Financial Meltdown (1 Viewer)

[Rutledge]

Whoopee. So government once again saves the behinds of the banks and speculators who caused this mess - but who's going to bail out the common man when this shakes through the rest of the system?

The government is trying to SAVE the ENTIRE system. While some argue that it should be allowed to collapse, I disagree, although I appreciate their position.

Thus, in a sense, the common man IS benefitting from the govt's actions. A financial meltdown means anarcy. Thus all measure must be deployed to avoid it. And dont forget: some "common men" also benefitted from the housing and credit crisis bubbles. Of course, not everyone benefitted equally. And that needs to be addressed.

How?

Well, there MUST be a great deal of effort exherted toward finding and punishing those who gamed the system. The Wall Street Fatcats who employed absurd amounts of leverage to create unsustainable profits need to have their (obscene) bonuses clawed back and perhaps charged with fraud.

There was also PLENTY of egregious fraud at the local level -- from lying loan officers and appraisers to look the other way lenders/securitizers. Those who "broke all the rules" should face consequences. At minimum the system should be corrected so that the excess never occurs again.

And lets not forget: the people behind the Freddie and Fannie debacle should be punished, as well the legislators who forced banks to loosen their lending standards to absurdly low levels.

Through hubris and greed, Wall Street has killed the goose that layed the golden egg. It will never be the same. Ultimately that may be best - assuming we can dial back to healthier and normalized standards of living, without too drastic measures.

Personally, I believe strongly "financial wizadry" must become purely a legacy of the past. Those who create opaque financial products and instruments are more interested in creating fees for Wall Street and/or gaming the system. Going forward we must see a greater focus on adding real production value to the overall economy. Financial wizadry is just a creative way to obfuscate, and to create untenable ponzi-like schemes. "Investment Banking" must also be exposed for the canard that it is. Its primary purpose is to create large corporate transactions that transfer profits/wealth from Main Street over to Wall Street. Despicable.

Even so, THE most important thing, by far, is that we continue to operate under the greatest system in the world: Capitalism (albeit perhaps a much changed and more regulated version) .

 

[OzDigger]

I couldn't agree that Capitalism is the ideal human system as it tends to favor less than 20% percentage of any population, which is hardly a democracy.

I like to see people do well in their life but imo it demeans their success if they succeed by making others less well off. When there is no win - win situation and the guys at the top get too greedy then that system will inevitably collapse because the majority at the bottom will rebel.

This is not Communism, or even Socialism, it's just human nature, and despite all our advances we can never get away from being human. Money or Greed in general is not the root of all evil, but it has to be in the top three

As for increased house prices. I own a reasonably large house and don't owe a cent on it, but I don't gain any real benefit from its increased value unless I sell it, then I would just have to pay a high price for the next house I buy. High house prices just make it that much harder for new buyers to get a home and as most of us have children we don't like to see a first home getting beyond their reach. Which is exactly is what is happening as wages haven't kept pace with prices for the majority of the population.

I don't know what the housing situation is in the US but in Australia higher land prices means higher rates and I presently pay over $2 K a year in rates as it is and doubt if any of that is going where I would like it. I understand US home owners get some tax relief but in Australia home owner/occupants can't claim a cent in tax for their housing loan.