Is This a Replay of 1929?

In a few weeks we will make a choice that will decide our future.
I follow an economist named Bob Proctor. He has called the top and bottom of every market crash since the 70s correctly.
Also, he perfectly predicted the current real estate market meltdown and the picture he paints about what will happen in the next couple years
is terrifying.He thinks it will be worse then the great depression.
The banks in the U.S. are going under one after the other. Countrywide ,Bear Stearns, Lehman Brothers and Merrill Lynch , Fanny and Freddy Mae ,AIG
The government took them over because they are essentially bankrupt. Even with the goverment nationalizing hundreds of billions of dollars in debt the stock market is crashing
the credit markets are frozen and all of us may suffer beyond anything in the last 80 years.
McCain just like Bush " doesn't understand the economy".
That not just my opinion its his own words. Not only does he not understand how to fix it but he does not understand exactly what is broken.
It is no surprise that he doesn't. The people that make up these securities use complex mathematical models very few people understand.
Bush and McCain both can take the credit for this mess since they helped deregulate the laws that were protecting us.
Bush's economic advisor Phil Graham wrote the deregulation bill that allowed banks to take huge risks with all of our future.
Now, Phil Graham is the head of McCain's economic policy.He is also McCain's choice for the next secretary of the treasury.
No one in this country can afford for that to happen. The last time Bush met with his economic advisors was in March. He didnt realize that anything was wrong. Phil Graham had the guts to say that we are in a mental recession after he helped create the worst economy meltdown in our lifetime. Check out this link to the truth http://my.barackobama.com/keatingvideo
It will take the best and brightest minds in the world to get us out of this nightmare. As bad as Bush has done, McCain would be
even more destructive because things are in much worse shape. The next president will not inherit a surplus like Bush did but a crashing economy and a 11,600,000,000,000 (trillion) dollars deficit. Most of it Bush created and it will take decades to pay it back.
If you do what you have always done then you will get what you have always got.
When it comes to policy Bush and McCain are the same 90 percent of the time.
So why are the polls even close then ?
Mccains team just said they no longer want to talk about the economy.Instead they would like to spend time talking about obama
which means running the biggest smear campaign in history.
They think they can just tell you lies and you wont be smart enough to see through it
Let's teach him we are smarter than that .
Elect Obama Biden 2008


Check out this video of sarah palins interview and ask your self if she understands what she is talking about.
http://www.youtube.com/watch?v=r36Xc0GG4iQ

Who played the financial markets to crash down for Obama's favor? THE TIMING WAS VERY CRITICAL. Right when Mccain was in the lead. How many "international " investors were involved? who is bent to make Barack Husein Obama the POTUS? fIRST THEY PLAYED THE energy crisis. WE beat them. Then they withdrew their holdings and support for our fianancial system. "AMERICA had it coming". WE entertained all these back stabbers who were more than ready to pull the money away from wall street market. All so legally. Govt had to step in to stop the short sale of uSA. YOu liberals who play with antiamerican terrorist coutries, we will let you know you also hold the other end of this stick.

They harassed her until she registered to vote six times!:
http://www.foxnews.com/video2/video08.html?maven_referralObject=3145562&maven_referralPlaylistId=&sRevUrl=http://www.foxnews.com/politics/

They harassed her until she registered to vote six times!:
http://www.foxnews.com/video2/video08.html?maven_referralObject=3145562&maven_referralPlaylistId=&sRevUrl=http://www.foxnews.com/politics/

The ???Great Depression??? was great compared to what would happen now. Life has become very complex, crowded and expensive. It's no surprise McCain understands the results of his consistent votes and support of Bush Administration bank deregulation. I think they all knew what they were doing. Experts warned and re-warned them of what was happening. (Keep in mind the estimate of worth of all the economies in the world added together is about $97 trillion). Glaring evidence of this, i.e.: J.P. Morgan Chase Bank NA has $89,997,271 TRILLION in derivatives, with a total credit exposure to capital ratio of 411.6 (not 411.6%); Bank of America NA $37,939,665 trillion derivatives, 215.4 ratio; Citibank National Assn $37,691,434 trillion derivatives, 279.1 ratio. See this at Comptroller of the Currency Administrator of National Banks, Washington, DC "OCC's Quarterly Report on Bank Trading and Derivatives Activities First Quarter 2008; Table 4 ??? Top 25 Commercial Banks ..." These statistics have not happened over night. And they don???t talk about this. // A big problem is what if the very guys (possibly fascists who have made trillions of dollars on politically ill-managed wars, drug pusher bosses, and those who have made millions upon billions of dollars by creating this very financial and societal problem), fix it to where they can pick up this real estate for pennies on the dollar? Most loan documents I have read have a call clause where the bank may demand all the outstanding money they have lent you, with a period of days or weeks to repay them, or the borrower loses his equity and the property. If you can't get another loan this could have a horrible domino affect. I think this is what must be stopped. And I think this, I would consider micro targeted bank policy to stop this, is what Bernanke is trying to do. // I think a market price for real estate could be set by computing the cost of building the structure. Then, if they estimate they built 20% too many structures, the real estate market price could be reduced by 20% (I???m not a mathematician). To that add variances for value of the lot. If people chose to pay huge premiums for lots, and on land where you can???t get insurance for flooding, hurricanes, earthquakes where these events are apt to occur, society in general should not be required to foot the bill for his. Therefore, various real estate should be reduced less than 20%, some more than 20%. The $700 billion bail-out bill Bush presented to Congress would have made him King Bush, above any judicial or Congressional review; and his policies of deregulating the financial industry over the last 8 years have caused this problem. I don???t know what can be done about the horrible financial banking bubble. I think for starters, the people who are responsible for this bubble should be legally and financially accountable, and to the extent they can, payable for the losses they caused.

I USE to buy this Mag until it recently had become a LIFT WING RAG.After seeing the picture os Governer Palin on the RAG I decided I wont read a RAG that is BY/ ASS to ANY PARTY. I know a lot of people that felll the same.

Another thing is different. We have screwed up by doing the global NAFTA Free Trade thing. Now we have taken the rest of the world down with us.
As far as unemployment goes, the government figures are hugely underreported. All the construction contractors and IT Contractors that have lost jobs, are being reported. Most conservative estimates are around 15 percent unemployment. Remember, most of the tech jobs have been shipped to East India.

ACORN Vegas Office Raided in Voter Fraud Investigation
ACORN's Las Vegas headquarters has been raided by Nevada authorities looking for evidence of voter fraud.

http://www.comcast.net/articles/news-politics/20081007/Voter.Fraud.Probe/

The link below contains a purported list of the top 25 in Congress who got contributions from the folks at Fannie and Freddie. Obama is listed third, after Dodd and Kerry, even though Obama is just a junior Senator. Obama is followed next by Clinton. Barney Frank and Nancy Pelosi are on the list as well.

http://www.investors.com/editorial/IBDArticles.asp?artsec=16&artnum=1&issue=20080918

Then there is the Senate Banking Committee Chairman Christopher J. Dodd who allegedly got special mortgage deals from Countrywide, who gave preferential rates to 'friends' of company's chairman.

http://www.msnbc.msn.com/id/25140560/

For an interesting article purporting to detail the House Financial Services Committee Chairs long history with Fannie Mae, See http://www.businessandmedia.org/printer/2008/20080924145932.aspx

"House Financial Services Committee Chair promoted GSEs while former 'spouse' was Fannie Mae executive."

The link below describes how some in Congress tried to use the original version of the bailout bill to divert money eventually recovered to groups like ACORN. See:

http://online.wsj.com/article/SB122247015469280723.html?mod=googlenews_wsj

And then there is House Speaker Nancy Pelosi, who allegedly has directed nearly $100,000 from her political action committee to her husband's real estate and investment firm.

http://www.washtimes.com/news/2008/oct/01/pelosis-pac-pays-bills-for-spouses-firm.

Funny, the Democrats talk about how we have removed ourselves from the good graces of the world because of our foreign policy decisions. But the Democrats have done more to piss off the world because of their major contribution to the financial crisis that no only effects the U.S. but the global markets. The U.S. is not the only country that will suffer because of this! And the financial crisis gives Obama's campaign a boost how? There must be a lot of misinformed voters! But when the Democrats, with the assistance of George Soros, have the media in their pockets, who can blame them!

Very interesting views and comments, Depression brings ugly images of the twenties & thirties. One factor not mention in comments is Inflation, which controls FOOD PRICES. I lived in this country when the population was UNDER 100 MILLION not so many mouths to feed, with the resources this land has , today there are close to 400 million a lot of mouths to feed, much of our food is imported, inflation will curb the source. The Whigs' ( Republicans ) John McCain address the some of the issues at hand he supports the Electric Car, Fuel Cell car, Nuclear Power Plants and others Health Care, Education. None of the WHIGS ( republican ) or the TORIES ( democrat ) use the word INFLATION or what they will do about it. Bread is 4.50 $ a loaf , Milk is 5$ gal. The MEDIA and Politicians must bring it to the forefront. The African, Nations are Horrid example of Inflation, along with many others. Even the Educated get hungry and are included in that 400 million.

The Antichrist!:
When George Soros failed to obtain the election of his candidate, John Kerry, in 2004, he brooded for a while, even said he might get out of politics altogether, but he just couldn???t stop himself. He has stated publicly that he wishes to burst the ???bubble of American supremacy,??? because he says our preeminence in the world is a detriment to global ???equilibrium.??? So far, he has failed, but he keeps on trying.

And Mr. Soros has made no secret either of the fact that he sees the shortest way to effect political shake-ups, what he terms ???regime changes,??? is through very difficult economic conditions.

America has not yet felt the full force of Soros style economic shock treatment. But others have.

Soros made his first billion in 1992 by shorting the British pound with leveraged billions in financial bets, and became known as the man who broke the Bank of England. He broke it on the backs of hard-working British citizens who immediately saw their homes severely devalued and their life savings cut drastically in comparative worth almost overnight.

When the Asian Financial Crisis of 1997 threatened to spread globally, George Soros was right in the thick of it. Soros was accused by the Malaysian Prime Minister of causing the collapse with his monetary machinations, and he was branded in Thailand as an ???economic war criminal??? who ???sucks the blood from the people.??? Right in the middle of this crisis, Soros dashed off his book, The Crisis of Global Capitalism, which demanded a ???third way??? toward economic stability.

Wake up, America, before it is too late!!!!

Do Obama and the Democrats deserve a lift in the polls as a result of the financial and mortgage problems? The answer from history is a clear NO. Here's the lead of a New York Times story on September 30, 1999:

"Fannie Mae Eases Credit To Aid Mortgage Lending" [link below]. That's 1999 folks. Clinton Administration, I believe.

Here's the lead of a New York Times story on Sept. 11, 2003:

"The Bush administration today recommended the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis a decade ago." [see link below] The Democrats killed it.

McCain said in co-sponsoring the Federal Housing Enterprise Regulatory Reform Act of 2005, S. 190:

"If Congress does not act, American taxpayers will continue to be exposed to the enormous risk that Fannie Mae and Freddie Mac pose to the housing market, the overall financial system and the economy as a whole. " The Democrats killed it.

What was Barney Frank and fellow Democrats saying at the time of these attempted reforms? According to reports, Representative Barney Frank(D-MA) claimed of the thrifts:

"These two entities -- Fannie Mae and Freddie Mac -- are not facing any kind of financial crisis, the more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing."

Representative Mel Watt (D-NC) added of the reforms "I don't see much other than a shell game going on here, moving something from one agency to another and in the process weakening the bargaining power of poorer families and their ability to get affordable housing." [ See Community Reinvestment Act, link below w/ history]

The link below contains a purported list of the top 25 in Congress who got contributions from the folks at Fannie and Freddie. Obama is listed third, after Dodd and Kerry, even though Obama is just a junior Senator. Obama is followed next by Clinton. Barney Frank and Nancy Pelosi are on the list as well.

http://www.investors.com/editorial/IBDArticles.asp?artsec=16&artnum=1&issue=20080918

For an interesting article purporting to detail the House Financial Services Committee Chairs long history with Fannie Mae, See http://www.businessandmedia.org/printer/2008/20080924145932.aspx

"House Financial Services Committee Chair promoted GSEs while former 'spouse' was Fannie Mae executive."

The last link below describes how some in Congress tried to use the original version of the bailout bill to divert money eventually recovered to groups like ACORN. See:

http://www.investors.com/editorial/IBDArticles.asp?artsec=16&artnum=1&issue=20080918

http://en.wikipedia.org/wiki/Community_Reinvestment_Act

http://article.nationalreview.com/print/?q=M2QwNDhkZTg2OGYzZjkzM2E2NDEwM2U5OGVkNTc0YzU=

http://query.nytimes.com/gst/fullpage.html?res=9E06E3D6123BF932A2575AC0A9659C8B63

http://query.nytimes.com/gst/fullpage.html?res=9C0DE7DB153EF933A0575AC0A96F958260

http://www.businessandmedia.org/printer/2008/20080924145932.aspx

http://online.wsj.com/article/SB122247015469280723.html?mod=googlenews_wsj
http://www.investors.com/editorial/IBDArticles.asp?artsec=16&artnum=1&issue=20080926

(Continued from the previous post)

Now, the smart PhDs that form the second type came up with a lot of innovations to carefully control the risk involved in turning a housing mortgage loan into a hierarchy of claims on payments, called tranches. For their part, the senior executives that form the first type, who had built up a reputation for trust-worthiness over several decades, could borrow money from the pension funds and other sources at leverage ratios of 25 to 30 -- far in excess of the reserve ratios expected from the commercial banks under the regulations of the Glass-Steagal act. This unlikely marriage of old wise-heads and smart innovators on Wall Street was sanctified by the Federal Reserve which kept interest rates low to avoid a slowdown in economic activity, given the tragedy of 9/11. However, from 2007 onwards, cracks in the marriage began to appear one by one, and it became apparent that the party had gone on too long. The smart PhDs had not take into account that the process of securitization separates the property rights on mortgaged homes from the investments on mortgage securities. The home-owner lives under the threat of foreclosure. So, his/her property rights are compromised. The security-owner bears liquidity risk and credit risk. So, his/her income is uncertain. It is plausible that left to themselves the smart PhDs would have, in due course of time, overcome their error by devising a market-based solution that would mutually alleviate the grievances of the home-owner and the security-owner. However, the Wall Street money-machine was on high-gear by then, and it was not designed to slowdown for any eventuality. The senior executives, who were more comfortable with people-to-people communications rather than arcane finance theory, ran to their long-established connections in the political establishment and the media. Moreover, these senior executives decided to play smart. They used the very same unreasonable expectations that society had placed on Wall Street as a bargaining chip to hold society to ransom. Their constant chants were "Bail-out Wall Street, for otherwise there is the 'systemic risk' of a financial meltdown". "It's going to be armageddon, so raise FDIC insurance to $ one million" (CNBC's Jim Cramer). "We're going to see a repeat of the Great Depression's bank runs". Unfortunately, the long sage of bail-outs starting with Bear Stearns in March 2008, then Fannie Mae, Freddie Mac and AIG in September 2008 and finally the $700 billion bill passed now have not stopped the financial crisis, and the reputation of Wall Street is in tatters. Thus Wall Street was brought down by unreasonable expectations.

(Continued from the previous post)

The advent of computers transformed the industrial economy into an information-based economy. This meant that smart people who could devise intelligent strategies to take quick advantage of the flow of information could expect to make large profits, especially from financial investments. Thus, starting in the early 80s, Wall Street investment banks began to make huge profits, aided by their large investments in computers and their new army of smart PhDs. Over the course of the 80s and 90s, the capital in the 'bulge-bracket' investment banks grew from a few tens of millions to one or two dozen billions dollars. The capital in the smaller investment banks and hedge funds on Wall Street produced similar returns. Thus Wall Street turned into a sleek and mean money-making machine. It was for its massive returns on capital that the managers of pension funds and other sources of accumulated capital had been turning steadily to Wall Street. The boom in the technology stocks during the 90s turned the trickle of capital to Wall Street from these fund-managers into a flood. Now, as history would have it, the technology sector went bust in 2000 with the NASDAQ composite index losing more than 60% of its value between 2000 and 2003. This drastic loss of wealth exposed an inability of modern finance theory to figure out how to determine the proper economic value of technological progress. There was a big question about how Wall Street could continue to churn out its massive profits. It was in this scenario, that the smart PhDs on Wall Street stumbled on the great innovation to direct the huge sources of accumulated capital in America and the rest of the world towards solving the long-term demographic incongruities in America. This was how Wall Street came to trade in mortgage-backed securities. In the process, they found a way to keep the money-machine that is Wall Street hum along smoothly for another 8 years.

Q. How exactly did unreasonable expectations bring down Wall Street?

A. When one refers to Wall Street, it is important to keep two types of people in mind. The first type is the senior executives who have gained their credentials through many years of involvement in the traditional roles of investment banking, beginning in the 1950s or later. The conventional wisdom among these people places a lot of importance on trust-worthiness, reputation, people-skills and management techniques as the path to career-success. Advising industrial firms in mergers & acquisitions, underwriting the issuance of company stocks and bonds to the public, helping the government finance a deficit through the purchase of treasury securities for their clients, and trading in securities on behalf of their clients were the main activities of Wall Street firms before the 90s. We note that all these activities required trust-worthiness primarily, and moreover they didn't require much of the firms' own capital. The second type is the smart, innovative PhDs who have arrived on Wall Street starting from the 1980s. These people have helped build the massive computational infrastructure on Wall Street along with the development of financial innovation. Their most valued skills are quantitative and they are quite tech-savvy. On the downside, many of the senior executives making up the first type have come to exercise a lot of political influence which could be illegitimate sometimes. For their part, the tech-savvy 'quants' of the second type have grown-up with post-modern, anti-heroic sensibilities that has no use for honor or reputation, as defined conventionally. However, in spite of their differing attitudes towards reputation and the 'word on the street', when it comes to compensation, both the types would like to cash in on their professional worth right away with large bonuses.

(Continued from previous post)

Thus the fundamental reason for the current financial crisis is the time value of money. To maintain the standard of living that people who are close to retirement or have already retired would expect, the income from their pensions have to be substantially larger, in view of the reasons discussed above, than what a senior citizen in 19th century Europe would have received, even after adjusting for inflation and GDP growth. This enhanced pension income would have to come from interest on investments, because the senior citizens who receive them could not possibly compensate for this income with active work. Thus the managers of pension funds found it imperative to look for high returns on their investments. At the same time, since these funds were so huge and so critical to the lives of many millions of people, their investment strategy had to exercise the utmost caution. Diversification served as the compromise in this situation. The managers of these huge funds would invest the major part of their portfolio safely, for example, in treasury securities. A smaller part would be put under the stewardship of the Wall Street firms for more risky investments in the expectation of high returns. Over a period of two or three decades, such unreasonable expectations on Wall Street to keep generating high returns on capital took its toll.