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ElPato
Posts:378

11/23/2008 9:13 PM	Alert
Spiegel.de (German) "over the next five years fresh loans backed by the FHA that go sour will cost taxpayers $100 billion or more. That's on top of the $700 billion financial-system rescue Congress has already approved." So why is it you need to read the foreign press to get news about US issues? It really makes me wonder about the objectivity of the US media.

Brian
Posts:2614

11/23/2008 9:57 PM	Alert
The prediction goes without saying. The government wants banks to lend money to people who are not qualified. Those loans will go bad. Roubini predicted that credit cards debt will also go bad. Citibank also predicts large credit card defaults. And now Citibank itself is being bailed out.

wilson
Posts:670

11/23/2008 10:35 PM	Alert
I agree, for someone to predict that some new mortgage loans will need to be foreclosed on in the future or that $700 billlion is not enough is hardly surprising.

Aeneid
Posts:52

11/23/2008 10:59 PM	Alert
The US media coverage is horrible. It is so limited. If one were to read international press such as "Financial Time", "International Tribue", one will see that the US mess is much more serious than most local news paper or something like the "Time". The US papers sensationalize that our economy is bad and horrible but never fully contextualize it. There is so much depth in foreign newspaper and magazines coverage of world events. I just returned from Paris after three month stay. While I was there, I got scared reading those international newspapers. French newspapers such as "Le Monde" and magazine such as "L'express" gave pretty dired pictures of the US economy. The US media hardly covers any foreign news. Any foreign news would be just about Iran and Iraq. I don't mean to be snooty here-after reading Europe's newspapers and magazines for awhile, I find that US newspapers and magazines very deficient. Considering this age of globalization, the lack of coverage of world events -the US media is doing a disservice to its readershp. If anyone read the column by Tyler Brule's "America Inc needs to get smart" in the "Financial Time" this past Saturday, one will see how others view America and our current state of affairs. It's right on the target.

ElPato
Posts:378

11/24/2008 6:50 AM	Alert
>>for someone to predict that some new mortgage loans will need to be foreclosed on in the future or that $700 billlion is not enough is hardly surprising. >> I find that US newspapers and magazines very deficient. Considering this age of globalization, the lack of coverage of world events -the US media is doing a disservice to its readershp. Good points both of you, and I agree. But my question is, why don't we see this information in the US media? In the US, we are bombarded with media coverage, so it can't be lack of resources. So if you take away lack of resources, what is left? It looks to me like deliberate omission, but that leads me to think I'm becoming a tin foil hatter... Anyone else got a better rationale?

tpc
Posts:624

11/24/2008 7:55 AM	Alert
Europe takes a more global outlook because it is so interlinked by adjacent economies, a common currency (euro), old rivalries, new rivalries, etc. America is blessed by being its own little island. In America, we dont need newspapers to inform us or tell us what to think. We have our priests and ministers make our political decisions for us. How else would "W" have gotten elected. In the West, the NRA tells people how to vote. Sportsman for Bush. Shouldnt it be obvious to everyone that the right to carry arms issue is beyond anyones ability repair. But there are people who vote based on that issue and that issue alone. Huge numbers of people in the us live by slogans and slogans alone. "Get the govt off our backs" is the favorite of wall street. "Tax and spend" is another favorite. Their idea is to reduce taxes at the high end by borrowing (increasing the deficit) the money from the govt to pay for the tax breaks. If progressive taxes are so onerous, then why are the wealth and income disparities between classes getting wider with a smaller and smaller middle class??? Everyone thinks that their contribution to society and to the wealth of the economy is so much more important than someone elses. But if we really believed in a free economy, then lets import more doctors, more engineers, more computer people from other parts of the world. Lets throw open the doors to the best and the brightest from the rest of the world and see if our professionals are willing to compete. Last year Goldman Sachs had a bonus pool of $19 Billion. These executives want everyone to believe that only they are so extraordinary that only they were capable of creating this wealth. Believe otherwise, and Rush Limbo will tell you that you are engaging is class warfare. Why dont we need good newspapers-because they would be irrelevant huge portions of the American population who refuse to think for themselves. They are parrots. They hear a slogan 3 times and boom, it becomes dogma.

Aeneid
Posts:52

11/24/2008 7:57 AM	Alert
" But my question is, why don't we see this information in the US media? In the US, we are bombarded with media coverage, so it can't be lack of resources." ElPato, it is a very interesting question. There are two possible reasons for this. One, the US media coverage does not do such coverage because its readership does not demand such coverage. Or, the readers just not demand for it because they did not know better. It is the "egg vs. chicken" scenario. However, I suspect it is the former. I probably get burned for say this-intellectual discourse is not a high priority for lots of people here.

Brian
Posts:2614

11/24/2008 8:23 AM	Alert
One thing that I should add is that leverage and financial engineering is designed to borrow from the future so that we can have economic growth today. The idea is that economic growth today will lead to more growth in the future. In America, we have perfected the art of financial engineering. We've borrowed from the future and now it's time to pay back. The rest of the world tried a more sustainable approach. But when they compared their growth rates to ours, they could not help but but feel jealous and imitate. That's why the whole world is in financial crisis. Having lived in the other parts fo the world, I believe that the American system is best for productivity, in the present. When people think too much, they complain more and work less. You want workers to be happy and content so you don't want them to know anything different than their reality. In general, Americans have less intellectual nourishment, but they have lots of food, clothes, electronics and plastic widgets. Which is better? Some would argue that ignorance is bliss. Better to have more consumer goods and lead a "happy" life.

footin08
Posts:17

11/24/2008 8:37 AM	Alert
FYI, this was in US media. I read that exact line from an article (can't quite remember the source, but I think it was a headline on either msnbc.com or nytimes.com) over the weekend. It discussed how many of the subprime lenders that had gotten into trouble have repackaged themselves and are now giving FHA loans to people with shaky credit or employment status. It said that these fresh loans now could cost us up to 100B in the next 5 years. Apparently there is too little oversight still so the people running these shady mortgage brokers are simply starting up a new business under a different name and aren't getting caught.

Brian
Posts:2614

11/24/2008 11:37 AM	Alert
This is from the LA Times. They give percentages but fail to publish the absolute numbers. If you look at the millions of mortgages defaulting, you can easily see that there is no way for prices to increase in the near term. When it comes to realistic news, the press is always a day late and dollar short. ---------- Foreclosures, delinquencies skyrocketing among 'prime' borrowers Nationwide, 3.07% of prime mortgages were in foreclosure or at least 60 days late in the second quarter of this year, easily topping the previous record of 1.97% set in 1985. http://www.latimes.com/business/la-fi-prime24-2008nov24,0,6174050.story

Aeneid
Posts:52

11/24/2008 10:01 PM	Alert
Brian, When you said that when people think too much, you probably were thinking of the French. I have to agree that dont they work much less than we do. It is the French system that creates this phenomenon not because French people are more intellectual inclined. It is extremely difficult to fire people. If people get fired, their unemployment benifits are great. Therefore, they might not take their jobs seriously. We we have lots of things in the US. This is the very reason people over eat, drive more which result in obesity and wastefulness.

jakob
Posts:549

11/25/2008 7:51 AM	Alert
On the different countries, France is the land of the 35 hour work week and 100 vacation days a year. The US is the land of financial engineering and where you don't have to pay your mortgage. China is where people actually work making real things and where they promote the mantra "to get rich is glorious". Here we say to get rich is greedy and evil. Makes me wonder who the future will belong to if we don't turn things around.

Brian
Posts:2614

11/27/2008 11:17 PM	Alert
I see countless properties come back on the market because they fall out of escrow. 1) Many sales are squeaking by. Buyers are barely qualifying for loans (and standards are still very loose). And you know that Realtors and loan brokers are doing everything possible to qualify their buyers. 2) Banks have no business lending to people who barely qualify. They are setting themselves up to for future losses. 3) That will only create another wave of foreclosures a few years down the road. Here is an example: 1205_Pacific_Hwy_3404_San_Diego_CA_92101

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