> [woods]
> > the Fed. has been handing out billions of dollars of loans to banks
[Craig]
> Banks shouldn't be borrowing, they should be lending. That's part of the
> problem.
Platt:
The problem causing the problem was the government forcing banks to make
loans to deadbeats.
woods:
I agree to an extend, but that's small game compared to what the Investment
Firms on Wall Street, not Fannie and Freddie, I'm talking about the big fish.
They have accumulated credit swap black holes as big as 40-90 trillion dollars,
which so far
linger in debt and haven't been opened up into the market. It's a debt sitting
around just
as the U.S. national debt sits around. On Wall Street the problems are in the
trillions
whereas the deadbeats are chump change, merely in the single digit billions
maybe at
most near 20 billion. The economy of the U.S. would have absorbed this easily.
What is
downward spiraling the market is the subprime mortgage defaults made by the big
wall street
investment firms, in which they had a debt of ca. 4 trillion released into the
market.
Another huge contributor was the lowering of federal interest rates that the
Federal Reserve now
admits their numbers were off and they did not consider inflation. The whole
reason
you lower federal interest rates is because inflation is not a concern, but
they
went and lowered it very far as you can see below. That was a huge dent in the
market too.
http://en.wikipedia.org/wiki/Subprime_mortgage_crisis
"From 2000 to 2003, the Federal Reserve lowered the federal funds rate target
from
6.5% to 1.0%.[108] The central bank believed that interest rates could be
lowered
safely primarily because the rate of inflation was low and disregarded other
important
factors. The Federal Reserve's inflation figures, however, were flawed[citation
needed].
Richard W. Fisher, President and CEO of the Federal Reserve Bank of Dallas,
stated that the Federal Reserve's interest rate policy during this time period
was misguided by this erroneously low inflation data, thus contributing to the
housing bubble."
"These five institutions reported over $4.1 trillion in debt for fiscal year
2007, a
figure roughly 30% the size of the U.S. economy."
woods continues:
Platt, the deadbeats would have been absorbed. That's small money. It's
wall street's gambling habits, it's legal Las Vegas, that caused a global
economic
crisis. The world's a bit bigger than Tom and Betty's little mortgage default.
That's
a side-show distraction don't ya think?
woods
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