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To read Dr. Tremblay's coming
book The Code for Global Ethics, Ten Humanist Principles And
to pre-order the book, click on: Economic Bubbles and Financial Crises, Past and Present Comments
(11) New
Foreclosed Homes
Posted, Saturday, March 20, 2010 10:38 am I agree with everything you wrote. As an appraiser,
I have been following this financial disaster in terms of real estate, for
many years. I gave up my certification to do bank appraisals
three years ago because of the pressure of brokers to meet their over
inflated requirements in order to justify their loans. In fact, I became so upset with what was happening,
I worked, along with three other individuals, with the Secret Service,
FBI, Postal Inspector and the Attorney General to bring about the attached
indictment in December 2007. I would like to take you on a tour of foreclosed
homes, and the ones involved in mortgage fraud, so you can see first hand
what this ongoing problem is causing for property values. I'm sure you
could write a book about it. Here is an article from Bloomberg
about Bernanke's attempt to close the barn door after the horses escaped. Bob New
Very Instructive
Posted, Monday, March 22, 2010 09:08 am I have read Dr. Tremblay's article. It is very instructive. Mel New
Steadily Increasing Price of Energy
Posted, Saturday, March 20, 2010 8:24 pm I have recently read the 22 March 2010 article
entitled Economic Bubbles and Financial Crisis, Past and Present, which I
found well researched and most interesting. There is however one key element missing i.e. the
linkage of the current economic/financial debacle with the steadily
increasing price of energy and in particular of oil. You will recall that at
the beginning of 2000 the average oil price stood at 20$ US/gal. In August
2008 it shot up to 147$/gal after having steadily risen since the beginning
of the third millennial. In September 2008 the financial system crashed with
the US government having to take back on its books the 5 trillion $US debt of
Fannie Mae and Freddie Mac, Lehman Brothers could not be saved after the UK
made some last minute difficulties with a deal that was being engineered with
Barlcays, and then all the rest of the "great" banks had to be put
on government life support systems...They still are... Since then the oil price, after having gone down to
40$ /barrel, has now gone back up to over 80$/barrel. That is four times the
average price of energy in early 2000 and it is a huge drag on real economic
growth. World economic growth is now hitting the energy wall... The world oil
depletion rate is now over 6% per year and increasing. Meanwhile even if OECD
countries hit by recession cut back on oil demand, all the slack production
is being taken by China, India and the growing internal demand of OPEC
counties... We have a real energy supply problem during the coming years and
it is already causing havoc within the financial and non-financial economy. Jonatan Nouveau
La Réalité Économique
Affiché, samedi, le 20 mars, 2010 6:56 pm Ce dernier article est très pertinent. Je ne comprends toujours pas pourquoi vos propos ne
sont pas diffusés à plus grande échelle (média de
masse, journaux, radio, tv...) de sorte à ce que plus de gens puisse
se faire une vrai idée de la réalité économique,
et ce en toute franchise pour notre bien futur et ne pas se fier
aveuglément aux politiciens qui sont à la main des lobbys. A mon avis, il est clair que ce sont les plus
grandes banques US qui ont provoqué cette crise, soit comme coupables,
soit comme complices. Qui est assez puissant pour changer toutes les lois et
règles de prudence financières qui on traversées le test
du temps (le uptick rule, le Glass-Steagall act, le Commodity future act, les
ratios de réserves des banques, etc.)? Goldman Sachs et la Fed sont tellement puissants et
même immunisés de toute imputabilité, ce qui est
scandaleux. Aujourd'hui les CDS, CDO et les
dérivés sont d'une ampleur incommensurable. Si ceci explose un
jour, je vais prier pour ceux qui ne détiendront pas un peu d'or
à ce moment. Je m'attends à une dévaluation
monétaire planétaire sans précédent dans
l'histoire d'ici 5 à 10 ans. Même le Canada n'a pas de
réserves d'or (3 tonnes) pour sa monnaie, advenant une crise de la
devise de réserve US, notre devise serait vraiment malmenée. La Fed (Greenspan et Bernanke) continue de nier
toute responsabilité face à la crise, eux qui manipulent les
taux d'intérêts et créent l'excès de
liquidités et de crédit qui mène au casino actuel. Je ne suis pas partisan de la conspiration, mais
j'ai l'impression que même Obama ne peut rien pour faire plier le
secteur financier qui est la source de tous les maux en occident. On dirait
que Obama ne pourra pas trahir les gens qui l'ont mis en place sur le
siège de président et que c'est la raison pour laquelle les
gens qui ont créer la crise, qui se sont honteusement enrichis avant,
pendant et après sont libres comme l'air et intouchables, alors que certains devraient
être en prison. Peut être qu'il est voulu d'avoir une crise
monétaire internationale, de sorte que la population mondiale en
vienne à accepter une banque centrale mondiale, ce que l'élite
bancaire mondiale a toujours voulue mais impossible à réaliser
contre les peuples libres. (re: Tragedy and Hope : C. Quicqley et E. Griffin
: The Creature of the Jeckyll Island). Yves Nouveau
Vision Large
Affiché, samedi, le 20 mars, 2010 12:09 am Merci pour cette vision large de ce qui se
passe globalement et présentement en termes simples. Votre analyse est une excellente vulgarisation de la
crise, de ses effets, de ses conséquences, des risques futurs et de
son prolongement dans un langage clair et rendu enfin accessible à
quiconque possédant des connaissances très minimales en
matière économique. Gilbert New
General Motors
Posted, Saturday, March 20, 2010 1:10 pm Your article is the clearest analysis of the present
financial crisis that I have read. Thank you. I have one problem with: “In fact, let me say
that this is what drove General Motors into bankruptcy. Speculators killed
General Motors, not the recession and low car sales. GM could have survived
the recession as it had in the past. But this time, there were the
CDSs.” It is not clear to me why GM should expect their
bonds to decline in value. This would imply that GM has the right in time of
trouble to get a capital gain on their outstanding bonds, and could only
survive with a guarantee of such capital gain. I thought that bonds are a
senior liability and that bonds only get devalued after all stock equity has
evaporated, that is after bankruptcy. Marie-Ange ______________________ Answer by R. T.: I am referring here to GMAC Financial Services'
unsecured debentures. GM borrows a lot of money to finance car purchases, and
this is the debt that usually is the riskier when car sales fall. Unsecured debentures lose value when they are
downgraded during a recession. By having that kind of debt securitized,
structured and insured, it could not lose value from a GM's point of view,
and it could not reduce GM's debt load. There were no way out for GM but
bankruptcy. New
Déja vu and Déja Prévu
Posted, Saturday, March 20, 2010 4:33 am This article is a fine description of what has
happened, what had to happen. When one contemplates the financial crash one
cannot but feel not only déja vu, but déja prévu, that uneasy
sensation that these events will occur again in the future, and endlessly.
That is unless the entire contraption that unfailingly produces such
outbreaks of elite kleptomania is done away with, forever,in its entirety. I simply find it dumbfounding to see all these fine
plans designed to forestall such outbreaks of ruling class larceny, when what
we should hope for is that this crisis deepens and deepens until the entire
system collapses.For if we 'reform' market capitalism, which I doubt is
possible, it will merely go on exploiting at a lower level of avaricious
intensity, until enough time has passed for the public's recollection to have
dimmed sufficiently,and enough of our corrupt political class is bought off,
that a new era of elite hyper-parasitism will dawn. That is if, by dint of
some currently unimaginable miracle, we survive the unfolding ecological
collapse of the planet's life support systems caused by capitalism's innate
nature as a neoplastic system predicated on unending growth. Capitalism is, in fact, irredeemable. Its basic
operating principles eg the relentless, unending, accumulation of capital,
infinite greed, avaricious, competitive, self-interest, the fetishism of
converting everything in existence into commodities to be bought and
sold, thereby absolutely negating any value but that of profit, its essential
impulse to create and endlessly exacerbate inequality, and its promotion of
the worst type of human and the worst type of human behaviour, ie moral and
ethical unscrupulousness,lack of empathy and compassion, indifference to the
results of your actions on others etc, make it antithetical to continued
human existence. We can see it plainly in the manner in which this crisis is
playing out.Not only did the parasites of the financial elites lie, connive
and mislead to rig the markets in their insatiable quest for more, but, when
the pyramid collapsed, they induced their bought and sold political stooges
to bankrupt their countries to bail them out. They kept on paying their psychotically
greedy bonuses in the time-honoured larcenous and shameless manner, while
workers in Ireland, Iceland, Greece and elsewhere,already having suffered
years of stagnating real wages and growing inequality, are suddenly hit with
demands for wage reductions of 30 or 40%. Shades of the IMF Structural
Adjustment Plans of the last thirty years. If the kleptocrats, who adhere to a philosophy that
sees them as a chosen elite, selected by a perverse pseudo-Darwinian process
where greed and hatred for others are the most powerful selective
forces, get away with this new stage of immiserating the public to pay for
their larceny, while having their corrupt political place-men obstruct any
reform, then the future is one of a new world order of neo-feudalism, with 90%
plus reduced to the status of serfs and flung into debt-peonage.Delusions
that this system, based on the psychopathlogy of a fiercely misanthropic and
arrogant parasite elite can be reformed, are truly misbegotten. Mulga New
Big Government and Big Business
Posted, Saturday, March 20, 2010 3:52 pm This is an excellent piece. But there are two other
significant points that I would like to have seen included: 1. The human beings that were behind the
deregulation of financial services (for example those who "spent over
$100 million in lobbying efforts to have bill S-256 passed") obviously
knew what they were doing, knew there would be a huge payday for themselves
before the balloon went up (by which time they would, of course, be long
gone). Although these human beings should of course be held to account we all
know that will never happen; however, what about regulating the bonuses of
today's crop of financial 'experts' so that they are tied to the long term
success of their institutions rather than the system of short term cah
payments the last lot of 'experts' received? 2. The housing bubble that fueld the inflated
mortgage industry was created on the assumption that rising property prices
underwrote the money lent to pay for those properties; and so long as the
incomes of home owners were increasing enough to pay back their mortgages the
collapse of that industry might not have happened, and someone might have
come along to restore some sanity into the system (well it's theoretically
possible), and the whole collapse might never have occurred. But... at the
same time as mortgage costs were skyrocketing workers' wages were collapsing,
making it impossible for them to pay back their loans - a situation that was
also engineered by central government, no doubt also at the behest of big
business. John New
Excellent Article
Posted, Friday, March 19, 2010 5:43 am This is an excellent article. Hanna New
Why the Friedman's Quote about Europe?
Posted, Thursday, March 18, 2010 12:55 pm This is a good analysis, which in regard to Europe,
puts the blame where it belongs: four square on the Wall St. manipulators and
speculators and not on the European victims, although for that very reason, I
fail to see the relevance of Milton Friedman's bit of wishful thinking. Michael New
Derivatives
Posted, Thursday, March 18, 2010 10:42 pm Excellent article. —Fundamental, I'd rather say. Only one thing: Can you please confirm the number of
one and a half trillion dollars for what concerns to total amount of
derivatives sold? Other sources report a much larger number...Is
that a misprint? Andrea ______________________ Answer by R.T.: Not to be confused: the total notional
value of derivatives outstanding in the world ($600 trillion or
$600,000,000,000,000) and the value of mortgage-backed CDOs sold before the
crisis ($1.5 trillion or $1,500,000,000,000). |