Comments on: Credit Crunch 2010

By: Mike S

Mike S — Sun, 22 Aug 2010 22:15:43 +0000

Unmonitored Free Trade has ripped the heart out of North American manufacturers. You want jobs? Quit importing products that are made at near slave labour rates and bring the jobs and money home.

By: john tucker

john tucker — Fri, 30 Jul 2010 13:48:42 +0000

These days my mailbox is being swamped, like the good old days, with offers of credit cards from banks. While I realize my good credit score is unusual, I’m still appalled. However, I send them all back to the banks in their postage-paid envelopes. Because the “low rates” that they promise to me am0ount to usury!
In a world where they can borrow money for 0% interest, even the “teaser” rates they offer to try to lure me in are close to the highest rates anyone has ever offered to me. These banks are out of their minds! They want 15% for purchases, and 25% to 30% for cahs advances …

By: crapdetector

crapdetector — Thu, 29 Jul 2010 17:24:17 +0000

I can’t stress enough how utterly sick and dissapointed i am at the stupidity of partisan posts – both Democrat and Republican – that are interestted ONLY in blaming the other party for this economic collapse. If only it were that simple! But the truth is much bigger and deeper than that. Clinton’s ‘surplus’ was the result of Fed bubble #1 (stock market) caused by the same Keynesian monetary inflation policies that caused bubble #2 (real estate). There was NO Clinton surplus because SS inflows expanded hugely, exceeding budget shortfalls that are the persistent feature of every president since Kennedy. Bush fiscal conservatism evaporated into thin air after 9/11 and dug us deeper into the hole that only few people would acknowledge. Debt fueled consumption by consumers at all levels were sustainable until they were not. We are now in a painful but necessary process of re-allocating resources – or what’s left of them – and we will not see another barn-burner of fake prosperity for a long time. And that may be a good thing. Until then, blame yourself for electing politicians who see no further than the next election, just like corporate leaders see no further than the next quarters profits and their own bonuses. As soon as the spendulus loses steam, like the cash-for-anything programs they fund, we will see the resumption of recessionary pressures. Prepare yourself by living within your means.. and try to do a little more thinking about the need for true leadership rather than the short-term debt-fueled money fixes that seem to be the only solution offerred by the two-headed monster that we call our party system.

By: Mike

Mike — Sun, 25 Jul 2010 14:41:30 +0000

Four words…Live Within Your Means. For years, we watched our government borrow their way to “prosperity?” We, too, as consumers were encouraged (and banks MANDATED by the FEDS) to loan to uncreditworthy people. How long does that formula work?

I, too, fell into that trap…and managed to pay my way out of it…since living in a cash only world on a MODEST income, I am happier and much less stressed!

By: Pangea

Pangea — Tue, 20 Jul 2010 15:54:24 +0000

The U.S. is already in a Depression. You don’t see it, because it is covered-up by design. There are 40 million on food stamps. In the Great Depression, those 40 million would be captured in black & white photos, standing in soup lines. But the gov is sheltering us from this, by handing out coupons to get their soup at the stores. Millions more are allowed to live as squatters in their homes, without making payments, because the gov doesn’t want them on the streets. I could go on & on, but you should get the picture in crystal clear color.

By: sharonsj

sharonsj — Tue, 20 Jul 2010 15:29:23 +0000

Abut 5 years ago I had a chilling conversation with a woman who worked in the Federal government. She was just a standard office employee in some department, not even a person of some importance, and she warned me that the economy would fall apart–there was no other expectation.

That was because of the government’s accounting practice of listing debt as income. This confused me. To any human who, for example, owes on a credit card, having to come up with $75 a month to pay it is considered an expense. But not for the government and not for the finance industry. They “balance” their books by listing debt as credit.

If this all isn’t a Ponzi scheme, then Americans are stupider than I think. The way out for individuals is to get rid of debt (pay it off, walk away, declare bankruptcy), Keep your money far away from the big banks and do not invest in stocks (another Ponzi scheme) because then you give the financial industry your own money for them to risk and to pay themselves big bonuses while you go broke. Screw them in return.

By: Flyer1

Flyer1 — Tue, 20 Jul 2010 03:31:39 +0000

Seems to me less borrowing is better. So why is it our economy cannot exist without everyone borrowing through the nose? Why is that? Because without borrowing, the wealth transfer stops. No one needs to borrow money. Period.

By: dippity doo

dippity doo — Tue, 20 Jul 2010 01:38:56 +0000

And all the kings men couldn’t put Humpty Dumpty back together again…

By: MtNobody

MtNobody — Tue, 20 Jul 2010 00:29:32 +0000

But this article only refers to the tip of the ice burg. Don’t forget the biggest problem of them all. Derivatives. 600 to 1,500 trillion dollars! Who’s addressing that?

By: ray

ray — Mon, 19 Jul 2010 23:22:58 +0000

You cannot blame this on Dems. or Gop. they are both equally to blame. The biggest problem is that all governments attempt to manipulate their economies to maintain a steady 3 to 5% growth and that was great while it lasted. But continous growth cannot be sustained indefinately, eventually we will overpopulate and deplete our natural resources. When that happens it will all come crumbling down. At some point in the next few hundred years or less we could experience a population collapse of up to 80% dead within a generation or two. and a crazy world that is a cross between mad max and the bronze age.

We need to stabalize our population and develop an economy based on flat to very small growth 0% to 0.5% growth. and concentrate on developing new food and energy technologies to survive the millenia

By: john Donohue

john Donohue — Mon, 19 Jul 2010 22:16:54 +0000

Personally I feel that the elite like it this way. It’s always the poor, working class who are made to feel the pain/blame first. As a nation we aren’t really that strong as a people to stand up and demand different. What I mean to say is nobody is marching in the streets, or doing anything about the millions of unemployed who have dropped off the rolls and now have to survive by their wits or off the kindness of relatives. As to those who have given up looking for work, what is going to happen there? You can only ignore the so-called bums for so long-and live in gated communities safe and secure, still you have to come out for food and work….
There is no leader in DC who can offer even a marginal solution to the crisis that you paint. And sorry but the so-called Tea Party only complain and a lot of us don’t really like to hear complainers endlessly whining about immigrants or gay marriage or abortion or whatever.
An FDR or a Lincoln would be a start. FDR was of the elite but he was able to strong-arm them to realize that it was in their own best interest to change course. We have none of that now. Obama or the people around him, or both have no inkling what is going on in middle America or lower-class America for that matter. There is no change that I can see and that spells disaster in the short-and-long term for this once proud and great nation.
It is also alarming that most people who comment here are adopting a head for the hills attitude while ignoring the fact that this nation was built upon people putting differences aside and working together. That more than anything is why this nation will continue on it’s self-destruct course, the lack of humanity and it’s effect will cause us to be consumed by our own stupidity.

By: James

James — Mon, 19 Jul 2010 18:51:23 +0000

@Joe in JT
July 19th, 2010 at 3:19 pm

“Then Dick Cheney… lied, and convinced W to invade Iraq…Then (as planned) the housing bubble burst due to lack of oversite and no rules just as W Bush and the neocons were splitting.”

Yeah, Dick Cheney and the Boogie-Man.

Splitting? Some don’t split. Some just stay. And stay. And stay.

Hey Joe, call it what it is.

“The war in Iraq was conceived by 25 neoconservative intellectuals, most of them Jewish, who are pushing President Bush to change the course of history. ..

This is a war of an elite. I could give you the names of 25 people (all of whom are at this moment within a five-block radius of this office) who, if you had exiled them to a desert island a year and a half ago, the Iraq war would not have happened.”
– Thomas Friedman (New York Times)

By: Uncle Sam

Uncle Sam — Mon, 19 Jul 2010 18:33:20 +0000

The banks need to get a clue about the housing industry. They need to send offers to homeowners who are straddling the fence between strategic defualt (like me) and paying on a loan that will not par during a lifetime.

They can eat some now, or the whole thing later. I hope they are hungry.

Also, it seems the Islam world has a great idea that may actaully see the light of day.

http://whatwouldwarrendo.com/wwwd/?p=1084

The concept of usury, fractional reserve lending and the good old money multiplier of econ 101 will cease to exist!

The capatlists system does not have an end game except for that.

Good Luck.

And May Your Dow Never Jones!

By: bob

bob — Mon, 19 Jul 2010 17:00:57 +0000

Well, guess what, we’re going to really get screwd by the lame duck congress right after the elections. Hmmm, new congress doesnt get sworn in till January, so, what happens between nov and jan? Obama passing everything under the sun that is bad for us. Its like this, obama hates business, but without them, you’re going no where. Remember, IRS took over tax deliquent brothel in Neveda, Hmmm, seems they couldnt even run it, and went bankrupt. So, what makes obama think govt can run anything, let alone right? Banks wont lend money to small business’s they cant make payroll or other obligations, so, this is going to be a loooong and sad story in American history.

By: Joe in JT

Joe in JT — Mon, 19 Jul 2010 15:19:36 +0000

So you think the malls and shopping centers will look like ghost towns by Christmas? Let’s look at the reason why.

First, George W Bush and the Republicans of Texas completely striped Wall Street of any oversite. This turned our economy into a casino parlor game and a ponzi scheme. Then Dick Cheney(the guy with no heart, literally) lied, and convinced W to invade Iraq, costing the US about one trillion dollars so far. Then (as planned) the housing bubble burst due to lack of oversite and no rules just as W Bush and the neocons were splitting. They demanded a multi trillion dollar bailout, took the money and ran.

Today, O’Bama was on the tube asking the Republicans to have a heart and pass the extention on unemployment benefits. To no ones surprise, the neocons said tuff ****, I’ve got my money, so kiss off.

By: Jack E Lohman

Jack E Lohman — Mon, 19 Jul 2010 14:57:11 +0000

All that you say is true, but nothing is going to change until we have public funding of campaigns. The McCain-Feingold bill was watered down by McConnell and DeLay or it would have done the job. The Financial Reform bill will turn out like ObamaCare, a giveaway to the bankers. What is it about political bribes do we not understand?

If politicians are going to be beholden to their funders, those funders should be the taxpayers. And at $5 per taxpayer per year it would be a bargain. Even at 100 times that. We MUST lobby our senators and representative to co-sponsor the bill at:
http://www.fairelectionsnow.org/more/summary

Jack Lohman …
http://MoneyedPoliticians.net

By: Elocutionist

Elocutionist — Mon, 19 Jul 2010 13:52:39 +0000

“Credit crunch” – it sounds like a candy bar. It is, of course, an insidious poison to economies sold bills of goods relative to the value of sinking into oceans of debt to achieve positive GDP growth. If we were only heading into a credit crunch, this would be a good thing. But because we are more likely taking chocolate away from the recovering heroin addict, we are in for a period of far more deliterious consequences than simple credit contraction. As the relatively few remaining private sector jobs go overseas to the world’s emerging economies and Westerners (Americans and Europeans alike) adjust to lower standards of living, tensions will run increasingly high. Social disorder will become the order of the day. Disincentives for production vis-a-vis higher taxes and regulations will result in shortages of basic goods; another way of saying fundamental commodities (i.e. food, fuel) will cost more. No government has ever ‘saved’ a society from plunging into depression. If history has taught us anything, in fact, it’s clear that governments’ involvement in economies has worsened and prolonged such events. If the restriction of credit to the uncreditworthy can be likened to taking chocolate away from the recovering heroin addict, we’re about to experience the consequences of removing the last few drops of whiskey (credit) now available to the functioning alcoholics (middle class). Buckle up. The hardest of times lie ahead.

By: whoisbiggles

whoisbiggles — Mon, 19 Jul 2010 06:23:25 +0000

So the banks are being naughty again because they won’t lend to people with low credit scores. If they had of exercised such restraint over the last 10 – 15 years. Who knows how the US economy would be looking today.

The flow of credit from banks must be slowed so that banks can start to write off their bad debt. This process can not be avoided; the Japanese Government tried and so began their lost decade (or is it decades now). The proverbial band-aid must be ripped off so that the painful healing can begin. There are no quick and easy solutions. American families are going to get hurt, is that fair, I don’t know, did the bankers put a gun to the borrower’s heads?

Only when the bad debt problem has been resolved can real growth begin again. “America is about to have the depression you have to have”

Governments can not be allowed to try stimulus packages again – we all know that for every dollar the Government spends – the taxpayer has to repay with interest.

Like individual households all government budgets must be brought into surplus – reducing the size of the deficit or bringing budgets into balance isn’t good enough anymore.

The world economy may be slowing down – but if the stagnant OECD economies (excluding Australia and Canada) are removed from the growth calculations, I believe that the world is getting along just fine.