October 01, 2008

Why didn't people listen to us?

Could we have been any louder?

Could we have fought any harder?

Or did the ignorance, greed and corruption just run too deep?

Thanks for fighting the good fight HP'ers. And I'm glad so many of you listened, and prepared.

But it disheartens me to see this mess today. The ponzi scheme could have been stopped in its tracks in 2003, 2004, 2005, 2006, or 2007. But now, it's just too late. Now, the pain will be greater than even most of you expected. And the damage to the reputation of America will last forever.

It didn't have to be that way. They could have listened.

And they did not.


Anonymous said...

They didnt listen because America is a country with no values.
It is greed, arrogance, stupidity all rolled into one.

Just one of these characteristics would have been enough for things to get out of control. But when you have a combination of all three elements brewing together to the nth degree with the implicit encouragement from the government, then this a tragedy in the making.

Its the perfect storm and thats exactly what we have going on here. A financial storm the likes of which we have never seen in our lifetime. It will indeed be catastrophic for many people.

But the signs were there. HPers were there, in addition to the many numerous blogs crying out in the wilderness that this credit bubble could not continue.

I mean come on, really, did anyone believe that lending $700,000. dollars to an illegal alien working at Taco Bell was an economic formula for success?

So this sends us back to the the three elements of greed, stupidity, and arrogance. America the beautiful, America the stupid, America the Greedy, America the Arrogant, America the land of the Snapper Turtle roasting over a pit of slime just waiting to be fu&^ed up the A%%!!!!!!!!!!!!!!!!!!!!!

Anonymous said...

Media Politics.....Hand in Hand.
Our Media is runned by pudits and politicians.
I just found out Laura Ingrahm dated Keith Olberman....What the????
OK Andrea Mitchell Alan Greenspan married.
Carvil is married to some powerful crazy republican woman..ok we knew that.
Ann Coulter dated Bill Maher...What the??/
Politicians Lobbyist are the media. Wake up folks while we were sleeping they took over.
Fuck the media.

Refuse to buy overpriced said...

The Ponzi scheme could have and should have been stopped in 2004. That was the year Robert Schiller published the 2nd edition of Irrational Exhuberance. Or it could have been prevented completely - Ron Paul warned us in 2002!

20% down payments alone would have prevented so much damage!

Why didn't politicians act to prevent this? "Its the economy, stupid." Politicians are obsessed with short term economic activity - the long term economic well being of the country is 2nd priority.

Anonymous said...

Because the NAR was louder than HP

Sir Harold said...


you and your band of fools are broke joes who are hiding your heads in the sand, it will not be as bad as you say and yet as you are living in fear others will continue to get richer and live life while you and other morons live in poverty and fear for what ?

I stay far away from jerkoffs like you and your band of buffoons


and the sad part is that thousands will commit suicide because they are taking you and others at your every word


Chris said...

People didn't listen for the following reasons:

- too many stupid people making easy money (for a while)
- lack of a proper financial education
- lack of understanding of macroeconomic and microeconomic forces (cause and effect)
- flawed financial models (especially assumptions made with liar loans)
- lack of regulation/oversight (SEC, Treasury, Fed and OTS asleep at the wheel)
- Greenspan lowering fed funds rate to 1% and encouraging people to take adjustable rate mortgages
- President Bush (too incompetent to comprehend anything of any significance)

Also, to respond to the first anon, I vehemently disagree that it was a "perfect storm" --- this term is becoming such a cliche and every damn journalist seems to be saying it. A "perfect storm" would imply several unrelated events that combine to form a highly destructive force. If you understand how this played out, this was a systematic chain reaction, not a perfect storm. Each event that eventually caused this crisis was caused by the event that preceded it. Greenspan lowered rates, which encouraged loose lending, which caused skyrocketing home prices, which encouraged more fraud and delirium, which caused a tidal wave of defaults, which led to the contraction of credit, then bank failures, investment bank failures, and finally, the freeze-up of the financial system we see today....a systematic chain reaction that followed a logical path.

k.w. - Southern Ca. said...

Our congressional employees are trying to "sweet'n the pot" for small business owners and US tax-payers.

What bullox - have to laugh at all these political blow-hards still working hard to deceive the US tax-payer for fear of losing their ass-sets.

Let's keep calling in folks, do what you can while your voice can still make a positive difference for our nation.


If you're a house debter, any benefit to you will be minimal and somewhere far down the line, not enough to make any real noticable difference in your payments.
In short, you get no or very minimal help. So why would you be in favor of this bill?

So many people just don't want to admit (including our employees up on captical hill) that housing prices must continue to drop in order to fall in line with AVERAGE incomes.

Until that fact is fully accepted and steps taken to resolve it, we'll continue to see more job losses, foreclosures and bank-owned properties.

This crap legislation may just pass, but don't expect it to resolved anything, infact, it will make problems far worse, with the tax-payers (who still have jobs) footing the bill for decades to come.

Why should your money as tax-payers go towards paying for something (over-valued mortgage assets) which has an undetermined or no value at all now?

Would you pay $20 for a ham that the store was about to throw out?
If you support this legislation, then I suggest you head on down to your local grocery store and request that they charge you whatever they want for food which should be thrown out - that's what you're signing up for if you support this legislation.

If passed, this will be the biggest tax-payer rip-off in US history.

Both of our candidates are using fear statements to convince the public that this legislation must pass. Makes sense for them since they both have invested heavily in the over-speculated market and could potentially lose alot - why not have their debts paid in full by the sucker tax-payers.

Who will you be voting for?

k.w. - Southern Ca. said...

Well, "Sir Harold" -

You spent the time to blog here, so something of interest caught your attention.

Perhaps it's personal now?
Getting pinched yourself in the wallet?

Who knows for sure, but what is true is that some of the elite who engineered this financial mess just might get their come-upings.

That's definitely worth fighting for - don't you agree?

Sir Harold said...

you and your band of fools are broke joes who are hiding your heads in the sand, it will not be as bad as you say and yet as you are living in fear others will continue to get richer and live life while you and other morons live in poverty and fear for what ?

I stay far away from jerkoffs like you and your band of buffoons


and the sad part is that thousands will commit suicide because they are taking you and others at your every word


Chris said...

Sir Harold (aka Sir Douchebag),

I'm sure that Keith will respond, but first of all, you seem to be challenged by spelling the word "Keith". This makes you qualified to be a realtor by the way (which you probably are).

Secondly, I got out of the stock market in June, so you go ahead and stay the course while you continue to lose money.

Third, I don't see how thousands of people will commit suicide because people like Keith have been trying to warn others about these events. In fact, it's the exact opposite of what you say --- people will commit suicide because they DIDN'T listen to people like Keith, and decided to listen to incompetent realtors who were willing to sucker everyone they could so they could get another commission. They bought big expensive homes that they couldn't afford, and now they're losing their houses and possibly their jobs as well.

Why do you belittle people who can actually predict the future?

Anonymous said...


HP loses again.





Anonymous said...

This bill explicitly allows government owned mortgages to be renegotiated. So when your boy wonder gets in, every FB with a $500K loan making $30K a year will have that loan reduced to $200K.

But you all go ahead and vote for Obama. And watch as the Casey Serins of the world get to keep YOUR tax money.

Alex3191 said...

Obama rulz ... or is he .. ?

patrat said...

Why do they talk about holding the paper for 5 years or so? Are they figuring it will take that long for all the foreclosed houses to gradually be bought up, gradually allowing for the pricing of the bad paper? Are they actually going to trace all that paper and reduce loans?
This bailout gets added right on to the national debt, right? I read today that there are only about 100 million actual taxpayers in the US, out of a total population of about 300 million. (There are a few more filers, but about 100 million payers.) So I guess it is us 100 million who are paying on 9.8 trillion dollars of national debt.
I can’t see how the economy will be any good for a while. Unemployment is up, people are having trouble paying their credit card payments, car payments, house payments… then in April we have the pay-option-arm resets coming up, which will result in another wave of thousands of home-debtors walking away. I would guess there is less foreign money coming in – are they still buying housing bonds, other bonds?
It seems like for the next few years, people will not be able to consume as they have been doing. Consumer spending is 70 percent of the economy. Can’t see how companies can make earnings in a situation like that. Not good for stocks.
Is there a brighter side? Am I missing something?

Anonymous said...

Chris, you're wrong, it IS a perfect storm, and I started using that term back in 2003, long before the first time I saw it in print, which on the front cover of USA today in probably 2005.

Tell me, did the war in Iraq cause the housing bubble?

Did low interest rates cause the oldest years of the baby boomers to start retiring recently?

Did the new CDO, CDS products and other inventive securitization of american home loans cause computer jobs to go to India, and cause the Chinese government to open its economy enough to cause China to really get going on being a real member of the global economy?


These are largely UNRELATED events (which I agree is part of the criteria for "perfect storm") happening in the same few years and the consequences are mostly DISADVANTAGEOUS to America.

Here's a partial list of things that have been making things worse lately:

An extremely costly war.
A more competitive global economy.
Russia feeling its hubris again.
India getting educated and infrastructured.
Global warming, and/or a peak in the supposed 40-year cycle of hurricanes.
Peak oil.
Medical technology and medicines keeping people (including baby boomers, injured troops, and starving africans) alive after when they would have died.
Baby boomers retiring, many of whom get their salaries "spiked" before they retired so their pension payouts are maximized.
America turning to a service/knowledge economy from a manufacturing economy.
Internet/cable TV competing with Hollywood movies and music concerts around the world.
Digital convenience competing with intellectual property rights.
Internet use affecting work productivity and social skills especially in U.S.
Red states vs. blue states.
The aging U.S. transportation infrastructure.
The aging commercial aircraft fleet worldwide, plus air route congestion, plus fuel costs.
Global population gains, and related shortages of clean water.
Cheap credit and the overbuilding of housing in the U.S. and around the world.
9/11 and it's knock-on effects, including unintended consequences from new legislation and policies that meant well.
The effects of an identified 3-generation cycle in society: "one generation builds the wealth, the next perserves it, and the next squanders it."

Last listed but not last and CERTAINLY not least: A U.S. government run almost exclusively by corporate money.

You think things are bad now?

Here's just one piece of this perfect storm:

Start with four separate things:
1. U.S. government going broke on its war and other spend-and-debt policies. That means they'll soon have to cut federal assistance to state and local governments.

2. House price boom has been called off. That means state and local governments will be getting less in property tax revenue, and jobs will be lost in the housing sector.

3. Global economy truly emerging. That means more jobs lost in a variety of sectors. Again, more lost tax revenue for states and local governments (from personal income tax and local business taxes.)

4. Interest rates are low, and they'll stay low if the recession continues and there are no "accidents" in the bond market. This forces states and localities to be required to add more to their pension trusts than they would have to with higher rates.

The result of all this? Just wait until all these state and local governments start REALLY GETTING PINCHED for money. Then projects will get cancelled, and more jobs will be lost. They'll spend more and more on pension funding costs and payouts to the growing number of baby boomer retirees.

And, if things continue with the stock and credit markets the way they have, some of these public (and corporate! but there are fewer of these these days) pension funds are going to start BLOWING UP. And who gets to bail them out? Private pensions have the PBGC, which in turn would probably be backstopped by the U.S. Government. Public pensions don't have such a guarantor, I think, and so the problem would fall directly to state governments and the fed.

Pension payouts as generous as they have been requires a healthy, growing economy (and the higher interest rates that follow can help.) I figure when the job losses AND the pension defaults really get rolling, THEN we'll be in the "middle innings" of this crisis.

After we get done bailing out the banks, brokerages and foreign mortgage investors, are you ready to bail out the General Motors pension and the pension plans of states and cities? Especially if you've lost your job and prices for necessities are higher because the dollar is falling?

Perfect Storm. The next ten years are going to be truly breathtaking.

Anonymous said...

they were to busy out buying those houses they would have never gotten if they had to put 20% down so they could show off to friends and coworkers that they were livin the good life, a house big enough so each kid could have their own private space and the wife could fill up with a bunch of shit from IKEA. Where the wife could recreate designers rooms from magazines. Where the husband had three garages and one for working on that old car or pretended to be a woodworker. They bragged about exotic vacations Club Med, Cabo, Puerto Valarta. They couldn't complain anymore about affirmative action usurping their kids place in college and then they refinanced to send spoiled brats to go to school to learn about anthropology (a real money making field)and they bragged about private school all their lives. Little so and so plays soccer, little league, football, dancing, swimming, boy/girl scouts you name it they are signed up for it. And that money paid for mexican house cleaners, nannies, gardeners you name a way for people to make money out of american laziness and desire to look affluent and you ask why people didn't listen to what was coming down the pike. They didn't want you to interfere with the illusion of prosperity and wealth even if it was all borrowed. That is why six figure salary was bandied about like it was, that too was so that for some reason people think they are so important thier time was worth the money given to them, and that's why companies started to hire from other countries. They didn't sit at the hiring table and start talking about salaries and begin at 100,000 for 50,000 worth of work. Oh, well guess they'll be paying for their greed now. No jobs, no house, no private school, no maid, no retirement. Better start pushing all those mexican's out of McDonalds they are gonna need those jobs for unemployed americans.

Anonymous said...

Short sighted self interests: They saw their property going up, never mind how much it screwed the guy (or gal) who is in the position now that they were just a few years ago, trying to find a break and buy a house that needed some "sweat equity", someplace they could call home and be part of the community.
Here in New England, those modest little starter homes have been bought for hundreds of thousands of dollars (usually cash from developers) and bulldozed (literally) to be replaced by McMansions or McTownhouses, or whatever else, with price tags hovering around a million dollars.
As a result, the character of many towns has been forever changed and the very fabric of many communities, the middle class worker, has been ripped out and sent far away, hoping that gas doesn't rise too high because they won't be able to afford the commute.
But hey, at least our pal pre-bubble seller made out nice, so screw you.

Anonymous said...

Sir Harold said...

That he is 100% clueless.

The credit markets have stopped, because of bogus mortgages. This is happening right now.

Nothing short of the end of the universe would be proof to people like this guy.

Still pumping, all the way to the end.


Anonymous said...

At least one of the Senators got in that Paulson was a fox in the hen house .
The house should stand their ground against the Senate at this point ...will they ? I take great pride in the fact that Senator Shelby voted against it, Dole voted
against it ,Feingold voted against it ,Bunning voted against it ,Sanders voted against it (this guy made a great speech and he is a hero ,the Senator from Vermont )
and some others for a total of only 25 voted against it . 75 jerks were traitors to the Country .I think a list of the 25 Senators should be published and
these Senators should be applauded for their no vote .

Wall Street ,the lobbyist ,the
cheer-leading news ,and the crooks won tonight . They sold out the people so small business could get credit ,that they are already getting . It was a lie , a Bill passed claiming emergency so right-minded people couldn't figure out who the crooks were . Nobody going to jail ,no body paying for the biggest financial crimes in history against the public . Sorry day ,but lets always remember the
Senators knew it was a Bill conceived in fraud -based campaign to pass it by all the parties that gain by free money . We know we are not going to get the money back . No talk about how Paulson and the Fed Chairman have already spend over 900 billion . Its a bigger bail out than they are disclosing .
I'm watching the cheerleaders that
just ripped us off laugh and smile over cheating the people again and getting the last laugh .
Watching the Politicians pat themselves on the back for their hard work in cheating us is
hard to take .

Anonymous said...

Have you ever tried to reason with someone who was totally DRUNK.

DRUNK with GREED and without FEAR.

So if people are giving you more to drink while you are DRUNK why resist them.

It all about the two rules of economic.

1) "FEAR and GREED"
2) "Path of Less Resistance"

mickeyc said...

Sir Harold,
I'm up over $250 000 because I did my own research but also because of the excellent research of blogs like this one.
I know what your trading account/401k looks like because it is the opposite of what mine looks like this year.
I've tracked the account of one of the two people I've managed to convince there were problems coming. Her Fidelity positions (the ones she used to be in) are down 24% this year and with the positions I suggested she's up by a similar amount. That's a difference of $100k on a fairly small account. The other person I convinced of trouble ahead pulled $200k out of a mortgage pool before it collapsed. That is 100% of her savings. It is her retirement money and kids college money all rolled into one.
Both of these people are very normal Americans and they would have definitely made different choices if I hadn't badgered them to change their investments.
As is the nature of things I haven't recieved a "thank you" from either person but my guess is they are feeling happier than if their wealth had been decimated.
Good luck with your anger Sir Harold. You're going to need some fire to ressurect whats left of your life over the next couple of years.
BTW if every world leader is saying publicly that we are at the edge of financial collapse doesn't that make this blog the status quo now?!

Anonymous said...

I wish someone would listen to me now .

The new Senate Bill that was passed makes the bail-out amount unlimited .
Because they passed the FDIC increase as well as the Paulson Plan
part ,it makes the bail out amount unlimited .You guys don't get it .
It should of been either the FDIC plan or the Paulson Plan ,not both .
This would be the biggest blank check in history .

Chris said...

Good God, anon 1:55, you sure have a lot of time on your hands. I don't have time to read your endless rant, I really don't...so I'll just focus on the first part of what you said. Oh, and congratulations for coming up with the term "perfect storm" earlier than anybody else...I'm sure the relatives are proud of you. If you're going to write so much, start up your own blog, for Christ sake.

Movement of jobs to India and China has been going on for decades now. There is no need for me to even bother with that side of the argument.

Baby boomers retiring? Another process that will happen over the next 20 years. You act like they're all going to retire tomorrow.

The Iraq war? Happened another the same administration as the housing bubble.

But to back up a bit, your first post didn't mention anything about these issues anyway, and neither has any journalist that I have seen. Journalists have used the term "perfect storm" in relation to what I stated in my post. They didn't say anything about what you discussed above. You want to know why?

Because it wouldn't make a damn difference if the three things you mentioned above happened or not. This is still an epic crisis regardless of those issues.


The senate monkeys sold you out. The passed the "please don't make another temper tantrum and crash the market wall street please please please" act and slapped a lot of lipstick on that pig.

It now goes to the house, where it will pass unfortunately.

Anonymous said...

Simple - no one likes it when you rain on their parade. Nearly everyone lives for the moment (or if you are a corporation, for the quarter). It is almost as if they are programmed to not try to look forward and put 2 plus 2 together for themselves. They rely too much on "the experts" and not enough on their own intellect (and they probably always will).

Smug Bastard

DaveO said...

Because too many people don't have brains and therefore listen to the illogical spew from the likes of Lereah and Yun. This kills me. Even a 10 year old could have seen through their BS.

Anonymous said...

"I'm sure that Keith will respond, but first of all, you seem to be challenged by spelling the word "Keith". This makes you qualified to be a realtor by the way (which you probably are)."

...just as you seem to be grammatically challenged, as found on your blog:
"He also provide a diverse assortment of topics..."

How's that glass house of yours holding its value? LOL

Adam SlowHand Smith said...

I don't care if the people listen to HP: what I care about is if your ELECTED REPRESENTATIVES listen to the voice of the PEOPLE!

Here's a link to e-mail Senators and elected representatives over this issue:


It's easy: don't know if it'll matter, but you've GOT to do it.

Sir Harold said...


I invested in the market in the 70's

the dow would have to dive to 2000 and the nasdaq would have to go below 500 for me to take a loss

I only invest in blue chip companies and microsoft, intel and HP

my net worth is 5000% of what it was from back then thanks to wall street

now if you have been getting into the market recently then this blog is 100% right in their views

but it is guys like me that will keep it from going under and this blog has no effect on me or my net worth

good luck to you

Chris said...

'...just as you seem to be grammatically challenged, as found on your blog:
"He also provide a diverse assortment of topics..."'

No, just a proofreading failure. Thanks for looking at my blog though.

P.S.: So what kind of ramen do you like better....chicken or beef flavor?

WTF1920 said...

I regret that I came to this blog late. (end of 2007)

I should have been here in 2005 when the cracks in the economic foundation were becoming apparent.