Root Cause

We hear a lot of discussion on the “Root Cause” of the current financial crisis. The common conclusion is that a large number of home foreclosures, funded primarily by sub-prime loans, caused a massive collapse of our banking and lending systems. People were buying houses they could not afford, but were coerced into high mortgages by low ‘teaser’ rates that were set to increase at a later date. Everyone involved knew the loans could not be repaid. The banks were counting on it. With home values increasing in leaps and bounds it didn’t matter. Once the period of the teaser rates was over, the value of the home would have increased substantially, allowing the owner to turn it over, pay off any bank fees, and still pocket a profit. Win-Win.

But the fact that buyers were purchasing homes they could not afford was not the real problem. Well, let me put it in a different way. The homes they were buying were drastically overpriced. THIS is the problem. While wages for the middle class have remained stagnant over the past 8 years, prices have been steadily increasing. But how is that possible? It undermines the basic concept of money and the financial system. In order for things to cost more, someone out there must be getting paid more. It wasn't me, and I'm pretty sure it wasn't you.

See, rather than pay the middle-class workers more of the company profits, the elites were pocketing the cash themselves, then investing that money into financials (and other markets) and lending it back to the middle-class so they could live with the standard of living they work for. Not only were the elites hauling in extra cash by failing to lift wages for workers, they were earning interest on the that money by lending it to the workers rather than actually paying them! And the middle-class bit. And here we are.

Oh, and it's a lot worse than you may think. See, you paid $300k for a house that was really only worth $150k. Someone at the top walked away with that extra $150k. That money did not dissappear. Now the foreclosed mortgages are causing the banks to take on massive losses, which are in turn being 'relieved' by the government. But the government is also broke. They get thier money by taxing the middle-class. So, not only are you out $150k on your house, but now, in addition to it, you're about to be forced to pay extra taxes to pay off the financial bailout of the very people who overcharged for your house in the first place.

Ron Paul

This is why I was for Ron Paul.

Stabilize The Housing Market? - Schmuck!

Well, I'll refrain from calling McCain a fool directly, but it's either him or me! (Ya, I know what you're thinking - but if you have an opinion, back it up). One of his main points for shoring up the economy is to help homeowners & get housing prices rising once again. But how does this help the average Joe? IT DOESN'T! What could be the possible motive for wanting to make a select few housing contractors & owners of large ammounts of 'hand-me-down' land super-rich by over-charging the general public for houses. Oh, and lets not forget the banks who are hauling in cash for the mortgages.

Isn't the average guy better off with housing provided at rates near cost (adding reasonable ammounts for construction labor & supervision)? How can the public want oil prices to drop, but want housing prices to rise? OK, so I know the answer, but it's flawed. You want housing prices to rise because you own a house! - Just like the Saudi Royal Family likes high oil prices!

But... The Saudis get to SELL the oil & BUY OTHER goods with the profit. You don't have that opportunity with your house. If you sell at an inflated price, you'll be stuck buying another at an equally inflated price. You are NOT richer! You might think you are (and perhaps McCain knows this), but you are NOT!

Lower, more affordable prices are better. Houses are no different. Vote Obama.

Putting It Into Perspective

$700 Billion = $12,000 per American family of five
-Economic turmoil began as a result of the subprime housing crisis.
-Early 2008 forclosure rate: 0.83%
-Delinquancy rate: 5.82%
-Median American home price before market crash: $230,000
-Home Ownership rate currently ~70%

With a little simple math:

Now, I'll be extreemely generous here and assume prior to this economic crisis, delinquancy was 0.0%, and that all delinquant loans would NOW be forclosed on. This would mean 1 out of every 17 homes in the country would be siezed by the Bank. BUT, if the government decided to help the individual home-owners who needed it by allocating a portion of the $700Billion directly to them, they would give each delinquant family of five $290,000, which is $60,000 ABOVE the average home value! But what are the chances they're gonna attempt to help Main Street?

Americans have absolutely NO IDEA how badly they are getting screwed!

Counterfeit

It finally happened. I've seen hundreds of people discussing the current economic turmoil, but I finally saw one I agree with. His view is that we've borrowed and spent ourselves into debt. The market NEEDS to crash, because it is overpriced. Government intervention can only worsen the problem, because you can't solve an economic crisis with a printing press. People are so far removed from the basics of the economy that they can no longer understand the fundamentals of the dollar.

We live in a world where people truly believe they can work (and earn money) from home. News Flash: You can NOT! -well, the vast majority of you- I'm not saying you won't recieve a check, I'm saying you won't earn money. If you cannot see the difference between the two, then you are the cause of our problem.

The government is going to bail out Wall Street with a $700 billion package. But it is impossible for this to fundamentally solve the problem. There's a reason why I'm not allowed to photocopy money and spend it. The same fundamental behind that truth is the fundamental that will lead to the collapse of the American economy.

Accountability

First view this again:

http://www.youtube.com/watch?v=wQK1al91drs

You know, there are several top executives likely heading to jail for a very long time for supposedly misleading investors in the recent Mortgage Meltdown. They are being held accountable for misleading the public. But then we have these clowns in the video (amoungst many others), who are obviously misleading the public on a Pesidential Election! And this is commonplace now. WTF?! I WANT THESE GUYS IN JAIL! They are influencing the masses of the morons, just like the mortgage firms did. Only its far more blatent. And in the end, not only will I get stuck with a house that's lost half it's value, but I'll have an incompetant President as well. I repeat, I WANT THESE GUYS IN JAIL, or as least send them to Iran where they'd cut out thier tongues for speaking such garbage.

Conservatives

I'm really begining to resent Conservatives. Why? Because I am the REAL Conservative. The people running under the 'conservative' name do it just to get my vote, not because they are actually of my standpoint on the issues. Palin is big with Conservatives. I won't even get into the earmarking (which is extreemely troubling). She gave Alaskans a $1200 tax rebate last year. She flaunts this fact. But for every federal tax dollar her state collected, she swindled back TWO! Where did that $ come from? ME...YOU... And somehow Conservatives seem to love this girl? Gimme a break. Once again, before you vote, THINK!