Comments on: Ugliest Word Of 2008 – Financial Expert! Why? https://notaniche.com/ugliest-word-2008/1060/ My Mind is not Pigeonholed, neither is my Website Sun, 02 Feb 2020 16:29:17 +0000 http://wordpress.org/?v=2.9.1 hourly 1 By: Alex https://notaniche.com/ugliest-word-2008/1060/comment-page-1/#comment-12719 Alex Thu, 02 Apr 2009 15:52:04 +0000 http://notaniche.com/?p=1060#comment-12719 Hey Vince, thanks for this loong comment. I think the G20 will end up with nothing, how can they figure within 1 and half day how to direct the future of the economy. It's just wasting a bunch of money in London. They have to get together at least a week, not arriving there with a final plan and trying to convince other countries to confirm the plan. They rather should create a plan all together, build by every nation. Hey Vince, thanks for this loong comment. I think the G20 will end up with nothing, how can they figure within 1 and half day how to direct the future of the economy. It’s just wasting a bunch of money in London. They have to get together at least a week, not arriving there with a final plan and trying to convince other countries to confirm the plan. They rather should create a plan all together, build by every nation.

]]> By: Vince https://notaniche.com/ugliest-word-2008/1060/comment-page-1/#comment-12714 Vince Thu, 02 Apr 2009 10:55:09 +0000 http://notaniche.com/?p=1060#comment-12714 Agreed. Seems like most economists and market analysts are just guessing. They predict $200/bbl oil, a few months later, it has collapsed down to $40. One day, this stock is hot, the next day a different stock. The talking heads are a whole industry by themselves. Often they don't even agree with each other! Actually, I think there is enough blame to go around for the financial crisis/recession. In no particular order: -Financial institutions, for pushing the limits too far, both in lending to "subprime" borrowers who wouldn't otherwise qualify for loans, and in leveraging their capital to the hilt. -Governments, for neglecting sufficient oversight of financial institutions in regards to capitalization requirements and mortgage lending criteria. Now, governments and central bankers are scrambling to bail them out, sometimes <a href="http://www.blikopdebeurs.com/weblog/images/bearstearns_save385.gif" rel="nofollow">unsuccessfully </a>. -Consumers (yes!), for recklessly borrowing and spending beyond what they can really afford. If the only way they can afford a house is with low interest rates, mortgage amortization periods of 40 years, and tiny downpayments, then they should not be buying a house. All this adds up to unsustainable expansion, and the inevitable crash that follows. An economic house of cards. Now, because of the bailout packages and various monetary stimulus measures, those who managed their affairs responsibly end up bailing out those who didn't, through tax money, or drastically different interest or exchange rates. I wish governments wouldn't intervene every time an industry messes up (especially the N.A. automakers). Often, the effort is futile and it's just throwing good money after bad. The only justification I can see for bailouts is to protect the hard-earned pensions of the average retiree, not to prevent job losses, or sustain unviable businesses. Otherwise, they should just focus on regulations. Ironically, it was a politician, not an economist or banker, who actually said the most sensible thing I've heard lately: "...throwing too much money into reviving global economic growth would make the recovery unsustainable...this crisis did not come about because we issued too little money but because we created economic growth with too much money, and it was not sustainable growth." Who was this voice of reason? It was Germany's Bundeskanzlerin <a href="http://ca.news.yahoo.com/s/afp/090328/business/finance_economy_g20_germany" rel="nofollow">Angela Merkel </a>. The G20 would do well to heed her warning. Agreed. Seems like most economists and market analysts are just guessing. They predict $200/bbl oil, a few months later, it has collapsed down to $40. One day, this stock is hot, the next day a different stock. The talking heads are a whole industry by themselves. Often they don’t even agree with each other!

Actually, I think there is enough blame to go around for the financial crisis/recession. In no particular order:
-Financial institutions, for pushing the limits too far, both in lending to “subprime” borrowers who wouldn’t otherwise qualify for loans, and in leveraging their capital to the hilt.
-Governments, for neglecting sufficient oversight of financial institutions in regards to capitalization requirements and mortgage lending criteria. Now, governments and central bankers are scrambling to bail them out, sometimes unsuccessfully
.
-Consumers (yes!), for recklessly borrowing and spending beyond what they can really afford. If the only way they can afford a house is with low interest rates, mortgage amortization periods of 40 years, and tiny downpayments, then they should not be buying a house.

All this adds up to unsustainable expansion, and the inevitable crash that follows. An economic house of cards. Now, because of the bailout packages and various monetary stimulus measures, those who managed their affairs responsibly end up bailing out those who didn’t, through tax money, or drastically different interest or exchange rates. I wish governments wouldn’t intervene every time an industry messes up (especially the N.A. automakers). Often, the effort is futile and it’s just throwing good money after bad. The only justification I can see for bailouts is to protect the hard-earned pensions of the average retiree, not to prevent job losses, or sustain unviable businesses. Otherwise, they should just focus on regulations.

Ironically, it was a politician, not an economist or banker, who actually said the most sensible thing I’ve heard lately: “…throwing too much money into reviving global economic growth would make the recovery unsustainable…this crisis did not come about because we issued too little money but because we created economic growth with too much money, and it was not sustainable growth.” Who was this voice of reason? It was Germany’s Bundeskanzlerin Angela Merkel
. The G20 would do well to heed her warning.

]]>