You're supposed to get a job, and save up to buy a house. Put a chunk of what you make every month away into your 401k and the stock market. Save up. Raise a family. Go to work. Play by the rules.
So that's what folks all around the globe did.
They weren't fraudsters. They weren't speculators. They weren't gamblers. They were just doing the right thing. Playing by the rules. Saving up for retirement. And they lost it all.
Their house, that that nice man Mr. Bush and that nice realtor and those really smart people on TV like David Lereah, Lawrence Yun, Kendra Todd, Mike Norman and Nicholas Retsinas recommended they buy, crashed in value.
Their ARM payments, that that nice mortgage broker and that smart man Alan Greenspan had strongly recommended, skyrocketed.
Their stocks and mutual funds, that that nice man Jim Cramer, and that swell guy Larry Kudlow, and those great magazines like Smart Money, Money, Fortune and Forbes said were great ideas, well, they crashed too.
Oh, and the job is gone. And the pension too. Millions and millions of good, honest, innocent people are having their lives turned upside down by this crash.
They've lost everything. And for them, there will be no year-end bonus, no big bailout, no golden parachute.
There's nothing. It's all gone. Their hopes, their dreams, and their trust in the system and their leaders.
They played by the rules, and they lost.
Who'll bail them out?
Nobody.
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25 comments:
Same thing happened after the stock market crash of 1929 to people who hadn't even invested in the stock market when the banks failed and
unemployment hit over 25% . People who just had their savings in a bank
got taken down by the crash of those days that was all based on the greed of those times .
What were the Politicians thinking when they allowed a financial system to have free rein and not
be regulated and leveraged so absurdly ? People who could never pay a debt based on their true income being encouraged to take on
debt they could never pay unless some real estate gamble paid off?
How dumb could a whole financial system get .
History is very specific about
what happens without regulations
in Business/Stock Market. Why do you think America formed monopoly
laws and other strong laws to stop the schemes that fleeced the public .
Business and Capitalism is great ,but not without regulations to protect against the people who
would scheme for unfair advantage or get rich quick schemes .
I think in truth many standing laws were broken during this
mania that ended in this financial disaster .A lot of fraud was committed in the course of this housing run-up ,so it was a epic crime wave .
Stock market accounts have never usually been insured accounts ,so anybody investing in the stock market should of known there was some risk .Real Estate has crashed before ,so people should of been advised of the risk as well as not allowed to purchase unless they could afford the payment .Lenders had a duty to underwrite loan risk and not allowed unqualified buyers and speculators and criminals to gamble that real estate always goes up .
I really wonder how Main Street is containing their anger right now . I really wonder how people who played by the rules and believed the system and authorities are containing their anger right
now.
And now Obama is going to institute a punitive tax system against business, resulting in even more layoffs. And he's going to give more power to unions, resulting in more layoffs and companies moving to China and Mexico.
The next four years are going to suck, but I think it will be a necessary evil. The pain and economic depression this Marxist a**shole are going to cause us are necessary for Americans to finally wake up and realize what they've voted themselves into.
The "pension "article you posted Keith is a real eye opener . Not only does this article point out the betrayal of the Corporations ,but it shows how the Politicians support the Corporations. Article also shows how Corporations are increasingly
just throwing the employee under the bus . Good Read
Investors are licking their wounds. The peak-to-trough decline in the Dow Jones industrial average was 42.3%, the second worst since the Depression. The angle of descent has never been matched, and volatility as measured by the VIX index is at record levels. The Dow is 32% below its 200-day moving average, the widest spread since November 1937.
The bottom of a bear market by definition has to be the point of maximum bearishness, and I think we're there. For the market to go up, the news doesn't have to be good. It just has to be less bad than what has already been discounted.
http://money.cnn.com/2008/11/10/news/economy/hedgefunds_Biggs.fortune/index.htm?postversion=2008111106
Keith has failed to understand the heart of the problem. No one in America is innocent. Our entire American economic system is rotten. Evil even. Those who take part in it ARE PART of the problem. And therefore they reap what they sow. How does one redeem themselves? Change your life. Walk away from American materialism and find the way you were really meant to live. You can still live in America but not be 'of' America. Looking for a bailout means you are just staying in the 'game'. Not a winning move. Think about it.
quick question for all the housing people. "IF" in 2 years I can not sell my house that I have no down payment in, can I walk away from it and not have the bank ( which is holding both loans ) go after the second house that I intent to keep for retirement and have it mostly paid off. I'm starting to think we all are getting screwed by all this housing bailout stuff. I bought house that we could afford and have made all my payments and now other who lived WAY beyond their means are getting rewarded.
My Mom makes me laugh. She's a saver. Has never had debt. She always pays off her credit cards on time. Balances her checkbooks. When the credit card company makes 2 cent mistakes she calls them up to have them credit her the 2 cents!
When she found out that everybody had multi-thousand dollar limits on their cards, while she was still at 500$ whe was royally insulted. How could this be? She was a perfect customer!
For the last 5 years, she's been wondering how she's brought up such a cynic (me). Can't I just be optimistic, she would say. Or maybe I should go see a shrink who can make me see the bright side of this economic dream.
Then she watched Oprah a few months ago, and finally found out the truth about this cycle. That people were increasing their mortgages to buy stuff. She couldn't believe it!
She has finally seen the light and no longer calls me a pessimist.
I love my Mom dearly but unfortunately there are just too many naive people like her who played by the rules and got burned.
We will keep on getting these bubbles as long as our system lets opportunists take advantage of the naive masses.
Oh yeah, the job is gone. What's the unemployment rate - 6%? In 1932 it was almost 24%.
Savings gone? Whose? Kids who just got in the market 5 years ago? Did they lose everything? Of course not. There's a difference between "down" and "wiped out".
ARMs? Suckers buy those. Suckers that can't afford the payment in the first place. I don't call that playing by the rules. I call it trying to be something you're not.
Pension? Who was ever stupid enough to buy into that idea anyway? My grandfather has a pension from public sector work, but he put away millions in bonds to be sure he'd retire.
I think what we are witnessing is evolution in reverse. Instead of survival of the fittest, the fittest have to support the weakest. Millions of Americans did not lose after playing by the rules. Millions of Americans are losers.
I forgot to mention that there are just too many people who do not understand how the system works, yet they are allowed to participate uneducated. How can we permit this?
You have to get tested to get a driver's license why not for car leases or mortgage contracts?
When you enter kindergarten, our education system starts with the assumption that you will become a rocket scientist instead of starting with the assumption that you will be first of all a functioning member of society.
DANM said...
The rules your Mom plays by are the rules that were in place for the last 2000 years. Your Mom isn't naive she is ethical and moral. She is a good American and we need a whole country just like her.
"Frank R said...
And now Obama is going to institute a punitive tax system against business, resulting in even more layoffs."
GREAT! Start with GM, Ford and Chrysler. WE need an auto industry, just not the one we have.
Let them eat Ramen with the Realtors. They DESERVE it.
DIE GM. Stick to army helmets, knives and forks and at the cutting edge of your tecnological envelpe, may, maybe push lawn mowers.
DIE U PIGS
Why play by 'the rules'?
If I had a youngster I would teach them to be little slimy liars and cheats and use politicians as the gold slime standard.
I would show them that being stupid is no impediment and show them George W. Bushco as an example of gross incompetence.
I would show them that being a war profiteer is good and show them Dick Cheneyburton.
Like the Mormon missionaries that ring my doorbell, I too would send the kids on a mission. Their goal would be to swindle at least one elderly person out of their life savings. They would not be welcomed back into the family until they could show me the money.
After all Paulson and Bernanke do this daily, don't they?
America, the Turd World capitol of nothing.
DIE U PIGS
I lost.
I should have went out and bought a house or an apartment, and taken as much money as possible in loans. I should have leveraged myself as much as possible.
Instead I played by the rules.
I followed the values that are supposed to the foundation of this country; be prudent, find a career that builds society, save before spending.
I did what I was taught and was told to do only to see those doing the opposite, not sacrificing, not saving, not contributing get ahead. Now I have to pay for the mistakes of the people who didn't play by the rules.
It's the reason I'm a perma bear, and why I'm so bitter.
I am disgusted by all of this that has happened. It seems like the best way to make it is to cheat. Afterall, that is the message our society is sending by not prosecuting wrong doers and allowing people who played by the rules to get away scot free.
Blogger Frank R said...
And now Obama is going to institute a punitive tax system against business, resulting in even more layoffs. And he's going to give more power to unions, resulting in more layoffs and companies moving to China and Mexico.
The next four years are going to suck, but I think it will be a necessary evil. The pain and economic depression this Marxist a**shole are going to cause us are necessary for Americans to finally wake up and realize what they've voted themselves into.
November 16, 2008 8:06 AM
You forgot to also add that Obama will mess up everyone's indoor plumbing!
Anonymous Anonymous said...
quick question for all the housing people. "IF" in 2 years I can not sell my house that I have no down payment in, can I walk away from it and not have the bank ( which is holding both loans ) go after the second house that I intent to keep for retirement and have it mostly paid off. I'm starting to think we all are getting screwed by all this housing bailout stuff. I bought house that we could afford and have made all my payments and now other who lived WAY beyond their means are getting rewarded.
November 16, 2008 12:51 PM
First, you need to know if the state you are living in if it's ok to walk away from your home and not pay any penalties. In certain states, if you walk away from a 200K house and the bank ends up selling it for 150K, you are still liable for the other 50K. In other state's that is not the case. Then, you must do what is in your best interest.
Hey HP'ers and SA'ers:
Don't you all feel so damn stupid for playing by the rules? I lived way beyond my means and had a great time doing so. I bought a house I couldn't afford and took out all of the equity. I didn't make a mortgage payment for ONE FULL YEAR. I just made a payment and paid $2000 to Chase. Now, they will "modify" my loan. At first they wanted to give me a 40 year mortgage and I told them "no thank you, that is not enough of an incentive for me to still paying". We are headed towards "principal forgiveness"; where the Federal Government ends up buying the mortgage and then reduces the principal from that property. Oh yes, the government will want whatever profit the townhouse gains, but honestly, who in their right mind thinks the property will go back to $800,000?
So either way, I win. This housing bubble is way to big and thus the government will end up SOCIALIZING ALL OF THE LOSSES; those who saved will end up paying for those who didn't.
I am not saying you HP'ers and SA'ers are idiots, but you folks simply believed in the ideals of this country and you lost!
"DIE U PIGS"
I bet you're an American too and as upset as I am at the shock state.
Why play by 'the rules'?
If I had a youngster I would teach them to be little slimy liars and cheats and use politicians as the gold slime standard.
Just bring Nick over on the weekends. He will have them slimey limey in no time.
"JaneZ said...
Why play by 'the rules'?
If I had a youngster I would teach them to be little slimy liars and cheats and use politicians as the gold slime standard.
Just bring Nick over on the weekends. He will have them slimey limey in no time.
November 16, 2008 6:13 PM"
Thank you for the suggestion, but I didn't say I would teach them to be amoral unsuccessful retards like Nick.
DIE U PIGS
In the end if you do not play by the rules, the rules will catch up to you.
With no assets will Iceland's currency reach hyper-inflation.
And what then of the Yen Carry Trade.
http://www.stratfor.com/analysis/
20081114_iceland_laboratory_
social_unrest
Constrained by the island’s small pool of depositors and the country’s sizable but limited pension fund, Icelandic banks sought to expand their capital by relying on the “carry trade” for funds.
Taking advantage of the low-interest Japanese yen, Icelandic banks were able to offer their customers in Europe low interest rates, acting as middlemen in many cases for the booming real estate market in the United Kingdom.
Unfortunately for Iceland, the global credit crunch has dried up the carry trade. The downturn panicked investors around the world, and those dealing in the carry trade began repaying the original yen loans while they still had the money to do so.
This caused an appreciation of the yen that left Icelandic banks holding debts they could not cover with assets.
The end result of the crisis is an inflation rate of nearly 16 percent and climbing and a currency — the Icelandic krona — that has lost half of its value since the beginning of the year.
Considering that Iceland is wholly dependent on imports for nearly all commodities (including food), the island nation is staring at a complete financial and economic collapse.
danm, I don't know what your mom's problem is. Didn't she meet any factory workers living in $400K homes? Or a single mom with 3 kids doing daycare out of her house flying out to Disneyworld for a week? When you see people like this, it makes you wonder how they can do it. The obvious answer is: they can't.
Things are the same as when your mom was a kid and growing into adulthood. I honestly can't figure out why she didn't see it. Was she too busy keeping up to think for a minute?
Mom was brainwashed like we all were while the elite rich was fleecing us at every turn .
I honestly can't figure out why she didn't see it. Was she too busy keeping up to think for a minute?
November 16, 2008 11:23 PM
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I don't really understand either.
My dad has always taken care of their finances and he's done well so she's never had to worry. If he passed away, I'd have to help her through the estate.
She's very opinionated and disciplined so that does not make her a very popular person. So she's adapted by minding her own business and keeping to herself. She's retired and more of a loner now.
She sews, cooks, gardens, and looks after the grandchildren.
I guess she's never thought of maximizing her revenue. As a good wife, her focus has always been on minimizing costs.
Interestingly, a vast number of women are not interested in finance. When I speak business with them, their eyes glaze over, usually prefering to talk about their children, trips or fashion. I've never had trouble talking business with men!
And you people think this is the greatest nation on Earth ?
Haaaaa, Heeeee, Hooooo.
Man, dude, you people are pathetic like a bunch of scabby dogs !!!
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