jdl51

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    • Fri Nov 21st 16:25 PM | Rating: 0 0
      Commented on:
      The Downfall of Keynesian Economics and the U.S. (Part 3 of 3)
      SWRichmond wrote:

      "The ludicrous idea is the idea that government should intervene in an economy. Paulson et al are merely pursuing this idea to its logical conclusion."

      The reason Paulson et al are running around going crazy now trying to put out this conflagration is because they were asleep at the switch for the past eight years while the banking system was gambling that they could win the credit default poker game. They should have regulated the credit default swap market years ago but Paulson was a big proponent of CDSs when he was at GS and therefore part of the problem. Kind of like Dick Cheney formulating energy policy. It would only benefit the oil companies. To say that intervention is the problem is ludicrous. Non intervention for the past eight years was and is the problem.

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    • Fri Nov 21st 15:07 PM | Rating: 0 0
      Commented on:
      The Downfall of Keynesian Economics and the U.S. (Part 3 of 3)
      Invest-in-a-farm said:
      "Now: Since we have a world monetary system, the so-called IMF system today, this system is hopelessly bankrupt. The cause of the problem is not some mortgage crisis. The cause of the crisis, which broke out in July of 2007, was a result of an increase of an expansion of derivatives expansion, which now totals to obligations in excess of quadrillions of dollars! The greatest amount of this expansion occurred under the administration of the former head of the Federal Reserve System, Alan Greenspan. And we have now quadrillions of dollars of obligations, so denominated, which are self-expanding obligations. This hyper-inflationary monster is eating the world, and the only thing we can do is put it out of its misery: Put it into bankruptcy by governments, by agreements of governments, and create a new international system, which is based on credit systems, such as the Constitution of the United States provides. "

      I absolutely agree with this statement. Anyone who thinks Keynesian policies caused this meltdown either has no idea of how credit default swaps work or is an apologist for the Milton Friedman school of economics. If Bush and Greenspan had regulated the CDS industry we wouldn't be in this mess. This present mess is a unique situation caused by Greenspan's low interest rate environment and institutional banks discovering credit default swaps. Credit default swaps gave the banks a false sense of security on the loans and packaged securities from these loans that banks produced. Furthermore, the CDS's weren't regulated, thanks to Phil Gramm, the incompetence of the SEC and Greenspan's blind faith in Freidmanomics, so that the liability of them wasn't reflected on banks' balance sheets. Banks were writing loans as fast as they could to generate more fees, more derivatives and not caring whether people qualified for them or not. Contrary to poplular opinion, no one forced the banking system to write no doc loans with questionable appraisals, etc., etc., they did it on their own accord thinking the housing market would always go up and make even defaults profitable. Then when the housing market inevitably went south because of the banking systems' self inflcted bad loan policies, it brought the credit default swaps into play which exposed the tens of trillions in liabilities that the banking system didn't account for. All of this has nothing to do with Keynesian economics, which actually would have been beneficial if the past three republican administrations had followed his principles instead of running up trillions and trillions in deficits in both good and bad times. Now we have had three decades of discredited Miltonian economics, it's belief that deregulation or non regulation frees markets, it's deficits don't matter humongous pile of debt, and the banks' discovery of the credit default swap "financial weapons of mass destruction" market all hitting the world financial system like a tsunami. I don't know what the final solution of the current disaster will be but if we ever get out of this mess, returning to solid Keynesian principles will hopefully be the eventual outcome.
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    • Sun Nov 16th 16:43 PM | Rating: 0 -1
      Commented on:
      ECRI: Economy Falling at Fastest Pace in 60 Years
      Unemployment is just beginning to accelerate with thousands of new layoffs being announced daily. If any of the big three go under, or if all of them do, there will be unemployment in this country the likes of which we haven't seen in 70 years. With the housing market already under severe stress, foreclosures would increase even more than their already high levels. A few months ago the rest of the world was doing relatively well and could be expected to soften the blow by importing more of our industrial goods, but now one by one the European countries are falling into recession and China and Russia are slowing dramatically. Our ability to spend our way out of this mess is further hindered by the massive debt accumulations of the past eight years and especially of the past few months. The world's ability to absorb all this debt is questionable without significantly higher interest rates. All in all not a very good scenario for our new administration to find themselves in. In my opinion it will take years to work our way out of this mess IF everything goes right. Longer if it doesn't.
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    • Fri Nov 14th 09:48 AM | Rating: +1 0
      Commented on:
      The Downfall of Keynesian Economics and the U.S. (Part 1 of 3)
      I'm guessing that you're a republican and are trying to cover up the fact that instead of Keynesian economics, it's Freidmanian economics that has caused the current downturn. $7 trillion deficits for the past eight years is not Keynesian, nor is deregulation or non regulation of the financial industry Keynesian. These are all tenents of the Milton Friedman school of economics. The banking industry falsely and intentionally labeled their derivatives credit default swaps to avoid regulation and did not value them on their books properly, if at all. The current administration, a proponent of Milton Friedman style economics, did not attempt to correct the situation and when the housing market started depreciating it took the banks and their "financial weapons of mass destruction" with them. If basic Keynesian economics were being practiced since 2000, we would have had budget surpluses instead of massive tax cut induced deficits. It's a basic rule of Keynes that during good times we have surpluses and in bad times we spend those surpluses and go into deficit. With Friedman/Reaganomics we just get massive deficits year over year and let our children, grandchildren and great grandchildren pay the bill. Non regulation/huge deficits/tax cuts in good times, and now government ownership of the banking/auto/credit card industry are nowhere close to being Keynesian and I have to seriously doubt you've ever been to an economics class if you say that they are. Sounds like you're just another republican who can't take responsibility for the destruction of our economy that the policies of the past eight years have brought us.
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    • Tue Nov 11th 13:32 PM | Rating: 0 0
      Commented on:
      The Case for Derivatives
      What seems to have happened in the CDS markets is that they were deliberately structured to avoid regulation. They made investment banks tons of money when the underlying securities behaved themselves but increased risk exponentially when they didn't. From what I understand, they are like insurance policies, yet anyone can participate in them. So if I have a life insurance policy on my wife, and my whole neighborhood does too, then when she dies the whole neighborhood has to get paid off. And to top it all off, this huge liability was not on the books of the issuers which would have prevented them from exposing themselves in the first place. This is what happens when you have deregulators in charge. They looked the other way when all this was going on and now the chickens have come home to roost.
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    • Sun Oct 5th 12:51 PM | Rating: 0 0
      Commented on:
      Fannie and Freddie Did Not Cause This Crisis
      "THESE AGENCIES SOUGHT SUBPRIME AND ALT-A PAPER in order to expand low income and minority home ownership at the request of the Democrat controlled oversight committees in Congress."
      ----------------------...
      The democrats didn't gain control of any committees until February of 2007. The republicans were in charge of those committees and not only didn't oversee anything, were actively encouraging banks and lenders to step up their activities. Bush repeatedly stopped efforts by various state governments to rein in predatory lending practices. Minority loans are but a small percentage of troubled mortgages in this market. Here in S. Florida there are thousands of multi million dollar beach front/ocean view properties that are in default that had nothing to do with Fannie or Freddie. You have to remember that Fannie had mortgage limits that have only recently been raised. You could not get an FHA mortgage over, I believe, 300,000 until recently and a large percentage of defaults are over this amount. This blame Fannie by the repubs is trying to draw attention away from their lack of oversight and incompetence and which also has a not so subtle racial element to it although most FHA mortgages are to white folks.
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    • Sun Sep 28th 15:13 PM | Rating: 0 0
      Commented on:
      Common Sense: My Solution to the Mortgage Crisis
      From what I've been hearing, the real problem is the credit default swap market. There's trillions bet on these mortgages and they want to be paid off. The repubs keep talking about Fannie Mae to score points with their base yet it's the bankers who should shoulder most of the blame here because of their insane lending practices. We'll be lucky to survive this mess without a financial meltdown that could strangle the U.S. economy, if not the world's.
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    • Mon Sep 22nd 10:18 AM | Rating: 0 0
      Commented on:
      Gold Bull Sees Huge Run for Gold
      Thanks, GWB and all his supporters for destroying the U.S. economy.
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    • Sun Sep 14th 14:17 PM | Rating: 0 0
      Commented on:
      The Next Bubble
      "Will agriculture stocks like Potash (POT) or Agrium (AGU) ever regain their bubble inflated highs?"

      The difference with POT, MOS, etc. is that fertilizer prices are still rising as we speak, unlike the grains, oil and precious metals. So with the underlying commodity price still rising and the value of the stock down 30% or more, I would suspect you haven't seen the end of the AG "bubble" as far as the fertilizer companies are concerned.
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    • Fri Sep 5th 08:53 AM | Rating: 0 0
      Commented on:
      Why Commodities May Be Nearing a Turning Point
      Population will go up another 500,000,000 in the next seven years. I think I can safely say food production will be hard pressed to keep up and that's not even taking into account regional droughts, rains, etc. So from a long term perspective the ags look like the place to be. We are one crop report away from a run up, frost, flood. Everything is now lumped together with oil and the dollar. If they decouple from the two because of demand increases, look out.
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    • Fri Aug 29th 10:33 AM | Rating: 0 0
      Commented on:
      So Why Does It Feel Like a Recession?
      With the way the Bush administration tried to manipulate economic statistics to try and show the 2001 recession started on Clinton's watch, I would view these numbers with a great deal of skepticism. From what was it, flat 4th quarter last year, .5% in the 1st quarter to 3.3 in the 2nd? Something smells fishy especially with a lot of our trading partners also slowing down. Wouldn't put it past them.
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    • Sun Aug 17th 15:44 PM | Rating: 0 0
      Commented on:
      Shifting Emphasis from Inflation to Growth
      My supposedly fiscally responsible die-hard republican cousin told me that our trillions of republican debt are no problem. We'll just default on it and stick the Chinese, Russians and Japanese with a bunch of worthless paper. Apparently there's no need to worry about the consequences.
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    • Sat Aug 9th 14:57 PM | Rating: 0 0
      Commented on:
      King Dollar Roars Back
      With 10 trillion in debt and rising at the rate of $700 billion a year (don't forget those little off budget items, like Iraq) the world will be awash in U.S. debt for the foreseeable future. I expect interest rates to rise to entice the world to swallow this tsunami of debt which will force our floundering economy to grind to a halt. Then we'll see how the dollar does. Might happen even sooner if any of our friends decides to get out from under their treasury holdings, like China, Russia and Japan.
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    • Thu Aug 7th 00:26 AM | Rating: 0 0
      Commented on:
      Careening Towards a Financial Crisis?
      surgcare: From 1800 to 1980 the total federal deficit was around $1 trillion. Since Reagan, Bush I, Clinton, Bush II the deficit is now closing in on $10 trillion. Clinton was the only president to move the budget into surplus at that time mainly because of his 1993 tax increase which was criticized by republicans who said it would destroy the economy. The military was so decimated by the Clinton years that 10 months after he left office our military invaded Afghanistan and completely took over the country. Then a year and a half later, they invaded Iraq and overran that country in 3 weeks. If you want to look at a state that is in terrible shape, look at Florida which is on the verge of collapse because of the policies of Jeb Bush and the republican state legislature. Like his older brother he was left with a budget surplus and squandered it all. People are leaving the state in droves. California has had republican governors for 21 of the past 25 years. The failed policies and the outright criminality of the Bush administration and his rubberstamp republican congress had damaged our economy, our credibility around the world, and has completely decimated our military. It will take years to fix the damage Bush and his supporters have done to our great country.
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    • Wed Aug 6th 10:32 AM | Rating: 0 0
      Commented on:
      Careening Towards a Financial Crisis?
      What I find interesting is when the republicans are in office it's both sides fault and when the democrats are in office it's the democrats fault. Just ask yourself this: If we weren't $10 trillion in debt and counting, would we be having this discussion. Since Reagan was in office the republicans have added $9 trillion to our national debt with their tax cut policies that were supposedly supposed to pay for themselves, remember? It was their trickle down, tax cuts reduce the deficit, deficits don't matter, borrow and spend, laffer curve, etc, etc, theories that have driven this country to the brink of financial disaster. It was all a big con scheme to destroy social security. The $185 billion a year SS surplus went to pay for their tax cuts for the wealthy taking the poor and middle class's SS surplus. Now there's nothing left and yet they still claim they're the party of fiscal responsibility.
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