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Old 09-28-2008, 04:58 PM   #61
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It's a political hot potato. The market needs regulation like freedom needs justice. Just because people have freedom doesn't mean they can cause crimes. Crimes need laws and crimes in economics need laws. We shouldn't be forcing poor people to have loans since poor people often can't pay back loans. It's better to save for a downpayment and buy a house when the job situation is better. Otherwise why force the market to supply these mortages? Just get the taxpayer in a less roundabout way to pay for it. But of course when presented that way, tax payers say NO.
You do relize the same thing will happen in Alberta in the next few years right? People are making big money now but when that money drys up we are going to be in the same sittuation. People that were poor, or lower income are now earning 100k a year. But when the construction boom slows how are they going to pay for their 300-500k mortages?
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Old 09-28-2008, 05:21 PM   #62
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European bank stocks will probably plummet tomorrow but I can't even short them because the bastard regulators fixed the market.

It's terribly unfair that I can't make money out of this unfortunate situation.
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Old 09-28-2008, 05:55 PM   #63
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Me neither, the dollar isn't cooperating.
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Old 09-28-2008, 09:09 PM   #64
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Dollar could appreciate in the short term.

I would be inclined to short Euro and sterling against the yen and Swiss franc.

ECB will eventually be compelled to reduce rates (in my opinion) which is bad for the Euro.
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Old 09-28-2008, 09:16 PM   #65
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Sterling down to 1.827 US$!
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Old 09-28-2008, 10:59 PM   #66
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You do relize the same thing will happen in Alberta in the next few years right? People are making big money now but when that money drys up we are going to be in the same sittuation. People that were poor, or lower income are now earning 100k a year. But when the construction boom slows how are they going to pay for their 300-500k mortages?
I could have got a mortgage as well. I didn't because I knew that when the government had low interest rates too long that it allowed people to buy easily so they could flip for quick gains (gambling) and the demand for housing in Alberta was huge so the prices went through the roof. At some point interest rates could not go down any further and people would be in so much debt they couldn't keep flipping the houses to other suckers. All you would need is a drop or even leveling off of prices for people to not be able to sell at the price they want and also have little money left to keep making payments.

Who said that they should have bought when they did, and why didn't they save more money and put downpayments? Greed led people to think the prices would go up forever no matter how unlikely that would be. Few people ask questions about how people spend money in regards to lifestyle. It's called priorities. My dad bought at the wrong time and had to take whatever jobs he could and he put as much money into the mortage and paid it off. It wasn't fun but he honored his contract.

People should take responsibility for themselves. If they don't have a large downpayment on a house then they shouldn't get it. If more than 30% of your pay goes to mortgage payments you shouldn't get one. People knew that the government (taxpayers) would back them up to avoid recessions, (because they are political fodder), so they kept doing it anyways.

Many people will do like they always do. Go to Alberta and eat when the eating is good and go back east. Many I know live in New Brunswick and Newfoundland and just rent spaces in Alberta and send excess cash to their families in the east to buy cheap property. Things have already slowed down. Many are going to Saskatchewan. Some are addicted to drugs and blowing their money. At which point do people take responsibility for themselves and their choices or they pass the buck to the government.

All I can say is that there is no free lunch. Printing money causes inflation which is a cost. Getting the tax payer to bail out people is a cost. Or people tightening their belts and paying off their mortgage is a cost. You can't avoid the dual nature of exchange. You want a house? Pay for it.

This is why people like me rail about how so few people today really save any money at all. Throughout history we have lessons like "the fat cow and the lean cow", "the ant and the grasshopper." People don't get it. The stock market should not be treated like a casino.

The housing market was treated like a Casino. Alberta didn't have as many subprime mortages and the conservatives have been paying down debt federally so we will get hurt by the slump in the U.S. but not as bad. We have to start over and governments shouldn't be priming the pump and lending 40 year mortgages with no downpayment. Lowering the interest rates down to practically 0% is giving an incentive to go into debt. It keeps happening almost every 5 - 10 years now.

In the end if people don't want to earn 4% interest on their investments and grow over time they will always resort to gambling. "I want 20% return." Well then take the risk. Even high interest rates can't completely stop gambling if people are willing to do so. Older generations knew there was going to be a recession at some point and the younger ones thought it would go up forever. There's a sucker born every minute.

My brother has a wife that demanded a larger house no matter the cost and he said yes. Now he has 2 mortgages and if he loses his job he will have to deplete his savings to stop forclosure. He felt the economy would be doing good because of Chinese demand for oil. What is this? Gambling! He knows big shot investors that have 5 houses that they have to bankroll. Even if you make 500,000/year you're going to be sweating. McCain, Bush, Obama, Clinton. None of these guys can stop greed and stupidity completely. All they can do is try not to have perverse incentives and useless regulations. The rest is up to us. We are the economy.

There are some smart people out there that did what I did and waited the market out. Soon there will be mortgages with a reasonable cost and I can enter at the right time. If something happens while I pay it I will have savings to keep my house. If I have to lose my pride and get a crappy job to make ends meet until I get a better one you bet I will do what I can instead of complain. People need to cultivate self-discipline.

If people didn't buy big screen TV's and expensive cars and multiple vacations they wouldn't be so hard up. I know a lot of people got into consumer spending and didn't prioritize right, but the media and politicians don't talk about it because they don't want to get criticized by those very same people. Does anybody ask the question "why did you spend on vacations or home decoration when you could have put that on your house?"

Dr. Frankenstein’s Wall Street by Victor Davis Hanson on National Review Online

This is the only guy I heard mentioning this.

An Old Story by Michelle Malkin on National Review Online
She talked about an old story.

These are life lessons people can learn. I just wish they would.
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Old 09-29-2008, 10:53 AM   #67
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How we got to where we're at.



YouTube - Shocking Video Unearthed Democrats in their own words Covering up the Fannie Mae, Freddie Mac Scam that caused our Economic Crisis
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Old 09-29-2008, 11:14 AM   #68
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How we got to where we're at.
Yes that was obviously edited together by someone who was completely fair and unbiased...
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Old 09-29-2008, 12:09 PM   #69
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Purplescar, you are right in so much of what you say. People in this province are living the good life and seem to think its never going to end. In the construction industry tradesmen from all over the country are turning their backs on long established trade unions and their responsible pension plans. They are turning away from a respectable retirement for a few thousand dollars in RRSP's that they inturn cash in and buy a new toy. People need to start rationalizing their outlook on their carrer paths. If our working life is 40yrs, we must assume some of that time is going to be tough times. We need to plan for those times and ensure that what we are doing now is going to benefit us in the future.

In my opinion, the Alberta PC's have not done that and continue to ignore the glaring holes in their plans, or lack thereof.

We are allowing Encana to build a pipeline to send raw bitumen south to Illinios. We are granting every oilsands plant and refinery that comes across the table. When does our govt get involved in responsible manangement of their finances and economy? We cannot change what the average person does, we can change what our govt does. But what do Albertans continue to do, vote for the party without a plan. Its digusting.

You say you think or hope that you have waited out the high end of the market, I hope for your sake you have. But when you do get your 300K house and the interest rates are climbing to double figures, it will not matter if you were responsible. People will start to walk away from homes if things slow down. Interest rates will sky rocket, and you, the patient taxpayer, will be stuck with the same problems as everyone else. I have a 300K, and it makes up under 7% of my income. But when my income go from $5000/week to 1000/week it won't matter if I was responsible when I purchased it, I am still stuck with a mortgage of 40% of my income.

How do we negate these problems? A start would be trying to create an economy with long term growth. Why we are building oilsands plants at the rate we are is dangerous. If, for every oilsands plant (eg. Syncrude, Suncor, Albian, LongLake, CNRL, Fort Hills, FireBag) we built a matching refinery (PetroCan, Scotsford, Mobil) we could be producing and refining and constructing for decades to come. If we then, instead of piping raw bitumen or petro chemicals south, set up tax incentives for manufacturing companies to set up plastics and other petro related manufacturing facilities in Alberta we would have longer term steady work.

There are many things right with Alberta. There are many things wrong. We need to start looking ahead, not just a few years, but decades. We need to institute the programs and show the leadership that is going to decrease the chance of this province once again falling into a deep depression. If, and when, the oil boom falls out we need other industries there to support it while we find our footing again. I do not want to have to leave Edmonton or Northern Alberta to find work, I want to live hear my entire life. I love this Province and city too much to sit back and watch the PC's let us run it into the ground.
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Old 09-29-2008, 02:09 PM   #70
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The bill has been defeated by the House Republicans.
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Old 09-29-2008, 02:17 PM   #71
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Oh this is bad. Stocks down 500pts right away
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Old 09-29-2008, 02:26 PM   #72
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It looks like almost everything is down - except gold.
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Old 09-29-2008, 02:58 PM   #73
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It's interesting to me that we continually here others bashing Wall Street for defrauding those of us on Main Street and if it were not for greedy WS we would not be in this mess.

Last time I checked, we were in this mess because of home prices and defaulting on loans. Seems to me that if Main Street would have been more fiscally responsible like putting 20% to 30% down on a home, buiying a home they could AFFORD, or getting a traditional loan and not the 'loan to help me get into a house I can't afford' we wouldn't be in this mess.

Fact is: WS greed AND greed from MS contributed to this mess.
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Old 09-29-2008, 03:25 PM   #74
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I'm just watching Nancy Pelosi talk about the bailout bill. Who would have ever thought the she and the President would be fighting so hard together. kinda weird.

Oh another note. They have the camera on the dowjones, it is falling so quick.
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Old 09-29-2008, 03:32 PM   #75
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Purplescar, you are right in so much of what you say. People in this province are living the good life and seem to think its never going to end. In the construction industry tradesmen from all over the country are turning their backs on long established trade unions and their responsible pension plans. They are turning away from a respectable retirement for a few thousand dollars in RRSP's that they inturn cash in and buy a new toy. People need to start rationalizing their outlook on their carrer paths. If our working life is 40yrs, we must assume some of that time is going to be tough times. We need to plan for those times and ensure that what we are doing now is going to benefit us in the future.

In my opinion, the Alberta PC's have not done that and continue to ignore the glaring holes in their plans, or lack thereof.

We are allowing Encana to build a pipeline to send raw bitumen south to Illinios. We are granting every oilsands plant and refinery that comes across the table. When does our govt get involved in responsible manangement of their finances and economy? We cannot change what the average person does, we can change what our govt does. But what do Albertans continue to do, vote for the party without a plan. Its digusting.

You say you think or hope that you have waited out the high end of the market, I hope for your sake you have. But when you do get your 300K house and the interest rates are climbing to double figures, it will not matter if you were responsible. People will start to walk away from homes if things slow down. Interest rates will sky rocket, and you, the patient taxpayer, will be stuck with the same problems as everyone else. I have a 300K, and it makes up under 7% of my income. But when my income go from $5000/week to 1000/week it won't matter if I was responsible when I purchased it, I am still stuck with a mortgage of 40% of my income.

How do we negate these problems? A start would be trying to create an economy with long term growth. Why we are building oilsands plants at the rate we are is dangerous. If, for every oilsands plant (eg. Syncrude, Suncor, Albian, LongLake, CNRL, Fort Hills, FireBag) we built a matching refinery (PetroCan, Scotsford, Mobil) we could be producing and refining and constructing for decades to come. If we then, instead of piping raw bitumen or petro chemicals south, set up tax incentives for manufacturing companies to set up plastics and other petro related manufacturing facilities in Alberta we would have longer term steady work.

There are many things right with Alberta. There are many things wrong. We need to start looking ahead, not just a few years, but decades. We need to institute the programs and show the leadership that is going to decrease the chance of this province once again falling into a deep depression. If, and when, the oil boom falls out we need other industries there to support it while we find our footing again. I do not want to have to leave Edmonton or Northern Alberta to find work, I want to live hear my entire life. I love this Province and city too much to sit back and watch the PC's let us run it into the ground.
Alberta has always gone through booms and busts but I don't think the interest rates will go as high as you say. When there is a downturn they won't need to increase interest rates because the prices will naturally come down.

The only way to reduce the yo-yo effect of commodities in Canada is to keep balanced budgets and then to lower taxes for corporations so other industries want to come here instead of just relying on commodities. The provincial government has already done that. 10% provincial corporate taxes. The federal government will do the same if the conservatives are elected again. The conservatives want to institute a savings plan of 5,000 per year to earn investment income tax free. Certainly save your annual mortgage lump sum payments in there and remove it tax free to lower your mortgage balance a little further every year.

Things will slow down in the oil sands when the royalties go up 5 years from now when they increase. Stelmach is trying to increase other industries but it will take time. It's amazing how many people have moved here and not just oilsands workers. Many are moving to Saskatchewan as well. I would think continuing to look for other sources of energy beyond oil, like nuclear power will help to offset oil as the major industry.

Certainly if the federal government didn't make us eat inflation and put the interest rates down so low things wouldn't have boomed as much and people wouldn't race to get into debt and growth would have been more stable. Unfortunately only the federal government can influence central bankers. The federal government avoided raising interest rates to curb our inflation because Ontario was doing bad so they kept them down. Ontario would scream if it was raised. Also higher interest rates compared to the U.S. would mean foreigners would invest in us a lot meaning the Canadian dollar would increase. You know that exporters would also scream if there was a high dollar. I don't know what to do beyond what is being done already. The people themselves are also coming to Alberta because they say they can't find anything in other provinces. Certainly if other provinces did the appropriate things we wouldn't have as many people coming here. These are more things the Alberta government has out of their direct control.

Be thankful that the federal government has a surplus and will not likely be in the situation the Americans are in so there is still room for us to get into debt if it's an absolute crisis and we need to. The U.S. is already got a large deficit that will take years to narrow and they can't so easily bail out companies without going further into debt. I think a crash may be necessary and while people are on welfare programs the companies will have to start over again and act risk averse. If the government keeps bailing out people then there is no risk in the eyes of the investor and they will do more stupid investments. Capitalists are supposed to be risk averse. What's happening now is that the Capitalists don't really exist anymore. Nobody is saving and companies are leaning on the taxpayer. To be honest I'll have to do some more studying on recessions. Certainly the Keynesian method of just making more money failed in the '70's and unemployment mixed with inflation (stagflation) and they needed extremely high interest rates to make people feel confident in the currency. This lead to a huge recession in the '80's but the peopl had confidence in the currency and inflation reduced so people could go back to work again. No pain no gain. No matter where you look at it any move to reduce the loss simply transfers losses to either inflation, job losses, or taxpayers getting an increased tax burden. Throughout the '90s and '00s the interest rates shouldn't have been kept so low. I think that's the real solution. When the debts get cleared off and people start over there should be reasonable interest rates available. Most economists think 4% grows well with the economy. The rest has to do with the people which should stop gambling. The government can't stop people from making dumb greedy choices. Part of the recession was to punish bad behaviour but so many people don't understand economics and the cycle has to repeat. Super low interest rates can create fake jobs by having crappy companies exist that shouldn't. When the interest rates go up the useless jobs disappear and the government comes in with EI.

Another problem is politics. Nobody wants a recession during the election cycle so there's always a short term incentive for politicians to push central bankers to prime the pump.

Do the best you can and just plow your extra money into the house. It usually takes 10 years minimum to pay off a house and there will be economic shocks that appear during that time. Some people take on extra jobs. Wives who were at home will start working to make extra income.

It's worth the effort. My dad has enough saved to retire (despite having low paying jobs all his life and only safe investments with low rates) and his house is paid so the recession doesn't affect him at all unless the inflation goes to 100%. There's definately a light at the end of the tunnel when you do this work. This is the time people can enjoy a better standard of living. Ignore commercials and peer pressure that says you should enjoy life while you are young. When you pay your house become an investor. You're savings helps the economy so we don't have to constantly print tons of money.
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