MARKETS

Goodbye to the Bulls?

Fifteen key economists, policymakers and strategists weigh in on a week of volatility and economic turmoil.

Newsweek Web Exclusive

Jan 25, 2008 | Updated: 3:43 p.m. ET Jan 25, 2008

« Return to Article

Discuss

Posted By: OnlyCureJGK @ 08/05/2008 3:55:40 PM

Comment: The problem is simple corruption needs to be stopped beginning with those who have profited for years from corruption. Please look up this individual ---- Nelson Wilmarth Aldrich ---- he was the father in law of Mr. Rockefeller who's family went on to controll the private banks which became the central bank the FED which is a private institution. This individual Nelson came up with the Income Tax and The Central Bank. Follow the money and you will find the corruption behind the problems in society. For 240.00 the Central Bank the Fed can create 1 million dollars then using the IRS they can bilk the public for 1 Million plus interest. Its easy math to see they have the complete control of the US government and even the world. Money is the root of all evil. Look up the owners of Standard oil it is a circle leading right back to the FED.
Posted By: blessedone @ 01/31/2008 7:30:06 AM

Comment: These bankers know their customers better then they customers know themselves, this is all creative net working a money game that they're playing. how can you blame a straving man for eating the bread that someone is handing him who has arterial motives behind their deceptive gesture of generosity. and believe me these bankers had did their homework up there on capital hill, by lobbying and spreading money for the protection they needed so the law want come after them, for the shrewd shell game they play on the american people. Wake UP! dress a pig up any way you like, it's still greed and simple con.
Posted By: blessedone @ 01/31/2008 7:11:58 AM

Comment: people get real, the Bush Administration has financially broke the USA, It's nothing our economy can do but financially collapse now, all we are doing now is prolonging the inevitable. it's over, can we understand that; do we know how to pick up the pieces and got home. How blind can fools be, maybe to blind for the love of country; and love is truly blind. But for those who can see, call it like you see it.
Posted By: Holly Garfield @ 01/28/2008 3:40:23 PM

Comment: In reply to the last comment by uvemoory I have already mailed two letters to my Senator and Congressman. One asked for public hearings by the heads of the major players for the purpose of presenting their actions and plans to recover from these problems and the other letter asking for regulation to bring transparency back to the whole process. Specifically I asked for rules requiring all non-personal data in the loan origination process on any loan-based securities be made available to the buyers, potential buyers and market analysts. This way they can be analyzed accurately and independently before purchase. I asked for rules of disclosure for rating services. The input data used by the rating services should be made available to market analysts. This way there is outside verification of the reasonableness of the ratings. Also I asked for limits on off-balance-sheet and non-open-market transactions for banks. The banks clearly built a house of cards behind a curtain. Take away the curtain and the house of cards falls before it gets too big. This is based on the priciple that if we can make subprime financing less profitalbe the size of the market will diminish. I'd rather try to regulate a few corporations than millions of loans. It has dawned on me that we get more required information on the contents of a $1 bag of potato chips than on a $1 billion CDO. The hearings and rulings are made to bring confidence back to the market and consumers. They are less costly than bailouts, and offer longer term solutions. Right now we are missing confidence as much as anything.
Posted By: Holly Garfield @ 01/28/2008 3:39:39 PM

Comment: In reply to the last comment by uvemoory I have already mailed two letters to my Senator and Congressman. One asked for public hearings by the heads of the major players for the purpose of presenting their actions and plans to recover from these problems and the other letter asking for regulation to bring transparency back to the whole process. Specifically I asked for rules requiring all non-personal data in the loan origination process on any loan-based securities be made available to the buyers, potential buyers and market analysts. This way they can be analyzed accurately and independently before purchase. I asked for rules of disclosure for rating services. The input data used by the rating services should be made available to market analysts. This way there is outside verification of the reasonableness of the ratings. Also I asked for limits on off-balance-sheet and non-open-market transactions for banks. The banks clearly built a house of cards behind a curtain. Take away the curtain and the house of cards falls before it gets too big. This is based on the priciple that if we can make subprime financing less profitalbe the size of the market will diminish. I'd rather try to regulate a few corporations than millions of loans. It has dawned on me that we get more required information on the contents of a $1 bag of potato chips than on a $1 billion CDO. The hearings and rulings are made to bring confidence back to the market and consumers. They are less costly than bailouts, and offer longer term solutions. Right now we are missing confidence as much as anything.
Posted By: uvemoory @ 01/28/2008 1:59:26 PM

Comment: It is not clear why the real culprits responsible for the so-called sub-prime crisis', namely the bankers who passed off sub-prime credit as prime credit, the credit rating agencies who ascribed high rating to the securities created out of such credit, the auditors who failed to bring out the error and the fraud involved in these two processes are hardly discussed .and information is not made known to the public about the investigations in progress in this connection.
Posted By: Holly Garfield @ 01/28/2008 11:30:11 AM

Comment: I find many of the views here interesting, and ignoring well known facts. The facts say to me the problem is not that the US is broken, but that the rest of the world is even more broken. The US has about 5% of the world's population and produces about 30% of the world's goods and services. This shows clearly that the US has far fewer problems than the rest of the world. The biggest problem is that the global productivity is so far behind the US that something as small as mortgages based on weak credit in parts of the US alone can throw the global economy into a downslide. I live in New York, and a few miles away a Revolutionary War battle was fought where the most common weapons were stone-tipped arrows and spears, and the combatants were mostly on foot. That was under 250 years ago. Most of the people in the current US were no more advanced than that at the time. In under 250 years the US has grown from a narrow strip of coastline with a big back yard to the world's biggest economy by far. Europe, Asia and Middle East have done less in 10 times as long. If the rest of the world had followed the US lead then the global economy would not be falling apart on such a small problem. If you want to point the blame, point it where the total sum of fact point, not the few facts that support a US-centered blame. Blame belongs with the societies that failed to follow the US lead in economic management thus allowing them to become susceptible to US economic swings.

That being said, we need to look at solutions, not point blame or try to punish the guilty. So far, and this morning's reports from Verizon and McDonalds continues support for this position, the US economy is slowing down but not hurting to the point of the global response. Unemployment is at historic lows, and within range of 'full employment' guidelines (5% or less). Core inflation is still holding. Energy prices are starting to stabilize, oil is floating at about $90/bbl. The New York attorney general is working on managing CDS problems before they become out of control. Falling house prices and interest rates will start a turnaround in the housing sector when buying season hits. Sovereign wealth funds are buying on the US to offer better financial industry security. The bulk of the solution is to work on the global economies to bring them up closer to the US standard of productivity so that small local problems in the US won't become large global problems. This involves large, basic changes in the fundamental societies of the older, but not wiser, markets.
Posted By: Watchman3839 @ 01/27/2008 10:29:36 AM

Comment: The current economic quake embracing the United States is sending after-shocks around the globe. The housing and credit bubbles were thought to have been created to stimulate an already faultering economy dependent on the ability of China and Japan to continue to absorb our debt. It has come clear that there is no fiscal discipline in the U.S., this is evident in he panic move prescribed by the Fed.

The facts being presented are not always the truth, there is a darker side to the story, presently there exists many benefactors who maintained huge profits while the bubbles of credit and real estate continued to increase in volume. We must take a closer look at our representatives and leadership who had inside knowledge of the timing of these bubbles bursting. The exploitation of the masses is not a new story, consider Iraq, a conflict based on fabricated intelligence yet continues to increase the investment portfolio's of those holding shares in the Defense and Petroleum markets.

The firm that holds the greatest amount of diversification in the fields of real estate, defense, petroleum, technology, finance, and the medical field is the Carlyle Group. When we take a closer look at the established clients of this investment firm and their board of trustees we then can see the wider scope of the planned rape and plunder of the unlearned American people. While we are subsequently being turned upside down government insiders and former government officials have made it possible for foreign nationals to increase their wealth as well, examples of these are Saudia Arabia and Dubai.

It is time to wake up America before it is too late, we are being led to slaughter by wolves dressed in sheeps clothing. The domestic citizens of this country are not alone, the reach of the Carlyle Group extends everywhere and the citizens of many countries are being liquidated financially. We are under the grip of a military industrial complex with no bounds and corruption is only second nature, greed and exploitation is their game and we are their prey.
Posted By: mac2007 @ 01/26/2008 6:50:18 PM

Comment: Bush is a proven failure. Before the economic failure, we have the Iraq war--the gigantic failure of foreign policy, and many negligence of domestic issues--the katrina, the energy, the environment, etc. Now, it is in full circle--adding on the looming economic downturn. In fact, they are all interrelated. Who should deny that the gigantic cost of the Iraq war will limit the federal government's ability to handle a deep economic slowdown?
Posted By: bhhb1930 @ 01/26/2008 2:56:25 PM

Comment: The problem with our ecomomy is Bush, Cheney and the whole admistration for starting a war we should not be in and young Americans that lost their life for nothing. Iraq did not invade us. The country was in better shape before we butted in like we have numerous times before with other countries. The people in Iraq would have eventually overthrown Sadam. Brad Bienvenu
Lacombe, LA
Posted By: pinkpanther87413 @ 01/26/2008 1:17:36 PM

Comment: I SAID HOME OWNERS ARE NOT THE REASON THEY WANT A HOME WHICH IS A NOBLE THOUGHT AND WANT BUT WE WERE ALREADY TRILLIONS IN DEBT PRIOR TO THE FIRST HOME SOLD QUIT BLAMING YOURSELVES FOR A PROBLEM WHICH WOULD STILL EXSIST EVEN IF YOU BOUGHT A NORMAL HOME! WHAT WAS BUSHS NOBEL THOUGHT=HE HAD AND STILL HAS NOT GOTTEN ONE NOBAL ACTION TO HIS NAME! THAT'S WHY IT'S THE FAULT OF A WAR CRAZY PRESIDENT WITH A VP WHO COULD NOT RUN A HOT DOG STAND!!!
Posted By: bob parden @ 01/26/2008 11:46:43 AM

Comment: It's a crap-shoot. People took out mortgages they hoped they could handle through real-estate price appreciation. It didn't work out. The system encouraged, not screened. Why has this become a Bush failure?
Posted By: Pete7849 @ 01/26/2008 11:17:50 AM

Comment: Mr Scharma's comment 'that inflationary pressure remains modest outside the food sector,' is cause for some alarm. Much of that inflationary pressure has, I suspect, to do with the expropriation of food-producing land for use in growing maize for use in the ethanol industry. The price of wheat has outpased that of oil and gold largely as a result of a diminsihing acreage for procuction of this vital food crop. How can we not expect this not to have a devastating effect upon emerging maarkets and developing countries whose budget for food is a huge percentage of their overall GDP.

Developed countries can bear the brunt of this increase in food costs because their economies are diverse and wealthy enough to allow for only a modest percentage of their GDP to be allocated to food consumption. But in the long-term, concentration of so much of arable land to the dubious industry pf ethanol production is bound to have long-term deleterious effects on global food production. And let's not forget that maize production depletes the soil of essential nitrogen for the production of other crops. Much like tobacco growing in 18th and 19th century America where new land had to be constantly put into production when older fields were depleted, maize production, without the use of costly nitrogen fertilizers to replenish the soils, demands a constant search for new land to maintain production. And unlike the farms in Iowa, where maize production in alternated with soy beans that fix nitrogen in the soil, there is no comparable land management in most area invested in the head-long rush for ethanol production, And unlike 18th and 19th century America, we can no longer go over to the next hill and find and clear previously untilled land in order to maintain or increase production.

Rather, the land comes from existing acreage previously used for food production leading to increased scarcity the commodities that form the very basis of civilization. The ethanol industry has within its reach the dubious distinction of being the most devastating economic policy ever foisted upon the world--comparable to the deforestation of the Amazon, except much, much more sweeping in its global effects and potential for economic disruption.
Posted By: BillsCatz @ 01/26/2008 9:31:27 AM

Comment: Lets hear it for the banks and realtors, the real driving force behind the massive subprime lending crisis. They bought up and sold entire neighborhoods fully aware that the buyers could never afford the mortgages once the initial low interest periods ran out. The banks sold the mortgages to sources outside the US to avoid the backlash they knew was coming. Thousands of families have had their lives and credit destroyed for the sake of these two groups out to make a buck. Lets foreclose on all the subprime lenders to pay off the debts of those they swindled.
Posted By: clementel @ 01/26/2008 9:17:24 AM

Comment: When I was shopping for my first home mortgage, I was horrified and quite taken aback when the mortgage rep informed me that I could afford a $390,00 mortgage. Sitting down with pencil in hand, I discovered that my husband and I could no where near afford such a high mortgage. So we waited. And waited, and saved and saved. We now own a home and are paying a $245,000 mortgage and at times the pocket book really is hurting. Imagine if I had listened to that mortgage rep. I place the blame both on unscrupulous lenders as well as dimwitted buyers. If you cannot afford something, then you should either save for it, or go without. While I understand the desire to buy a home, after all it is the American Dream, I also understand the concept of prudence and saving. Shame on the lenders. Shame on the buyers who could not afford homes in the first place.
- Posted By: pinkpanther87413 @ 01/26/2008 1:13:11 PM
  
  Comment: like the sellers and buyers of the USA hu
Posted By: axcs @ 01/26/2008 8:08:31 AM

Comment: I don't understand the sub-prime thought process. When was it a good idea to loan money to someone that could not demonstrate an ability to pay you back? Lending money at a low rate to entice people over their head, and then sit back and complain when it happens is wron on both parties part.

Yes it is nice to own a home, but if a person can't afford it then their dollars may be better spent in another area.
Posted By: axcs @ 01/26/2008 8:07:04 AM

Comment: I don't understand the sub-prime thought process. When was it a good idea to loan money to someone that could not demonstrate an ability to pay you back? Lending money at a low rate to entice people over their head, and then sit back and complain when it happens is wron on both parties part.

Yes it is nice to own a home, but if a person can't afford it then their dollars may be better spent in another area.
Posted By: squeezyr @ 01/26/2008 5:51:46 AM

Comment: If CEO "X" makes bad moves and ignores vital signs of company problems, the CEO (presuming the financial errors were quite bad), would feel the front door hit him in the behind as he left.
Why are people putting blaming where blame should be resting, on Bush?? His unintelligent white house staff simply walked around this debacle that now is a global crises.
What could he have done?? Mr. decider (God how juvenile) should have opened his eyes and ears and realized that the housing market was going to crash, the stock market was headed for a tailspin and that the key economic indicators were in fact worse than the first depression.
Put the blame where it belongs, a president that was so obsessed with killing Saddam (who was all bluster) that he let his own country go to hell in a hand-basket. America is in a quagmire of 9,000,000,000 dollar debt that your family owes $144,000 for (with interest piling on interest), remember folks the debt has reached a point that nothing is being paid on the principal. Your baby-boomers better your little butts off because this is all coming out of your retirement, sad to say.
But you are a republican (no caps from me) and you must stick by your fool, no matter what his illiteracy rate is. Congratulations, he will destroy the world with stupidity. Wake up and impeach now!!!
- Posted By: pinkpanther87413 @ 01/26/2008 1:05:29 PM
  
  Comment: impeach bush leaves us cheney like his daddy with Dan Quail hires the worst to keep him in and alive so sad it will be the same if they should take office again does anyone want Cheney or Quail running the country-to hell in a hand basket sounds familiar right on!!
Posted By: tvoneschen @ 01/25/2008 11:53:05 PM

Comment: Wow even the economist do not understand the "subprime crisis." The banks releverage the CDO's and SIV's to buy more and when they do not perform so well they have to sell these no assets at big losses. So now instead of marble floors and gold rails in their offices the rails shall have to be gold plated .
Posted By: tvoneschen @ 01/25/2008 11:52:07 PM

Comment: Wow even the economist do not understand the "subprime crisis." The banks releverage the CDO's and SIV's to buy more and when they do not perform so well they have to sell these no assets at big losses. So now instead of marble floors and gold rails in their offices the rails shall have to be gold plated .
Posted By: pinkpanther87413 @ 01/25/2008 11:07:25 PM

Comment: WHAT'S THE PHRASE "TO HELL IN A HANDBAG" YUP THAT'S THE ONE AND THE USA IS FAR TO RICH [SIC] TO FILE FOR BANKRUPCY! SO WE PRINT MORE, TO GIVE TO ANYONE "NOT INSIDE US BORDERS" AS A BRIBE, OR TO BUY ANOTHER PUPPET GOV. WE HAVE TO TOPPLE FOR JEB TO RUN ON, OF COURSE! WE ARE FLAT, BUSTED, HOMELESS, NON-SELF SUFFIENCT, COUNTRY IN THE WORLD! NO LONGER LEADING BY EXAMPLE, BUT BY DIS ARMED [SIC] NUCLEAR ARSONEL, AND ANY ONE WHO WANTS TO BUILD [ 1 ] COMPARED TO OUR 5000+ , IS A MUST KILL AND FUND TO REBUILD COUNTRY! MEAN WHILE WE INVEST NOTHING, INTO OUR OWN COUNTRY! NOTHING, NADA, ZIP, ZERO!! WE BROKE! GET IT PLAIN AND SIMPLE. CAN'T AGRUE THE POINT! IT'S A WELL WORLD WIDE KNOWN FACT!!!!!
- Posted By: pinkpanther87413 @ 01/25/2008 11:20:56 PM
  
  Comment: HOME OWNERS WHAT AN EXCUSE LOLOLOL[ YOU KNOW WHAT AN EXCUSE IS ] FOR OUR DEBT?? STOP BLAMING YOUR SELVES! YOU WANTED A HOME, THAT'S A REASON! WHAT DID BUSH WANT??? TO BAD WE WERE TRILLIONS IN DEBT BEFORE THE FIRST HOME WAS BOUGHT! IF THIS SPENDING CONTINUES TILL 2012, TIMES SQUARE WILL BE CALLED HUNG SQUARE! AS THE CHINESE WILL NOT HAVE TO FIRE A SHOT TO TAKE THIS COUNTRY OVER! JUST CALL IN THERE LOANS! SO MUCH FOR YOUR HOME ON CHUNG DRIVE. NO DISRESPECT TO AMERICAN CHINESE, OR CHINESE AMERICANS? AS YOU PUT IT! ALL RACES SHOULD ASK "IF I WERE IN IRAN WHAT EMBASSY WOULD I GO TO? THE AMERICAN OR CHINESE, AS YOU WERE BORN HERE I SAY AMERICAN. NO I HAVE NO WANTON LUST TO TAKE AWAY YOUR HERITAGE, BUT YOU ARE AMERICAN FIRST, RIGHT? YOUR ALSO DEEP IN DEBT TO, SO WE ARE ALL IN SAME AMERICAN BOAT.
Posted By: purrmonsta @ 01/25/2008 9:26:00 PM

Comment:
Oh, so its OK to bail out huge Savings and Loan companies (though they weren't YOUR bank), airlines (though YOU don't fly), and Energy companies (even though they're not in YOUR state) with OUR tax money, but not marginally middle class people trying to hold on to their houses when they've been fooled into what SHOULD BE illegal loans?

You are short-sighted if you think that, just because YOU don't have one of those loans, that YOU are not affected by this debacle. We are all connected, and it's because there's NOT ENOUGH regulation in the financial sectors (due to GWB's giving them whatever they want) to protect the average consumer and stock owner from these rip-offs. Yes, it's not fair that we all suffer and we all pay. Much of this is due to the fact that the Republican Congress for the last dozen or so years has been in bed with the banks and financial institutions. Selling mortgages as stocks should be illegal, as should some of the predatory lending practices of mortgage companies that have started this recent debacle with sub-prime loans.

There should be an immediate freeze on foreclosures so that people can re-finance their mortgages, and this would not cost the tax-payer. Many of these mortgage companies take their fees up front, so they've already been paid and will still earn MORE if they re-finance than if they foreclose. Hillary Clinton has recommended such a plan.

If you want to see your tax dollars spent more wisely, vote Democratic in the next election. Democrats are the only ones who truly watch out for the "little guy."

Check out this website www.presidentialperformance.com/book.html, which I'm not affiliated with. It spells out how each party and administration has done from JFK till now. All the data is from government sources.
- Posted By: pinkpanther87413 @ 01/25/2008 11:23:03 PM
  
  Comment: YOUR ARE CORRECT GOP= RULE THE WORLD ON THE MONEY OF THE POOR!! DEMS = INVEST INTO BORDER TO BORDER COAST TO COAST=AMERICA, FOR AMERICANS! FACT
Posted By: Soluciones Logicas @ 01/25/2008 7:49:05 PM

Comment: This recesion is real and the government needs help with a new re-financing for all homeowners found in the mess of loans with variable rates and scandalous prices for real estate if not we could go in depresion
Posted By: DanLineberry @ 01/25/2008 7:43:49 PM

Comment: A government bailout amounts to rewarding the financially irresponsible with the hard earned tax dollars of the financially responsible. It is a crime against personal responsibility and the infant form of socialism.
Posted By: DanLineberry @ 01/25/2008 7:43:29 PM

Comment: A government bailout amounts to rewarding the financially irresponsible with the hard earned tax dollars of the financially responsible. It is a crime against personal responsibility and the infant form of socialism.
Posted By: 2005mustanggt @ 01/25/2008 6:46:47 PM

Comment: I agree 100%, but we all now when we buy something new no one ever reads the directions. When that happens things tend to break.
Posted By: 2005mustanggt @ 01/25/2008 6:45:40 PM

Comment: Absolutly , but like everything new no one read directions anymore.
Posted By: AmericanWoman1976 @ 01/25/2008 4:24:56 PM

Comment: In regards to Mr. Shiller's conclusion that "people need more protection"...what people need is to take the initiative and edcuate themselves on what type of mortgage they are signing up for. Individuals need to take responsibility for their actions.
- Posted By: brac @ 01/25/2008 7:03:38 PM
  
  Comment: Let's be realistic. Stopping lenders from preying on people was a practical measure that could of and should have been taken. Blaming people for their lack of savvy, on the other hand, is a waste of time. Lending laws are changeable; human nature is not.

Top Story

Latest News

Goodbye to the Bulls?

Discuss

Posted By: OnlyCureJGK @ 08/05/2008 3:55:40 PM

Posted By: blessedone @ 01/31/2008 7:30:06 AM

Posted By: blessedone @ 01/31/2008 7:11:58 AM

Posted By: Holly Garfield @ 01/28/2008 3:40:23 PM

Posted By: Holly Garfield @ 01/28/2008 3:39:39 PM

Posted By: uvemoory @ 01/28/2008 1:59:26 PM

Posted By: Holly Garfield @ 01/28/2008 11:30:11 AM

Posted By: Watchman3839 @ 01/27/2008 10:29:36 AM

Posted By: mac2007 @ 01/26/2008 6:50:18 PM

Posted By: bhhb1930 @ 01/26/2008 2:56:25 PM

Posted By: pinkpanther87413 @ 01/26/2008 1:17:36 PM

Posted By: bob parden @ 01/26/2008 11:46:43 AM

Posted By: Pete7849 @ 01/26/2008 11:17:50 AM

Posted By: BillsCatz @ 01/26/2008 9:31:27 AM

Posted By: clementel @ 01/26/2008 9:17:24 AM

Posted By: pinkpanther87413 @ 01/26/2008 1:13:11 PM

Posted By: axcs @ 01/26/2008 8:08:31 AM

Posted By: axcs @ 01/26/2008 8:07:04 AM

Posted By: squeezyr @ 01/26/2008 5:51:46 AM

Posted By: pinkpanther87413 @ 01/26/2008 1:05:29 PM

Posted By: tvoneschen @ 01/25/2008 11:53:05 PM

Posted By: tvoneschen @ 01/25/2008 11:52:07 PM

Posted By: pinkpanther87413 @ 01/25/2008 11:07:25 PM

Posted By: pinkpanther87413 @ 01/25/2008 11:20:56 PM

Posted By: purrmonsta @ 01/25/2008 9:26:00 PM

Posted By: pinkpanther87413 @ 01/25/2008 11:23:03 PM

Posted By: Soluciones Logicas @ 01/25/2008 7:49:05 PM

Posted By: DanLineberry @ 01/25/2008 7:43:49 PM

Posted By: DanLineberry @ 01/25/2008 7:43:29 PM

Posted By: 2005mustanggt @ 01/25/2008 6:46:47 PM

Posted By: 2005mustanggt @ 01/25/2008 6:45:40 PM

Posted By: AmericanWoman1976 @ 01/25/2008 4:24:56 PM

Posted By: brac @ 01/25/2008 7:03:38 PM

Reply

Report Abuse

SPORTS

If You Build It, Will They Pay?

VIEWPOINT

It's Just a Flesh Wound

Subscribe Now

Partners