Way OT and political, too

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Han wrote:

This theory was settled in the 18th century by Adam Smith in "The Wealth of Nations." He proved that when everyone worked to maximize his own personal benefit, the nation as a whole benefited more than any other system.
Some people just haven't kept up.
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Oh-h-h-h-h-h! Then that would explain the prevailing theory of executive compensation in today's corporate world(s). I get it; I get it! Think AIG.
Dave in Houston
--
I never meant to say that the Conservatives are generally stupid.
I meant to say that stupid people are generally Conservative.
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Dave in Houston wrote:

Yes it would. Bonuses and commissions are part of the "commercial" mindset. This differs from the "guardian" (government) philosophy where they are generally prohibited (think "quotas" for traffic tickets).
In the case of bonuses, there were tax reasons behind them. Federal law prohibits, in many cases, paying a salary that both the employee and the company agree upon. These same regulations do not prohibit bonuses, so that's how many businesses circumvent the restriction.
Governments often try to interpose themselves in the general marketplace, but the marketplace usually finds a way to flow around the obstruction - sometimes at great cost, but the market always wins.
In the case of AIG, be aware that AIG is the largest insurance company in the world. They did not get that way by paying key employees an hourly rate.
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I know this is a popular theory, but it's wrong. Less than 20% of the subprime mortgages were made by banks subject to the CRA. The rest were made by what is now called the shadow banking industry. Mortgage brokers making crap loans, which were sold to investment banks, which packaged them up and sold them to unsuspecting investors all over the world.

Too true.

Nah. It was started by good old fashioned greed. The brokers got paid for making loans, regardless of quality. The investment banks got paid for packaging the loans. The investors thought they were getting high returns on AAA paper. Don't forget the rating agencies that got paid for putting a high gloss polish on a turd and turning crap into AAA.
Free enterprise at its best.
-- Doug
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Douglas Johnson wrote:

Your facts are approximately right, your conclusions are at least partly wrong:
1) While the CRA represents a minority of the overall bad loans in question, its passage signaled a culture shift to the banks: You take the upside and the government will take the downside. This ended up extending way beyond just the CRA as it turned out. It is part of the reason the banks created the derivatives mess they did because they felt they had no real downside (for many reasons). Guess what? They were right. Both a Republican (in a small way) and a Communist President (in an obscene way) have seen to it that the banks don't feel the consequences of their own idiotic decisions.
2) If the banks were stupid, the Congress was criminal. Under repeated questioning that little weasel Barney Frank insisted that Fannie/Freddie were just fine even though the wheels were already coming off in that same timeframe.
3) If the banks and the Congress were bozos, the regulators were even worse. (Recall that a "regulator" is another name for a government bureaucrat.) They utterly failed to stop something that is indisputably illegal: Writing so-called "naked" short positions. This is- and has been illegal for decades, but the SEC turned a blind eye to a kind of trading that actually allows markets to be manipulated and is thus illegal.
4) If the banks, the Congress, and the regulators were irresponsible, how about Joe Sixpack that make $48K per year, wrote down much more when he applied for his interest only loan on a $400K property, and then took a home equity loan on that same property a year later to buy a big screen TV, boat, or other luxury item? Why should evil bankers be responsible when the public pigs have their snouts in the trough in every bit as much of excess?
5) And if the banks, the Congress, the regulators, and the greedy/stupid Sheeple are at fault, how about our fine Stealer-In-Chief. He looks at all the above and places the blame on ... the banks and/or "Big Business" and/or the Eeeeeeeeeeevil corporate executives. Then with a straight face he recites from the teleprompter, "It's time for you people in business to act more responsibly." There is never any similar cry for responsibility from the Congress (indeed, he signs their porky spending bills). There is no demand that the piglets in the larger population learn to live within their means. There is no demand that the dishonest and vastly greedy unions regain their senses. Nope, it's all about the Eeeeeeeeeeevil rich. So what does the Stealer-In-Chief do? He uses force and intimidation to dishonestly reposition wealth where he thinks it should go.
In short, your government created the culture of theft, held *no one* in- or outside of government accountable to this day, and is now busy taking the money of the people who actually pay taxes and giving to the top- and the bottom- of the economic scale. That's not a "Free Market" in any way, shape, or form - it's just standard political demagoguery and plain stealing. ---------------------------------------------------------------------------- Tim Daneliuk snipped-for-privacy@tundraware.com PGP Key: http://www.tundraware.com/PGP /
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The important thing is that as long as it costs YOU money, (and I mean you personally) we don't care about anything else.
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Upscale wrote:

Who's "we"?
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I have trouble understanding how the CRA signaled this, but it doesn't matter. It didn't work out so well.

Oh, really. So Sebring Capital, Countrywide, Bear Stearns, Lehman, Merrill Lynch, Indy Mac, Wachovia and AmeriQuest are still alive and well? So the stock price of BoA and Citi isn't down by 90%? So Fannie and Freddie stockholders didn't lose 98%? The only CEO that has survived the mess is Ken Lewis at BoA and he's swirling the drain. Do you happen to know the unemployment rate in the financial services industry?

It kind of depends on what time frame we are talking about. Fannie and Freddie were set up for trouble in 1992 (Dem Congress and George I president) when they were allowed to increase their leverage from 10x to 40x. This meant that the slightest decrease in housing prices would sink them.

It is kind of funny to have you complaining about a lack of regulation, but I can agree. It was stupid for the SEC to drop the up tick rule. They also allowed the investment banks to increase their leverage to 40x.

So where is Joe Sixpack sleeping tonight? It ain't in the $400K (now $300K) house. But, yeah, he had a part, too. There is a reason they call them liar loans.

You want the government to make people live within their means? Really? Did I read that right? Anyway, the market is taking care of that all by itself. The savings rate has gone from near 0% to 4%. It will probably get to around 7%. I think it will stay there for quite some time.

You mean like the UAW? Have you seen what the new Chrysler contract does? New hires at half the starting salary, retiree health care funding with Chrysler stock (how much is that going to worth?), elimination of the jobs bank, and much more. GM workers are going to have to do the same.
-- Doug
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Douglas Johnson wrote:

New-hires at half the previous starting salary is still three times the minimum wage. Most other retirees rely on Medicare.
Carpenters don't have a "job bank." When it rains, they don't work - and they don't get paid.
I agree that GM workers are going to have to do the same - work for a living.
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Douglas Johnson wrote:

The endgame did not, but it caused banks to behave in way as you might when you knew your downside was limited or nonexistent.

Irrelevant (for purposes of this discussion). The fact is that these very same institutions are in receipt of the wealth of millions of people that is being used to (irrationally) keep these institutions afloat in some limited or perverse way,

And when questioned under the GW Bush administration (repeatedly), Frank the chimp *repeatedly* insisted there was no problem. He should be removed from office and tried for treason.

I wasn't arguing *for* regulation. I was merely pointing out that the highly vaunted regulators utterly failed to do their job - gee, what a shock, and incompetent government bureaucrat. FWIW, the uptick rule and naked shorting are two very different issues. The lack of uptick trading was *legal*. Naked shorting was not. The former required a change of law, the latter required an enforcement of existing law. Neither happened under the "government" the current bunch of idiots want to further enfranchise.

Yet, you never hear the ObamMessiah calling these people to account - it's always the eeeeeevil rich he whines about.

No I don't. I want the dishonest politicians like Obama to quit painting this mess as the problem entirely generated by the greedy and evil rich. I want an honest public discourse in which we admit that the $40K/year pigs are just as guilty as the $4M/year pigs and that government has no obligation to save either of them from their own stupidity.

Yes ... but only after dishonestly bestowing some - what is it now? - 40% of the company upon the UAW, thereby giving them something they do not deserve and screwing the legitimate bond holders out of what is properly theirs. Like all thieves, the Obama administration has no discernible principle other than who they have to buy off to get reelected.

--
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Like Bush really cared about the Constitution while taking away our rights over the last 8 years CC
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What rights were taken away?
--

-MIKE-

"Playing is not something I do at night, it's my function in life"
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The right to walk with your head held high...anywhere on this planet.
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Robatoy wrote:

If any US government could have taken that away it would have been the government under either Johnson or Carter either of whom made any President up to an including W look flawless. Obama is well on his way to shattering their respective records for duplicity, stupidity, incompetence, capitulation, and evil.
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Tim Daneliuk snipped-for-privacy@tundraware.com
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It is becoming increasingly clear that you are a right-wing nutbar, Timbo.
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Robatoy wrote:

Oh, sorry, I forgot to mention Nixon in that list. It's just that his sins are so minor by comparison to the other two, at best he's just naughty.
As I recall, it is you that freely acknowledges your preference for conservative politics - at least as the term was defined before the neo-cons came along. Now, of course, we have the neo-Comms ...
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Nein, Dumkopf! I profess a preference for (moderate) conservative ideology, not conservative politics.
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Robatoy wrote:

Don't see that one in the Constitution. Must be right there with the "right to privacy," so many people make up when talking about traffic cameras.
--

-MIKE-

"Playing is not something I do at night, it's my function in life"
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wrote:

Are you kidding? There's a right to privacy in the Constitution. Just ask the late Justice William O. Douglas: It's in the "emanations" of the "penumbra" of the 4th Amendment.
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Doug Miller wrote:

Isn't that the guy they tried to impeach three times? :-)
--

-MIKE-

"Playing is not something I do at night, it's my function in life"
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