Are you in the top 1%?

Parent Cafe
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<p>I hear you, PerformersMom. I recently moved to New Jersey. The vast burden of public sector benefits and pensions and payroll is mind boggling here. It is like a great ocean sloshing over the state, drowning everyone.</p>

<p>And yes, those bubble years drove it all. </p>

<p>I don’t want to come off as above the fray. My DH and I are very nervous about his job continuing (I can’t find anything here) and certainly about our kids. It’s hard to sleep at night. No question.</p>

<p>I don’t trust people who try to turn the mass angst into anger, though. I don’t think that’s how we will get through it.</p>

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<p>The other side of it, SH, is that this one gal DID benefit HERSELF and so did SOCIETY up to a certain point from this gov workfare.
WELFARE does not come easily when the pie is shrinking, but it is even more needed at such times.
It is hard to know what to think about all this. I am just PO’d that the mayor was padding his votes; to me it should be OCCUPY DC, OCCUPY CITY HALL, OCCUPY STATE CAPITOL… Maybe the Mayor could have set up some outside programs, that trained workers to enter the private workforce.</p>

<p>I just dunno.</p>

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<p>sew said: “My point is that the fundamental problem was extending mortgage financing to segments of the population who should not have been buying homes. This was brought about by government policies. Are you familiar with “redlining”?”</p>

<p>Ummm . . . setting aside facts you are spot on.</p>

<p>What % of the derivatives that drove the over-leveraging were backed directly by the government? The government backed about 28-30% of the total mortgage debt but did NOT back any of the derivatives that were used to create the over-leveraging.</p>

<p>Redlining is the practice of not issuing loans to people who could qualify financially but were denied because they were not white people.
Anti-redlining means you cant’ discriminate because of race; it doesn’t require issuing NINJA loans or require brokers to falsify applications or the creation of sophisticated complex derivatives.</p>

<p>Even in my socialist daydreams (oh Single Payer Health Care, where are you?) the government never had the power or regulatory to require the kind of over-leveraging and falsification of loans that you attribute to government policies.</p>

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<p>“It feels more satisfying to blame “Wall St” though. And I do believe there is some bigotry going on with that approach that is really unspeakably ugly. But not a good topic for here.”</p>

<p>I am pretty sure that Wall St invented the cdos …well JP Morgam…and Wall St ran with it…including creating synthetic cdos…and Wall Street created credit default swaps…and wall street pushed to get a law past so off exchange derivatives would not be regulated. Wall street also pushed the SEC to allow leverage at much higher rates than existed before…and we can stll see how that works with MF Global.</p>

<p>Mortgage companies created liar loans…and banks came up with loans
where you pick your payment…and you can add interest costs to your principal and pay your interest costs later.</p>

<p>And of course…nobody put a Gun to the leading financial institutions of the world and told them to risk more than they could possibly pay back…and book profits that did not exist yet and pay bonuses on these
phantom profits. </p>

<p>I’m sorry…but…
These financial institutions really put a number on this economy…millions of people are never going to recover…Never…and millions of these people never were careless…</p>

<p>The home prices crashed so their equity was wiped out…or they lost their job…or they can’t afford their medicines…</p>

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<p>I tell my dad, the ardent socialist who worked for the government his entire career and still thinks Stalin was a great guy, that I’m for Big Government AND Big Business. We do best when both are cooking.</p>

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<p>Ummm ^^^Kei-o-lei, the flood of capital out there was created by a Federal Reserve (part of the GOV, no?) with its foot on the accelerator for a looooong time: we had low low interest rates for a verrry long time.
The capital found its way into these sub-prime mortgages. Even without the CDO’s etc, which were a result of GOV deregulation (bye bye Glass Steagall) and GOV AGENCY NEGLIGENCE, these mortgages were mostly bad credits and super-risky.
How the heck did all the central, multinational and local banks around the world end up with these on their balance sheets??? Deregulation, greed, stupidity, inexperience, negligence, self-dealing.
What a lovely happy party it was! Just about everyone believed it would go on forever, that there was no risk. WHO should have known better???
The politicos all still have THEIR jobs!! and they spend all sorts of money fighting with each other and buying votes, instead of creatively and humbly facing the difficult problems they were very much a party to.</p>

<p>And what a hang-over we have now. We have seen Iceland, Ireland and Greece go down the tubes, taking us for the ride, too. Now it is Italy. What is next???</p>

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<p>This is the gist of the problem. Right there.</p>

<p>The govt was essentially backing the risky loans. The government. When that is going on then it is essentially the job of the investment people to capitalize on the landscape for their companies and clients.</p>

<p>The essential germ of what caused the whole mess was government intervention to put everyone in America in a home. Presidents from both parties embraced this. We all did! </p>

<p>It was lunacy.</p>

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<p>The government was backing a small segment of the loans…the govt missed most of the subprime mess…fnm and fre are not saints…but to blame them…</p>

<p>Fnm and Fre were not the leaders of the subprime mess…or the alt-a mess…</p>

<p>You had firms like countrywide credit and new century…going crazy…And the leading investment banks…and most of the major commercial banks…</p>

<p>If the govt was backing all the loans…then why did the leading financial institutions of the US blow up…</p>

<p>Because the govt did not back all their crap…</p>

<p>They still have crap…the financial institutions are trading below book value…because they are worth less than their stated net worth. Mark to market rules were suspended. These firms can keep their assets on their books at inflated prices.</p>

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<p>dstark,
just a minute there…
Why do we pay taxes to support a government that is paid to help avoid these scandals, and then say they should not/could not have known, it was not their doing??</p>

<p>You pay mucho bucks to support these watch-dog agencies, these congressional committees. I would have thought you would be outraged.</p>

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<p>I am outraged…</p>

<p>These agencies failed…</p>

<p>I Think the people who run these agencies are in the pockets of Wall Street. </p>

<p>I think our 3 legs of government…are owned by these corporations…</p>

<p>But…I don’t think any govt overseer ever thought these financial firms would leverage the system like they did.</p>

<p>And the financial firms are the ones that actually committed the deadly deeds.</p>

<p>We need things cleaned up.</p>

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<p>dstark,</p>

<p>Sorry, but I just don’t agree with you that the fault lies with evil Wall St. I think most blame should be with the government. They meddled too much and then they regulated too little. But everything the government did was directed at fanning the flames fueling the bubble. Everything. And this is not a partisan issue. This went on in both camps.</p>

<p>I probably shouldn’t post this but I will go ahead and say that I’m very uncomfortable with the wrath against wall street because I think a very strong anti-semitic sentiment underlies much of it. I’m not Jewish. No one in my family works in finance. But I am very uncomfortable with much of the rhetoric and I don’t buy the storyline at all.</p>

<p>The government did what it did for votes and to have power.</p>

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<p>Look, there is enough “blame” to go around in all of this to hit us all, at some place or other.</p>

<p>I would say ground zero was Greenspan and his endless bubble creation as monetary policy, beginning with the crash in 87. </p>

<p>His push to deregulate under administrations and congresses of both parties, and their support of that deregulation.</p>

<p>The politicians who loved to talk about how everyone was achieving the American dream of homeownership (both parties)</p>

<p>The banks who figured out a way to get the morgage risk “off book” with the CDO,s and then figured out a way to further take that bad risk, chop it up and leverage out against BAD RISK, as triple AAA, 30-1.</p>

<p>The ratings agencies who agreed to rate unratable products.</p>

<p>The people who took the bad loans from countrywide.</p>

<p>Mozilla and eveyrone who worked for him at countrywide.</p>

<p>Paulson, with his bait and switch TARP, and favoritism.</p>

<p>Berneke for being in bed with the banks, nationally and internationally.</p>

<p>Geitner, who is practically a lobbyist for goldman, et all, rather than doing his job.</p>

<p>Now, what is the solutions?</p>

<p>Cuz, what we need is a solution.</p>

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<p>Well…I am Jewish and I work in the financial industry…and I have seen a lot of greed and selfish, destructive behavior in this industry…</p>

<p>This industry tends to attract a lot of scam artists…and some good people too. Sometimes…the bad takes out the good.</p>

<p>I think OWS has the general idea right…but some of the details wrong…
But that is ok…the details can come later…</p>

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<p>^^What I have been speculating/assuming ever since you posted about your family having to leave two countries.</p>

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<p>Yeah…the second time…though …it was really communism that did it…religion had nothing to do with it…</p>

<p>Unless…well I never heard that it did…
Now I have to double check. :)</p>

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<p>I didn’t think China had to do with religion. Just know there were Jewish communities that left sort of all at the same time. or at least that is my impression. I don’t really know anything :)</p>

<p>but it does make your take on all this really fascinating to me</p>

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<p>The details matter.</p>

<p>without the right details we keep coming up with the wrong solutions. </p>

<p>ie Dodd-frank instead of going back to glass-steagall.</p>

<p>If we don’t understand what exactly we need, we are going to just keep tossing money at a problem that really requires regulation and anti trust suits. imho</p>

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<p>poetgirl,
Good summary.</p>

<p>Yes, now that we see that ALL parties and ALL sorts of biz people and consumers are to blame, it is time to undo some of the things in place that ALLOW or SUPPORT the list of things that went wrong.</p>

<p>The problem is that people cannot agree based on ignorance, misinformation or self-interest on what to do.</p>

<p>There are some that would even like to dismantle or significantly shrink the whole government. Other want to reform government. Others want to change policies. Others want to change laws and rules.
Some want to alter the power balance within government.
Some want government to get larger, to spend more.
It is still ALL OVER THE PLACE.</p>

<p>Nor am I seeing any brilliantly creative not already thought of things being proposed.</p>

<p>I confess that I am way out of my league in really understanding enough of this in all the details at all levels to be able to scrutinize or create solutions reasonably well.</p>

<p>Maybe we are so big that we HAVE to fail, as a nation, because nobody can figure this out anymore…</p>

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<p>The details come later…OWS is just getting going…</p>

<p>It’s like starting a company…you have a general idea…you write plans…you try to raise capital maybe…The details don’t exist at first…</p>

<p>Hopefully the details will make sense for OWS…not stuff like cancel all student loan obligations. :)</p>

<p>Although…wth…some people don’t want to pay any capital gains taxes and call it a flat tax…some people don’t want to pay off their student loans and call it OWS.</p>

<p>We’ll see…</p>

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<p>the problem, I think Performersmom, is that what we really need to do is what the big banks and their lobbyists, and therefore Berneke and Geitner, dont want, which is to just get rid of Dodd Frank, and go back to Glass Steagal.</p>

<p>There should be a difference between a bank and an investment house.</p>

<p>Insurance companies and companies like GE ought not to be able to be investment houses.</p>

<p>We need to tarrif countries which tarrif us.</p>

<p>We need to penalize US companies which offshore manufacturing jobs by tarriffing them, as well.</p>

<p>We need to make laws which disallow CEO’s from sitting on the boards of those who sit on their boards.</p>

<p>Just those few things would reduce the issues tremendously, and force banks to lend to business, bring back jobs, and get rid of the need for more and more regulating agencies, who do nothing but rubber stamp what Dimon wants, anyway.</p>