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Edited by Mrph1 on Nov 30th 2023 at 11:03:59 AM
As I understand it, it goes a bit like this:
Investment firms sold other investment firms products that they didn't understand, and lied about both how safe those products were and what they were worth. These products were loosely based on the worth and reliability people's mortgages and how they could be monetized, but it could just as well have been based on anything else. It could have been based on lollypop sticks and nothing would have been fundamentally changed.
The firm that bought that product then turned around and sold it for more to the next firm, who turned around and sold it for more to the next firm, who turned around and sold it for more to the next firm, who turned around and sold it for more to the next firm, who turned around and sold it for more to the next firm, who turned around and sold it for more to the next firm, who turned around and sold it for more to the next firm, who turned around and sold it for more to the next firm, who turned around...
Until finally everyone started to realize that the product was worthless, and suckers were left holding the bag for an unsafe, worthless product that they had paid hundreds of millions for, and suddenly everyone knew it.
The suckers left holding the bag then suffered huge losses, as did all the companies and individuals that they had been managing money for, or who had been investing in them. Furthermore, banks which in earlier years had worked solely in individual and business accounts and loans had years ago gotten involved in these sorts of investment products, because restrictions on how they could do business were relaxed and they had looked at all the money being thrown around by investment and Wall St. firms and said "Hey, that's where the money is!"
So they suffered huge losses, both from being the suckers left holding the bag, or having invested in the suckers left holding the bag. Therefore, their customers lost money, and because the customers lost money and couldn't buy products or be sure that they'd still have a job in the following months or years, everyone else lost money from sales that couldn't be made, so those companies losing sales cut cots by firing or cutting the salaries of employees, which then made people buy less, which made more companies fire people or cut back on salaries to cut costs...
edited 7th Oct '16 7:17:58 AM by TheWanderer
| Wandering, but not lost. | If people bring so much courage to this world...◊ |![]()
Yes, but that's kind of water under the bridge at this point.
Regarding 2008: the actual impact of the 2006 housing market collapse was only a few percent of GDP. That was, however, enough to set off a cascading series of catastrophic losses in the highly leveraged banking sector, which caused a credit crisis and corresponding loss of confidence in the consumer sector. While large in absolute terms, it was nowhere near a Venezuela, or a Zimbabwe.
In slightly more detail, there were two basic kinds of products marketed in the run-up to the financial crisis. One was these tranches of mortgage-backed securities, which had been (fraudulently) rated AAA to lure investors to buy them. The other was a series of complex "derivative" products, such as credit-default swaps, which were essentially bets for or against losses on those securities.
Imagine that you take out a mortgage, then buy insurance against that mortgage going under. The insurance product is itself an investment instrument with an expected payout/loss, so you then use the net value of the insurance policy as collateral for a loan to get another mortgage. Keep doing this until your original cash investment is leveraged many, many times over, such that there is no possible way for you to pay off the loans if anything falls apart in the chain of deals.
Now, imagine that the person doing this is a major Wall Street financial institution like AIG, and that its investors' stock price is based in part on the value of that chain of financial products, all of which are derived from some sub-prime mortgages in California or Florida. Then the Jenga tower falls over. But it isn't just that you're suddenly facing huge liabilities with no cash to pay them off: it's that the underlying value of trillions of dollars of security instruments is effectively unknown. Nobody will buy them, so those assets just sit on the books, gumming up your balance sheet and making it impossible to secure any sort of rescue financing.
The solution: the government has to step in to buy all those bad assets: injecting good money to replace bad so that the system will start functioning normally again.
edited 7th Oct '16 8:44:31 AM by Fighteer
"It's Occam's Shuriken! If the answer is elusive, never rule out ninjas!"Donald Trump is fortunately his own worst enemy.
Trump blows off debate tune-up.
On Thursday night, Howie Carr, a conservative radio host and Trump booster, played the role of moderator, and the crowd was hand-picked by his campaign. The audience didn’t even ask Trump their questions. Carr did so on their behalf. Before the event, Carr had said Trump would take 20 questions. He stayed for about a dozen.
And while Sunday’s debate will stretch for 90 minutes without a bathroom break, Trump bolted from his town hall in Sandown after barely more than one-third of that time.
Trump’s campaign did place a two-minute countdown clock in front of their candidate on Thursday. He repeatedly blew past that time limit anyway.
“I said forget debate prep. I mean, give me a break,” Trump said at one point. “Do you really think that Hillary Clinton is debate-prepping for three or four days. Hillary Clinton is resting, okay?”
I do question at times how seriously Trump is taking this whole thing. Debates may be a pain in the ass, but they're a necessary pain in the ass. I imagine the act of governing will be a major pain in the ass. Welcome to Earth.
One might expect him to adopt a public persona of unconcern about the debate, but to do it in private, when there are no cameras watching... man.
"It's Occam's Shuriken! If the answer is elusive, never rule out ninjas!"I know I shouldn't be shocked any more, but it keeps happening. The degree to which Trump is genuinely representative of the know-nothing right is astonishing.
"It's Occam's Shuriken! If the answer is elusive, never rule out ninjas!"Regarding the hurricane talk: Hurricane Matthew is a liberal conspiracy. Specifically, the laws of physics have conspired to unleash a highly destructive weather storm upon unsuspecting people. Despite conservative insistence that physics should not be taking sides on partisan matters, the unfortunate truth is that reality has a liberal bias.
My Tumblr. Currently side-by-side liveblogging Digimon Adventure, sub vs dub.It's almost like those tax dollars do useful things.
"It's Occam's Shuriken! If the answer is elusive, never rule out ninjas!"Where I'm from we don't get natural disasters so it's kinda weird for me to see a weatherman say "leave now or you will die" and people just kinda shrug it off. Are apocalyptic pronouncements more common on the coasts or are Floridian folk really as crazy as the memes say?
Is using "Julian Assange is a Hillary butt plug" an acceptable signature quote?![]()
It's also amusing in that the technology to control the weather and the sophistication of the conspiracy needed to hide it would be absolutely amazing to have access to — think of all the things we could accomplish!
The North American continent has a ton of nasty weather that can be quite fatal to the unprepared or unlucky. Along with that comes a handful of folks who are too stubborn/ignorant to believe themselves to be in danger from said weather.
edited 7th Oct '16 9:27:47 AM by Fighteer
"It's Occam's Shuriken! If the answer is elusive, never rule out ninjas!"Honestly I've never cared much about extreme weather. I dunno if I'd call myself stubborn so much as apathetic. Like what am I gonna do? It's the weather, if it really wants to kill me there's about jack all I can do to fix that.
Either way I bought lots of snacks and gasoline since my town is straight up outta food and gas and everything. Nothing to do but wait.
edited 7th Oct '16 9:33:41 AM by LeGarcon
Oh really when?I wonder if he's actually not focusing on debating against Hillary per se, but aiming to come off as the more entertaining and "charismatic" politician on screen. After all, he plays to the anti-stuffy-politico crowd anyways.
I just saw a guy this morning wearing a Batman-themed shirt that is a mock campaign poster: "Joker for President: Let's Bring a Real Clown to the House!"
He'll likely lose, but Trump is the final warning to the elites
“Will it play in Peoria?” goes back to the days of vaudeville. The city of 115,000 in central Illinois was once considered the ultimate focus group, the embodiment of Middle America, the place to test a joke or a soda or a social policy to learn what white folks without a fancy degree thought of it. Back in the day, you knew better than to defy the settled judgment of this ultimate test market. You went as far as Peoria would let you, and no further.
But we grew impatient. You have to fight Jim Crow, whatever Peoria thinks. Free trade will lift most boats, even if it swamps a few. The environment is too precious, and at too much risk, to go slow. Lower taxes and less red tape will help the economy grow, even if it profits some more than others.
The left wanted social justice, protection for minorities, a cleaner environment. The right wanted lower taxes and trade deals. Despite the rhetoric, each accommodated the other. Republicans left the Democrats’ progressive policies largely intact; Democrats learned to embrace, or at least reluctantly accept, globalization.
And everybody knew what was really going on in Washington. A tax break for you. A subsidy for me. You take care of my client and I’ll take care of yours. Deal? Then let’s celebrate. We’ll expense it.
So this brings up two ideas - one, that ideas should be tested to see if they work well with the masses, and two, that it was perfectly normal for politicians to say what their people wanted to hear while secretly compromising to get stuff done.
Until it didn't work anymore, because too many people were hurting.
But what does Washington care? The left worries more about combatting global warming than about blue-collar workers with bad backs and no jobs. The right promises to retrain them, but somehow never gets around to it.
The laid-off boys in the bars of Peoria blame the illegals, the only ones even more voiceless than themselves. They seethe at the Wall Street suits who destroyed the economy and got off scot-free. And what the hell is transgender, anyway? They look at their daughter’s report card. She’s only getting Cs. What future is there for anyone who’s only getting Cs?
I will be your voice, Donald Trump promises. I will get your job back, or at least wreak revenge on the company that gave it away to a guy in Bangladesh. I will send the Mexicans back and keep the Muslims out and build a wall around our country. And you’ll have a man, a real man, a white man, your kind of guy, in the White House. We’ll be back in charge, folks, you and me. It’ll be great again. And they’ll never take it away from us.
It ends with a warning:
In other words, think about the effects of policies before trying to enact them because they just have to be done that quickly. Prepare for unforeseen consequences.
I wonder if there's a possibility of bringing consensus back. I think maybe there is, if politicians start focusing less on divisive issues and more on things like how to help those who are jobless, how to improve schools, reduce crime, etc. Things that are far less partisan and are more universal concerns.
As much as I'd like to play ivory tower politics and tell those folks from Peoria that we really know what's best for them if they'll just trust us, it is true that unless Democrats get buy-in for their policies, it's going to be an uphill slog. Also, somewhat obviously, Democrats don't share a single political viewpoint and have made their share of messes.
The problem is that the article you just cited, again, presents the false-equivalence dilemma. Right now, Democrats are attempting to compromise and educate and negotiate. Republicans are not. Until they get punished for it, we're in for a long, rough haul.
edited 7th Oct '16 11:27:09 AM by Fighteer
"It's Occam's Shuriken! If the answer is elusive, never rule out ninjas!"![]()
generally I agree. partisan-ism needs to dial back big time, however I have doubts that there is a "Peoria" anymore. A place where easy, all encompassing focus testing can occur. America might be too diverse to appropriately capture that.
also, as
said, the problem is one party has completely gone insane. and comprising with them is kinda damn near impossible, since they don't wanna compromise.
edited 7th Oct '16 11:31:31 AM by Jetyl
I'm afraid I can't explain myself, sir. Because I am not myself, you see?

And 2008 wasn't the real state alone, the entire financial sector while in bed with the mortgage loans conducted what could be considered a scam. By mixing sub prime ratings with prime ratings, leading to a practical lock down of the US financial sector. People started realizing something was iffy with all those real estate being left unoccupied thanks to increasing mortgage values, the foreclosure of the loads made to sub prime families who wouldn't be able to afford those estates and the inevitable demand drop due to increasing prices.
There were more details on the Economics thread, but the 2008 crisis alone could fill an entire page worth of explanation.
edited 7th Oct '16 7:05:11 AM by AngelusNox
Inter arma enim silent leges