Comments on: Crazy Week http://www.joetaxpayer.com/crazy-week/ Financial Commentary For The Average Joe Mon, 06 Feb 2012 21:56:17 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: JOE http://www.joetaxpayer.com/crazy-week/comment-page-1/#comment-82 JOE Mon, 28 Jan 2008 01:03:15 +0000 http://www.blog.joetaxpayer.com/archives/96#comment-82 eric - you pose more (great) questions than I can address here. But I do agree that the situation is not so simple, I do believe there was a combination of events that came together to cause the subprime mess (as I've posted here) and that it will take time for the system to right itself again. ARMs' rates resetting were the turning point that set the stage for the defaults. A bit of an oversimplification, perhaps, but a major cause. JOE eric – you pose more (great) questions than I can address here. But I do agree that the situation is not so simple, I do believe there was a combination of events that came together to cause the subprime mess (as I’ve posted here) and that it will take time for the system to right itself again. ARMs’ rates resetting were the turning point that set the stage for the defaults. A bit of an oversimplification, perhaps, but a major cause.
JOE

]]> By: eric http://www.joetaxpayer.com/crazy-week/comment-page-1/#comment-81 eric Sun, 27 Jan 2008 13:37:34 +0000 http://www.blog.joetaxpayer.com/archives/96#comment-81 What if this is not a liquidity crisis but a solvency crisis? Can the fed provide capitol, or only credit? What's the difference? Why is it that sub-prime borrowers are going into default? Do they lack something needed to make monthly payments? Will lower FF rates fix that? Is unemployment causing the defaults, or are the defaults causing unemployment? Could one argue that it was the 1% federal funds rate and freely-flowing liquidity that caused the sub-prime crisis? Does it stand to reason that more low interest rates will cure the problems? And what does that say to the long term viability of regulating the economy by "targeting the federal funds rate"? Too much "credit" given to the fed when it deserves so little. What if this is not a liquidity crisis but a solvency crisis? Can the fed provide capitol, or only credit? What’s the difference?

Why is it that sub-prime borrowers are going into default? Do they lack something needed to make monthly payments? Will lower FF rates fix that?

Is unemployment causing the defaults, or are the defaults causing unemployment?

Could one argue that it was the 1% federal funds rate and freely-flowing liquidity that caused the sub-prime crisis? Does it stand to reason that more low interest rates will cure the problems? And what does that say to the long term viability of regulating the economy by “targeting the federal funds rate”?

Too much “credit” given to the fed when it deserves so little.

]]> By: Daniel http://www.joetaxpayer.com/crazy-week/comment-page-1/#comment-79 Daniel Sun, 27 Jan 2008 01:30:54 +0000 http://www.blog.joetaxpayer.com/archives/96#comment-79 Joe, It amazes me how much everyone glorified Greenspan while he was in office, and then he conveniently retires before a major issue (which was indirectly caused by him). Then he publishes a book seemingly saying "hey, I kinda set you up for failure." Then he gets a job as an advisor to a firm that made over $15 Billion from the mortgage meltdown. Thanks for reading my blog! -Daniel youngandfrugal.wordpress.com (And thanks for visiting mine! - JOE) Joe,

It amazes me how much everyone glorified Greenspan while he was in office, and then he conveniently retires before a major issue (which was indirectly caused by him). Then he publishes a book seemingly saying “hey, I kinda set you up for failure.” Then he gets a job as an advisor to a firm that made over $15 Billion from the mortgage meltdown.

Thanks for reading my blog!

-Daniel
youngandfrugal.wordpress.com

(And thanks for visiting mine! – JOE)

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