blueblood

So you didn't read the article... Here's a list of fed rates since 1990 My link If you notice the hikes in interest rates come just before a recessionary period - housing bubble and the dot com bubble. The fed was down to extremely low levels in the early 2000's and the early 90's. Those fed rates dropping led to an increase in the money supply, and that money finds its way into speculators hands that go and chase the hot investment at the time. In the 90's it was tech. In the early 2000's it was housing. The fed rates propped up the dotcoms with cheap money after that popped, the fed tried to inflate its way out of that recession and money found its way into housing. That forbes article is evidence enough for this discussion and was written by somebody with greater knowledge of the housing bubble than the either of us. Your lenders were only at 5%, not enough to prop up the market, guess who the main culprits were? That would be the GSE's Fannie and Freddie. Read the article. With the fed printing money like they are, it inflates prices of everything, not just houses. For example after QE2, we had the price of food commodities take off immediately after it was announced and it sustained those levels until May when QE2 ran out.

Yah, that sounds right, head to both places if they want to protest. I think there are enough occupy protests here in Canada for the same thing as the USA, uni grads are realizing that some of their degrees don't necessarily get them employment and naturally they are frustrated. I can't blame them for being frustrated because of the expense they paid to get said degree. How would you feel if you just got your degree and the only job you could get that paid well was roughnecking out in Alberta, oh and you get to work with someone who barely has their grade 12? I understand them being frustrated, but at the same time, if they are so upset about people in the finance sector making a killing, why didn't they take finance while they were at uni and join in the party? Had some of those kids taken management, commerce, economic or finance classes at uni, they would know how things are done and might not be so frustrated, and knowing how things are done could work around it and spend their time finding work instead of protesting.

Chirp Chirp Chirp *cricket noises My link And then there's the book meltdown. I don't think your following the money, those speculators have to have a reason to dump all sorts of money in the housing market. Did you think those speculators arbitrarily put a boatload of cash into the housing market on a whim? the forbes article clearly states that it was low interest rates which initially inflated the bubble. The speculation market you are talking about is acting like adrenaline. The article also clearly states how the government did clearly play a role with the HUD, the CRA, Fannie/Freddie, the Fed, and whatever back room shenanigans they could come up with. Another interesting tidbit is that those 25 mortgage lenders you like to trot out only accounted for slightly more than 5% of mortgages during the housing boom. So I don't know what how you think that 5% of all mortgages caused the system to collapse. I'll go with the guy who accurately predicted the housing bubble, Peter Schiff. He blames the government and was one of few people to call the housing bubble. Following the money it simply starts with the Fed and their low interest rates. Your speculation theory was chasing the money, not causing the initial inflation of the bubble. It wasn't just sub-prime, it was the entire mortgage market. It seems to me forbes magazine shot your argument full of holes, sorry.

Yes, the government did lower lending standards. All the big FDIC insured banks got the CRA, then there was other gov't intervention, saying no there wasn't and ignoring the facts on that won't make it go away. What you aren't realizing is that those mortgage specialists have to compete with those same FDIC lenders, how do you do that - by offering stupider mortgages. Gov't market distortion at work. Also those subprime lenders are also competing to go after normal income people to increase their market share. They forced the lender because of political pressure from constituents. Banks have made fortunes since the 1400's, you don't make fortunes by being stagnant. Banks tend to be very good at adapting to whatever environment they are in, as is the case in Canada and the US during the housing boom. I take it you haven't much experience with a commodity market, those speculators do a massive amount of research when they go into investments, part of that research involves looking at market conditions, For a long time market conditions told those speculators to go long on housing, then they look at conditions for example at Lehmans financial statements and look at how cash flow dried up and income still rose, then they decided to short the market. There is nothing wrong or crooked with that, and thank goodness they did otherwise a lot more wealth would have got wiped out. The Fed overnight rate would have made money in the overall economy harder to come by and thus lending institutions would have been more prudent in their lending practices, as there would be less money in the economy to go after consumption which is what owning a house generally is. I don't think a bank is going to be around long enough when the fed is charging 5% and the lender is going subprime. As for the lenders charging way more than the fed rate, that means the money is more expensive to the client and is a signal not to borrow. A higher fed interest rate would have sent the signal to save money, and more money would have found its way into government bonds. It was the teaser rates on those loans that put the ninja clients over the barrel, if they had trouble paying for the low part, they got cooked when the rates rose. And they had to charge those high interest rates because of the risk of the client.

That's been essentially my point the entire time. I however must emphasize the other side as people always tend to blame one side (the bankers). Like the saying goes, pigs get slaughtered.

I wouldn't say that... My link My link Highest economic expansion in USA history and little to no taxes, that would be the gilded age.

So there was no government pressure and no pressure from Freddie and Fannie??? Riiiiigghhttt. There is adequate literature that supports that claim. You aren't seeing the forest for the trees. You are looking at how people took advantage of an environment government policy gave them. Those global investors were betting in other things as well, and at the time it looked like a safe bet because of ridiculously low interest rates, favorable policy towards housing, and every tom dick and harry popping up a house with access to incredibly cheap money. Those mortage speciialists had to compete with banks. Had the market set interest rates, housing would have been going along at a more sustainable clip. The shareholders at the bank took a bath. To say that they purposely crashed the system is flat out ignorant. They made the bet as long with 95% of everybody else that the housing system was solid and wouldn't crash. The threat of litigation ensured the CEO's feathered their nest.

I'll go with the Austrian School any day over the Keynesian nonsense that got us into this nonsense. And no it can't, the size of the US government is unsustainable, the way things are going social security and entitlements are going to eat up almost all of the USA budget. So you want more money in the hands of the poor and your idea is to tax the rich. 1) that puts a damper on production which makes everyone poorer as a result and 2) the rich don't have the kind of taxable money to pull everyone out of poverty. The rich would be better off keeping their money and going about their business. IF anybody is buying into the hollywood movie economic theory its you. Rich people by being around improve the lives of others by buying, saving, and investing because they have more capital to do so. As for the old and sick. I'm not saying stick them anywhere, I'm saying its time to start cutting funding because the US really can't afford it. I don't think you appreciate how dire shape the economies of the western world are. Spending needs to be cut and everything is on the table. As for rich people only being born into it? Really, Steve Jobs, Bill Gates, Warren Buffet, Kevin O'Leary, Robert Herjavec, Jim Treliving were born with a silver spoon in their mouths? Welcome to equality of opportunity, there is equal opportunity to accumulate wealth and equal opportunity to squander it. If the kid who was born rich expects to sit with his thumb in his ass, that fortune of theirs goes up in smoke. That's a problem existing with a sizeable number of pro athletes. Greece, Italy, and Spain have tried your high spending, high tax, high entitlement regimen and it turned out to be a disaster. Hell the Greeks didn't even want to pay for it. As for pension plans being paid for by younger people as a model of success, can you say General Motors??? That's a classic example of why we should be careful with spending money on retirement of others. Nope the way out of this mess is to cut spending and increase production, and that means the unsustainable consumption party is over.

I'll go with the Austrian School any day over the Keynesian nonsense that got us into this nonsense. And no it can't, the size of the US government is unsustainable, the way things are going social security and entitlements are going to eat up almost all of the USA budget. So you want more money in the hands of the poor and your idea is to tax the rich. 1) that puts a damper on production which makes everyone poorer as a result and 2) the rich don't have the kind of taxable money to pull everyone out of poverty. The rich would be better off keeping their money and going about their business. IF anybody is buying into the hollywood movie economic theory its you. Rich people by being around improve the lives of others by buying, saving, and investing because they have more capital to do so. As for the old and sick. I'm not saying stick them anywhere, I'm saying its time to start cutting funding because the US really can't afford it. I don't think you appreciate how dire shape the economies of the western world are. Spending needs to be cut and everything is on the table. As for rich people only being born into it? Really, Steve Jobs, Bill Gates, Warren Buffet, Kevin O'Leary, Robert Herjavec, Jim Treliving were born with a silver spoon in their mouths? Welcome to equality of opportunity, there is equal opportunity to accumulate wealth and equal opportunity to squander it. If the kid who was born rich expects to sit with his thumb in his ass, that fortune of theirs goes up in smoke. That's a problem existing with a sizeable number of pro athletes. Greece, Italy, and Spain have tried your high spending, high tax, high entitlement regimen and it turned out to be a disaster. Hell the Greeks didn't even want to pay for it. As for pension plans being paid for by younger people as a model of success, can you say General Motors??? That's a classic example of why we should be careful with spending money on retirement of others. Nope the way out of this mess is to cut spending and increase production, and that means the unsustainable consumption party is over.

Ah excellent so we are in agreement there is a finite amount of money. Where should it go, being spent on consumption to improve things short term or investment to improve everything long term. In Canada, I agree we won't have to do as much cutting as our friends to the South and in Europe. Have you looked slicing and dicing Ireland did? Wow!

Paul Martin didn't seem to mind sacrificing Canadians when he knocked off 20% of government spending. There have been rumblings of healthcare reform in Canada to prepare for the coming storm, and it is coming.

And if we keep how we are going, we will be there. Have you looked at the US debt to GDP ratio?? Have you looked at demographics and how much medical care currently costs?? Then there is Ontario and Quebec with their albatross debts. All people eventually die, just because gov't funding is cut off doesn't mean its a death sentence. The road to hell is paved with good intentions. THe USSR thought they could be compassionate and take care of everybody, and look where that got them, it was in fact crueler than any society on earth. England during the industrial revolution experienced massive growth and eventually through that growth it increased their standard of living. You have to remember that those brits were only peasants wallowing in their own filth living under a lord's good graces, a fate much worse than working in a factory. Canada (except for Ontario and Quebec), Norway, and Australia can afford to take care of people (barely), but they aren't really bastions of innovation and progress, that's the cost it pays for genorous privileges to people who don't contribute. What do you say about the starving kids in Africa, should the developed world pour down tax resources to ensure they have comparable living standards as we do? You can't save everybody, that's just cold reality. Everybody deserves to have millions of dollars and live a life of luxury, unfortunately that kind of wealth doesn't exist. This is about being proactive and preventing a catastrophe down the line, and the Americans are starting to realize that.

Yes, it's horrible, its unfortunate, but for the good of society its also necessary. It's like that scene in master and commander when russell crowe has to cut the rope sending the one sailor to his death while saving his ship.

And at that point in time demand for hogs was tapped out and those who shouldn't be producing hogs were purged from the market. You forgot to mention how the provincial NDP has taken a bat to the provincial hog industry. A market board isn't going to save producers when the market price of anything comes down.

We are at the point where that may be the case. There quite simply is not enough wealth created for those programs to work like they were designed. People should start saving now. Seniors have managed before massive gov't spending and will manage after. What good is a society that spends all of its resources on those who can't contribute that it could quite possibly collapse on itself. This experiment has been tried over and over again and keeps failing.

the entitlement programs have to be cut and deep. The Irish took an axe to their govt spending and there isn't much being said about them in the news recently. People have got along without entitlement programs before. People might have to start saving their money. I think its just as morally repugnant running the economy into the ground and impacting the lives of everyone so that a few can enjoy their entitlements. It's the lesser of two evils.

Read my posts throughout the thread. What about those non-board grains everybody grows...

We have massive investment in the prairies the last 5 years iin value added production in non-board grains. Guess how much private investment in value added production for board grains...

Because if we're going to be spending gov't money, it should be based on investment in future production, not consumption as it presently is.

The gov't spends 4x as much on the elderly as they do on young people and you don't see that as a problem? Thats as much a drain as anything on an economy and is one of the biggest drains. Its an unsustainable and unaffordable program. Is paying for big money for somebody because they are entitled to it worth hindering the economy? I say not.

Correct Alliance Grain is dropping 50 million bucks in Regina to build a pulse and pasta plant citing that the loss of the cwb monopoly was a major factor.

Really? In the old south growers down there would grow cotton every year, and it turned out to cause production problems later on.

It's still the policy of cheap money that led investors into this house of cards. Had interest rates been at proper levels, those investors would either be saving or have their money invested elsewhere because the interest rates would have sent the signal that taking out mortgages isn't a good idea. Then there is some investors taking advantage of cheap money to plow it into speculative investments in the housing market. Those lending agencies were under pressure from the federal gov't to make it easier to extend loans to people who shouldn't have loans. The politicians were doing what they were elected to do. Speculation provides liquidity and sends clear market signals. That's not the problem, the problem is a boat load of cash caused by bad gov't policy and foreign investors investing in the US as its the safest bet in the world. Mortgage companies wouldn't have been making those loans if interest rates were at proper levels and there wasn't gov't policy of home ownership. Your beef is the vehicle that investors used to help prop up the bubble. My beef is that there shouldn't have been that large amount of money around in the first place and government policy that helped guide said money into that vehicle. My final beef is that some of these people need to smarten up, you can't afford a 400,000 dollar loan with a salary less than 50K. It's bad policy to try and keep inflating prices and trying to keep prices continuously rising, prices should be allowed to rise and fall as the market sees fit. You are correct in that these bankers/speculators became extremely complacent and continued to bet on the housing market while ignoring basic fundamentals and they took a bath because of it.

Considering that any producer with a brain in their head rotates their crops and those crops typically being non-board grains and the fact that those producers are not only surviving but thriving with at least half of their production in non-board grains should bode well for the tories. Do you think we do things like the old south before the civil war and plant wall to wall wheat every year and the board handles all of producer's production?

Wrong! The Canadian agriculture sector hasn't been this high performing since the 1970's. Have you seen what grain prices are? Not only that we have massive investment in developing countries and it still isn't bringing down prices. The fact that the economy is booming in Asia is a good thing. Eventually it will result in the cost of labour in Asia to rise and as a result it will be too expensive for North Americans to buy products from there and we will once again be producing products for ourselves. Even through a hard hitting financial crisis, the agriculture sector hasn't missed a beat thanks to foreign jobs. Its because of throwing protectionism under the bus that our agriculture sector is thriving instead of being in the dumps like eastern canada.