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Originally Posted by Rob Instigator

but there is NO FINANCIAL CRISIS

It is a mortgage lending crisis, which in all actuality affects the lenders who made bad loans (fuck them, they chose to do so) and the fucking IDIOTS who accepted loans they could never pay (FUCK THEM TOOO, that is free market right? you suffer the consequences.

I own a house. I have a 30 yr fixed mortgage that I worked very hard to get, I can afford my payments even though I am stretched thin some months. There are MILLIONS like me who will benefit nothing from this, who will see fucking LOSERS and IDIOTS benefit from their LOSER IDIOT mistakes.

yes there is a financial crisis. it works this way:

used to be that banks would hold the mortgages & charge you for them. that was heavily regulated.

the problem is that the mortgages were turned into securities that could be sold or bought beyond the original issuing bank.

because the risk was now spread rather than concentrated in the lender, lenders felt compelled to make risky loans. and of course sell them int he market.

those risky loans were bought up by all kinds of people and financial institutions and flooding the markets with, basically, a river of shit.

and the civilians buying those securities, which were practically untraceable because of the complex math behind it (think: rube goldberg), and because of the "booming" housing market, thought the shit was actually good. people saw high returns in their portfolios, retirement accounts, pension funds, etc.

then-- surprise!-- it's all shit! our assets are worthless. all the chains of promises to repay monies based on prior promises becomes tainted. suddently the real value of what you had is made evident: it's worthless.

but it doesn't end there with people saying "oh fuck, it lost money". it gets worse, and it's when a financial crisis becomes an economic crisis. it works kinda like this:

because of the worthlessness of financial assets, people start pulling out of the market. so there is no money to lend. and so there is no money to operate businesses. so businesses shrink. GM for example just got out of the car leasing business. that means less cars produced, less workers paid, less people spending money, less money for businesses, & the spiral continues and you end up with a nuked economy. every imort & every export, for example, require banks to back up the transactions-- otherwise, there is no guarantee that when your shipment arrives you'llg et the money. all that is credit.

it's a bit fucked up but the economy depends on the exchange of goods and services and when the means of those exchanges collapse, it all collapses regardless on the availability of real goods and services. basically what happens is that people have no faith in being paid. for me, every time i issue an invoice to a client, it requires an act of faith-- i even spend money in advance of their paying up. conversely, when a client pays me a deposit, it's an act of faith on their part that i will do the work and not run away with the money or go broke before im finished. without that trust, it's very hard to do any kind of business.

t's pretty fucking complicated and i apologize for my primitive explanation, but macroeconomics is not an easy science.