Forum Post: For all of those who don't understand why we're angry at wallstreet and policies which "regulate" wallstreet. Let me break it down for you.
Posted 12 years ago on Oct. 13, 2011, 1:35 a.m. EST by jmcdarcy
(158)
This content is user submitted and not an official statement
Correct me if I'm wrong but this is my understanding of the financial crisis: Financial services companies held far too many investments in mortgage backed securities, dispersed throughout the secondary market. In a true loan scenario, the issuer of the loan hedges his bets by checking the borrowers credit (ability to pay back the loan). Keep in mind that the financiers who are offering the loans are the ones who are "in the know" about the risks and possible gains when lending. The reason for companies extending mortgage loans which were too good to be true was because they knew that they would make their profits repackaging the loan(s)-this is an important distinction... into some kind of financial services product (security)...and then repackaging it again into incredibly complex products called derivatives, which nobody fully understands. So basically these companies bought MASSIVE amounts of securities on the margin (with borrowed money)...in a word, legalized gambling.
There is no way, that if these companies hedged their bets with minimized risk counting on the consumer to pay the loans back and checking their credit and so forth that...listen now...that these companies would implode sucking a number tantamount to 20 percent of the national GDP out of the markets. No individual consumer acts on his own to borrow money. The institutions who lend it also hold equal responsibility to act responsibly, since after all, the growth of the GDP depends on it, as do all Americans depend on the growth of the GDP for REAL LIFE expenses. Actually, the institutions who lend it hold MORE responsibility since they actually KNOW what they're putting on the line. Consumers don't understand economics. They don't expect a reputable bank like Bank of America to be giving them a mortgage contract tantamount to throwing all their money down on "black" on the roulette wheel. That's not what a mortgage contract is supposed to be. Granted, they should have had the sensibility to know "if it's too good to be true...it probably is." But to say that it was "everybody's" fault is not really fair.
Buying a house you can't afford is timid compared to buying extremely risky, repackaged securities, the original documents for which no one knows where they are, ON THE MARGIN, with a value of up to 300 percent more than the worth of your ENTIRE COMPANY. AND! The ratings agencies KNOWINGLY committed insider trading by marking these securities AAA when they KNEW EXACTLY WHAT WAS GOING ON because they were on the take!!!! So everybody's fault? I think perhaps some are guiltier than others. And let us not forget that NOBODY has been held accountable for the crimes of insider trading, and issuing securities without actually handling the paperwork (which is illegal). And don't even get me started on the government, who allowed these things to happen by axing regulation and then after the companies acted a damn fool and gambled with the wealth of the nation, the government has done NOTHING to change the way things are done! Everybody's fault? Please. We elect officials who are supposed to understand how to run a country so we don't have to go to our 9 to 5s and then tell them how to not be complete morons when we get home. Oh wait, they're on the take too. This whole system is a travesty of Democracy. It's a disgrace and we have every goddamn right to be furious.
As much as I support this cause, this is pretty much a third grader's understanding of what really happened, and how the securtized debt market functions. There are valid reasons to be pushing for more regulation and legislative change, but the financial and economic (il)literacy of the average person on this board makes it no wonder why media cannot take us seriously. I worked in structured finance for years and I am sign-carrying demonstrator too - but if we can't understand the system then what qualifies us to demand changes to it.
Is there an argument in there, or are you just here to badmouth everyone who isn't a financial whiz? We certainly understand enough to know that the system is fucking us, and that qualifies as a reason to demand change. If you have some brilliant solutions, then by all means, present them. Otherwise, stop degrading people.
Bill Black worked on the S&L debacle (he actually put people in jail) and now talks about the 2008 crisis: http://www.youtube.com/watch?v=cV5Q_tCUPj0 (note: this is a 5 part interview, but they are informative interviews).
These people took Matt Taibbi's article: "The Great American Bubble Machine" and set to video (it is GREAT and only 10 minutes): http://www.youtube.com/watch?v=QEhQrnKTQk0
Dont call it third graders. bring a real discusion to the table.bring your point of view explain to us.
The formality of discussion requires you to demonstrate the truth of you contentions by providing examples and evidence to support your claims.
You're entire post here is simply an insult with no scientific analysis or backing, it's nothing more than emotional criticism and bias.
You might as well have said 'NO U' and left it that.
Seeing as you are so educated to the workings of the economy, perhaps you can communicate the reason why OP's post does not adequately represent the truth. Demonstrate this with examples, evidence and facts,
Until you do so, you won't be listened to by anybody.
Good! Makes sense!
Completely agreed, in order to bring about real, sustainable change we need to educate ourselves on what got us here and what we can do to improve the situation for the 99%. Simply bi%&ching about the problems we as a nation face and offering up overly idealistic post-Marx pipe dreams of creating a Utopia will do nothing but discredit and kill the movement.
We have the chance to enact real change here, to hold politicians accountable for their actions, to stop the excessive profits being made by the banks at our expense, and to impose a divorce on the marriage of Big Business and corporate lobbying by enacting campaign finance reform. Let's leave our social ideologies and opinions at the door and unite under a cause that the rest of the 99% can support!
Your posts have been very informative I bookmarked them, thank you.
How in the world would people possibly understand "the securitized debt market." They have their own professions, families, job search, illnesses, finances and more to worry about. People know something is wrong. And people are not trusting that those in charge in both government and the financial sector are doing the right thing. We can turn to experts. but those experts may have an agenda. If you are a sign carrying protester with knowledge of the issues that is great! Please share your knowledge. But, if we wait for the entire populace to get business and economics degrees we might have to wait a few centuries for anything to change :).
It's called the internet, you should try it sometime. A simple wiki search can make you infinitely more informed and therefore credible supporter of the cause.
It can also make you dumber too. Just saying
OK to be fair, I think it is really difficult to understands this tangled web of the federal reserve, government backed institutions and banks. It's not like you can just look it up and understand all of a sudden. You practically have to be educated in economics just to begin to be able to read the threads on MBS and CDS and all that stuff. Most people are not educated on these matters but we are majorly affected by them by loosing our jobs and houses. I did learn more by researching. But I've learned that it is more complex than I could have imagined. I mean, it's a huge mess and even economists don't know how to clean it up. I found this post that explains some of it decently...tell me what you think:
"I think all of the points raised so far are valid - shoddy if not fraudulent ratings of securities, overly aggressive lending policies, lack of underwriting standards, probable deception in structuring MBS by loading them up with bad loans, unrealistic expectations for property values, and so on. There were so many opportunities to staunch the flow of red ink and so many failures. If any one of those factors hadn't existed, there wouldn't have been a crisis.
But underlying all of this was the fact that the entire financial system was overleveraged. MBS's are just a part of that. You also have companies like AIG who were writing derivatives for amounts that did not reflect the risk they were taking and those derivatives were being backed up by the slimmest of capital requirements.
Add to that the fact that all of these instruments contributed to the availability of liquidity. Let's say I sell you a credit default swap on $100M in GM bonds. Maybe I charge you a premium of $5M per year for my guarantee of GM's debt. That $5M is now a predictable cash stream which I can bundle and sell as another derivative such as a total return swap. This now becomes yet another security that can become the basis for yet other derivatives or used for collateral to create new loans. And around we go.
I won't pretend to fully understand derivatives, but the point is that you are creating new assets essentially out of thin air and those assets can become the basis for more assets and so on.
By itself that's not too shocking since that's how our fractional reserve banking system works. I deposit $100 and my bank takes $90 and loans it out. The guy who gets that $90 puts it in his bank and they loan out $81 (90% of the $90). And this continues indefinitely.
The difference is that my bank has to meet certain capital requirements. They can't loan out $99 of my $100 because they are required to keep a certain percentage in reserve. Buyers and sellers of derivatives either had no such limitations or they were substantially more relaxed than those imposed on banks. The closer to zero the amount of reserves held by sellers of these instruments, the closer to infinity becomes the growth in the amount of money available."http://boards.straightdope.com/sdmb/showthread.php?t=579945
Like a reflection of a reflection in a mirror that goes on forever. The reflection is not real.
I've read books and looked up information about the financial crisis on the internet. It's very complex and I grasped some it. But I would never claim that I knew it all just from reading a few blog posts about how Barney Frank cause the meltdown encouraging lending to low income buyers or that Phil Gramm colluded with banks to deregulate the market making it more unstable which is what alot of people do.
Valid point, it is an incredibly complex topic but still, we should all be trying to learn the best we can about it - I'd recommend these basic Economics videos: http://www.youtube.com/user/mjmfoodie#p/p
Which ones now? What's this Mrs. Beasley all about? I was looking for the hidden economics lesson but I don't think it's there! hehe.
Ha, yeah you can ignore Mrs. Beasley - click on the economics modules (playlists) on the right side of the screen - either Micro or Macro.
Thanks. I'll check them out after I get some sleep. I saw the one about Mrs Beasley...but I don't think that will help much with my understanding of economics :).
Thanks for that karai...true enough. I also agree though that sper0 should share his knowledge and I am eagerly waiting for him to help us understand better.
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So why don't you use your literacy to explain what happened instead of making fun of someone who had at least tried? The financial and economic literacy of the average person in America, which includes all past Presidents and Treasury Secretaries, is why this kind of activity was tolerated in the first place. In fact the illiteracy evidently extended to the underwriters at AIG since Goldman was able to intentionally insure Bad Loans with them.
Here is a slightly better summary, but still very simplified.
Banks loan money out so people can buy houses. This is a good thing. People owning houses is generally a good thing. So the banks make a lot of these mortgages, then package these into securities. The idea is: as an investor, you don't want to be exposed to just one buyer (because you have no idea if he'll default or not) but you like the idea of broad exposure to say maybe, 100, or 1000 mortgages, because the likelyhook of you losing your money is a lot lower. So, as long as all 1000 people pay their mortgage on time, you're getting the cashflows. Sometimes you get less cash because mortgage owners are late. sometimes mortgage owners just decide to stop paying. etcetera, but the idea is not everyone will screw you over all at once.
So this system is working pretty well, but people decide, Hey! Everyone should have houses! So they push for fannie may and freddie mac; what these 2 companies do is they provide timing insurance on these securities- AS LONG AS THE Underlying mortgages are in qualifying properties! (note; all sorts of subsidies for the poor, etc., so these mortgages have to be targetted at low income families etc.,) and what this insurance says, is if the mortgage payment to the security pool is late, fannie and freddie will just front it. So fannie and freddie make a tiny fraction of money to insure the timeliness of the banks securities. So now the banks are implicitly backed by the government, and have these securities that are backed by 100s, 1000s of mortgages. So instead of buying treasuries at 4%, you could buy into a tranche of one of these, paying higher rates at the same risk rating.
Great! So now the banks can lend for much cheaper; everyone's happy because the banks have a new product to sell, they can make loans for cheaper prices to a larger supply of customers, and they can pledge the securities as collateral in trades; reducing their costs as well. Politicians are happy because mortgages are easily accessible.
Anyway, long story short, the unthinkable happens, and all of the mortgages in the securities start missing payments or defaulting simultaneously. This fucks the banks over- and now nooen wants to do business with the bank because they'll pledge mortgage backed securities as collateral. Instead, any counterparty will charge insanely high rates for short term lending; and because all of the banks participated in this, noone knew which banks would fail, so this caused credit to dry up, because noone would lend.
So with noone lending, the economy stalls, and we're in the situation where we are today. Banks are holding massive amounts of excess capital over the required rates because they fear more onerous legislation - rightfully so. So when you want to demonize banks for lending to people, sure you can do that, but the reality is fannie mae and freddie mac, who held a majority of mortgages in this country, were programs pushed for by your elected representatives.
This really gets back to some of the building blocks of finance; if you're not paying(or getting paid) for risk appropriately, something is wrong.
I am not here to propose a method to fix it- thats another discussion.
That was good, not far off at all. But it is time for solutions.
You have to lift controls and regulations. The reason why Fannie and Freddie did what they did (loan to everyone) is they were told too. That is the essence of the Dodd/Frank scandal.
Freddie and Fannie exist due to the Savings and Loan Crises of the 70'80's and the formation of another govt agency the RTC.
It is the liberals in our govt that think they can legislate fairness.
The solution is less govt, flat taxes. If we just did that to start. that would be begin the turnaround.
You inspired me to read more into it...after your explanation I was still confused though... What I've realized is people don't understand it because it is INCREDIBLY complex. I found this post that seems to do a good job explaining so I can have SOME kind of idea of what the hell is going on:
"I think all of the points raised so far are valid - shoddy if not fraudulent ratings of securities, overly aggressive lending policies, lack of underwriting standards, probable deception in structuring MBS by loading them up with bad loans, unrealistic expectations for property values, and so on. There were so many opportunities to staunch the flow of red ink and so many failures. If any one of those factors hadn't existed, there wouldn't have been a crisis.
But underlying all of this was the fact that the entire financial system was overleveraged. MBS's are just a part of that. You also have companies like AIG who were writing derivatives for amounts that did not reflect the risk they were taking and those derivatives were being backed up by the slimmest of capital requirements.
Add to that the fact that all of these instruments contributed to the availability of liquidity. Let's say I sell you a credit default swap on $100M in GM bonds. Maybe I charge you a premium of $5M per year for my guarantee of GM's debt. That $5M is now a predictable cash stream which I can bundle and sell as another derivative such as a total return swap. This now becomes yet another security that can become the basis for yet other derivatives or used for collateral to create new loans. And around we go.
I won't pretend to fully understand derivatives, but the point is that you are creating new assets essentially out of thin air and those assets can become the basis for more assets and so on.
By itself that's not too shocking since that's how our fractional reserve banking system works. I deposit $100 and my bank takes $90 and loans it out. The guy who gets that $90 puts it in his bank and they loan out $81 (90% of the $90). And this continues indefinitely.
The difference is that my bank has to meet certain capital requirements. They can't loan out $99 of my $100 because they are required to keep a certain percentage in reserve. Buyers and sellers of derivatives either had no such limitations or they were substantially more relaxed than those imposed on banks. The closer to zero the amount of reserves held by sellers of these instruments, the closer to infinity becomes the growth in the amount of money available." -http://boards.straightdope.com/sdmb/showthread.php?t=579945
Cut the condescending crap, we don't need it . Were not idiots. Were here dude because we know we've been robbed by a bunch of slick bankers and their endless army of shills and flunkies. We don't need the fine pts. we get it? All you need to know about what these folks do is find some huckster on the corner stealing people's money doing a 3 card monty show or find the pea under the cup routine. We all see the ruin around us and in our communities these slick boys and girls and their high finance games have wrought and were sick of it. We also understand how these same orgs. have bought our Gov't out from under us and were not all that happy about it. Again, we don't need a college course on all the fine pts. comrade. So save for later.
It isn't condescending comrade. Knowledge is power. We know we've been screwed and the more we know specifics the more respect we will garner. Anyway, this post was not intended for people who already agree with me. It was intended to explain the legitimacy of the movement to people who think that we're just mad at rich people and demanding that they pay higher taxes.z
I really can't figure out why you'd be mad at a post like this. The more details and examples we provide, the more solids our arguments are. Furthermore, as someone already said, how can we provide solutions if we do not understand the problem? A blanket statement isn't necessarily the solution. I meet people here and there who think rich people are just generically the enemy. The reason is because they lack understanding of who deserves the blame. It's elements within the 1%, not the whole thing. Those people make us sound as ignorant as the trolls who come on here and call us all idiots and children...labeling thousands and thousand of people who they don't know...and I don't think I know everything...I've been served multiple times by people with a better understanding of what happened. And I'm better for it.
The Political and Economic chain of events as I remember them: America’s love of big gas guzzling vehicles, ever increasing dependance on imported oil. Our failure to heed President Carter’s warning on oil dependency.
Reagan defeats a humbled President Carter. President Reagan’s Trickle Down Economic policy.. Reagan began Union busting, and the rise of Right to Work state laws. Supporting Saddam Hussein war against Iran States compete for corporate jobs with corporate tax breaks. Bush succeeds Reagan, no new taxes pledge. Saddam invades Kuwait, he’s now the enemy. Middle East Gulf War to secure oil supplies American armies in Saudi Arabia infuriated devout Moslems. Clinton is elected due to slow economy. NAFTA is passed to search for cheaper labor in Mexico. Securities regulations relaxed allowing Banks to invest for profit in stock markets. Greenspan, Secretary Rubin and company denied “The Warning” See PBS’ Front Line. The Markets are self-regulating and will always get it right? The Monica Lewinsky affair, and Ralph Nader contribute to Al Gore’s defeat. Bush is elected. V.P. Dick Cheney’s energy summit of 2001 President Bush administration underestimates Bin Laden threat. Capital gains tax reduction, enables the making of billions on short term stock gains. Not all Tax reductions are good, and not all Tax increases are bad. Sept 11 2001 and the Wars that followed refocused public attention away from economy. Manufacturer’s profitability increases stock values and capital gains. Exporting jobs, now to Asia, accelerates, skyrocketing profitability and capital gains. Home mortgage liar loans, and housing boom super inflates the housing market. Mortgage Backed Securities, MBS, were created and over rated as AAA secure.
Selling MBS, required creating CDS and unregulated derivatives, or a balloon ready to burst. The loss of millions of exported jobs contributed to mortgage load defaults. The financial balloon began to deflate, and in 2008 it burst. Apparently Greenspan, Rubin and company were wrong about markets self regulating. TARP was grossly mishandled. The above only proves that the American people put too much trust in slick talking politicians and that Washington is Broken.
The Political and Economic chain of events as I remember them: America’s love of big gas guzzling vehicles, ever increasing dependance on imported oil. Our failure to heed President Carter’s warning on oil dependency.
Reagan defeats a humbled President Carter. President Reagan’s Trickle Down Economic policy.. Reagan began Union busting, and the rise of Right to Work state laws. Supporting Saddam Hussein war against Iran States compete for corporate jobs with corporate tax breaks. Bush succeeds Reagan, no new taxes pledge. Saddam invades Kuwait, he’s now the enemy. Middle East Gulf War to secure oil supplies American armies in Saudi Arabia infuriated devout Moslems. Clinton is elected due to slow economy. NAFTA is passed to search for cheaper labor in Mexico. Securities regulations relaxed allowing Banks to invest for profit in stock markets. Greenspan, Secretary Rubin and company denied “The Warning” See PBS’ Front Line. The Markets are self-regulating and will always get it right? The Monica Lewinsky affair, and Ralph Nader contribute to Al Gore’s defeat. Bush is elected. V.P. Dick Cheney’s energy summit of 2001 President Bush administration underestimates Bin Laden threat. Capital gains tax reduction, enables the making of billions on short term stock gains. Not all Tax reductions are good, and not all Tax increases are bad. Sept 11 2001 and the Wars that followed refocused public attention away from economy. Manufacturer’s profitability increases stock values and capital gains. Exporting jobs, now to Asia, accelerates, skyrocketing profitability and capital gains. Home mortgage liar loans, and housing boom super inflates the housing market. Mortgage Backed Securities, MBS, were created and over rated as AAA secure.
Selling MBS, required creating CDS and unregulated derivatives, or a balloon ready to burst. The loss of millions of exported jobs contributed to mortgage load defaults. The financial balloon began to deflate, and in 2008 it burst. Apparently Greenspan, Rubin and company were wrong about markets self regulating. TARP was grossly mishandled. The above only proves that the American people put too much trust in slick talking politicians and that Washington is Broken.
Further more, most people could afford their homes when purchased. The failing economy is what collapsed that market. I lost my home. I easily could make my payment with one paycheck. My wife couldn't get work. Eventually I got laid off. Then the house of cards tumbled down. It can happen to ANYONE. Even people who buy homes well within their budget. Your source of income disappears, you too no matter how rich you 'think' you are, will lose your home as well.
:( sucks. No bail-out though for you dude, right? If your name was Bank of America though a different outcome, right? Right.
Sorry to hear it man. Justice needs to be done and I hope for your sake it happens soon.
Exactly, which is why what we most immediately need is a comprehensive strategy, and related candidate, that implements all our demands at the same time, and although I'm all in favor of taking down today's ineffective and inefficient Top 10% Management System of Business & Government, there's only one way to do it – by fighting bankers as bankers ourselves. Consequently, I have posted a 1-page Summary of the Strategic Legal Policies, Organizational Operating Structures, and Tactical Investment Procedures necessary to do this at:
http://getsatisfaction.com/americanselect/topics/on_strategic_legal_policy_organizational_operational_structures_tactical_investment_procedures
Join
http://finance.groups.yahoo.com/group/StrategicInternationalSystems/
if you want to be 1 of 100,000 people needed to support a Presidential Candidate – such as myself or another you'd like to draft – at AmericansElect.org in support of the above bank-focused platform.
Many contributing factors, but in my mind the biggest blame, far and away, is Wall Streets greed. They did the crime, 99% do the time.
They knew the fraud they were committing. Yet, they would have us believe they are such fragile flowers. Oh, yes, fragile flowers making billions of dollars in fraudulant sales. Makes me want to vomit in my mouth to hear their lame excuses as to how they were just "market makers" for their customers! DISGUSTING.
If Wall Street had not bought the bad loans, the bad loan market would have dried up. Or at least been smaller and less damaging.
Who let them do it?
Wall Street is the boss of the world. Govt is their paid employee and obediently does anything the boss asks of them. Oh yes, the govt listens. To the 1%
Then lets reform the government. They are paid by us to do their job. If they arent doing it, lets protest them.
How? Don't u listen? The 1% own the Gov't.
Agree. I think we are protesting them. It shouldn't matter where we camp. What is important is that the govt is listening. Sadly, we have to shout at them because for so long our voices have not been heard. They are not paid by us. They are paid billions of dollars by wealthy individuals, corporations and special interests, the 1%, in campaign and election contributions. And that is who they listen too. The govt is like a very obedient dog. The 1% is the dogs master.
We need to retrain the dog. Too listen to the 99%. In order to do this we must take all of the money out of the political process. Money speaks too loudly in our government and is drowning out the voices of the 99%. We need to get back our fair and equal representation in our government through election reform - publicly funded campaigns and elections. Once the dog is listening to the 99% then we can take care of its master (Wall Street).
First they ed you, then the government paid them to you again. .............. http://market-ticker.org/akcs-www?post=195841
Expecting our politicians to be tough on Wall Street and bring some sort of accountability is a bit naive in my view. Most of the guys in congress are more or less employees of big business. They just come to us ones every 4 years or 2 years to beg for votes and then for their full time job they serve their masters in wall street. I mean there is a reason why congress's approval rating is so damn low. It's really a systemic crisis we are facing, not just a problem with isolated law makers or groups or them. We need to change the whole electoral process to get some real people into congress. But, then again, to bring this systemic change you need a congress willing to legislate such change, which under these current guys, will never happen......The only solution is to have a people's grassroots movement to force upon our government these demands.....This is why I support OWS or any other movement for meaningful change in this country. This shit has got to stop.
Agreed. Although I don't think you can "force" anything upon the government. We can oust them in election. We can vote for third party. Also, we can participate in grassroots movements like Americanselect.org to abolish the role of the party in politics.
correction, first paragraph. in order for a bank to have made a transaction that qualifies as a loan they need to have lent THEIR money. but as you seem to have missed, you give them a note, they ledger that as an asset on their books THEN cut you a check. They have no money in the deal. the rest of that hocus pocus you mentiond in the first paragraph is nothing more but high stakes gambling, with other peoples money guised in a super complicated series of schemes to cover up the first move they made, which was to take your credit in the form of a note and give you back your credit in the form of a check. Paragraph 2) Real Americans depend on food water and shelter for a good life. What your spewing is crap you got from being institutionalized too long in banker controlled institutions., totally missing the fact that people need to borrow because their savings ability is constantly being crippled through inflation and deflation. A point always missed in those institutions. Paragraph 3) yea I agree, but in light of the following 2 quotes: firstly "It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning".- Henry Ford, and Secondly "Give me control of a nation's money and I care not who makes the laws".- Mayer Amschel Rothschild(1744-1812) Who is keeping the people dumb?? See Quotation 2. This not some new Enemy the people are dealing with, it goes back 200+ years
Nice quotes. I'm not sure I understand how you can just get a check from the bank and they are not giving you any of their money. I mean I know they sell the mortgage and likewise the mortgage risk when they sell them as mortgage backed securities to Freddie may or whomever...so I guess they get the money back right away, but isn't there initial lending going on? Also what 'institutions' you're talking about which are controlled by bankers? Also, I'm confused as to how your comments on paragraph two actually relate to what I said. Not that they're not good points, but I don't see the relation to what I said.
You could change your screen name to " blinded by institutions" I'll say it again. you give your credit to the bank in the form of a note, they ledger it as an asset on their books THEN they cut you a check for the same amount of CREDIT in the form of a check, you use the check to buy something, whats a check, its an order to pay, its not payment but an ORDER to pay, its also considered a note, or in legal beagle terms, a negotiable instrument. What's a negotiable instrument you ask, well i'm glad you did, its money, M2 money to be exact. so you see you funded the loan with your own credit.
I'm still confused though. When you cash the check, doesn't the bank who gave it to you have to pay? I suppose we're talking about the difference between assets and liquidity? Doesn't the bank have to have enough liquidity to pay?
At the end of every banking day the bank has 0 money, all their accounts are zeroed out because of GAAP, more commonly referred to as double entry bookkeeping. When a bank "cashes a check" they are substituting the order to pay (the check) with NON REDEEMABLE Notes (federal reserve notes, negotiable instruments) At no point in time is anyone "PAID" as defined IN law. Its a shell game of credit, the peoples credit. If you hold my promissory note in your hand I owe you money, money as defined IN law. If you hold federal reserve notes in your hand they owe you money. If you hold any negotiable instrument in your hand someone, somewhere owes you money, money as defined in LAW! Credit is not money and neither are federal reserve notes. Please accept my apologies for my obvious sarcasm as you have truly demonstrated you wish to be part of the solution, by keeping you mind open.
Ok thanks for that. I'm still confused though...although I am perhaps beginning to understand. So a federal reserve note is not money? You mean dollars right? On the dollar it says "this note is legal tender for all debts, public and private" And by promissory note, you mean a check? What then is the real money? Gold? I could understand that dollars are not money if it is only because the "note" represents an actual gold value, which it used to...but I know it no longer does. It's pretty clear that credit is not money. Also, what do you mean by IN law?
this note is legal tender for all debts, public and private", now please check a federal reserve note series prior to 1964. you will see that it also says " And is redeemable in lawful money at any federal reserve bank or the US treasury". A promissory note is what you give a bank when you ask them for a loan any loan, it is not an order to pay. A check IS an order to pay. Both the note and the check are negotiable instruments. I am sure by now you are starting to feel the pit in your stomach. Its that feeling you get when you realized you got screwed real good. Real money is Gold, Silver, Copper, Labor or any other form of substance that has VALUE and can be exchanged for Value, think bartering. Lawful money is generally referred to as Gold and Silver as it is referred to in Article 1 section 10 of the US constitution. At law or in law??? If you hire an attorney at law, he is AT the game he's not IN the game. COLOR OF LAW IS NOT LAW, its public policy...
So why is gold actual money? Because there is a finite supply of it and it is rare?
Because the Sumerian Anunnaki integrated a "lust for gold" gene in the DNA of the human prototype which was 'created' for the purpose of mining and collecting gold for the survival of planet Nibiru's atmosphere-- Nibiru being the planet from which the Anunnaki gods came. See Zechariah Sitchin and his archaeological findings of when the human race was created as a "slave" to serve the Sumerian Anunnaki gods over 10,000 years ago.
lol...I wasn't expecting that
To summarize: The 99% are "slaves" created to serve the 1%. And if you read the History... every now and then the "slaves" have to revolt against the 1% to instill a new Era of humanity on Earth. And the cycle begins again...
I dunno, maybe because its so malleable and has 3 free electrons in its outer electron shell.
I must say, that is much less of a certain answer than the ones you gave before.
Check out this Anonymous video in which they blame the Bankers for the current problems and all problems leading up to it. They make a good point and it quite funny: http://www.youtube.com/watch?v=j5xRaQnHGA0
And, on top of it, after they crashed the market, we bailed them out, and then repossed our houses, that would have still been paid for, if theyvhad not crashed the market in the first place.
hey so i get that your furious but what are your solutions?
I've been a bleeding heart Democrat my entire life. But now I actually think we need to listen to what the libertarians are saying or what people like Ron Paul are saying. The system is broken and we need to take it down first before we rebuild it. Ron Paul has stood by his own beliefs and his voting record shows. Alternative to Paul, we can vote third or fourth party. And EVERYONE on this site should sign up for Americanselect.org- direct nomination of a candidate.
do you get paid for each new 'click' or member to AE? Sure seems that way. Like I said, LOT'S of BIG money behind the website your pushing.
Ron has some good ideas but he goes off into gaga land on allot of subjects that could be very dangerous for the country. As an example.
Iran, He's correct in saying we started the problem. We installed the Shah you all know the story. However for us to say oops, sorry about that one and walk away, it's a mistake. We need to bring it to conclusions. Told adage, finish what you start. So be careful of him.
Plus this:
http://images.memegenerator.net/instances/400x/10251510.jpg
lmao, that is some hilarious shit.
Paul Krugman today-
What’s going on here? The answer, surely, is that Wall Street’s Masters of the Universe realize, deep down, how morally indefensible their position is. They’re not John Galt; they’re not even Steve Jobs. They’re people who got rich by peddling complex financial schemes that, far from delivering clear benefits to the American people, helped push us into a crisis whose aftereffects continue to blight the lives of tens of millions of their fellow citizens.
Yet they have paid no price. Their institutions were bailed out by taxpayers, with few strings attached. They continue to benefit from explicit and implicit federal guarantees — basically, they’re still in a game of heads they win, tails taxpayers lose. And they benefit from tax loopholes that in many cases have people with multimillion-dollar incomes paying lower rates than middle-class families.
What I find really unfortunate is that 3/4 of the forums I have read end in some different form of racist comment. Godsent? Are you part of the cure? Or did you just find another place to be heard?
Don't protest corporations! Protest our government. It is badly broken and needs a brand new constitution that eliminates the political party system, the tax system, and the supreme court (with no checks) for starters! Our forefathers never envisioned such a disaster!
It is our government that has caused all of the huge profits that are abused by corporations. Profits should be subject to usury restrictions. Why should anyone make 200% and greater profits?
Yes! Protest the government. Protesting wall street only helps the nxt election. Or is that what OWS really wants?
I don't know about that second part there. But I'm on board with the first paragraph.
Just a thought... Why not hit them where it really hurts. What would happen if the working class suddenly turned off the flow of capital into Wall Street in the form of 401K deposits for a month?
Just a thought... Why not hit them where it really hurts. What would happen if the working class suddenly turned off the flow of capital into Wall Street in the form of 401K deposits for a month?
Don't misinterpret...wall street is not the enemy. The original idea of lending money at an interest rate I think is OK...unless you're Jesus, then money changers are the root of all evil. But we need to go in and clean house for sure. And we need to go to Capitol Hill and clean house(this one first). I mean, can you imagine a system in which actually morally sound, and sustainable companies went public? In that case, it would be a worthy thing to invest money in, since money is how we express value. The problem now is that money is coupled with the wrong things which are not actually valuable but destructive.
Money is coupled with the political process. That is the wrong thing too. We need to get the money out of politics by establishing publicly funded campaigns.
Agreed...totally.
http://www.youtube.com/watch?v=A4x7MFZ4BXg&feature=player_embedded