What, no thread on the banks?

[Robert J]

So all is good now - just print some money and ban shorts. TSX goes up 660 points, the Dow 340. We can all sleep easy now!

[Jazzmoose]

Well, considering some of the people I've seen wearing shorts, that's probably a good idea...

[Guy Berger]

The great economist Rudi Dornbusch once said `The crisis takes a much longer time coming than you think, and then it happens much faster than you would have thought.`

[Chuck Nessa]

The argument that the government pressured mortgage companies into giving low-income people home loans is bullshit.

Amen.

No, it's not BS. The government definitely did. I just don't think that it played a significant role in what was ultimately, for a while, an extremely profitable industry.

Guy

Why not BS? I'd really like to know.

[Neal Pomea]

I for one welcome our foreign bank overlords.

[GA Russell]

The argument that the government pressured mortgage companies into giving low-income people home loans is bullshit.

Amen.

No, it's not BS. The government definitely did. I just don't think that it played a significant role in what was ultimately, for a while, an extremely profitable industry.

Guy

Why not BS? I'd really like to know.

Chuck, Jim and Bruce, I read on Digg late last night that Larry Kudlow made the same point I was making about this govt coercion on CNBC's Morning Joe Show yesterday.

As I see it, this was simply a case of a politican (Clinton) paying back a constituency without whose help he wouldn't have been elected (the blacks). As far as I know, this has been going on since the days of Andrew Jackson. I see it as politics as usual rather than some sinister racial deal.

I suspect, though, that the problem in this case was that not only were the blacks able to take advantage of the new easier credit standards, but also speculators and house flippers; thereby significantly increasing the number of people who obtained loans who shouldn't have.

I see another factor that I haven't heard any of the talking heads talk about, but one which I have been railing about for two decades. A huge number of Americans were looking at their homes as an investment. And with the consistent increase in real estate values since ca. 1945, people came to see the investment as one that couldn't lose.

So they would agree to any price. I have heard commentators this week say that people bought "too much house" as if they were being extravagant. In fact, I think that the value of modest homes has been far too high.

As I see it, a home is a consumer good, not an investment. And anybody who thinks that an investment is a can't-lose proposition is a fool.

[Chuck Nessa]

Jeez! You and Kudlow! Now I understand. Did you miss the point where Joe and company laughed at Kudlow's comments?

edit to say I just realized you didn't see the broadcast in question.

Edited September 20, 2008 by Chuck Nessa

[BruceH]

'Morning Joe'? Ya gotta be kidding.