How appropriate! I did not know it was 666 when I was preparing all the financial crap that follows page 3 of 8 below...
Here is a good, easy-to-understand This American Life episode from last weekend that goes into some detail about some of the financial crisis. I know, BORING, but how can you not want to understand why your savings are evaporating? I want my rage to be directed at the proper people!
Also, a liberal friend asked me to listen to it. She wanted to know what my "conservative take" is on the whole thing. I'll cut-n-paste my take below, assuming somebody will ask in the comments. What the hell, it's all typed up, so I may as well use it.
ALSO, I have been curious to understand more about the regulations that "the Left" blame "the Right" for not having in place. So it was interesting to me to learn a bit more about that.
I questioned that in a post on MyRant a few weeks ago, and I have to applaud Mr. Bissette for posting lots of links on the subject. But that was when I had to drop everything (well, lots of things) and focus on the September project, so I lost track of that whole exchange. I'm sure it's all still over there, but I haven't been able to get back to it.
Anyway - LISTEN TO THIS if you are interested. It's a pretty good show.
My jabbering about it:
OK, first segment over.
I have not heard all that "commercial paper" stuff yet. But I have heard what that last guy said, which is the reason Lehman couldn't cover the paper is because they made a buncha of risky no-good loans. Which is the root of it all. And I think that is a HUGE problem for USA, and the world. Pandering politicians have made everybody think it is their RIGHT to own a home, and have pressured Fannie & Freddie etc to make such loans. On the other side of the aisle you have Republicans beating their chest and crowing because "housing starts are UP!" while ignoring the fact that people who can't really afford them are gettying crap loans to buy the houses.
Now, if anybody talks about all this, they are seen as uncaring and wanting to take away the poor's houses. Barney Frank even calls it racist to face the reality that poor people can't make payments on exploding mortgages. You can force CEOs to make less money etc, but if they are still bundling up tons of risky loans trying to make everybody feel good, you still got a problem.
That idiot Bush and those idiots in the Senate majority are the last people I'd trust to fix the mess.
Part two, same thing - "Bad mortgages got the financial system sick, credit default swaps made the sickness an epidemic".
To me, it sounds like it all goes back to the bad mortgages.
OK, so now I understand CDSs, and these are at least one of the things that liberals think the big bad neocons should have regulated more. AND I AGREE. 100%. But I have to say that the root of it all still goes back to the bad mortgages, and those are the things that Barney Frank and crew fought to NOT regulate.
I'm not hearing This American Life saying that - yet. They talk about the bad mortgages, but they don't look at them under the same microscope that they apply to the CDSs. They seem to think they just happened...
Personally I think both sides of power in US govt had their own piece of action going and are equally culpable. And it makes me sick to hear both McCain and Obama saying we gotta pass that stupid bailout bill and trust those crooks to fix things.
part three - more of the same, focusing on how we should regulate the fatcats, and ignoring the root problem of bad mortgages. I was at least glad to hear the guy say the Clinton admin resisted regulation, and it was a bipartisan failure to regulate in the halls of congress, so they're not totally blaming the Evil Bush Admin, the way most on the left do. But they (This American Life) do seem to be repeating the mantra that failure to regulate "the rich" is the basic problem. It's only part of the problem.
part 4 - Stock injection plan sounds okay, and if their info is correct, I'm glad it's at least an option in the final signed bill. But I am astronomically cynical about the 21st century US govt doing the right thing in nearly all circumstances.
THANKS FOR SHARING. Very interesting and I learned some stuff.
I'm sure you are like me, and not like that moron who wrote in begging Ira Glass to tell him what to think. We just heard what the problems and solutions are, according to this one set of economists. Another set of economists would have a different spin. But I think these guys were pretty accurate.
I still think there is a root cause of all these symptoms, and that cause is societal.
Here's another good article that another different liberal friend sent me.
"Four are the usual suspects -- Nevada, Florida, California and Arizona, boom states where regional housing bubbles were fueled by an irresponsible alliance of house-flippers, predatory lenders, fraudulent borrowers and notoriously politicized federal laws like the Community Reinvestment Act, which forces banks to give mortgages to poor people and even illegal immigrants who can't afford or qualify for them."
This guy must be a racist! (That's MY comment, not my friend's...)