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Because ratings agencies failed with respect to risk management.
Real estate backed mortgage securities derive their value from the cash flow streams of mortgage payments. Bundling alternative risk classes is a private securitization method used to hide risk and provide high beta returns. The risk of a security is determined by the quality of the underlying mortgages that represent them, and hence a MBS composed of low FICO score borrowers should (by definition) should raise red flags by risk managers.
You seem confused.
Absolutely false! The data is what is important, and you have nothing.
Toxic securities were primarily composed of adjustable rate mortgages, which were much more likely to go into default than standard fixed rate mortgages. Between 2001 and 2008, 88% of all mortgages purchased by GSE's were fixed. This varies heavily with respect to private mortgage origination and securitization, of which 70% of all private label loans were made up of ARM's.
You cannot even define a toxic MBS, nor do you understand the fundamentals of bond pricing necessary to make such determinist statements.
I don't think that the problems outside our realm of control are solvable by our actions...If the rest of the world wants to come up to our standards, then I suppose they would have to take proactive measure in that direction.
It is like the old adage, 'Success is nothing new, or complicated, all one has to do is look at what the steps are, and copy them.'
IMHO, I wouldn't do trade with countries who refuse to apply our standards.
Wouldn't that effect jobs right here? We are a global trader, and the jobs rely on export no?
To those bashing WalMart in here, they must want the middle class, and the poor to really suffer. WalMart like it or not brings a host products to these people that otherwise they would not be able to afford, including expanding their grocery buying power. To want to destroy that in the name of some quasi socialistic ideal of equity is a proven disaster.
You make a fair point. It is the same point made with free trade. It is also fair to look at the tradeoffs. With WalMart the tradeoff is the closing of higher cost neighborhood stores. In the case of outsourcing it is the tradeoff of cheaper goods versus the loss of American manufacturing jobs.
At least for me, little is black and white. Perhaps the reason I get bashed by both sides on this site.
I enjoy reading your posts but you are wasting your time. This wont be the first or last time some of these posters will continue to repeat this misinformation. You can correct them a million times on the very basics and you'll see them repeating the same falsehoods.
Meanwhile Kushinator just keeps apologizing and justifying government, corporate, and investment banking mistakes. Sheesh.
Sorry guys,
businesses built on the Wal-Mart plan need to go. The trade off is not worth it.
Who cares if items are cheaper if the whole process continuously reduces the number of citizens with gainful employment who can pay for them? When a business like Wal-Mart enters a community there is short-term benefit and long-term loss, both to the local economy and the general economy at large. As stated, the money used to purchase these cheap items leaves the community and goes overseas to pay foreign workers and buy foreign resources.
Meanwhile Wal-Mart employees also use most of their low wages primarily to buy at the Wal-Mart store. Wal-Mart becomes the biggest local employer and the community becomes completely dependent on it giving it significant economic and political power.
The cycle continues at every locale a new Wal-Mart springs up. It's like a frickin virus, and it needs to be cured.
WallMarts not the only Company that sells cheap Chinese Crap and any decision that would force WallMart to close down needs to made by the private sector, by the Consumers.
I understand how it works, I just don't like it. In
keeping with that I never shop there either, so I am already doing my small part.
Because ratings agencies failed with respect to risk management.
Real estate backed mortgage securities derive their value from the cash flow streams of mortgage payments. Bundling alternative risk classes is a private securitization method used to hide risk and provide high beta returns. The risk of a security is determined by the quality of the underlying mortgages that represent them, and hence a MBS composed of low FICO score borrowers should (by definition) should raise red flags by risk managers.
You seem confused.
Absolutely false! The data is what is important, and you have nothing.
Toxic securities were primarily composed of adjustable rate mortgages, which were much more likely to go into default than standard fixed rate mortgages. Between 2001 and 2008, 88% of all mortgages purchased by GSE's were fixed. This varies heavily with respect to private mortgage origination and securitization, of which 70% of all private label loans were made up of ARM's.
You cannot even define a toxic MBS, nor do you understand the fundamentals of bond pricing
necessary to make such determinist statements.
We loose jobs due to trade in places like China. Here is how it works:
But Mr. Hanson says the magnitude of the negative impacts, as found in their research, surprised him despite his years of studying the economics of trade.
As people are pushed out of jobs by Chinese imports, the research found a substantial increase in government transfer payments to individuals in the form of things like unemployment insurance and disability benefits.
The potential offset is that US consumers (including families affected by job losses) reap benefits from access to lower-cost goods from China.
An important conclusion of the new research, however, is that the economic losses to the US may be roughly equal in size to those gains for consumers.
The government "transfers fall far short of offsetting the large decline in average household incomes found in local labor markets that are most heavily exposed to China trade," write Hanson and his colleagues. And as the use of public benefits goes up, "our estimates imply that the losses in economic efficiency ... are, in the medium run, of the same order of magnitude as US consumer gains from trade with China." How much does US-China trade hurt American workers? Slowly, a clearer picture. - CSMonitor.com
It may be a great exercise in academic circles to say that losses in jobs are made up in lower cost in goods, but try to tell that to the family that no longer has the job with the rent, electric, and grocery bills due right now. You can't be a consumer without a job.
Yep, then some idiot decided we should go to one of those places and prepare to go to the other and BOOM, look at what happened. I do miss those days though.Remember the good ol' days when people just ranted about Iraq and Iran and didn't worry about jobs?
I like this post.It's not really black or white, but I think we need to think about whether we see ourselves as consumers or citizens. Consumers have a right to be served while citizens have rights and also responsibilities. That last thing comes in handy when we have to weigh different perceptives, choices, trade offs and be part of that decision making. For instance, it may be my right to buy cheap goods but is it responsible to buy those goods if they were made in slave shops, if in doing so, I am harming my own community by driving down wages and working conditions, etc...etc...etc....Things like labor conditions, environmental impacts, community resources like safety net usage and other things come into play with decision making.
How much trade are you doing today with countries who refuse to apply our standards?IMHO, I wouldn't do trade with countries who refuse to apply our standards.
Sorry guys, businesses built on the Wal-Mart plan need to go. The trade off is not worth it.
...
The cycle continues at every locale a new Wal-Mart springs up. It's like a frickin virus, and it needs to be cured.
Those with a tyrant's heart can be found in the strangest places.
Oh, I agree. I think the job is more important than cheap goods. And, China was just my example.
Sorry, my "Libertarian-Left" viewpoint is based on business models that work from enlightened self-interest, not rapacious greed. The Wal-Mart business model is one of the most selfish, short-sighted, and economically destructive in the American market. That's how I see it anyway.
Yeah, those damned short sighted companies that have only been around for 53 years....flash in the pans! :lol:
WOW! Wal-Mart had factories in Communist China 53 years ago? You don't say! I bet John F. Kennedy woulda been surprised too!
WOW! Wal-Mart had factories in Communist China 53 years ago? You don't say! I bet John F. Kennedy woulda been surprised too!
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