Investor Sentiment

[Liberty28]

Wasn't it Ronald Reagan who coined the phrase "Greed is good!". And I think that the Pope just said "Greed is bad!". Hmmmmmmm.

[GordMay]

Originally Posted by Liberty28

Wasn't it Ronald Reagan who coined the phrase "Greed is good!"...

While the Reagan era could be (partly) characterized up by it’s faith in the “free market religion”; it took the fictional character Gordon Gekko, from the movie 'Wall Street' to coin the phrase: “GREED IS GOOD!”
American Rhetoric: Movie Speech: Wall Street - Gordon Gekko Addresses Teldar Shareholders - Greed is Good

On May 18, 1986 Ivan Boesky gave the commencement address at the University of California at Berkeley's business school, in which he said:
"I think greed is healthy," he told his enthusiastic audience. "You can be greedy and still feel good about yourself."

A few months later Boesky was indicted on the charges that would land him in Southern California's Lompoc Federal Prison.

[imagine2frolic]

I think there is enough blame to go around for everybody that signed paper. All the way from the White House TO THE DOG HOUSE!!!!!!!

[Liberty28]

GORDMAY...

U R Unbelievable!!!!

[amytom]

Like everyone said: Lot's of blame
-Greed could have been a limiter if the banks had been allowed to control who they lent money to thus lowering risk.
-Deregulation in how finances were reported- allowed specific people (CEO's, CFO's,etc) to inflate their greed criminally.
-Housing reform created the belief that eveyone deserved to own a home wether or not they pay their bills.
-more people buying homes means home values go higher which should have been self limiting but the new rules imposed on banks forced them to create loans for people who couldn't afford to buy.
A bad cycle that turned into the "Perfect Storm". Now we also added 150 Billion debt for every pet project of Congress.

I think Jimmy Buffett said it best when he explained why he always kept a sailboat.

[Palarran]

Originally Posted by Ex-Calif

Well I hope this thread doesn't go south with this comment but I for one disagree that "predatory lending" and "evil home builders" are the entire culprits in the sub-prime problem.

Mr. & Mrs. consumer were buying houses with basically zero equity, ridiculous finance terms - 1 year arms, 30 year interest only loans etc. - You can say these people were victimized but people buying 300-600k homes are not idiots. They were just greedy, trying to live in something they could not afford.

Don't buy what you can't afford. And if the deal looks too good to be true it is.

It wasn't just the new homes, and the speculators that caused the problem but the amount of people who re-financed their homes two or three times, taking all the equity out of it, then heading to Las Vegas to gamble. If they didn't gamble, they bought flashy trucks, big diamond rings, drugs, or whatever. If it wasn't re-fi's, it's credit cards loaded to the max, and people not feeling that bankruptcy is a bad thing. We all have to know people who ordered more expensive bottles of wine they we would, took big vacations, new cars, etc - and now have claimed bankruptcy. 50% of this problem is for sure that we are no longer a nation of savers. Many live and spend way beyond thier means. Now they can't as the money pool has dried up.

For what it's worth, I can't really belive anyone is suprised by this. We all saw it coming we just didn't know when.

[anotherT34C]

Originally Posted by GordMay

While the Reagan era could be (partly) characterized up by it’s faith in the “free market religion”; it took the fictional character Gordon Gekko, from the movie 'Wall Street' to coin the phrase: “GREED IS GOOD!”
American Rhetoric: Movie Speech: Wall Street - Gordon Gekko Addresses Teldar Shareholders - Greed is Good

On May 18, 1986 Ivan Boesky gave the commencement address at the University of California at Berkeley's business school, in which he said:
"I think greed is healthy," he told his enthusiastic audience. "You can be greedy and still feel good about yourself."

A few months later Boesky was indicted on the charges that would land him in Southern California's Lompoc Federal Prison.

What I want to know is, is Rand's objectivism now going to be as philosophically discredited as Marx's communism, in application.

Seems that real human beings can't handle either.

[schoonerdog]

I think a while ago we were talking also about the dollar and I posted I thought it would be raising, not because the US economy was doing better, but europe was crashing. Well, today we see some of the cracks. The major european banks are far more more leveraged than the already failed US investment banks ever were. Europe has already decided that as a community they can't decide anything as a community, so they just issued a general pep talk instead. Barclays and Deutsche Bank are the two most over leveraged banks in the world right now, time to see them crash as well.

[David_Old_Jersey]

The Germans would never let Deutsche Bank fail ala Lehmans. Not so afraid to Nationalise as the Anglo Saxons and look long term.

UK Plc on the other hand........not very bright

[schoonerdog]

Agreed, the Germans will pump a lot of money to keep that bank around, just as they did today with their second largest mortgage lender. But it's still going to be very ugly and even if they do nationalize them, it still wipes out the stock value.

[David_Old_Jersey]

Originally Posted by schoonerdog

it still wipes out the stock value.

A minor problem. apart from for the stock holders

Quite funny last night / this morning watching the UK Politicos run around like headless chickens following the German Chancellor's "Guarantee"..........probably looking for £2 trillion under the mattress

Next bet is GBP falls down the toilet.......

[Ex-Calif]

Originally Posted by rigamarole

50% of this problem is for sure that we are no longer a nation of savers. Many live and spend way beyond thier means. Now they can't as the money pool has dried up.

My point exactly - The only debt my (depression era) dad ever had was his house. $60k. And his mortgage payment was $90-something bucks. I never saw him pay for anything with a credit card in my whole life.

Now the real bad part of all this is that we are about to hold an annual regatta and our sponsor (a bank) has pulled out.

Not because they are broke but because of how it would look......


Grrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrr!!!!!!!!!!!!!!!! !!!!!!!!!!!!!!!!!!!!!!!11

[tomdidit]

The good news....10 years from now we will have forgotten this mess and will be remembering the new mess.

I loved the AIG bailot especially. The French and Germans were begging the US to bail them out as AIG was insuring $300 B of their debt as well. Last week Germany and France had "No Problems!", this week, they are bailing as well.

Sub prime is not just US stupidity, it is world wide. However, the world goes about it's business. Unfortunately, the average American did better this week by the gasoline price dropping $.50 offsetting their losses in the market.

[starfish62]

Originally Posted by anotherT34C

What I want to know is, is Rand's objectivism now going to be as philosophically discredited as Marx's communism, in application.

Seems that real human beings can't handle either.

Rand has been "discredited" for decades.

[Pelagic]

So…For those of us not in debt…..with substantial savings being held in TD’s with a Bank that shows by Schoonerdog’s graph only 20% leverage….HSBC…….

What would you advise to do with those funds?