I can't figure out why folks all the sudden when nuts on no spending. Why unemployment has shot up about 75%
Near as I can figure, the big catalyst was the huge increase in the minimum wage. But that really isn't that much of a biggie, as most firms were paying more than that anyway.
Anyone figure out what is making such a huge change in attitude from August till October?
The carter administration began pressuring home loans to people who couldn't afford them. The Bush 1 and Bush 2 administrations left that in place. The klinton administration basically put a gun to the heads of banks and S&Ls and set up informal but very real quotas. The quotas were the Rule Of Law a freddy mac and sallie mae -- 2 of the strangest and stupidest quasi-governmental entities ever created: they should have been stillborn.
Since the brokers get paid at the loan origination, this worked for them.
Then came mortgage-backed derivatives -- essentially taking all those loans and then bundling and selling -- or really renting -- them to investors. Again, the money to the sellers is up front with the investors taking the backside risk and everyone taking a piece of the action as they pass the paper to the next hand in the chain.
In the meantime, the housing boom was underway so people were buying more house than they could afford with the idea they could do stupid things like "interest only" loans and then just refinance endlessly. Since this made more paper and the creation of that paper gave more money to the paper creators and passers, so everyone was Ok with that. Again, they didn't use fundamentals: The loan approves, the loan borrowers, the loan servicers -- everyone made money as long as the refinancing would go on forever and the housing market ket going up.
Well, like a balloon filling with water one drop at a time, eventually it hit the point where there was more water than balloon and -- BOOM.
What followed was a spiraling down of housing prices, followed by foreclosures since the "refi forever" thing couldn't go and now the loaning institutions just wanted their money -- and the interest on;y was no longer on the table.
Enter the MSM and the DNC. Both these entities stood by and shouted with glee on how AWFUL everything was, eroding confidence. People started to get nervous about spending money, so spending reduced and confidence eroded resulted. With people spending less, products started piling up on the shelves.
And so on and so on.
This is purely in the hands of the last 2 democratic Presidencies, the democratic party controlled MSM, and the democratic party Congress.
