April 22, 2007

Did Osama bin Laden cause the housing bubble (and housing crash)?

OK, this one ain't PC, but think through the chain of events and unintended consequences of 9/11:


* Osama bin Laden's crew takes down the World Trade Center - check

* Greenspan panics and stupidly takes nominal interest rates down to 1% - check

* Housing market goes nuts with free money pouring out of the banks - check

* Greenspan and Bernanke stupidly leave interest rates way too low for way too long - check

* Housing and mortgage fraud go nuts while unregulated REIC spins out of control - check

* Consumers go on a spending and debt binge the likes of which have never seen before - check

* Housing Ponzi Scheme (finally) ends with millions left holding the bag, millions to go unemployed and trillions of dollars of wealth to vanish - check

* Osama bin Laden laughing in a cave - ???

34 comments:

Anonymous said...

I thought Bush caused everything?

Anonymous said...

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Negative. Tech bubble popped before 9/11. The response to THAT caused the housing bubble.

Anonymous said...

People who make their living in markets need buying and selling. Alan Greenspan's actions supplied the gas and then jaw-boned the market. The investment banks chipped in by slicing and repackaging mortgages into investment products for hedge funds, pensions, and overseas investors. In a rising market just about any loan could be made. In short, lots of action. And best about it, the rise to unsupportable multiples (with regard to personal income and wages) insures an active trading downside.

Though stable, fixed 30-year mortgages, the rock of America since the credit boom and bust of the '30s, are boring. Oh well, those who forget history are doomed to repeat it. Thank you, Presidential Medal of Freedom winner, Alan!

alCIAda said...

man those evildoing cave dwellers are smart.....

kilgore said...

I absolutely agree. I think that Greenspan wanted to make damn sure that nobody ever thought that they could take down the US economy through an act of terror, but he took it too far by keeping rates way too low way too long. It was a political, not economic, decision and it will be his ultimate legacy.

I've been saying this for years and everyone I know thinks it's finally time for me to move to Idaho.

Anonymous said...

No, it was Video games that caused it.

Anonymous said...

What nonsense!not a smart analysis!
Very poor economic culture. Bad job,man!

Batman said...

So you think OBL did the 9/11 job? Hmm, that's pretty much thinking inside the box big time :)

Anonymous said...

What scares the hell out of me is that there are 400 trillion (with a T ! ) dollars worth of financial contracts out there called derivatives. A large number of them were bet on the housing market, and that market is crashing 5 times faster than thought possible. I'm sorry, but with a US GDP of 13 Trillion, not even the Federal Reserve can bail out a major default without causing a complete currency collapse. People in the know financially, keep saying to themselves and their close groups of friends that the whole thing could collapse at any time. I don't know, but the amount of leverage and the numbers scare the hell out of me.

You could literally wake up one morning and find every bank in the USA bankrupt, the stock market crashed, and gold fetching 5 digits on the street. You could wake up one morning and every city in the USA would be facing chaos similar to New Orleans. Think about it, without the right to bear arms and the right of private citizens to protect their property, things could go down hill real quick. We've already seen the governments track record at providing security in chaos. If that ever happens, be prepared for attempted confiscation and do not be fooled for a minute - they've already shown their true colors.

Anonymous said...

I thought the 9-11 deniers had been so thoroughly discredited by now that they'd give up

http://www.youtube.com/watch?v=kv4s3fn8jDc

Anonymous said...

Osama who? Was he President of Iraq or something?

goldstein said...

Osama bin Laden's crew takes down the World Trade Center - check

Whatever you say al kweefer. Keep repeating the party line. Keef is a neo-con shill.

Andrew Hac said...

Yup, it sure was according to our "Dubya The Great". Not only was it Osama that brought to us the housing bubble but Saddam Hussein as well. And while Dubya is at it, I do think that the North Korean President Kim must have something to do with the bubble. After all, it is our "Dubya the Great" whom said so...

Anonymous said...

"Greenspan" 50 years from now will be a curse word

So will "Bush"

Anonymous said...

I thought it was all Walmart's fault. No wait illegals. No wait China. No wait India. No wait Fox News.

Make up your mind.

Anonymous said...

OBL didn't do 9/11 silly goose. Everyone knows it was an inside job. An obese man from Michigan told me so in a movie and I read it online so it must be true.

All hail Democrats!!

serindippity said...

The Bank of Japan caused the housing bubble---but they were attempting, without success, to stop their own domestic HousingPanic.

Greenspan was an accomplice in the crime instead of a watchdog.

The problem isn't just rates, but non-interest rate underwriting regulation and reserves.

The Fed and OHFEO have plenty of regulatory authority over that, and they did absolutely nothing, just how Alan refused to raise margin requirements in the 1999 stock dot com bubble.

He easily could have. Imagine---suppose in 1999 that Alan had done so. After the 1998 Asian stuff, the economy was doing fine, and equities were in an obvious bubble. Fall 1999, Greenspan raises minimum margin requirements by 10%, promising more hikes if needed. Brokers respond by reducing margin even more to the dot-bombs. Nasdaq gyrates, and eventually peaks at 4000 (not 5000) in March 2000.

Internet stocks and employment go through a retrenchment, but not a nuclear winter.

NASDAQ is 3700 on Election day 2000. Al Gore squeaks out an electoral vote victory with a significant popular vote win. Alan Greenspan quits. Bill Clinton gives him a pre-emptive pardon and Presidential Medal of Freedom.

2001: Economy shows a modest cyclical slowdown centered around in technology, and new Fed Chairman Ben Bernanke reduces rates from 6% to an "accomodative" 3%.

Summer 2001: Intelligence chatter picks up in mideast. "Bin Laden determined to strike USA." National Security Adviser Wesley Clark brings together heads of departments, orders improvements in customs and FBI tracking of foreign nationals. FBI questions and deports three Saudi pilot students. FAA alerted, gives pilot's advisory with reference to thwarted al-Qaeda "Bojinka" suicide plot. Crews ordered to resist middle eastern hijackers in groups and lock cockpit doors.

Sept 11,2001. Breathless media report two attempted hijackings of American jets. In one, hijackers kill two flight attendants but crew diverts to military base. SWAT and Delta Force surround aircraft. After 24 hours bomb threat is deemed unreliable, hijackers and two passengers killed during raid. In second, hijackers storm the cockpit during landing approach, plane crashes just short of runway in struggle, 87 killed. Surviving, wounded hijacker implicates Khalid Sheik Mohammed.

Anonymous said...

911 was needed to quick start the war on terror.......just ask yourself .....who benefitted from all of this?

so now we have this boogieman, that can never be found and never be caught....and the question that you have to ask yourself......is why all of this is happening? and does this man really exist?...

or has your government lied to you? has your government ever lied to you before? do you trust your government? its a start, i will leave it at that.......

Anonymous said...

Osama Bin Laden is nothing more than a figment of the imagination...

a.creampuff said...

Flip That Cave.

incessant_din said...

The Taxpayer Relief Act of 1997 lines up well with the first uptick from the bottom of the last housing market in many markets in the U.S., but it was just the kindling. The low interest rates were the gasoline, but that just accelerates things. The real fuel is the lax lending standards. Right now, I haven't heard any firm evidence for who did that, but if it's OBL, let's go get him!

Anonymous said...

New Jersey !!!

From the Times Trenton:
More owners facing foreclosure

http://njrereport.com/index.php/2007/04/22/too-much-cheap-money/

Two years ago, when the housing market was booming, William Soodul figured he would reduce his costs with a “creative mortgage.”

He took out a $226,500 adjustable-rate mortgage on his A-frame home in Allentown with a 1.8 percent interest rate and monthly payments that were not applied to either the principal or the interest. His plan was to refinance before his interest rate rose and higher payments kicked in.

But Soodul, a 61-year-old self-employed title insurer, got the surprise of his life when he tried to line up a conventional mortgage last month. Not only would his costs rise $7,000 a year if he kept the mortgage, he would have to pay a $10,000 prepayment penalty just to get out of the deal.

Soodul, a former mayoral and council candidate in Allentown, is among the legions of consumers finding out the hard way these days about the cooling housing market.

Easy credit deals have evaporated and the complex underpinnings of some loans, like the negative amortization mortgage Soodul took out, are becoming all too clear to an increasing number of homeowners.

more ... http://www.nj.com/news/times/index.ssf?/base/news-2/117721477183860.xml&coll=5

BIG scott said...

That's a sticky situation, my friend, I think I'll be like George Washington during the war between England and France and remain neutral on this topic.

I work for Wallhogs and we just began making Wallhogs for some realtors to use for their advertising and marketing. Is this something that would work in your industry? Let me know if this is something that you'd be interested in hearing more about. I can show you some examples and explain anything that needs explaining.


Thanks,
Scott at Wallhogs

Anonymous said...

no,... 911 was a false flag operation.

Anonymous said...

Anon, You're absolutely correct, people have short memories, the Tech bubble burst well prior to 9\11, Greenspan should have let the housing market go then, but then the masses would have attributed it to "terrorism", bunch of pussies.

serindippity said...

911 was needed to quick start the war on terror.......just ask yourself .....who benefitted from all of this?

Osama bin Laden, and global jihadism.

One might have thought that it was Lockheed & Exxon at the beginning but even they are going to lose.

Oil nationalism is increasing around the world, locking Exxon etc out. They got bupkis out of Iraq. Big Oil much would have preferred Saddam---who was willing to sell as much oil as he could.

The big military contractors---well the biggest ones are aerospace and these fancy planes and satellites are getting cut in the budget for the extreme demands of continued ground operations. The military is cutting future programs to pay for the wear and tear on the current stuff. So big military machine might even lose.

Nobody won except Osama. Osama was losing in Afghanistan, but his cause was won by invading Iraq.

trashwacker said...

Absolutely...9/11 and the aftermath phony war on terror are a cause of the housing bubble due to Federal government policies to keep the masses borrowing and spending.

Prof.C said...

No no & no... it was the pope.
Osucka big Llama was just a contributing member of the earth's final events, but more of a scapegoat than an actor. So why did the pope engineer a housing bubble in the US? Think about it. 2.7% of our houses are empty, just waiting for illegal immigrants to fill them via govt programs. Oh, and of course 99% of them worship Mary as evidenced by their prayer beads and idols hanging off their rear-views (i.e. false worship). All these illegals-made-legals will be voting according to what the pope says, and every good protestant knows the roman catholic church is the beast power in the book of Revelation. So the US who has always been anti-popery will suddenly find itself falling under the roman catholic spell, at which time the US becomes the image of the beast. The mark of the beast is simply choosing mans law (false worship) over God's law (ten commandments). So then what is left? Read about it... the Book has a killer ending.

GK said...

The Federal Reserve (a group of private banks) created the bubble by printing money, expanding consumer debt and encouraging massive increase in government debt.

JFK tried to stop it June 4, 1963 by authorizing the US to print interest-free money and you know what happened.

http://www.silverbearcafe.com/private/JFK.html

Salami Boloney Muhammed said...

In the words of The Great Sheik Osama Bin Laden (May Peace Be Upon Him):

"Shem shem shem. Allah sherpa sherpa derpa. Muhammed Jihad. Shem shem shem. Sherpa derpa sherpa. Muhammed Jihad."

Anonymous said...

Osama bin Laden, and global jihadism.

that is the big lie these days, for your consumption. who is osama? where is he? i say again. do you think for one minute this tall, skinny old man sitting in a cave somewhere with his trusty brand new never fired ak47 by his side, in any way orchestrated and /or carried out the most complex, and horrible terrorist attack on the united states? do you really think this? the northern air corridors are the most heavily guarded in the world, yet on that day on 911, 4 supposedly hijacked airplanes flew around for over a hour and no one did anything about it, and two of them were flown into the wtc somehow.? i think not sir.

global jihad is just a myth. we are fighting the wrong people. i say again.....who benefitted from 911? who indeed.....and so now we fight the war that never ends and your children and your grandchildren die for what? to make someone else rich and to justify a war economy based upon paper dreams.....please wake up.....

James Dean said...

Anonymous said...
I thought it was all Walmart's fault. No wait illegals. No wait China. No wait India. No wait Fox News.

Make up your mind.


A Hackneyed Response. Life is not black and white, despite what you have been taught on TV's 30 second sound-bites. Ultimately, the US caused it's own problems in respect to each culprit you listed. So, ultimately, the fault lies with our leadership and our apathetic voters. Our great democracy was eaten by greed from within.

Anonymous said...

The analysis and sequence of events in the original post is right on.

Sad to see so many 9-11 conspiracy kooks. Similarly, there are kooks who believe the Moon landings were faked:

http://www.ufos-aliens.co.uk/cosmicapollo.html

Tinfoily said...

Osama cant wait for the crash to upgrade to larger cave.