Posted in economy, politics, tagged asset, auto financing, bad loans, bets, boom and bust, bubble, business, cap, capitalism, casino, catostrophic, CDO, class war, climate of fear, commerce, concrete, creative contribution, employment outlook, fail, false economy, Fannie Mae, Freddie, free, fundamental economy, funds, gambles, Greenspan, haves and have nots, hedge, house of cards, inside job, IOUs, irrational exuberance, irrationality, lending, lose, Main Street, market inversion, marketplace, markets, MBS, mess, monetary policy, mortgage, OTC, predatory, rationality, real economy, redistribute, REMIC, speculative, speculator, subprime, subsidize, systemic risk, three Rs, trading, uncertainty, volatility, Wall Street, was Ayn Rand wrong, win, win by losing, work, yo-yo economics on November 15, 2011 |
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For all the talk of Wall Street reform and consumer protections the problem of predatory lending has not been eliminated.
Subprime lending continues in the auto financing industry and elsewhere, and unlike conservatives’ criticism of the housing market there are no federal subsidies to finger. Policymakers have, indeed, caused the problem but for reasons other than what many of us have been led to believe. True, Freddie and Fannie Mae advocated for the dream of home ownership even as it floated out of Americans’ reach. However, this reality only begs the obvious but lesser asked question: Why is the American Dream drifting out of reach in the first place? And might the answer to this question reveal that the hollowing-out of the middle class bears a reciprocal relationship to market volatility?
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Posted in economy, tagged agreement, austerity, author, billionaire, book, capital, Cassandras, Charlie Rose, competitive, consequences, consumer, contraction, contrarian, controversy, corporate mercantilism, corporations, correction, crash, credible, credit, currencies, cuts, dangers, debate, deficits, derivatives, disadvantage, disincentive, doomsayers, double dip recession, downturn, Dr. Doom, due, economy, effects, Elizabeth Warren, export, Financial Modernization Act, financial services industry, financial system, foretold, fragile, free trade, future, gambling, gap between the rich and the poor, GATT, Glass-Steagall Act, globalism, globalization, goldsmith, Gramm-Leach-Bliley Act, Great Recession, grow, hindsight, IMF, incentive, industrialized, international, International Monetary Fund, investments, irrational exuberance, Jeremy Grantham, joblessness, jobs, liberalisation, liberalization, losses, Main Street, markets, meltdown, middle class, NAFTA, nations, new normal, New Trade Theory, Nouriel Roubini, oligarchy, outsource, parity, PBS, pendulum, perma-bear, Peter Schiff, playing field, predict, private interests, protect, reasons, recovery, Reform, regulations, risk, Robert R. Prechter, Robert Shiller, Senator Byron Dorgan, shift, stimulus, stock, struggle, tariff, TARP, theory, trade, trade deficits, trap, treaty, two-income trap, unemployment, volatility, Wall Street, workers, world, World Bank, World Trade Organization, WTO on July 28, 2010 |
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Giving credit where credibility is due.
Charlie Rose:
How do you see the economy today? The world economy? Where are we?
Answer:
I think the financial system is extremely fragile. I think that you can see it in the volatility of currencies; you can see all sorts of weaknesses. I believe that there is an incredible amount of danger in things like the derivatives. I think that we are moving toward the outer limits of acceptable risk taking. … I think our financial system is dangerous and could create great problems for the real economy. …
— Sir James Michael Goldsmith, billionaire financier, 1994; February 26, 1933 – July 18, 1997
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