Thursday, September 25, 2008

Completely not wow related at all, but:

If anyone's wondering what's really going on with the U.S.'s economy right now, you might start looking here.

I sincerely hope anyone who even remotely cares to watch it. You even might learn a thing or two.

34 comments:

Anonymous said...

Hey Jayde,
I can certainly appreciate this particular post, and thought (if you hadn't already watched it) you might enjoy this particular film. While obviously we should take a number of what is says with a grain of salt, the chapter in regards to the banking system seems spot on.

http://www.zeitgeistmovie.com/

Thanks for all your feedback - cheers!

Anonymous said...

I think the current crisis falls on two main reasons. One, systematic deregulation by the National Republican Party to move towards a more "free market" or "laissez fair". The second reason being a decision by Alan Greenspan to lower the federal fund rates to 1.0%. The subsequent drop caused for investors internationally to look for places to spend their capitol that would give back rates that are not terrible. Banks in the USA used mortgages as a way to takes these investments from foreign countries and get a larger quicker return at what seemed to be a low risk. This is where deregulation comes in. All of a sudden, trillions not billions of dollars were being poured into these investment firms and the need to provide even more mortgages increased.

Without regulation and oversight millions of people with unreliable credit were convinced into taking high risk adjustable rate mortgages. As the demand went up, the rates went up on these people until they could not afford house payments and thus defaulted. Uh oh...

Why did this have such a huge effect on so many institutions not traditionally associated with banking? Deregulation allowed more companies to divest in businesses not apart of their original ... business. It does not sound so shocking, I mean Walmart does all sorts of different things at once, but historically the larger a company becomes the less it can have a business in everything effectively. These companies like AIG invested huge sums into sub prime mortgages and when they lost the whole company lost.
So that is the truncated story of what happened and why greed and the belief in "free market" caused trillions in losses for the entire world.

Anonymous said...

Agreed!

Chris said...

I'm convinced that the best thing anyone can do to learn more about the economy and banking system is to watch all 10 episodes of "Free to Choose" at http://www.ideachannel.tv
It's 10 hours total, but well worth it. Also check out www.reason.com

Anonymous said...

This is a wow site not a site for you to qq about the economy

Anonymous said...

idiot its a blog site..the owner is free to write anything he wants.

Anonymous said...

[quote]idiot its a blog site..the owner is free to write anything he wants.
[/quote]

^^This

(I know the qutoes dont work, but still :P)

Michael said...

I would watch the video but its like 3 hours long. But, on the topic of the economy, it is sad to see whats happening. Banks getting bailouts I personally don't think is the best solution. Getting a loan or a mortgage is good... but no one is going to get one if they can't afford to repay it. (Well, im sure people would but the banks make sure you can). Living in Michigan, we have one of, if not the, worst economy of any state. This is having a huge impact us, and I'm just glad to see the government doing something. Limited government I think is the best, but limited government is there to prevent a crisis, and thats what this is.

I really hope they reform the bill into something more than just a 700 billion dollar check to banks across the states.

Jayde said...

"I would watch the video but its like 3 hours long."

:(

And this is exactly why bankers get away with what they do. No one really cares enough to educate themselves. :(

Tim said...

First of all, I haven't watched that video and I don't pretend to understand the economy more than the average Joe, but here's my perspective on something I believe is relevant.

Pertaining to internet videos, Jayde, I'm sure you can understand people having reservations for dedicating time to watching something that could be half truth and half BS. I mean, the first comment in this post links one of those more infamous videos. Hell, I've sat and watched professional, high budget shows on the History channel or some other network and wonder how and why they're made, when I know for a fact they are completely speculative yet are still presented as fact. For example, in the video you posted, there are some very "interesting" taglines. Sure, the video may not be about that, but it's hard not to suspect it's their to attract those very people looking for something against the grain to believe just for the sake of it being against the grain.

People do want to learn. We aren't all sheep. But where do we find something that isn't speculative, something that balances fact? And with all due respect, I don't think they want to find it on a WoW blog, you know?

Anonymous said...

Come on now, this is pure propaganda. Try simply finding legitimate sources for some of the quotes or any legitimate evidence for the dots the video attempts to connect.

People love to believe they've found a secret and need to share their enlightened perspective, but that's just what keeps conspiracy theories going.

The fact is as simple as this: in the 1990s the Republican congress repealed banking regulation that was put in place after the Great Depression. Man is greedy, the market is greedy and the government needs to keep it in check. Bankers aren't out to take over the world, they simply want to make as large a profit as possible without any regard to the ramifications.

Anonymous said...

I know that senator Chris Dodd has said the revisions to be made to the 700 billion dollar plan are as follows:

-curb ceo severance packages
-insure protections and financial help to those with risky mortgages
-make an oversight committee to -monitor decisions made by Henry Paulson (sp?)

As far as i know deals were going well and then after a long meeting a few republican leaders said otherwise. Anyway, it's a crappy situation and the truth is is that no one really knows what to do. Limited government, big government historically people throw these ideals out the window when it serves them, so I think it will be interesting to see where lines divide.

Jace said...

I find it hillarious that so many people are tagging Republican to things that the Republicans had nothing to do.

The Republican Congress in the 1990s really?

The fact is that alot of this economic is our fault in our rush to be scared. A very large portion of this crash has alot to do with self fullfilling prophecy.

It started with people saying "Oh hey, our economy sucks, I cant buy what I want, gas prices are rising" and people started yanking money out of the market...

Than came "Oh, the markets suffering, theres no money to made there" and more people pulled their money out of the market.

Than came "Oh crap, we're going to go through an economic break down, pull out pull out!" And people pulled their money out of the market.

"We're going to have another Great Depression!" People get scared, and keep pulling their money out.

IF we werent such sheep in the first place, alot of this wouldnt be nearly as bad as it is. We put us where we are, and we're the only ones that can be blamed. Stop blaming the government for everything.

That isnt to say that there is no merit in the video posted. I think it make some decent points. But to a few of the anonymous comment makers in this thread. You need to go do some research before you start pointing fingers.

Anonymous said...

it's a shame that those people that are trying to fix the current financial pot hole don't know about this blog.

Jayde said...

I wonder how many of you would be making the same comments if you actually took set aside the time to watch the documentary.

I guess we'll never know. :)

Anonymous said...

With all due respect (which there is a lot of)I'm somewhat disappointed with this post. I was really hoping for some thoughts on the Unholy updates,oh well.

P.S. I've seen this movie, good stuff.

Anonymous said...

i will admit that i haven't clicked the link due to being at work, but i have a rather low opinion of documentaries being used as some sort of fact base.

i have watched documentaries on how aids are caused by anti-aids medications, how the jesuit order controls the world through the influence of smaller secret societies, how egyptians imported cocaine from south america, and howclimate change is a blatant lie.

now, i probly wouldn't mind watching this documentary that you're linking, but i also enjoyed the ones i mentioned. documentaries are entertainment. they may provide some facts, but they often provide just as much in the way of speculation and agenda.

saying that you will learn more about how our economy works by watching this documentary isn't necessarily false, but then neither is saying that you will learnmore about the cia by watching the bourne identity.

Legionella on Kazzak said...

But Jayde, people will always be sheep and act the way they do. Thats why the government in the US should and I believe WILL increase regulation and control of the financial system in the US. You can't expect the average Joe to know all about the risks of taking too high morgages or that not spending money worsens the situation.

Buying things on credit has sadly become a common thing in the US but brings terrible risks which are now all to obvious.

It saddens me to see the situation worsen every week and my heart goes out to all the families in the struggle.

Anyway just the 2 cents from a Dutch guy from Amsterdam!

Ow and Btw thnx for ur always informative blog!

Michael said...

Lol sorry for not watching the whole thing, but It's mostly because I've been studying Economics for over a year now. I watched probably a good half hour of different parts of the video, and by the tone of it I can see you think basically the same way I do about the situation.

Bankers CAN'T get pulled up out of the gutter because of their misconduct of the situation. Giving 700 billion dollars to the peope who helped cause the problem is not going to fix it. Pardon the over the top analogy but its like giving money to drug dealers to solve a drug problem.

The economy needs help. Higher spending and more money flow is what we need. How is that achieved? Lowering Interest rates. They have been lowered throughout the year without significant turn around, but atleast it will do something.

Anonymous said...

lowering interest rates is how got here in the first place...

Anonymous said...

So no more pvp video? :(

Jayde said...

Lol. All in due time. Making videos is very time consuming.

Jace said...

Unfortunatly its a pretty dirty cycle.

Interest rates are lowered. Nows the time to buy a house! woot!

Hey... have you ever heard of this really cool thing called an ARM Loan? It'll let you afford a little nicer house than you thought you could... Jacking up your interest? Oh dont worry about that, when that happens you can just refinance...

They played alot of Americans over pretty hard core with these type of things.

And than when their ARM expired and the homeowner could no longer afford the greatly inflated interest rate, houses start foreclosing. And the loan givers start losing excessive amounts of money.

Unfortunatly we're in a pretty tough spiral. I still dont think we're in an "Economic Pearl Harbor" like some like to claim we are, but it's still pretty bad, and something needs to be done.

The problem is that to reinflate the market you HAVE to increase spending. My problem is that I dont want to have to force my "spending" by increasing my taxes.

There has to be something better than a 700 billion bail out. But when a good portion of the community is hurting economically, where is their spending supposed to come from?

Anonymous said...

Though the economic situation isn't as good as it was 4 years ago, its also no where near as bad at it was 30 years ago.

One thing that history has taught us is that regulation isn't the answer to economic woes. More often then not regulation causes immense inefficiency, monopolies, social planning and corruption to become common place. Logic alone dispels socialist myths wrt to the subject: the only way any entity could regulate (aka plan) any economic affair properly as a removed third party it would have to be omniscient, omnipresent, and omnipotent. None of which any government can be. No matter how you try to avoid the subject no government official could ever be more knowledgeable about a company's or consumer's needs then the company or consumer themselves. Ergo it stands to reason regulation is a woefully inadequate and highly reactionary response.

If regulation was effective why is the American educational system in such disarray? Why were communist rabble-rousers and Mafia types allowed to control unions for decades despite the Dept. of Labor being informed by its own plants that this was going on? Why was this whole debacle with morgage lending allowed to occur when it was being regulated by the government in the first place?

Government officials aren't guardian angels or even roughly their equivalents. To say they are more knowledgeable about certain aspects of economics than the average Joe is likely true but in no way rationalizes affording them control over something infinitely complex.

If I may I'd like to suggest to you F.A. Hayek's "The Road to Surfdom" as an excellent rebuttal to economic regulation and other aspects of socialism.

Anonymous said...

If people would realize the difference between wants and needs there would be little if any negative debt in the American private sector (particularly of the credit card variety). You may want a house - but you don't need a house. You may want children - but you don't need children. The asinine sense of entitlement that many Americans and moreover Europeans possess absolutely infuriates me. If you can't afford something do not buy it lest you'll be expected to pay interest on what you owe. Just use common sense, plz. If you do most likely you will find your suffering shall dissipate.

David said...

I haven't watched the video, and I don't intend to.

I'd take the time to watch the video if the tag didn't say that the Bank of England and other central banks have placed the yoke of economic slavery on their nations.

This film, judging from the tag, is very close to the "illuminati" movement in general, which has always had very close ties to anti-semitism. When "The Rise of the Rothschilds" is a chapter title, you know you're in for a doozy. The preview is tagged with "NWO," "illuminati" and "zionist"--even though zionism obviously has nothing to do with the international banking system (Although, neither does Idi Amin or 9/11, and those are in the tags too).

I have my own opinions on the housing and credit crises themselves, which--as an economist who until a couple of years ago worked at the Federal Reserve--are surely suspect.

Films like this prey on people's fears, prejudices (conscious or otherwise), and misunderstandings of the issues involved.

Anonymous said...

@david

Yeah, anything that mentions "International Bankers" is usually thinly disguised code for "blame the Jews."

Anonymous said...

Notice all the "international bankers" discusses are usually Jews. Same is try with antizionists:

"im not against jews just their right to have self government" right...

Anonymous said...

I'm sorry, I lost my train of thought like 2 minutes into the video. I grew increasingly uncomfortable when the Author came on, and starting flicking his pencil towards the screen. I felt like he was trying to jab me through the computer moniter!

-Jared wuz (X)

Anonymous said...

It's disheartening to see people brushing off the simple facts about our Federal Reserve as conspiracy theories. Every single government, economics and law teacher I ever had of both Conservative and Liberal backgrounds agreed that the Federal Reserve was, is, and will continue to be a Private Institution whose profits are their priority.

I really wish people did watch the video. None of it is conspiracy or connecting-the-dots. It's a history lesson. And if people are not willing to become educated and learn what exactly causes these fluctuations and crashes of the global economy, they should watch it.

Though I will say.... the massively obvious explanation of the great deal of the issues going on today were caused by just simple greed. If bankers had an modicum of fear pertaining to high-risk loans .... well, yes, that may make the home sector growth look feeble and "oh no, the economy is slowing!!" but we can see how it just made it even worse than it would've appeared to of been had there been any hubris left.

David said...

I will be perfectly honest with you: The Federal Reserve is not motivated by profit. I know this because I worked in the Federal Reserve and helped set policy.

a) No mainstream model of the Federal Reserve's actions has anything to do with a profit motive--the Taylor Rule, for example, depends on the output gap and inflation.

b) At no point when setting policy does the Federal Reserve worry about its profits. I know this because I have been there. They go through a massive stack of economic statistics to forecast inflation and GDP, and base interest rate decisions on that. The Fed employs hundreds of Ph D economists, most of whom work in economic measurement, modeling, and forecasting. Why would a profit motivated company hire all these expensive employees that don't do anything to increase profits?

c) The Federal Reserve does not keep its profits, or disburse them to shareholders. Its profits go directly to the US Treasury. Why would it maximize profits when it doesn't get to keep them? Note that most of the Ph Ds are underpaid relative to their peers in the private sector.

I question your "economics, government, and law professors". What crackpot universities did you go to? Not once in my years studying economics as an undergraduate or as a graduate student did a single professor of mine ever suggest that the Federal Reserve was profit-motivated.

Saying that the Federal Reserve and its partner institutions worldwide are profit-motivated is simply wrong.

David said...

Oh, let me add to the above that the Federal Reserve can print $100 bills for 4 cents each. If the Fed is profit-motivated, why do they not exercise this privilege to the fullest?

Anonymous said...

zeitgeist is literally full of crap, most of his source material on the religious comes from one source which in itself is crap.

simple example of how bad it is is when the author of zeitgeist would say stuff like "Jesus was born on the 25th of Dec" when the 25th is only when Christians celebrate his birth and only started to celebrate on this date hundreds of years after the event and writing of the NT, same goes with comparing it to all other religions, he has no clear source, just some geeky uni student with lots of time on his hands to make a video about crap. but you know, atheists that know nothing about religion and know nothing in general will still believe the crap, even though actual smart atheists would hang their heads in shame at you mindless zombies.

Anonymous said...

David,

The intention of the system is to create an expanding and contracting financial system that allows the rich to buy up the world for pennies.

I saw a story on CNN the other day that said "How did JP Morgan avoid the Mortgage crunch?" The answer was that the CFO "suspected" trouble was coming. Bullshit, he knew it was coming because he was tipped off. Just like you can't tell me the fed chairman, Paulson and GWB did not see this coming. They've been lying for the last year.

If you want to be a sheep trained by a sheep training institution and not think for yourself that is your prerogative. But don't expect the rest of us to sit here and buy the bullshit they've sold the world lock-stock-and-barrel.

Next thing you're gonna tell me is that Jury Veto doesn't exist either...