"Crazy" Jim Cramer Takes This Opportunity To Gloat

About a year ago, CNBC’s Jim Cramer completely lost his sh*t on CNBC, screaming at Bernanke to lower interest rates before millions of borrowers went into foreclosure. Now, as the “Armageddon” that he was carrying on about is in full swing, Cramer is taking this opportunity to gloat.

“Alan Greenspan told everyone to take a teaser rate and then raised the rate 17 times?” Cramer yelled back in August, pleading with Bernanke to focus on the issue. “Open the darn Fed window. He has NO IDEA how bad it is out there. HE HAS NO IDEA.”

Here’s his initial meltdown:

And here’s Jimmy’s elegy to the economy:

[via Gawker]

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  1. metsarethe... says:

    Reminds me oh wen he assured everyone that Bear Sterns was going to be fine…

  2. No, this isn’t Greenspan. Or Bernanke.

    This is deregulation. They allowed the banks to go crazy and lend to anyone with a heartbeat. They allowed them to packages these loans as securities. They allowed them to do anything they pleased.

    Blame the borrowers all you want, they couldn’t have borrowed the money if the lenders weren’t allowed to give it to them.

    I usually agree with Cramer and I also have told everyone I know for the past year that Bernanke has no clue what to do and we’re heading for a depression. But Bernanke can’t lower interest rates any further. In fact, he’s lowered them too much already. They can’t hold off the pain forever. And it’s going to be painful.

    As the mayor of NYC says, let’s take the pain now instead of later. There’s no way to avoid it.

    • masterthundar says:

      @twophrasebark: I agree, this was a long time coming, and the lowering of the rates only staved off the inevitable for another 6 months or so. Hopefully, we can all leave this with a few lessons learned and the economy will be better off for it. But one thing I disagree with is regulation being the answer. Regulation can only make it more difficult for the economy to recover. What we see now is the (mostly) free market correcting itself. We had an artificially inflated bubble. It burst, like it always does, and the companies learn their lesson. Regulation comes from the fact that companies like Lehman that have been around for more than 100 years really don’t want to go bankrupt and lose everything. Even though the CEOs may get a huge buyout, there are thousands that don’t, and they would do everything in their power to keep something like this from happening again.

      • mythago says:

        @masterthundar: Companies ‘learn their lesson’? No, they don’t, or we wouldn’t have bubbles and crashes over and over again. Regulation is supposed to keep these stupid games from happening in the first place.

      • lightaugust says:

        @masterthundar: I’m an absolute admitted amateur at finance, and I have no doubt that most of you know way more than I do, but how do you consider this to be a ‘Free market correcting itself’ when it’s the government bailing out BS, Fannie and Freddie? It just seems like we need to either live and die by free market ideology, or not kid ourselves. If it’s truly free market, then don’t we just let the big collapse happen?

        • masterthundar says:

          @lightaugust: Well, the free market correcting itself does not have to mean that the victims of bad business practices have to die by the same sword the businesses themselves do. Maybe the government was wrong in taking control of the two lenders, maybe it should’ve let them fail and seized their assets and let the FDIC worry about the depositors and just let the homeowners sink or swim even though the crisis was of no fault of their own. I was just saying that this bubble had to burst, and maybe the gov’t should have stayed out of it and let it burst hard instead of cushioning the fall a little bit, but maybe (this time at least) they did some good. The government did no good however, in propping up the market this long to allow the companies to make more poor business decisions.

    • ARP says:

      @twophrasebark: With an election coming up? You must be joking. The Bush Fed will do everything in its power to stave off a full on recession (even though we’re in one by all reasonable measures but the “official” one) so that McSame can get elected. I feel bad for whoever gets elected as they’re going to clean up a mess that’s much bigger than anyone imagined. It might even cost them a re-election because it will take that long to bail out of.

      • Wormfather is Wormfather says:

        @ARP: Belive it or not, I dont think bush is really pulling for McCain. (Full disclosure) I’d go into all the evidence, but I dont have much.

    • edrebber says:

      @twophrasebark: FALSE! Government regulation caused the meltdown. Banks were forced to make loans in low income areas or face stiff government penalties.

      • ojzitro says:

        @edrebber:

        It’s unfortunate, but the fact is the Banking Industry spent a great deal of money lobbying for that “forcing”. The part that makes this unfortunate is how our senate tied this piece of lobbying up in a pretty little bow, and called it the “American Dream”.

        Let everybody in, not just those who can afford for it.

        You want to be mad at someone and lay blame at their feet, call your Senator. Lobby laws must change.

      • ARP says:

        @edrebber: Your argument assumes everybody with a bad loan is “poor.” But there are people from all sorts of backgrounds who have bad loans. Some were investors, some wanted a second house, some bought more house than they could afford (but were “rich” by the textbook definition). Do you have anything to prove that all bad loans are being held by “poor” people?

      • @edrebber: They were not forced into making loans to people who could never pay them. They were not forced into making loans to people with bad or no credit. They ASKED for more latitude in making mortgage loans and they GOT IT. As soon as they got it, they ran with it. They gave loans to anyone with a heartbeat. No legislation forced them to do that.

        Free market people, put your money where your mouth is. Abolish all the rules, let banks charge whatever interest they want and close the FDIC. Let consumers beware and let the market decide all. See well that works out. The banking industry did just so well when they got a teeny tiny bit of what they wanted in mortgage industry.

        Really, I think free market people will only learn if we have an economic collapse so bad it’s back to the Great Depression. No, wait. They’ll just blame it on regulation. Oh, well.

    • huadpe says:

      @twophrasebark: @edrebber: No on both of you.

      This was not caused by government regulation or lack of government regulation.

      This was caused by a massive infusion of capital into a saturated market. There was not enough growth potential in the US economy, and particularly the housing sector, to justify the massive amounts of money thrown by financiers at mortgage debt.

      Additionally, the investment bank structure was a failure here, putting too many links between capital source and borrower. Information did not flow upstream properly, largely because people downstream ended up with perverse incentives, due to the asymmetry.

      Bubbles happen under capitalism. They suck, but they tend to fix things in the long run. Investment banks are dying because they couldn’t do the job properly in a global economy. This is in the end a good thing, although it is temporarily painful.

      This had alot to do with China and India coming into the global economy, inserting huge quantities of capital into the US market. It has almost nothing to do with any policy the US government could/should/would have done.

      This is not Bush’s fault, nor can McCain, Obama, or anyone else running for office fix it. The markets will fix themselves eventually.

      The only government agency which had a discernible impact on this was and will be the Fed. They are not run by the President.

    • VRWC says:

      @twophrasebark:

      No, this isn’t Greenspan. Or Bernanke.

      This is deregulation. They allowed the banks to go crazy and lend to anyone with a heartbeat. They allowed them to packages these loans as securities. They allowed them to do anything they pleased.

      Blame the borrowers all you want, they couldn’t have borrowed the money if the lenders weren’t allowed to give it to them.

      Blame the banks and deregulation all that you want to — that’s mostly ostrich-like thinking. The government is what go us INTO this mess.

      The government pressured the banks to loan money to those with less-than-stellar credit because, Heaven-forbid, if you loan money based on credit rating that might be some sort of discrimination! Don’t you know that everyone in the US needs a home and a mortgage, regardless of their credit-worthiness? If banks don’t loan money to people that have already demonstrated (sometimes repeatedly) that they’re incapable of paying it back (i.e. bad credit) on the agreed-to terms, that’d be discrimination and some folks wouldn’t be “entitled” to their piece of “the American Dream”.

      To be fair, the banks/mortgage brokers are somewhat to blame, and there were some questionable financial vehicles in which sub-prime mortgages where bundled with others as investment vehicles and the risk of those vehicles was disguised.

      The vast majority of the blame, however, lies with those that just HAD to have the super-sized home and H2 in the driveway even though it was far beyond their means –those that lied about their income to keep up with the Jones’ — and, worst of all, those that make no effort to live up to THEIR end of the bargain they made with the bank.

      Let’s face it — if someone was STUPID enough to agree to an adjustable-rate mortgage when mortgage rates were at historical LOWS, they deserve their sign. If they’re financially-challenged enough to take out interest-only loans, they deserve a sign as well.

      After all, the home’s value will ALWAYS increase, right? [ahem]

      A home is an investment like stocks or other securities, albeit usually a “safer” one — and there were many, many people screaming about the “real estate bubble” and how it was going to pop for YEARS before this collapse. Furthermore, those evil, nasty banks are taking a huge hit here, too — and the last time I checked, the general idea of fleecing consumers was to ACQUIRE money, not HEMORRHAGE it.

      Sure, it’s a bad situation, but there’s plenty of blame to go around. Laying the blame squarely at the feet of the lending institutions and not blaming those consumers that gambled, lied about their income, or lived far beyond their means will only ensure that the financial ignorance of the American consumer spreads like a virus.

      YOU are the only person that can take care of you — thinking that the government is here to take care of you is the PROBLEM. Keeping the government’s hands out of the pot, financially responsible consumers and saving and living within your means are the SOLUTION.

    • LibertyReign says:

      @twophrasebark:

      You’re joking right? The economy isn’t bad because of inflation, excessive repetitive bailouts, socialization of the monetary system, and nationalization of our banks, investors and a cash flow based on total debt… it’s that we dont have ENOUGH regulation, ROTFLMFAO!!!! The dollar is crashing cause people who made bad investments lost their money!?!? LOL! O.K. Obama

  3. Crabby Cakes says:

    I’m seriously considering getting a lock box and putting it under my bed, a la the SNL Al Gore skit.

  4. metsarethe... says:

    Yes don’t blame the people who aren’t paying their mortgages – okayyyyy

  5. tange1 says:

    Right or wrong the guy is an actor..

  6. 11hawkinst says:

    So, I would like to know why Jim Cramer isn’t the Chairman of the Federal Reserve? He would make C-SPAN watchable, that’s for sure…

  7. Overheal says:

    a dozen odd callers into this post and nobody has said Boo Yah yet?

    BOO YAH!

    Give the guy credit, he made a sound prediction that came true.

  8. ojzitro says:

    FED bailed out AIG, takes 80% ownership.

    [www.nytimes.com]

  9. sirellyn says:

    Are you kidding me? Jim Cramer is almost never right. In fact you make more money doing the exact opposite of what he suggests! Add to that he goes back and forth on he’s views by the day. Check out Don Harrold who debunks Jim all the time:

  10. TWinter says:

    Argggg – I wish we could lift the level of our political discourse so that we could stop discussing regulation in terms of quantity. One side says there is too much regulation and the other side says there is not enough regulation.

    The thing is it’s the QUALITY of regulation that really matters. Markets benefit from GOOD regulation – regulation that keeps them open, honest, fair and somewhat stable.

    But the left seems to think that every problem can be solved with regulation and then writes quite a bit of bad regulation. The right then deems all regulation evil and starts throwing babies (good, sensible regulations) out with the bath water.

    • @TWinter: I think that’s well said.

    • Grive says:

      @huadpe: The problem with your argument is that it assumes that the financial sector operates in a vacuum, without taking into account government action or inaction.

      @TWinter: Nononono.

      That’s not how it works. You can’t just up and try to throw “rational” arguments into political debate. Middle ground? quality? How the heck are you going to feel able to call the other party naughty names then?

      Sheesh, some people.

      Seriously though, great post. Now, if more people (especially people up there in the government) thought like this…

  11. Cycledoc says:

    Listen to The Great Pool of Money and tell me we don’t need more regulation!
    http://www.thisamericanlife.org/Radio_Episode.aspx?episode=355

  12. maztec says:

    The only healthy market is a failed market. Holding it up, you set it up for more catastrophic failure when you can no longer hold it all up with the straw carrot and whip of regulation. It is better to have occasional failures, than long running catastrophic failure.

    • cerbie says:

      Seriously though, great post. Now, if more people (especially people up there in the government) thought like this…

      @maztec: …they would not get enough funds to pull off a successful campaign for re-election, and many of their former backers would give money to the competitor’s campaign, instead.
       
      @Front_Towards_Enemy: YES! Except he’s as arrogant as the ShamWow guy.
       
      So he got something right and gloats. Oh well. I’ve watched his show a couple times, and it’s like a tabloid show, but with stocks.

  13. the-perfect-face-for-radio says:

    i remember when cramer called the tech bust six months after it happened. the fools who listened to him in the interim lost their shirts. if you make enough predictions, some of them are bound to come true.

  14. bobert says:

    @twophrasebark:
    “Free market people, put your money where your mouth is. Abolish all the rules, let banks charge whatever interest they want and close the FDIC. Let consumers beware and let the market decide all. See well that works out.”

    Hear! Hear!

    The markets were free-market, almost completely laissez-faire until Roosevelt’s presidency. We saw how well that worked in the crash of 1929, and in the bank panic at the end of Hoover’s term in 1933 that killed off 4,004 banks.

    My grandfather mustered out from serving his country in France during World War I, settled down in Akron, Ohio, got married, started a family, and bought an inexpensive house. He worked hard for his employer, B.F. Goodrich, the tire company, and was a valued employee. When the market correction… err… depression hit, and tire sales went through the floor, the union voted to cut back to 6-hour work days, with 25% pay cuts, rather than have people lose their jobs. And it’s not like there were part-time jobs available my grandfather or grandmother could have gotten to make up the difference. So. They lost their house. Yes, my hard-working grandfather, my thrifty Pennsylvania Dutch grandmother, and my uncle and my mom, who were little kids, were out on the street. Through no fault of their own.

    So it’s all fine and dandy for nice middle-class computerized folks to cheerfully bloviate about market corrections and the evils of regulation and whatnot like they have no effect on innocent people. But as far as I’m concerned, such folks can just stick it…

    • Nofsdad says:

      @bobert: Who said:
      >>So it’s all fine and dandy for nice middle-class computerized folks to cheerfully bloviate about market corrections and the evils of regulation and whatnot like they have no effect on innocent people. But as far as I’m concerned, such folks can just stick it…<<

      That is probably the best I’ve seen it said in a long time Bobert. Thanks. I was beginning to think I was the only one angered by all of this BS.

      We were led to our present circumstances directly by deregulation which was part of the flipping ‘trickle down” theory of economics that Bush One correctly labeled when he was running against the savior of democracy.

      Did anyone actually think that they could open the gates to a pack of flipping wolves and not suffer any consequences? Are you ready to think again?

      on a related note, to those of you who still refuse to believe or admit that things have been totally bleeped up by your bleeping heroes on Wall Street:

      I’m also sick and tired of people who haven’t lived through any hard times trying to tell me what hard times “actually” are.

      You want to know whether we’re in a recession or not you don’t ask the flipping insulated upper middle class or some damned tenured college professor whoi wouldn’t know a callus from a hangnail.

      You go out to the flipping fields and into the flipping factories and you go spend a day or two in a retail store with some poor schmuck hawking cheapjack Chinese crap for flipping minimum wage (or worse if his employer can get away with it) or waiting tables in a restaurant full of professional bitchers and whiners yelling at them because their flipping filet is too done.

      They can tell you what a recession looks like from the INSIDE of one and if by some chance they manage to get through to you… if you can honestly look at what’s happening to them and not automatically start spewing up the endless government talking points faster than a fuzzy cat hurls hairballs, maybe… just maybe you’ll finally realize that this ain’t over… and that the people who brought it about and are sustaining it while they buy up banks or line up for their taxpayer provided handout have no intention of LETTING it be over… until they have come for you too. The sooner you realize that we’re all in the same boat and it’s only because that your end is more lightly loaded and is sinking slower that your ass isn’t just as wet as mine is.

      Have a nice evening.

    • LibertyReign says:

      @bobert:

      LOL! You probably didn’t even notice that you bashed UNIONS in your comment and gave clear evidence that the Federal Reserve helped cause the “Great Depression”.

      Hahaha, all you had to do to undermine your own socialist bullshit is by simply stating the facts in almost accurate manner.(There were no free Markets after The Fed was created)

  15. Brazell says:

    It’s not just companies making poor business decisions and the federal government over-regulating or under-regulating. In the cases of Fannie and Freddie, these were former high-level government officials, de facto appointees to their positions in FNMA who were deliberately and illegally cooking the books to make off with hundreds of millions of dollars for fake incentives programs. In any business world this would land you strictly in prison with a lengthy stay and your company would be penalized hundreds of millions and nearly forced into bankruptcy. The OFHEO had the facts on Fannie Mae, on Frank Raines, on Jamie Gorelick, but because they were former government appointees, when the OFHEO amassed charges, Fannie Mae threw money at congress (Chris Dodd, Barney Frank — I’m looking at you) which in turn preferred to investigate the OFHEO instead.

    So now, we have the Feds take over the FNMA, and at least one of the biggest crooks in the industry, Jamie Gorelick, is in one of the top spots to get a cabinet position come January… while she’s also making off with tens of millions from a lending giant that she drove into the ground through illegal statements.

    In business, she would be in prison. In government, she’s a multi-millionaire and may very well be the next head of Homeland Security come the coronation of the next president.

  16. giggitygoo says:

    @bobert

    “The markets were free-market, almost completely laissez-faire until Roosevelt’s presidency”

    This is simply an incorrect statement. The Fed was created in 1913 and it is certainly not a part of a “laissez-faire” approach. It’s reasonably well accepted that the Fed worsened the Depression by not releasing enough money into the economy, thus the massive deflation and unemployment. No one can possibly know what would have happened if the Fed acted differently or didn’t exist, but the idea that the Depression is proof that free markets don’t work is nonsense.

  17. u1itn0w2day says:

    Hold it! Freak Out so the Feds lower interest rates so companies that mishandled or bungled their billions already can borrow more money?

    I’d like to see his buys or sells on Lehman Brothers,Bear Stearns,Merrill Lynch or Washington Mutual over the last couple of years.See how much he gloats then.

    Hedge Funds buy and sell so much stock they can’t not influence the market.I’ve heard his STORY about how he would “leak” negative or possibly false news to effect stock price.That’s bad enough but I don’t think that’s the worst he did for some reason.

  18. madog says:

    you’re all wrong. It was caused by Godzilla crushing deep sea cables and pipelines as he makes his way to Hawaii.

    Seriously, it’s caused by us not learning from our mistakes. The economy was doing so well that everyone thought it would stay as it was for a long while. Everyone made bad investments and vouched for people who otherwise would not normally be allowed to take out huge loans, and then snowballed into this fluster cuck. The economy always has it’s ups and downs and everyone needs to realize that won’t stay up forever and not to get cocky. It’s essentially happened before and will happen again upon “saturation”.

  19. Ixnayer says:

    @ARP, I know you are Keith Olberman so quit using an alias! No matter what the problem just blame Bush, right? How about putting some of that blame into the democrat controlled congress that has done absolutely nothing good for the last year and a half. Instead of the so-called change they promised America, they’ve been busy sucking on Obamas cock.

  20. TexasScout says:

    I came when the congress MADE the lenders give loans to “disadvantaged” (read:couldn’t pay it back on a bet) people or PAY HUGE FINES FOR DISCRIMINITORY LENDING PRACTICES. They knew that these people wouldn’t pay them back and we, the dumb ol’ taxpayer would bail them out.

  21. The people accepted the loans. Nobody held a gun to their heads and made them sign on the dotted line.

    OK, maybe there were a couple cases of gun to the head.

    But for most folks, they went willingly. Hells Bells, you could talk till you were blue in the face to avoid ARM, ballon payments etc and the people still lined up to take the risk.

    Were they “knowledgeable” about the risks? Did the people even know there were risks? Some were, some weren’t, some didn’t care and some just saw a shiny new home and went like sheep to the slaughter.

    IF people weren’t signing up for these loans the banks would have stopped offering them. Sorry to say, can’t blame the banks because they were just reacting to the consumer demands. If next week a free front lobotomy is popular with new safety deposit accounts… you will see banks installing a surgerical suite to do the lobotomies on site.

    MAYBE the Feds should have been more aggressive in warning consumers. MAYBE the consumer magazines and websites should have been more aggressive in warning consumers. LIKE MAYBE 20 YEARS AGO. This is not something that just sprung up overnight. This problem has been in the works since banks discovered popularity of ballon payment mortgages back in the early 80′s.

    Maybe a little more diligent government oversight is needed. Not more regulation, but better quality requlation.

    And one last suggestion. Just like having your own lawyer, maybe people need to have an independant finacial advisor review their contracts and loans prior to closing specifically to explain the risks.

    • papahoth says:

      @Corporate-Shill: Agree, we need to take care of the execs and Freddie, Fannie, AIG, Bears-Sterns. Screw those scum that thought buying a house was part of the American dream. If they can’t get rich like those guys did, they deserve to be out on the street. That is what makes America great!

      @fisherstudios: I see they are really coming out of the woodwork now.

  22. redclear55 says:

    Regulation of the securities markets is a balancing act. On one side, you want to allow the markets to function with as little constraint as possible. At the same time you need to “regulate” the markets to be fair and open. The Great Depression set into motion regulation which helped constrain the bigger players in the market from taking advantage of the little guys out there (see Securities Act of 1933 and Securities Exchange Act of 1934). Just like the market cycles move up and down, so does the regulation. We went from the Great Depression to increased regulation. When the times get good, we start talking about deregulation and we end up in a bubble-like situation.

    A recent example of this was the partial repeal of the Glass-Steagall Act (est. 1933) by the Gramm-Leach-Bliley Act in 1999. We had just experienced a great economic time period in American history. Ten years later, you can see that this is part of the macro problem we are seeing today (the deregulation allowed a bank holding company to own other financial companies; BOA buying ML would be an example). So now there is talk to better regulate the markets again. It ebbs and flows just like everything else.

    The bottom line is that we need active regulation and better long-term memory.

  23. u1itn0w2day says:

    The one question that I have consistently asked myself since the new millenium is where the heck is the money coming from?

    Everytime I pass new construction,see a big screen walk out the door at a store or see/saw an SUV on the road I ask myself how the heck can they afford that? where the heck is the money coming from ?

    Back to some basic rules of a mortgage:a mortgage should be no more than 3 times your yearly salary-a simple rule or guidline.And THAT is the 1 question someone had ask but didn’t ask or refused to accept the honest answer to.

    Where the heck is the money going to come from?

    Even as an investor-it might not be 3 times your yearly salary but I sure as heck would to know if my investment is selling buggy whips or Ipods.Where is the money coming from?

    WHO is buying these houses? WHAT do they do for a living? WHERE is the money coming from?

    And believe it or not I want to see this type of loan to exist.I do NOT want to see it sold or used the way it was but it should be a choice or alternative.

    But if you can answer the WHERE question as a buyer or investor you should be in better shape than now.

  24. fisherstudios says:

    The only way that the United States will ever turn themselves around is if they completely tear down the so-called “federal reserve”. Only the government should be able to print money, not the banks.

  25. fisherstudios says:

    Perhaps an educational video is in order to satisfy your skepticism about where money comes from, and allow you to understand that my claims are neither crazy nor unfounded?

    Q. Where does money come from?
    A.

    After watching this video series you will understand what you never learned in school: US currency is no longer as ‘good as gold’ or redeemable for gold. It is no longer backed by anything. It is just a piece of paper.

    Just today there was an announced $85bn rescue package for AIG, the country’s biggest insurance company. According to the New York Times, a recession in 2008 is “unavoidable”…

    [www.iht.com]

  26. HIV 2 Elway says:

    Markets go through times of greed and times of fear. We’ve been in a fear stage since October. The sky isn’t falling. These things happen and in the long run are non-issues. Take a look at the S&P since 1950, the savings and loan crisis is hardly a blip on the chart. 2009 will be a good year to make a fortune.

  27. harvey_birdman_attorney_at_law says:

    I hate Jim Cramer.

    [i2.photobucket.com]

  28. Bladefist says:

    I think it’s funny, top economic advisers, are trying to figure out this problem, trying to figure out what caused it.

    Why are they wasting their time figuring it out, everyone in this article has already figured it out. lol.

    It’s not clear what caused this bubble in full. It’s probably a combination of what a lot of you are saying. But with it being a political year, there is a ton of spin out there.

    In my opinion, as someone who is not a phd in macroeconomics, I blame it on personal responsibility. Regardless of our neophyte government, people should be more accountable in the types of loans they make, and making their payments.

    Perhaps there was regulation to prevent it, and it didn’t work, perhaps there was no regulation, doesn’t matter to me. Don’t rely on the Government.

    For those who keep saying, “capitalism when there is profits, socialism when there is losses” – That’s exactly true. And I think a lot of people are upset about that. But to be political, that is not a policy of either party. And how its happening in front of our faces, is beyond me. After this is cleaned up, there needs to be a massive investigation, and I want to see some people put in jail for this.

  29. Chairman-Meow says:

    I’ve said it before and i’ll say it again:

    Jim Cramer is the Billy Mays of the finicial world.

  30. CrazyRedd says:

    At least he gave good advice about the Bluth company when they went from “SELL” to “DON’T BUY”

  31. stillkarenann says:

    “Go buy some Washington Mutual and that that yield!”

    (the last line of his initial meltdown)

  32. econobiker says:

    So what we have here is a version of “trickle up” econonmics:

    Many of the small the people default and kill the companies…because the companies were too greedy to start with!!!

  33. jimdoria says:

    @Corporate-Shill: Sorry to say, can’t blame the banks because they were just reacting to the consumer demands.

    Yes, we can’t blame the banks because of course they had NOTHING to do with creating that demand. It just started that one spring when leaflets began to fall off all the trees in poor neighborhoods saying “Quit renting and go get a mortgage now! The banks will give you one, but they can’t TELL you that they’re available because banks are so shy!”

    Sadly, the poor people listened to the trees and the poor banks just had to hand over those questionable mortgages due to the demand. Poor, poor banks.

    • @jimdoria:

      Remeber the 80′s and mortgages with ballon payments? Nothing new about ballon payments, been around for decades for commercial customers needing access to large sums of money for business development. But suddenly every home buyer wanted a mortgage with a ballon payment so they (the home buyer) could afford a big shiny new home. And the banks moved the ballon payment mortgages from the back burner to the front burner and promoted the hell out of them.

      Blame the banks or blame the consumers?

      BTW, I had one of those ballon payment home mortgages. I also knew I had a sum of money from the sale of a family business division that would be used to settle the account. I came out clean, others did not and were forced to sell their homes.

      No interest, subprime interest, deferred payments yada yada yada have been around for centuries as a tool to provide cheap money upfront for business development (the back end is steep, but the commercial customer fully knows the risks). The banks just rolled the same loans into the consumer market in response to consumer demand.

      Was it wrong for banks to provide these loans to consumers when the same loans have been provided to commercial customers for years? Maybe yes, maybe no. Tighter government oversite might have prevented these loans from occuring…. but the government liked the housing boom (increased property taxes, jobs etc) and encouraged home ownership….. so in a manner of speaking the government is at fault for encouraging these loans.

      Blame the banks? Hardly, they just responded to consumer demand. No demand, no product offered.

      • papahoth says:

        @Corporate-Shill: How about the fact that they pushed them on people that did not even need that type of loan? How about the fact that they quit validating that the loan application was not false?

        • @papahoth:

          First part…. guess what…. they did the same back in the 80′s with the ballon payment mortgages (cause in two or five years you will be moving due to job or bigger house).

          The second part is fraud. Criminal is criminal, doesn’t matter who did it. Some buyers did it as well by over stating their income. Banks should have done their due diligence.

  34. bbagdan says:

    To fix the economy we need to start a war that will create more jobs in the military industries and secure a source of low cost oil. Then we need to focus on white collar jobs in America and outsource blue collar jobs to countries with cheaper labor and more lax environmental regulations.

  35. friedduck says:

    Lower interest rates to prevent this mess? Shows how absolutely clueless Jim is (and I like him.)

    It’s caused the dollar to tank, but hasn’t improved liquidity one bit.

  36. LibertyReign says:

    @twophrasebark:

    History has proven your statements to be foundationless and contrary to reality. Sound money and free markets have consistantly created wealth and progress in the economy, industries, education, and science. Socialism has proven to be a wolf in sheep’s clothing time and time again and government intervention into the marketplace has always ended in catastrophic collapse of the economy/monetary system.

    You have two-thousand years of market history to study from in order to realize how misguided your fear of freedom is. I suggest you get to reading..