor


The problem with socialism is that not one (that I've seen, dunno about China) has been a true socialist society. There has always been one person at the top co-ordinating the show.

 

[Fishbong]

people seem to have short memories, this present crisis and past ones (albeit not in western countries) are all part of the nature of the beast (capitalism) you want to have peace of mind - kill the beast

The nature of the beast is greed, which is inherent in all humans. You can't do anything about it.

 

[klikklak]

it's not greed and you can't moralize capitalism out of existence. It's the cycle 'create profit -> invest to create more profit' if you don't do this, you'll be driven out of business. So a moral capitalist company would do suicide.

I agree with namco, even though I've started to vote on local elections, because they at least can be true democracies (like athens), even if they're severely limited now.